Report on Siemens Project Managemenmt

8/11/2019 Report on Siemens Project Managemenmt

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SUMMER INTERNSHIP REPORT

A STUDY OF: CUSTOMER SATISFACTION IN PROJECT BUSINESS

Submitted by

Shefali AggarwalA0101913102

MBA Class of 2015

Under the Supervision of

Dr. Shalini TrivediAssistant Professor

Department of Economics

In Partial Fulfillment of the Requirements for the Degree ofMaster of Business Administration

AMITY BUSINESS SCHOOL

AMITY UNIVERSITY UTTAR PRADESH

SECTOR 125, NOIDA - 201303, UTTAR PRADESH, INDIA


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DECLARATION

The title of Summer internship is Astudy of: customer satisfaction in project business.

I declare that (a) the work presented for assessment in this Summer Internship is my original

work, that it has not previously been presented for any other assessment and that my debts (for

words, data, arguments and ideas) have been appropriately acknowledged; (b) work conforms to

the guidelines laid by the University, and (c) Plagiarism for this report has been checked using

Turnitin software and is 7 %. The summary of report is attached along with for reference.

Date: 30-07-2014 Shefali Aggarwal

A0101913102

MBAGEN (Class of 2015)


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CERTIFICATE

This is to certify that Shefali Aggarwalstudent of Masters of Business Administration (Gen) at

Amity Business School, Amity University Uttar Pradesh has completed the Summer Internship

on A study of: customer satisfaction in project business, in Partial Fulfilment of the

Requirements for the Degree of Master of Business Administrationgeneral under my guidance.

The report has been checked for the plagiarism and it is acceptable.

Dr. Shalini Trivedi

Assistant Professor

Department of Economics


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ACKNOWLEDGEMENT

I would like to express my deepest gratitude to my mentor Dr. Shalini Trivedi, Assistant

Professor, Amity University for guiding me throughout my summer internship. she took time out

of her highly busy schedules to help me during my summer internship.

I would also like to thank my program leader Ms. Teena Bagga and the entire team and staff of

Amity Business School, Amity University for their kind support.

I would like to express my heartiest thanks to my supervisor, Mr. Rajnish Gupta (Senior

Executive, Business Administration). He helped me at every step of my internship to provide mea great environment for learning, conducive to skill development and knowledge sharing and

having a great industrial experience.

I would also like to take the opportunity to thank Siemens Ltd., New Delhi, for making me a part

of the Siemens family for this short period of 8 weeks.

Last but not the least I would like to thank Siemens Staff and my fellow interns at New Delhi, for

their continuous cooperation that helped me in successful completion of this training.


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Table of Contents

ACKNOWLEDGEMENT ............................................................................................................. iv

ABSTRACT .................................................................................................................................. vii

CHAPTER 1 ................................................................................................................................... 1

1.1. Introduction: ......................................................................................................................... 1

1.1.1 PROJECT MANAGEMENT: ........................................................................................ 1

CHAPTER 2 ................................................................................................................................... 6

2.1. COMPANY PROFILE- SIEMENS LTD. ........................................................................... 6

2.1.1. VALUES & VISION : ................................................................................................... 6

2.1.2 SIEMENS ORGANIZATIONAL OVERVIEW: ........................................................... 7

2.1.3 SIEMENSI&L OPERATIONS OVERVIEW: ............................................................. 10

CHAPTER 3 ................................................................................................................................. 14

2.1. Literature Review: .............................................................................................................. 14

CHAPTER 3 ................................................................................................................................. 18

3.1. Research Design: ................................................................................................................ 18

3.2 Objectives: ....................................................................................................................... 18

3.3 Research Design: ............................................................................................................. 19

3.4 Participants: ..................................................................................................................... 20

3.5 Data Collection: ............................................................................................................... 20

3.6 Instruments used: ............................................................................................................. 20

3.7 Procedures: ...................................................................................................................... 20

CHAPTER 4 ................................................................................................................................. 22

Data Analysis: ........................................................................................................................... 22

4.1 Various Phases of Project:................................................................................................... 22

4.1.1 Project Sales: ................................................................................................................ 22


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4.1.2 Project Execution:......................................................................................................... 29

4.1.3. Warranty: ..................................................................................................................... 40

4.2. PRODUCT OPERATIONS MANAGEMENT IN RESPONSE TO A SPECIFIC

ENQUIRY: ................................................................................................................................ 41

4.2.1. Marketing - Problem, Solution and Client interaction: ............................................... 41

4.2.2. Design: ......................................................................................................................... 44

4.3 PRODUCT OPERATIONS MANAGEMENT IN RESPONSE TO A GENERAL

ENQUIRY: ............................................................................................................................ 46

4.3.5. Bidding: ....................................................................................................................... 49

4.3.6. Tender evaluation and decision: .................................................................................. 49

4.3.7. Design: ......................................................................................................................... 50

4.3.8. Sales: ............................................................................................................................ 50

4.3.9. Installation: .................................................................................................................. 51

4.3.10. Maintenance and Service under warranty: ................................................................ 51

4.3.11. Post-Warranty Maintenance and Service: ................................................................. 51

CHAPTER 5 ................................................................................................................................. 60

5.1. Conclusion and Recommendations: ................................................................................... 60

REFERENCES: ............................................................................................................................ 62


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ABSTRACT

Project management is the process of planning and organizing an organizations resources in

order to move a specific task, event or duty towards completion. A project manager will help

define the goals and objectives of the project, determine when the various project components

are to be completed and by whom, and create quality control checks to ensure that completed

components meet a certain standard. Customer satisfaction can be seen either as a goal or as a

measurement tool in the Project business. This paper examines the performance of Siemens

Limited, I&L division measured according to the degree of customer satisfaction as perceived by

customers themselves. The purpose of the study is to explore the clients main

satisfaction/dissatisfaction factors. The data is in the form of surveys gathered from theCompanys client. The views of customer with respect to the performance of company are

measured in light of various factors such as quality assurance and handover, environment and

safety at work, co-operation, personnel, site supervision and subcontracting. Several implications

regarding customer satisfaction were drawn from the findings of the research. Customers were

typically satisfied with the contractors abilities to co-operate and the skills of contractors

workers and supervisors. In contrast, lower satisfaction could be found for the items related to

quality assurance and handover procedures and material. In generally, the quality of contracted

work and of overall service level has an effect on general satisfaction.

