Project Work Title Project report submitted in partial fulfilment of the requirements for the award of the Degree of Master of Business Administration of the University of Kerala Submitted by: Student Name Initials 134000xx CET SCHOOL OF MANAGEMENT COLLEGE OF ENGINEERING TRIVANDRUM July 2015
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Project Work Title
Project report
submitted in partial fulfilment of the requirements for
the award of the Degree of
Master of Business Administration
of the University of Kerala
Submitted by:
Student Name Initials134000xx
CET SCHOOL OF MANAGEMENT
COLLEGE OF ENGINEERING TRIVANDRUM
July 2015
CET SCHOOL OF MANAGEMENT
College of Engineering Trivandrum
2015
CERTIFICATE
This is to certify that the report titled “PROJECT WORK TI-
TLE” being submitted by Student Name Initials, Roll No. 134000xx,
in partial fulfilment of the requirements for the award of the Degree of
Master of Business Administration, is a bonafide record of the project
work done by Student Name Initials at College of Engineering
Trivandrum.
Dr. Chandramohan Guide’s NameDirector Professor
Declaration
I undersigned, hereby declare that the project titled “ProjectWork Title” submitted in partial fulfilment for the award of Degreeof Master of Business Administration of the University of Kerala isa bonafide record of work done by me under the guidance of Guide’sName, Department of Business Administration, College of Engineer-ing Trivandrum. This report has not previously formed the basis forthe award of any degree, diploma, or similar title of any other uni-versity.
Student Name Initials
iii
Acknowledgements
Write your acknowledgements here.
Student Name Initials
iv
Abstract
The objective is to minimize the overall system costs whichinclude the fixed costs of opening depots and using vehicles at eachdepot site, and the variable costs associated with delivery activities.A novel heuristic is proposed which is based on variable neighbour-hood descent (VND) algorithm to solve the resulted problem.
Keywords: keyword1, keyword2, keyword3, keyword4, and soon....
v
Contents
Page
List of Tables viii
List of Figures ix
Symbols and Abbreviations x
1 Introduction 11.1 Problem Definition . . . . . . . . . . . . . . . . . . . 31.2 Objectives of the Project Work . . . . . . . . . . . . 31.3 Scope of the Project Work . . . . . . . . . . . . . . . 31.4 Research Methodology . . . . . . . . . . . . . . . . . 31.5 Limitations of the Project Work . . . . . . . . . . . . 4
2 Company Profile 52.1 Background of the Problem . . . . . . . . . . . . . . 52.2 Introduction to the Industry . . . . . . . . . . . . . . 52.3 Introduction to the Company . . . . . . . . . . . . . 5
6.1 Common Caption for the Two Figures . . . . . . . . 29
ix
Symbols and Abbreviations
α Fractional rate of adjustment of WIPβ Fractional rate of adjustment of inventoryµ̂D Single period estimate of demandσ̂ε Estimate of standard deviation of the forecastµD Mean customer demandν Coefficient of variation of demand processω Scaling factor of DINVΦ Standard normal cumulative functionρ Smoothing factor in demand forecastσD Standard deviation of customer demandb1 Back-order cost per unit per periodh Holding cost per unit per periodNn Total number of back order occurrences till period n
z Standard normal deviate Φ−1(DOFR)i.i.d. Independent and identically distributedASC Average system cost per periodBIBO bounded-input-bounded-outputCDn Customer demand in period nFDn Demand forecast for period n
FPS Forward flow production systemIFR Item fill rateOFR Order fill ratePCR Production completion ratePREL Production order release in a production ordering sys-
temTOAR Total orders adjustment rateTOR Total orders receivedWIPk WIP in the kth intermediate manufacturing stage
Provide only if it is absolutely required and essential in
x
the project report.
xi
Chapter 1
Introduction
In this new era, Internet has revolutionary effects on corporate
purchasing practices, in both direct and indirect purchases. Since
1980’s enterprises and companies have been adopting enterprise re-
source planning (ERP) or manufacturing resource planning (MRP)
for supply chain management. The diffusion of the new E-business
technologies in the late 1990’s has created new practices and new
business models for corporate business functions. While the focus
of companies and enterprises has been in the reduction in cost of
bought-in goods and services, there has been a need for procure-
ment managers in increasing their productivity and value creation.
