SUPPLY CHAIN DEPARTMENT

PROCUREMENT
September 05, 2019

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 Key Figures of PRs vis-à-vis POs
for FY 18-19
18,000,000

15,000,000

12,000,000

9,000,000

6,000,000

3,000,000

-
All figures in PKR 1st Qtr. 2nd Qtr. 3rd Qtr. 4th Qtr. Cummulative
PR Amount 3,576,232 2,597,270 2,995,432 5,868,267 15,037,201
PO Amount 3,255,948 2,435,644 2,818,328 5,478,586 13,988,507
 Key Figures of SRs vis-à-vis SOs
for FY 18-19
50,000,000

40,000,000

30,000,000

20,000,000

10,000,000

-
All figures in PKR 1st Qtr. 2nd Qtr. 3rd Qtr. 4th Qtr. Cummulative
SR Amount 6,584,720 3,581,803 3,311,562 31,046,715 44,524,800
SO Amount 6,335,563 3,131,925 3,087,651 30,684,583 43,239,722
 NEGOTIATED BEST BUY/SAVINGS
While not compromising on quality, SCD tries its best to negotiate
prices before awarding the contracts.
A summary for FY-1819, is as under:
All figures in PKR

Cumulative Cumulative Cumulative Cumulative

Amount of Lowest Quoted Amount of Amount of
Requisitions Prices Orders Discounts

Services 44.52 m. 44.35 m. 43.23 m. 1.12 m.

Purchases 15.03 m. 14.5 m. 13.98 m. 0.52 m.

Total Savings: PKR 1.64 millions

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 Objectives of 2018-19

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 Objective # : 1
Objective Action/Steps to be/Taken

ACCOMPLISHED
 The existing Vendor’s List has already been
updated and approved by VEC however it is a
To carryout registration continuous process which is undertaken on
renewal of existing following basis:
vendors as required by
• The registration forms are being sent to the existing
Procurement Manual vendors for their renewal on a continuous basis.
which is to be renewed
• Prospective vendors are under process of identification
every 3 years, identify and their subsequent evaluation has been under taken
and register new in consultation with end users
vendors & get it
approved by VEC  Final list was put up to VEC and was approved
based upon following:
• Prequalification documents of vendors
• Selection of final vendors vis-à-vis their financial and
technical capability in line with APL’s requirements.
 Objective # : 2
Objective Action/Steps to be/Taken

ACCOMPLISHED
 A comprehensive training has been imparted to
SCD by Sidat Hyder team covering the complete
working of the software
To utilize SCM software  The new Service Requisition and Service Order
for Service Requisitions forms have been developed and deployed
(SR) and subsequent
Service Orders (SO)
 A SOP for raising SRs and issuance of SOs has
been developed and implemented
 Previous manually issued SRs and SOs of
FY18-19 have also been punched in system and
new SRs and SOs are now being issued through
SCM software
 Objective # : 3

Objective Action/Steps to be/Taken

Ongoing:
 End users were engaged and activities were
To carryout a identified for the year based upon budget FY 18-19
comprehensive  A detailed study was carried out in consultation
study of the major with the end user on budget utilization. Weekly visit
expenditures by a SC member ensured discussion on technical
planned by the aspects of the procurement items
end users in the
 The jobs and their time lines were worked out
budget for FY
based on their criticality, availability, with end user
2018-19 in order
to improve the  Prospective vendors were identified based on
lead time expertise.
 The PR were technically scrutinized and the
requirements discussed with the end-user
 Objective # : 4

Objective Action/Steps to be/Taken

Ongoing:
To liaison with technical  SCD is regularly coordinating with technical team for
team before sending clarification of required specifications for each
RFQ in respect of individual requisition
understanding of the  The PRs are technically scrutinized and the
subject procurement and requirements are being discussed with the end-user.
plan market visits
accordingly  In view of the above and based upon the information
gathered market surveys are being conducted
regularly
 Prospective vendors are being identified with respect
to their expertise and abilities
 In addition, periodic market visits are also being
carried out in search of the best buy
 Objective # : 5