Siemens is a global company headquartered in Munich, Germany. It primarily deals in Four

Sectors- Energy, Healthcare, Industry and Infrastructure & Cities. However, this shall be

discussed in more details in the pages that follow.

The report discusses about the various milestones a project undergoes and the subsequent tasks

and duties performed by Siemens for the unhindered execution of the same.

The report is the summary of my learning experience at Siemens. During my internship, I learnt

about using SAP software for generating goods receipt note (GRN), for making purchase orders,

etc. I was taught about the process of Vendor Management and the management information

system used by Siemens.


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CHAPTER 1

1.1. Introduction:

1.1.1 Project Management:

The project management at Siemens supports the continuous improvement of Project

Management processes, which can in turn help the organization to strive towards business

excellence. It relates to the successful delivery of a project with a goal, scope, deadline,

budget, and other constraints. These operations work to align resources, manage issues and

risks, and basically coordinate all of the various elements necessary to complete the project

on time and under budget while meeting the defined goals and objectives. Moreover, a

project at Siemens can also be defined as managing a cluster of products. Asthey relate to

products, projects can be undertaken to build a product that constitutes a varied cluster of

products and sub-parts that can themselves either be of Siemens or some other company.

It has the following objectives:

1. Harmonization and standardization of processes, methodologies and tools.

2. Offering a platform for best practice exchange and transfer.

3. Defining minimum requirements for project management.

4. Providing a Career Model to support the development of Project Managers.

5. Defining tools and systems for performance measurement and successful projects.

6. Implementing assessments to measure the maturity of processes and areas to

improve.

Project Management at Siemens follows a generic Project Phase model. The model

demarcates different phases and milestones that are crucial in the successful completion of

the project along with any further detailing necessary. The individual process operations are


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staggered in a practical fashion, on the basis of the integrated project schedule. Hence this

linear process approach also makes sense for projects business. To record the completion of a

process step, each milestone is accorded mandatory results. This provides the basis for

introducing Key Performance Indicators, allowing the quality of project processing as well as

on-time performance to be measured.

Fig 1.1: Project Sales Phase Model

Image Source: (Examples of the Phases of Project Management Model)

The project phase model is much more structured, methodological, demarcated and

hierarchical than the steps of product operations in terms of aligning its various phases,

especially when compared to product operations with tendering. Project Management at

Siemens defines and integrates the processes involved in project handling in a uniform

manner. Moreover, it has a swift and smooth handover in between the phases of the process.

Siemens uses an internal tool known as Limits of Authority for the requisite approval of

authorities regarding the terms and conditions of the project. It also uses tools like SAP,

Nexus, Quality Gate etc. for the accomplishment of the project.

Project Management at Siemens is defined for 3 types of projects:


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1. Plant and Solution projects: These are the major projects that require many stages

such detailed planning, design, manufacture and sourcing, installation,

commissioning etc. for major plant and solution project that Siemens has to build

for its clients. Since these are Siemens flagship projects that can completely

enunciate the sophisticated and complex PM operations at Siemens, the phases

described below relate to plant and solution projects.

2.

Service projects: These are the projects where Siemens has to perform some kind

of service so as to ramp up the operations of any project that is already functional

at a clients place. The PM phases for service projects are pretty similar to those

of the plant and solution projects, except for that dispatch, construction and

commissioning of the project, are replaced with transition, transformation and

handover phases.

3. Small Projects: These are very small projects that are performed with limited

resources and within very small time periods. In this PM, most of the phases of

Plant and Solution projects are clubbed together to form a single phase with a

single milestone.

All the projects start in a similar fashion, however, the Small Projects and Plant Solution

projects end at PM700 (End of Warranty) while the Service Projects end at PM1000 (End of

Obligations).

Fig 1.2: Various Phases of a Project

Image source: (5 Basic Phases of Project Management)


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The INITIATION Phase:

This process is primarily about identification of an opportunity (project). Opportunities are

made available via news and media. This phase determines about the nature and scope of the

project. It is essential to do this process very carefully for the successful execution andcompletion of the project. It is very important to know and understand about the project plus

about the environment that surrounds the business before the project is carried out.

The PLANNING Phase:

This process mainly deals with the planning related to the project. After the initiation

process, full planning is done regarding the project that is taken up. Also planning related to

the best alternative course of action that should be taken is also decided. The main planning

regarding time, cost and resources needs to be done. This is done to effectively manage risk

during project execution. For the successful completion of the project, to achieve the goals

and to avoid any failure, the project should be appropriately planned. Siemens uses a tool

known as Limits Of Authority (LoA) which is the internal approval of authorities for the

external processes.

The EXECUTION Phase:

Execution process involves the processes and tasks that are taken up for the completion of

the work defined in the project management plan for accomplishing the project's

requirements. Execution process involves coordination of people and other resources, as well

as performing the activities of the project in accordance with the project management plan.

For this phase Siemens uses Vendor Management and various other software to execute it in

a well-organized and less chaotic manner.

The CONTROLLING Phase:

Monitoring and controlling involves measuring and observing the execution of the project.

This is done to identify the problems that come and taking the corrective actions at an

appropriate time to control the execution of the project. Any variances from the planned

actions are measured regularly. For Phase in particular Siemens uses Management

Information System (MIS).


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The CLOSING Phase:

Ending the project and formally accepting it, is done under the closing process. Each project

is to be completed within a scheduled time as per the defined contract terms and conditions.


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CHAPTER 2

2.1. Company Profile- Siemens Ltd.

Siemens Ltd. is a part of Siemens AG, A German multinational conglomerate company

headquartered in Munich, Germany. It is a leading powerhouse in electronics and electrical

engineering with a business volume aggregating about Rs.12000 Cr. It operates in the core

business areas of Industry, Infrastructure & Cities, Energy and Healthcare.

Siemens which originally founded on 12 October 1847 by Werner von Siemens placed its

roots in India in 1867, when Werner von Siemens personally supervised the laying of the first

telegraph line between London and Calcutta. The line, stretching for 11,000 km, was one of

the fastest and amost reliable telegraph links in the world, and passed through four different

sovereign territories and the Black Sea. The line was completed in 1870, overcoming

financial, technical and logistical challenges. A message could be transmitted in 28 minutes

instead of the 30 days that mail took between India and England.