This has prompted the interest of companies and enterprises in re-
designing their relationships with suppliers of indirect goods and
services. According to Orr (2002) indirect purchases can account for
thirty to sixty percent of a firm’s total expenditures. Especially for
service companies the expenditures can rise up to sixty percent of
overall purchases. However, the focus has been more on the sup-
ply chains for direct material suppliers than indirect, due to their
low transaction volumes, low product values and low strategic im-
portance. In order to achieve substantial savings and added value,
managers need to pay more attention to the indirect purchasing pro-
cess. Generally corporate practices related to the purchasing of in-
direct goods and services have been affected with problems, such
as inefficient buying, redundant and disconnected processes, non-
strategic sourcing etc.The emergence of Internet Technologies has
changed the way the procurement activities have done in companies
and enterprises with respect to the indirect materials. The major-
ity of organizational spending consist of purchasing. In order to
decrease the total costs spent on purchasing, internet technologies
are used and E-Procurement has become popular. As mentioned by
several researchers studying in this area, E-Procurement is named
as the Revolution due to its potential to reduce the total costs of
acquisitions. The empirical and theoretical economic literature on
government procurement auctions indicate that as the number of
suppliers or bidders in auctions increase the procurement price is
significantly lower. Thus, the success of E-Procurement systems
highly depends on the increases in number of bidders (suppliers)
that participate to procurement auctions. But the implementation
of E-Procurement has some restrictions namely technology adoption
and usage of E-Procurement systems by suppliers.Purchasing of in-
direct materials is gaining more interest from companies, because
of its potential impacts on corporate-wide savings and productivity
(Puschmann & Alt 2005), and that is why this project only con-
centrates on e-procurement for purchasing of indirect materials.This
project studies what e-procurement is all about.Also it examines the
impact of E-procurement in the purchase of indirect goods quan-
titatively as well as qualitatively, with special reference to BPCL-
Kochi Refinery, Ambalamugal, Ernakulam. This project aims to
find out why the greatly hyped E-procurement solutions for indirect
purchases have not succeeded as expected.
2
1.1 Problem Definition
Provide a brief description of the problem and its domain, the
practical importances of the problem, etc.
1.2 Objectives of the Project Work
The objectives of this project work are:
1. To measure the cost effectiveness of E-Procurement of indirect
materials in BPCL-KR.
2. To compare the lead time of traditional procurement and E-
procurement of indirect materials.
3. To compare the cost pattern of traditional procurement and
E-procurement.
4. To assess the role of E- procurement in market penetration.
5. To measure the role of E-procurement in inventory manage-
ment.
1.3 Scope of the Project Work
The scope of this project work to be included in this section.
1.4 Research Methodology
This section is to provide an overview of the selection of re-
search methods used in the project work, tools, variables, hypothesis,
especially with the data collection, data analysis, making inferences,
testing of the hypotheses, comparing the results, etc. This section
should provide only an introductory description. Description of each
3
has to be provided in detail after the literature review in the next
Chapter, Sec 3.9.
1.5 Limitations of the Project Work
Limitations to be followed by a last paragraph for chapterisa-
tion. A sample will look like the following.
Chapter 3 discusses the ........ Chapter 4 etc... The conclusions
of the findings are provided in Chapter 7.
4
Chapter 2
Company Profile
2.1 Background of the Problem
The background of the problem is discussed in this section.
2.2 Introduction to the Industry
The industry details have to be introduced in this section.
2.3 Introduction to the Company
Here comes the details of the company. If required, we can
provide a sub-section named company profile, as follows.
2.3.1 Company Profile
5
Chapter 3
Literature Review
Here comes the intro to the literature review done. Tell how
the review is classified into sections and subsections.... etc.