Objective Action/Steps to be/Taken

Ongoing:
 Collected data from finance & warehouse for
vendors/volume/invoices
 Identified low value procurement with high
To prepare a detailed number of transaction representing small
procurement spend spending
analysis/mapping and
update quarterly  Identified top 10 suppliers who represents most
of the total spending for the year.
 All contracts that the organization has in place
were examined to make sure that are being used
effectively
 Identification of Focus Area
Orders Below Orders Below Orders Above
Description Total
PKR 50,000 PKR 100,000 PKR 100,000
Data for 2018-19

Number of PO/SO 84 29 41 154

Number of Vendors 41 21 26 88

Total Value (PKR) 5,230,032 2,159,515 49,888,576 56,278,123

Average per PO/SO (PKR) 622,262 74,466 1,216,794

Data for 2017-18

Number of PO/SO 152 52 117 321

Number of Vendors 61 24 79 164

Total Value (PKR) 3,677,871 3,649,206 162,977,351 170,304,428

Average per PO/SO (PKR) 24,197 70,177 1,392,968

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 Vendors With Whom Purchases of Less
Than 35k Were Made Repeatedly
General Traders pvt Ltd 02

The Karachi Paint House 02

Pakistan State Oil 02

Raza Enterprises 02

Suriya Motors 03

Bravisto Private Ltd 06

Hatimi Hardware 11
524,381
CUMMULATIVE

All figures in PKR - 100,000 200,000 300,000 400,000 500,000 600,000

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 Top Ten Suppliers

Jaffer Business Systems

Zafcom Wheels & Accesssories

Khan Brothers

International Office Products

DWP Technologies

AES Technologies

Hatimi Hardware

Matrix

Imtiaz Provision Store

Pakistan State Oil

8,560,567
CUMMULATIVE

- 1,500,000 3,000,000 4,500,000 6,000,000 7,500,000 9,000,000

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 Graph of Vendors From Whom Services of
Less Than 35k Were Procured Repeatedly
Sage Tech International 1

General Traders Pvt Ltd 1

GEMCO 1

Exclusive Motor Sports 1

Evolution Technologies 1

Delta Control Automation Co 2

108,121
CUMMULATIVE

- 20,000 40,000 60,000 80,000 100,000 120,000

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 Top Ten Service Providers

Prime Engineering Services

Evolution Technologies

United Transport Services

Supernet Limited

Lemon Communications

PATSA Pakistan

Zia ul Haq & Sons

Choudhry Illahi Baksh

Shahid Transport

Askari Guards
37,244,473
CUUMULATIVE

- 8,000,000 16,000,000 24,000,000 32,000,000 40,000,000

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 KEY ACHIEVEMENTS
Cash/Trade and Quantity Discounts
 Previously in place contracts revisited and new Vendors identified for following
various contracts to achieve Trade Discounts:
• Pipri Terminal Transport Contract Saving PKR 1,335,840
• Head Office Photocopier Machine Saving PKR 115,000
• Head Office Fumigation Contract Saving PKR 88,815
 On the basis of relations with Vendors following Quantity Discounts achieved:
• Internet connection for PT (8 Mbps to 10 Mbps - Fiber Connectivity) and
HO (6 Mbps to 8 Mbps - Radio Link) negotiated on the same price, terms
and conditions.
• Devices related to SLA of Firewall Systems License at PT and HO were
negotiated as free of cost.
 ADDITIONAL OBJECTIVE

Objective Action/Steps to be/Taken

ACCOMPLISHED
To process the Blanket  The implementation has been started from Jan-19
Orders through the SCM onwards
System  A comparative of the previous and reconstituted
processes is depicted on the following slide
 Previous Process
o PRs received from HO & PT
o Merged RFQs issued
o Vendor selected on the basis of
competitive bidding
o A blanket order issued manually
o Manual bimonthly PRs received
from user based upon actual
requirement
o Requirement emailed to vendor.
o Performa invoice, based upon the
requirement, received from the
vendor
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Reconstituted Process
o PRs received from HO & PT
o Merged RFQs issued
o Vendor selected on the basis of
competitive bidding
o A blanket order issued manually
o Bimonthly PRs received from
user based upon actual
requirement through SCM
o Requirement emailed to vendor.
o Performa invoice, based upon the
requirement, received from the
vendor
 Previous Process
o Performa invoice forwarded to
Finance Dept for issuance of
cheque
o Delivery of items
o After completions of the order a
completion certificate is issued
by end-user
o Order closed on basis of the
certificate
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Reconstituted Process
o PO, based upon the performa
invoice, issued through SCM
with the Advance Payment
terms
o Delivery of Items
o Issuance of GI&VAN
o Generation of GRN
o Closure of PO
 Objectives for 2019-20