Siemens established its first office in 1922 in Mumbai and Kolkata. Its first assembly plant

began operations in 1956. Within the space of a few decades the company grew from a tiny

workshop under an arch of the Mahalaxmi Bridge in Mumbai, into Siemens Ltd. one of

India's largest companies in electrical engineering and electronics. Today, the company has a

sales and service network that spans the country, 21 manufacturing plants, eight centers of

competence and 10 R&D centers.

2.1.1. Values & Vision :

We are faced with challenges of unknown dimensions due to demographic changes,

urbanization, climate change and globalization. The economic and financial crisis is

aggravating these global challenges by changing the economic conditions very rapidly,

deeply and continually. The change we are currently experiencing will go on and continually

transform our world.


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Against the background of these global changes, we are redefining the standard we have set

ourselves and, as a result, our vision. Siemens the pioneer in

Energy Efficiency.

Industrial Productivity. Affordable and personalized healthcare.

Intelligent infrastructure solutions.

Values: We say it we mean it

Responsible: Committed to ethical and responsible actions.

Excellent: Achieving high performance and excellent results.

Innovative: Being innovative to create sustainable value.

2.1.2 Siemens Organizational Overview:

Siemens Limited is divided into four business sectors that are each subdivided into divisions,

business units and business segments. The structure is detailed as:

Fig 2.1: Siemens Organizational Structure

Image source: (Siemens. Siemens Ltd., 30 Jun. 2013)

2.1.2.1. Energy:


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The energy sector at Siemens provides customers with products, services and

solutions in the areas of power generation, power transmission, power distribution

and oil and gas production. The energy sector is subdivided into:

a. Energy Service

b. Fossil Power Generation

c. Oil & Gas

d.

Power Transmission

e. Wind Power

2.1.2.2 Industry Sector:

The industry sector at Siemens helps industry and infrastructure customers to increase

their economic and environmental competitiveness. It is again subdivided into:

f. Drive Industrial Automation

g. Technologies

h. Customer Services

i. Metals Technology

2.1.2.3. Healthcare sector:

The healthcare sector, as the name suggests caters to providing products and solutions

for a variety of healthcare services. These services can range from prevention, early

detection to diagnosis, treatment and aftercare. It is subdivided into:

j. Clinical products

k. Imaging and therapy

l. Diagnosis

m. Manufacturing units

2.1.2.4. Infrastructure and Cities:


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The infrastructure and Cities (I&C) sector at Siemens caters to clients for sustainable

urban development, by providing them expertise products and solutions for the same.

The I&C sector is divided into the following:

a.

Rail Systems

b. Low & Medium Voltage

c. Smart Grid

d. Building Technologies

e. Osram (Lighting)

f. Mobility & Logistics: The division provides hardware, software and service

bundles for the optimization and automation of traffic and transport networks onroad and rail as well as for airports and harbors. The Division is in charge of all

the businesses of mobility and logistics management for people and goods. These

include rail automation, infrastructure logistics, and intelligent traffic and

transportation systems along with all the electro-mobility infrastructure activities.

The Division has been further divided into 3 Business Units (BU):

i. Rail Automation (RA)

ii.

Complete Transportation & e-vehicle infrastructure (CTE)

iii. Infrastructure & Logistics (IL): The business unit Infrastructure &

Logistics (IL) offers solutions for reliable transport of goods and

information. It provides comprehensive single-source solutions, ranging

from engineering, mechatronics and IT systems to operation and

maintenance services. The major business areas (segments) of IL are:

1. Logistics and Airport Solutions

2. Ports Logistics

3.

Customer Services

4. Logistics IT


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5. Postal Solutions:It includes the automated sorting mechanism for

the postal system.

2.1.3 Siemens I&L Operations Overview:

The operations at Siemens Infrastructure and Logistics division are demarcated into the

following two types:

2.1.3.1 Project Management:

Project operations relates to the successful delivery of a project a one-time

endeavor with a goal, scope, deadline, budget, and other constraints. A project

manager who oversees these operations will work to align resources, manage issues

and risks, and basically coordinate all of the various elements necessary to complete

the project. Moreover, a project manager ensures that the project is delivered on time

and under budget while meeting the defined goals and objectives.

A project at Siemens may also be defined as managing a cluster of products. As

they relate to products, projects can be undertaken to build a product, to add new

features to a product, to create new versions or extensions of a product, to install a

product or to service a product. When the project is complete, the project manager

will usually move to a new project, which may be related to a different product.

2.1.3.2 Product Operations Management:

Product operations management at Siemens takes care of the entire process of a

product from the beginning till the end, where a product is marketed, designed and/or

refined and finally sold to the client.

The product operations mainly pertain to the products that are entirely of Siemens, i.e.

the products that are designed, technologically developed and manufactured by

Siemens and constitute of Siemens sub-parts. Thus, the product operations can also be

said to be related tosmallSiemens products. This is because the development, design,

manufacture and implementation of big products sold by Siemens can take much time

and the products would constitute of many sub-parts both from Siemens and from

other companies. As a result, the operations for each would constitute an entirely new

project, and would come under the realm of Project Operations. Thus, as we will see


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later, the design phase and installation and service phase needed in theproduct

operations do not necessarily take much time because of the small products.

The scope of product operations begins once the project to manufacture/implement

the product is complete. A product manager is at the helm of a Siemens productoperations and his responsibility is to oversee the overall and ongoing success of a

product. A product manager manages the product through the entire lifecycle. Other

projects related to the product may be initiated, with the product manager being the

one constant stream throughout, defining the project goals and guiding the team to

accomplish the business objectives that have been defined.

Fig 2.2: Project Life Cycle at Siemens

Image Source: (Siemens. Siemens Ltd., 30 Jun. 2013)


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The product at Siemens can be one of the following types:

Standard:

A standard product is a pre-existing product at Siemens where no changes are

made before offering it to the customer. Thus, a standard product always comes

with a well-defined set of physical design features, specifications, controls and

performance guidelines that cannot be altered as per the requirements of the

customer. These design, requirements and guidelines are documented in a product

catalogue that is offered to the customer as a potential solution to their

requirements. Thus this type of a product is referred to as a Direct Sell to the

customer by Siemens since it is sold without any alterations.