3.1 E-Procurement
Procurement activities are an inseparable part of any organiza-
tion. In larger organizations, purchasing activities get complicated
when various goods and services are needed for different departments
and sections. Van Weele et al. (2003) define procurement as follow-
ing: Obtaining from external sources all goods and services which
are necessary for running, maintaining and managing the company’s
primary and support activities at the most favourable conditions.
In general, procurement processes are categorized into two sub
processes (Harink, 2003): (a) Procurement transaction process:- It is
about transaction-oriented procurement, and (b) Procurement man-
agement process:- It consists of activities for management of pro-
curement transaction process.
There are several steps defined within procurement transaction
process. A procurement process consists of six steps: specifying
procurement strategy, selecting right suppliers,contracting, ordering
products and services, expediting and control of deliveries, and follow
up and evaluation (Van Weele, 2001). In addition, Harink (2003)
adds procurement management process. Many organizations and
firms began to use internet as a new way of doing business and this
triggered the rise of electronic commerce (e-commerce). According
to Garrett and Skevington (1999) e-commerce is trading by means of
new communication technology (e.g internet). It includes all aspects
of trading, including commercial market making, ordering, supply
chain management, and the transfer of money.
Business efficiency, increased automation of processes, retained
and expanded customer base, and reduced information costs are
some of the major benefits of e-commerce (Kuzic etal., 2002). Through
the rise of e- commerce, various products and services are available
online and organizations are able to procure their needed products
and services on-line. This initiative was the start of new era for elec-
tronic procurement (e-procurement). E-procurement refers to all of
the connective processes between companies and suppliers that are
enabled by electronic communication networks (Meier and Stormer,
2009)
Harink (2003) defines e-procurement as using internet tech-
nology for procurement process. Thus the ultimate objective of
e-procurement systems is to provide electronic services (e-services)
that facilitate procurement process. By automating processes and
work flows associated with purchasing, the firm expects to increase
the productivity of its purchasing agents, lower purchase prices of dif-
ferent types of goods and services, streamline the information flow,
business processes, and work flows involved in purchasing, eliminate
maverick buying (i.e., buying from unauthorized vendors),reduce or-
der fulfilment and processing times, reduce the number of suppliers
the firm is dealing with, streamline invoice reconciliation and dispute
resolution, reduce the administrative processing cost per purchase
7
order, integrate budgetary controls into the procurement process,
minimize human errors in the buying and shipping processes, and
monitoring and regulating buying behavior (Turban et al., 2005).
From a different perspective, e-procurement can be considered
as a way to benefit from real time information sharing and it provides
the opportunity to take advantage of total quality management and
supply chain management (Sriram and Stump, 2004). Many studies
investigate the effects of increasing the number of participants which
is named in the literature as competition effect. Gupta (2002) anal-
yses how many bidders are required for auctions to be competitive.
By empirically analysing highway construction auctions he shows
that the winning bid amount significantly decreases as the number
of bidders rises to the level of about six to eight firms.
Paarsch (1992) also argues that in the common value paradigm
(CVP), the competition effect would taper off when the number of
bidders is large, as a result of expected winner’s curse effect. In
the independent private value paradigm (IPVP), on the other hand,
the equilibrium bid function may be monotonic. Using data on tree
planting contract auctions, he tests and rejects the hypothesis that
the bid function decreases monotonically with the number of bidders,
as expected at standard first-price sealed-bid auctions within the pri-
vate value model. Empirical studies about government procurement
auctions show the importance of the competitive environment to
achieve savings in government procurement.
Iimi (2006) investigates the competition effect in the Japanese
Official Development Assistance (ODA) projects. Iimi reports that
winning bid decreases as the number of bidders increases. Thus,increasing
local firm participation in auctions strengthens bidding competition
and results in more efficiency at the auction level. Tas et. al.
(2008) analyses 130,094 government procurement auctions for the
8
years 2004 to 2006 in Turkey and finds that the number of bidders
significantly and negatively affects the procurement price.
E-Procurement is a method to reduce administrative costs,
lower inventory levels, shorten the ordering process, prepare organi-
zations for increased technological collaboration and lower the prod-