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 Objective # : 1

Objective Action/Steps to be/Taken

2019-20:

To utilize SCM  To explore provisions of system generated RFQs

software for & CS and Vendor Induction using SCM Software
generation of the  Engage Sidat Hyder Team for possibilities of the
Request for said processes on SCM Software
Quotation (RFQ),  To utilize Vendor Master Module in SCM Software
Comparative
 When successfully implemented, engage Sidat
Statements (CS)
Hyder for a comprehensive training covering
and Vendor
complete working of the changes made in the
Induction Process
software
 SOP for generating RFQ, CS and Vendor
inductions on the system will be developed and
implemented
 Objective # : 2

Objective Action/Steps to be/Taken

2019-20:

Analyze Procurement  A exercise is planned by SCD to revisit the

Manual inline with Procurement Manual and its allied SOPs for
current market possible amendments in order to improve the
practices for possible process of procurement
revisions of existing  Following key topics have been identified to be
policies addressed during execution:
 Vendor Registration based on market visits
 Vendor Induction using SCM System
 Blanket Order Procedure
 Objective # : 3

Objective Action/Steps to be/Taken

Ongoing – 2019-20 :
To carryout a  End users have been engaged and activities
comprehensive study are being identified for next year based upon
of the major budget FY 19-20
expenditures  A detailed study was carried out in consultation
planned by the end with the end user on budget utilization. Weekly
users in the budget visit by a SC member is ensured to discuss
for FY 2019-20 in technical aspects of the procurement items
order to improve the  The jobs and their time lines will be worked out
PR to PO lead time based on their criticality, availability, with end
user.
 Prospective vendors will be identified based
upon their expertise. The PR are being
technically scrutinized and the requirements
are discussed with the end-user.
 Objective # : 4

Objective Action/Steps to be/Taken

Ongoing – 2019-20:
To liaison with  SCD will regularly coordinate with technical team
technical team before for clarification of required specifications
sending RFQ in  The PR will be technically scrutinized and the
respect of requirements to be discussed with the end-user
understanding of the  In view of the above and based upon the
subject procurement information gathered market surveys will be
and plan market visits conducted
accordingly  Prospective vendors will be identified with
respect to their expertise and abilities
 Periodic market visits will be carried out in
search of the best buy
 Objective # : 5

Objective Action/Steps to be/Taken

Ongoing – 2019-20:

Spend Mapping  The goal of this objective is to achieve Economic Order

Analysis Quantity (EOQ) on procurement of items with high number
of requisitions representing small spending
 Data will be collected from finance & warehouse for
vendors/volume/invoices
 Procurement of items with low value and numerous
transactions representing small spending will be identified
for current year in respect of current trend
 Suppliers with whom such items can be procured through
a single order rather than multiple times will be identified,
aiming to achieve EOQ and possible quantity discounts
 Key benefits of the exercise are:
• Vendors Interest
• Financial Element
 Objective # : 6

Objective Action/Steps to be/Taken

Ongoing – 2019-20
Classify Plant Items  A detailed study is to be carried out of the store items to
vis à vis Market categorize each in correspondence to the
categories market/suppliers
 Analyze and classify plant items against market items
and create new categories irrespective of departments
 Scrutinize the existing plant categories with availability of
items in the market (market category) and align vendors
accordingly
 To collect data of item-wise consumption and correlate
with its category market-wise & plant-wise
 ADDITIONAL OBJECTIVE

Objective Action/Steps to be/Taken

Imported items
assessment for local  Engage end users for assessment / probability of local
fabrication in liaison fabrication of imported items at a lower cost
with end user
 THANK YOU

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