The standard product may sometimes be readily available in the companyinventory. Otherwise it has to be manufactured once the customer places an order

for the product. Moreover, even though no changes to the design and functionality

of the product are made, the price of the product may not be standard as it may

vary according to different criteria across regions such as geographical locations,

rules and tariffs, the client profile, contacts and previous relations with Siemens

etc. among others.

Customized:

A customized product at Siemens is the one where minor modifications are made

to the design, functionality or physical specifications etc. of a pre-existing

Siemens base product so as to make it suited for the demands and problems of the

specific customer. Thus, a design phase is added during the operations

management of this type of products so as to make the desired modifications as

per the requirements of the customer.

i.

Specially developed:

A specially developed product at Siemens is a new product developed using pre-

existing base parts, technology and expertise at Siemens to suit the specific needs

of a particular customer. Along the same lines, specially developed products can

also be drastically modified versions of a pre-existing Siemens base product. This


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type of product does not have any product catalogue or any other specifications.

Thus, a design phase is required in these products as well to plan/design the

product using just a problem description, previous experiences with similar

products and a vision of a solution that has been developed by Siemens in

conjunction with the customer. Moreover, this type of products requires a greater

amount of time spent on the design phase as compared to the customized products

because the product has to be built/implemented from scratch.


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CHAPTER 3

2.1. Literature Review:

Customer satisfaction has become one of the key issues for companies in their efforts to

improve quality in the competitive marketplace. Customer satisfaction is considered to affect

customer retention and, therefore, profitability and competitiveness (Sullivan & Andreson,

1993). According to (Jones & Sasser, 1995), complete customer satisfaction is the key to

securing customer loyalty and generating superior long-term financial performance. It is also

apparent that high customer satisfaction leads to the strengthening of the relationship

between a customer and a company, and this deep sense of collaboration has been found to

be profitable (e.g. Storbacka et al. 1994).

Accordingly, customer satisfaction is an important factor in the development of the

construction process and the customer relationship. It is natural that managers in the project-

based industry should be concerned about customer satisfaction because of its expected

influence on future projects and word-of-mouth reputation. However, so far, customer

satisfaction in the project-based industry is under-researched. For example, (Torbica & Stroh,

2001) emphasize that the use of soft performance criteria, such as customer satisfaction, is

at an early evolutionary stage in construction. In addition, the main focus on customer

satisfaction approaches in the construction has been on house building.

Up-to-date information about customer satisfaction is important for successful management

of complex projects. The importance of customer satisfaction is emphasized in the case of

project-based organizations, where a customer often plays an integral role in the project

delivery process. Turner and Keegan (2001, p. 256) elegantly define project-based

organization as an organization in which: the majority of products made or services supplied

are against bespoke designs for customers According to (Winch, Usmani, & Edkins, 1998)

the client organization can have a great deal of influence on project success. Information

about sources customer satisfaction or dissatisfaction can be used to ensure that both project

product and the delivery process meet customer expectations.


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In accordance with (Kujala & Ahola, 2004), we define customer satisfaction measurement

system to include entire process consisting of:

Gathering information concerning customer satisfaction

Assessing the validity and reliability of this information

Using this information in decision-making processes

This wider definition emphasizes the use of information. (Gronholdt, Martensen, &

Kristensen, 2000) has demonstrated that there are significant challenges related to the use of

customer satisfaction information in organizational decision making processes. A company

must periodically measure customer satisfaction in order to learn how satisfied its customers

are. (Torbica & Stroh, 2001) argue that, in construction, the extent of customer satisfaction is

only known late in the project when most of the customers money has already been spent.

When companies know which attributes of a service or product affect customer satisfaction,

Their challenge is to modify their current offering in a way that would lead to maximum

customer satisfaction. According to an earlier study, based on RALAs feedback data (Kujala

& Ahola, 2004), factors of quality and co-operation have a strong effect on overall

satisfaction. Therefore, these factors can be used as a basis for improving overall satisfaction.

The study emphasises the fact that the contractors ability to co- operate can reduce the

adverse impact of poor quality assurance in the completion stage. There also exists adependency between the quality of the overall service level and the quality of the contracted

work.

In order to measure customer satisfaction in construction, the main subjects must be

identified. A customer may be defined as the owner of the project and the one that needs the

constructed facility. In simple terms, the customer is the buyer of the product or service.

(Chase & Bowen, 1991) describes the customer as a body that incorporates the interests of

the buyer of construction services, prospective users and other interest groups. Ireland (1992)lists the potential customers that have expectations and requirements that affect the outcome

of a project. This wider perspective on the customer includes: the co-contractors and

partners, project director, project team members, contractors and subcontractors, vendors and

suppliers, users of the product and services and society. It is also important to note that there

are generally several persons involved in a buying decision.


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This buying centre includes all persons involved in the procurement of the service and

consists of the following: decider, influencer, purchaser, gatekeeper and user. Customer

satisfaction is affected by the roles of individual members of the buying centre in terms of

interests and goals, the decision process and structures (Lin & Jones, 1997).


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CHAPTER 3

3.1.Research Design:

The process used to collect information and data for the purpose of making business decisions.

Research can be one of the most interesting features of any degree course as it offers you a

measure of control and autonomy over what you learn. It gives you an opportunity to confirm,

clarify, pursue or even discover new aspects of a subject or topic you are interested in.

The methodology may include publication research, interviews, surveys and other research

techniques and could include both present and historical information. Research is not confined to

science and technology only. There are vast areas of research in other disciplines such as

languages, literature, history and sociology. Whatever might be the subject, research has to be an

active, diligent and systematic process of inquiry in order to discover, interpret or revise facts,

events, behaviours and theories. Applying the outcome of research for the refinement of

knowledge in other subjects, or in enhancing the quality of human life also becomes a kind of

research and development. Research is done with the help of study, experiment, observation,

analysis, comparison and reasoning. Research is in fact ubiquitous. The methodologies are of

two types which are basically used: Positivistic and Phenomenological.

3.2 Objectives:

3.2.1 Primary Objectives:

To get a fair understanding of the entire Project Management process.

To understand the important attributes related to the customer satisfaction in project

business by analyzing the surveys and feedback from the customer.

3.2.2Secondary Objectives:


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To get a holistic view of day to day activities performed by Mobility and Logistic

division under Siemens AG

To get familiarized with tools such as SAP (System Application and Product) and various

other corporate tools.

3.3 Research Design:

While doing research, there are different types of research which are used. Hence in every

research specific approach is used.

Descriptive Research: Descriptive research can be used to identify and classify the

elements or characteristics of the subject, e.g. number of days lost because of industrial

action. Quantitative techniques are most often used to collect, analyze and summaries

data.

Analytical Research: Analytical research often extends the Descriptive approach to

suggest or explain why or how something is happening, e.g. underlying causes of

industrial action. An important feature of this type of research is in locating and

identifying the different factors (or variables) involved.

Predictive Research: The aim of Predictive research is to speculate intelligently on future

possibilities, based on close analysis of available evidence of cause and effect, e.g.

predicting when and where future industrial action might take place.

The research design adopted in this research project is a mix of exploratory, analytical and

descriptive research designs. The exploratory is the design in which the major emphasis is on

gaining ideas and insights. It is conducted to provide a better understanding of the situation. It

isnt design to come up with the final answers or decisions. Through this approach, researchers

hope to produce hypothesis about what is going on in a situation. It was conducted by the use of

exploratory techniques like brainstorming to generate a number of possible occasions and their

reasons, choice of promotional offers that affect the preferences of consumers towards fast food


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industry. The objective of exploratory research is to identify key issues and key variables. For

example, one outcome might be a better system of measurement for a specific variable.

Descriptive research seeks to provide an accurate description of observations of a phenomena.

The object of the collection of census data is to accurately describe basic information about anational population at a particular point in time. The objective of much descriptive research is to

map the terrain of a specific phenomenon. A study of this type could start with questions such

as: What similarities or contrasts exist between A and B, where A and B are different

departments in the same organisation, different regional operations of the same firm, or different

companies in the same industry. Such descriptive comparisons can produce useful insights and

lead to hypothesis-formation.

3.4 Participants:

Sample size: -Sample size determination is the act of choosing the number of observations or

replicates to include in a statistical sample. In this project the sample comprises of the senior

executives, project manager, project supervisor and the top management of the company, which

must be around 50. From this sample size we will try to conclude about the whole population.

Sample Coverage: The sample coverage refers to the area covered by the target population. Inthis research project the target population is Siemens' client of RMGL project.

3.5 Data Collection:

Field survey:In this research project, I have scrutinized the primary data of the company which

includes company's contracts, reports and customer feedback surveys..

3.6 Instruments used:

The research instrument used in this project is survey method.

3.7 Procedures:

Software used: Software is any set of machine readable instructions mostly in the form of a

computer program that directs a computers processor to perform specific operations. The


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software used in this research is IBM SPSS Statistics v19. It is a software package used for

statistical data analysis. (SPSS: Statistical Package for the Social Sciences). So I will fill all the

details in SPSS software and analyse the different statistical data required for the project.


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CHAPTER 4

Data Analysis:

(Understanding how the project business is handled in Siemens Limited and how it helps in

achieving customer satisfaction)

4.1 Various Phases of Project:

The basic project management model phases are as follows (Please note that the milestones

for each phase are given in brackets):

4.1.1 Project Sales:

Project Sales is the same as marketing, bidding and sales phase as seen in product

operations. Here the teams at Siemens start with lead management, followed by

marketing, bidding and on until finally the bid decision has been made. If Siemens

wins the bid, the process moves onto the project handover and official start of the

project at Siemens.

i. Pre-Acquisition (Milestone 1Acquisition Go/No Go decision):

This is the pre-acquisition stage that starts with the Lead Management, i.e.

generation of potential business clientele through marketing efforts at Siemens.

Here again, as in product operations, the marketing teams at Siemens keep a

watch on the latest trends in the market, the competitors and potential client

organizations. The main idea is to find an existing demand or an opportunity that

could create a potential sale for a Siemens product.

The key steps taken by the marketing team at this stage are, first, to analyze

inquiry/identify expected business that can be a potential lead for the acquisition.

Second, they have to identify the internal business coordinators that could have an

impact, either positive or negative, on the potential acquisition process.

Third, the team at Siemens has now to create or adapt a business plan that would

come in handy in the future steps of the process. Moreover, they have to assess

the expected business that can be generated out of the potential acquisition.


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Fourth, the team has to generate information for the Siemens product portfolio

process. This would be the tool necessary to present to and convince the clients

for the acquisition. Fifth, the team has to record the pre-acquisition and project

data that can be compared to the final data once the project is started or finished.

Moreover, this data can be kept for future reference for similar projects.

The few key deliverables that have to be completed so that the project can move

on to the next phase are:

1) Investment approval from the senior management for defined sales resources

to be utilized for making the sale.

2) An outline of the description about the customer, as well as the business

context in which the client operates for whom the project is about to be

undertaken.

3) Identification of the expected order from the client, and an outline description

of the same. This would detail the scope of supply for the order, as well as

estimate the anticipated sales numbers from the client.

Based on the above deliverables, an acquisition go/no go decision is taken for

the project from the client, and is the milestone for this stage.

ii.

Project Acquisition (Milestone 2

Bid Decision):If an acquisition go decision is taken, Siemens starts the process to acquire the

project. The tender offered by the client is purchased so as to make a detailed

study of its requirements. The tender document, along with all other supporting

documentation is circulated to the bid team at Siemens.

The bid team then, first, evaluates the expected business that can be generated out

of the given project for Siemens after a careful estimate. This is required for

taking a bid/no bid decision, and so the bid team requires a detailed look at the

tender documents and specifications. Special attention has to be paid to the profit

potential vs. risks and potential hindrances of the contract.

Second, the bid team has to analyze and structure the customer requirements. For

instance, a contract can sometimes contain terms that Siemens is not ready, or


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unable, to fulfill. Again, the bid team analyses the requirements to bid for the

tender such as past audited accounts, accreditation, certifications, references for

similar projects in the past etc.

To check if Siemens can fulfill the requirements in the tender, a ComplianceMatrix is developed. This is just a simple matrix that can be used to verify the

requirements of any regulation and finally summarizes, in a tabular form, to what

we agree on the terms of the tender and to what we dont.

Third, before making the bid/no bid decision, the team has to assess the

customers business field. Thus they have to assess the strengths, weaknesses and

competitive positioning w.r.t. Siemens. A SWOT (Strengths, Weaknesses,

Opportunities and Threats) study can be done to achieve this.

Fourth, the bid team has to develop a rough financing concept for the project.

Fifth, the bid team has to define the bid scope and determine responsibilities for

the upcoming bid estimation, generation, and marketing and approval process.

Sixth, the team has to perform a rough risk assessment for the project that would

include potential risks and their impact severity on the project.

Seventh, the bid team finally has to obtain an approval for the bid budget.

The key deliverables that have to defined and/or provided in this stage are:

1) Investment approval from the senior management for defined bid preparation

resources to be utilized in the bidding process.

2) Details of the bidding process and requirements. This must include a clear

definition of the resources required for the bid team, the project schedule and

time in place for the bidding process and planned bid costs to be incurred

during bidding.

3)

A detailed Compliance Matrix, to describe and tabulate the terms of tender

with which Siemens can fulfill and which it cant.

4) A supplemented Expected Order document.

5) A documented customer inquiry.


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6) Analysis of context in which the clients business is operating. This is very

important to understand the client, and hence a thorough SWOT analysis

has to be conducted. SWOT analysis is a structured planning method used to

evaluate the Strengths, Weaknesses, Opportunities and Threats involved in

the project that are favorable and unfavorable to achieving that objective.

7) An analysis of the planned project/service share and volume involved.

8)

A rough risk estimate for undertaking the project.

9) A rough cost estimate in undertaking the project.

10)Analysis of expected profit that could be generated from this project.

At the end of this phase, the bid team at Siemens has to come up with a

Bid/No bid decision.

iii. Bid Preparation (Milestone 3Bid Approval):

If bid decision is taken, the team starts the bid preparation phase. During this

phase, Siemens has to prepare a quote for the price to be bid for the project. Thus,

a bid project is set up in this phase, and then subsequently the team sets up and

completes different bid parts individually. The price to be quoted by Siemens is

an estimate achieved by detailed analysis and documentation of the total price

expected to be incurred for the product including the additional design phase. This

price includes the estimates for everything ranging from the costs of expected

man-hours to the price lists of parts, materials and other costs involved. These

estimates are provided by Siemens based on its previous technical expertise in the

field.

At least 10% of the design is completed is completed in this phase. This is to

show our interest before the clients, and to have a strong base for our pre-bid

negotiations, our estimates for the price quoted on the bid and our expected ROI

from the project.

Pre-bid meetings are held for different purposes before Siemens makes the final

bid/no bid decision. First, they are used for clarification about the terms and

requirements placed forth by the buyer in the tender without disclosing the price

estimate of Siemens. Moreover, they are used for negotiations between the buyer


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and Siemens. The negotiations can be about different aspects of the tender, such

as the value, terms, conditions, pre-requisites etc. Additionally, a pre-bid meeting

can be used by the buyer to gauge the expression of interest from the supplier.

Once the tender document, the bid, and the additional documentationrequirements have been completed by the bid team, they go for an approval from

all the organizations involved in the process. Once all the approvals have been

generated, all documentation is forwarded for approval again from the Siemens

management. The bid approval thus received would ultimately lead to the creation

of an LOA or a Letter of Agreement.

The key deliverables in this phase are:

1)

Detailed project description that would contain the project plan and the

solution.

2) Detailed project cost calculation, including details for the project sales and the

Economic Value Add (EVA) for the project.

3) Completed bid documentation, which would include the completed tendering

document, the additional documentation for certifications and accreditation,

and references for similar works in the past.

4) Defined Negotiation Framework", which would detail the negotiation points,

topics and strategies for the negotiation process.

5) Approval by all organizations involved in the process.

6) Current Risk Assessment. This can be achieved via identifying the hazards,

likelihood of occurrence, deciding who and what will be impacted and in what

severity, evaluating the risks and deciding on the required precautions, and

finally recording the findings.

7) Current project classification, i.e. defining the category under which the

project falls. The categories can be Plant and Solution projects, Service

projects or Small projects.

8) Approval for submission of bid to customer by the Siemens management.

9) Signed bid approval


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Thus, the milestone of this phase is the Bid Approval, and once it has been

achieved, the project can move onto the next phase.

iv. Contract Negotiation (Milestone 4Project Won/Lost):

This phase starts with the Siemens team handing over the bid to the customers.

Thus, now is the time for the contract to be negotiated and drafted.

As a result, the team starts to prepare for and realize the customer presentation, if

in case it has not already been done during the marketing and lead management

phase at the start of the project management process.

Once the bid has been submitted, the customer goes over it and processes it for

any changes it may want in the bid that has to be incorporated in the contract. The

customer may decide to give feedback to Siemens. Siemens in return has to

process the customer feedback carefully and in detail again in order to decide

whether or not to make the desired changes from the bid to the contract. The

changes can with respect to the resources, legal aspects, solutions etc.

Now comes the time for contract negotiations between the customer and Siemens.

The teams at Siemens have to develop a negotiation strategy that has to be

adhered to while negotiating with the customer for the changes from the bid to be

incorporated in the contract. Siemens organizes and conducts contract

negotiations with the customers, wherein both parties try to get the best out of the

deal for themselves.

Finally, toward the end of this phase, the teams at Siemens have to obtain

approval for contract signing with the clients from the senior management at

Siemens.

The key deliverables of this phase are:

1) A signed acknowledgement of order

2) Final contract documentation, which is received after making negotiations

with the customer and making changes to the bid.


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3) Described changes to the bid (resources, legal aspects, solutions, etc.) that

have to be incorporated in the contract, presumably after negotiating is done

with the clients.

4) A new and revised risk evaluation. This evaluation would be more detailed

than the previous phase and would include risk assessment, likelihood of

occurrence and actions to reduce risk.

5)

Approval of the projects revised risk evaluation by Risk Review Board in

charge.

6) Adapted escalation level that has to be defined for the project.

Once the contract negotiation phase if over, the final milestone is that the Project

is won/lost. In any case, i.e. even If the project is won or lost, the process now

moves on to the next phase.

v. Project Handover- Marketing team to Execution team (Milestone 5 Start

Project):

The process now moves on to the project handover phase. The first step taken

during this phase is to allocate an Overall Project Manager and a Commercial

Project Manager. These project managers are responsible for overseeing the

project from now on. A project manager works to align resources, manage issues

and risks, and basically coordinate all of the various elements necessary to

complete the project. Moreover, a project manager ensures that the project is

delivered on time and under budget while meeting the defined goals and

objectives.

The Siemens team then updates the project data, and the project documentation is

then handed over to the project manager. This would include all updated project

information including bid and the latest contract documents, along with the

changes between the two. Moreover, and importantly though, the project scope of

delivery and cost calculation is finalized and adapted for the project.

In the case of either won or lost projects after the previous phase, a final dialog is

held with the bid manager. This is done in order to analyze won/lost orders, and

the analysis has to be documented so that it can aid Siemens future endeavors in


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Second, the project manager now opens a project account that has to be used for

all the budgeting needs and monetary allocations for the project till it is

completed.

Third, the project manager performs a detailed check of the site that would beused for the construction of the project. Fourth, the manager has to keenly and in

detail verify and clarify the contract in legal and commercial terms. This can be

done either with related Siemens departments, the bid team or the clients.

Fifth, the project manager has to complete the as-sold cost calculation, i.e.

difference between the cost quoted on the bid, and the cost now that the project is

about to start. The as-sold cost calculation is done via completing the Order

Value Sheet. The Order Value Sheet defines the overall value of the project in

terms of its total costs. Apart from defining the value and costs, the OVS also

analyses the difference between the price quoted by Siemens in the tender and the

current price when Siemens has won the tender and the project is about to be

undertaken. This price difference may occur due to factors such as inflation etc.

between the times specified. Thus, the Order Value Sheet defines the current

profit margin and the change in profit margins for Siemens due to difference in

these prices i.e. the one quoted on the bid and the current price.

For instance, lets suppose the cost for the project was $100 in 2012, and Siemens

intended to keep a 20% profit margin. Hence the final price quoted on the bid for

the tender in 2012 was:

$100 + (0.2x$100) = $120.

Once the tender has been awarded and the project is about to be undertaken in

2013, the costs may have risen to $110, whereas the final price would remain the

same as stated in the tender. Hence, the profit margin for Siemens would go down

to:

($120-$110)/$110 = 9.1%

This change in margin from 20% to 9.1% would be reported on the Order Value

Sheet by the project manager.


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Eighth, the project manager now has to perform, or get a different entity or

organization to perform, a project assessment. This is done through Project

Management Assessment (PMA). PMA performs an in-depth analysis of current

project management methods, resources, tools and technology to uncover gaps,

potential risks and opportunities for improvement in the project. PMA

evaluatesthe existing project methodology against the industry best practices in

order to provide proper recommendations that can then be implemented by the

project manager.

To summarize, the key deliverables for the Project Opening and Clarification

phase are:

1) Project organization completed. This would include bringing people in the

project team and defining and demarcating their roles and responsibilities.

2) Detailed agreement with customer on the scope of deliveries/services and

specifications.

3) Change and claim strategy completed.

4) Contract structures adapted. This would include the latest contract structure

agreed upon with client after making changes to the bid.

5) Target agreements drawn up.

6)

Project structure created. This is done by defining the scope of the project, and

then completing the Work Breakdown Structure (WBS) to demarcate the

phases or work packages in the project. Moreover, a Project Schedule (MS-

Project) is defined by combining the phases of the WBS with their respective

start dates and durations in a graphical form.

7) As-sold cost calculation finalized using order value sheet (OVS).

8) Project Assessment (PMA).

The milestone reached at the end of Project opening and clarification stage is

stated as Entry order clarified.

vii. Detailed Planning (Milestone 7 Approval of detailed planning):

Once the entry order is clarified, the project enters the detailed planning stage. As

the name suggests, a majority of design for the project is completed in this phase.


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The planning here refers to the project design and plan, and not to the definition

of project structure, which is done in the previous stage.

In this stage, first, the project manager has to determine the technical basis for the

project. Then he has to define and take care of the solutions and implementationof approval for the project. For instance, the project manager now has to get an

Approval for erection for the project from the appropriate authorities.

Moreover, the manager will have to get approval for purchasing documents as

well.

Second, the manager and his project team now have to perform a detailed design

to be implemented in the project. Although some of the minor design was already

completed during the project sales phase, the remainder majority of the design is

completed at this stage. This is because the project manager and his team are now

absolutely clear as to the requirements of the client and the deliverables due from

Siemens as per the contract.

Third, the project team now has to create and release detailed specifications for

the project. Everything, from the projects technical requirements and pre-

requisite inputs to its physical performance metrics and dimensions are clearly

defined in the detailed specifications created by the project team in this stage.

Fourth, in continuation with the previous stage, the project manager now has to

freeze the basic schedule of the project that was defined in the last stage. The

project schedule that has been revised and reviewed since the last stage is now

deemed final.

Fifth, the project manager has to complete the sourcing concept for the project.

This means that the manager would have to define the material and other input

requirements for the project and their potential sourcing options. These sourcingoptions may include factors such as the potential suppliers, transportation etc. For

instance, apart from approval of the purchasing documents, the project manager

would have to list the selected suppliers and service providers for the project.


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Sixth, again in continuation with previous stage, the manager has to complete the

quality plan, i.e. a basic plan that intends to keep the final deliverable and the

process to achieve it adhering to a minimum quality requirement. Moreover, the

manager has to complete the detailed risk analysis for the project.

To summarize, the key deliverables of the stage to reach its milestone are:

1) Approved documents for erection.

2) Approved documents for purchasing.

3) Selected suppliers/service providers.

4) Completed service concept.

At the end of this stage, an Approval of detailed planning would be received as

the milestone for this stage.

viii. Purchasing and Manufacture (Milestone 8Dispatch Approval):

The approval of detailed planning shifts the project into the Purchasing and

Manufacture stage. As the name suggests, the stage is used to conduct purchasing

of products not manufactured by Siemens, as well as sourcing and manufacturing

for most of the products that have to be developed locally at Siemens.

In this stage, first, the Project team manufactures own products of Siemens.

Second, the project manager places orders for the products that have to be sourced

from outside the company. Third, the project manager has to keep tracing the

progress of manufacture of the products within the company. If necessary, he has

to try and expedite the process so as to be completed qualitatively and well within

time. Fourth, the manager needs to perform the works acceptance for the

products. This means that when the manager gets the notice of completion

ready for the products, he would review the scope for the products as needed by

the project. He would then evaluate the products, whether from within the

company or from outside, on the criteria of their fulfilling their scope in terms of

performance and other metrics. If the products are as per the requirements of the

project, the manager provides works acceptance. The works acceptance can be in

the form of a certificate of acceptance.


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Fifth, and perhaps the most importance step of the process is that the manager has

now prepare the products for export to the project site. Thus, a packing list is

maintained with the weights and dimensions of packing units. Moreover, export

declarations and pro-forma invoice for customs clearance have to be prepared

if the products are being shipped to a foreign country. Additionally, packaging

and dispatch information has to be prepared and maintained in case there is a

loss or damage to the goods during transit. Once these things are completed, a

notification of the readiness for erection is generated.

Thus, as stated above, the key deliverables involved for this stage of the project to

reach its milestone are:

1) Notification of completion ready, indicating that all the products required for

the project are now ready to be reviewed, packaged and shipped to the project

site.

2) Packing list with current weights and dimensions of packing units.

3) Export declarations prepared, if the products are being exported.

4) Pro-forma invoice for customs clearance, if the products are being exported.

5) Packaging and dispatch information, to keep and maintain a record of the

goods in transit in case any loss or damage occurs to them.

6)

Notification of readiness for erection.

Once the above steps are completed, a Dispatch approval is granted to the

manager indicating that he can now ship the products to the project site. This

Dispatch approval is the milestone 8 Dispatch Approval indicating that the

project can now move on to the next phase.

ix. Dispatch (Milestone 9Materials and Sources at site):

During the Dispatch phase, first, the project manager obtains approval for

dispatch that is granted as the milestone for the last phase. Once the Dispatch

approval is received, the project manager plans, monitors and oversees the

dispatch of materials and resources to the project site.


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Third, the project manager, along with his team, organizes infrastructure needed

for the project. This can include organizing tools needed for the project, required

approvals etc. Fourth, the project manager receives the goods at the project site.

He reviews them and incorporates their details in the respective inventories.

Moreover the manager inspects the dispatched goods for signs of damage, or any

other mishap or malfunction that can prevent the particular resource from

functioning properly as per its requirement in the project. Fifth, the project

manager now plans the assignment of internal and external resources, depending

upon their source of origin, to be implemented in the project.

The key deliverables for this stage to reach its milestone are:

1) Goods received and incorporated in inventories, indicating the acceptance and

review of the goods on site.

2) Site ready for erection.

3) Resources available.

The milestone 9 - Materials and resources at site indicates the completion of the

dispatch phase.

x. Erection/Construction/Installation (Milestone 10Erection Completed):

As the name plainly suggest, this phase involves the actual construction, erection

and installation of the project at the site. Moreover, the phase also contains the

start of the commissioning process, such as preparation of commissioning

instructions.

Thus this stage involves only two, albeit very major and typically very long, steps.

First, the project manager has to install the plant/system. For this he has to use the

pre-defined detailed plans, designs and prototypes that had already been

developed during the Detailed Planning stage. This may take a lot of time

depending upon the nature, size and functionality of the project. Thus, it would

not be improper to say that this is the longest phase of the project management

cycle that requires constant effort and attention. Once the erection is completed,

the various erection reports have to be prepared by the project team.


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The second step is to prepare commissioning of the project. In short words,

Commissioning can be stated as the process of checking, inspecting and testing.

Commissioning is the process of assuring that all the components and all the

systems of the newly erected and installed project are designed, installed and

operating as per the operational requirements of the client. Thus, commissioning

is a complex set of engineering processes that ensures that all components of the

project, from small parts to big modules are functioning as per their requirements.

In this step, all the previous documents, including the erection documents, are

handed over to the commissioning unit within the project team. The

commissioning unit then prepares all the detailed commissioning instructions,

and, once done, declares the site ready for commissioning.

To summarize, the key deliverables for this phase to reach its milestone are:

1) Erection completed at site. This would indicate the completion of construction

and installation of the project at site.

2) Erection reports prepared by the project team,

3) Handover of all documents to commissioning. These documents would

include the erection reports as well.

4) Commissioning instructions prepare.

5) Site ready for commissioning.

Once the phase is completed, the milestone Milestone 10 Erection Completed

at site is reached.

xi. Commissioning (Milestone 11Commissioning Completed):

Once the erection is completed at site, commissioning phase begins. In this phase,

first, the newly constructed plant/system is commissioned. As stated in the

previous phase, commissioning in project management is to inspect and test that

various components, from small parts to bigger modules, of the newly constructed

and installed project are performing as per the requirements of the client. Second,

the commissioning unit within the project team now performs internal

plant/system tests.


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the clients, or by the clients teams themselves. Once the tests are performed, the

acceptance test documentation is drawn up.

Third, the project team at Siemens creates provisional customer documentation.

This documentation would include information about the operation andfunctionality of the plant/system. Such information would include the expected

inputs/outputs, the specifications of the plant/system, basics about the internal

components and parts, as well as the tests performed on it.

Fourth, Siemens now holds a final dialog with the customer. This is the last team

that the project team at Siemens would talk to the clients before the project enters

the warranty phase.

Fifth, Siemens requests the client to sign and provide a Provisional Acceptance

Certificate (PCA). This means that the current acceptance of the plant/system by

the clients is only provisional, and the plant/system would only be finally

accepted by the clients if it functions as per the requirements during the warranty

period.

The key deliverables for this stage to reach its milestone are:

1) Provisional Customer Acceptance (PCA) signed and received by Siemens.

This is only provisional, and the final acceptance would only be received after

the warranty period.

2) List of open points adopted together with customer.

3) Acceptance test documentation completed. This would detail the information

about the acceptance test and its results.

4) Provisional customer documentation drawn up. This would include basic

information about the specifications, functionality, parts and tests of the

product.

Once the stage is completed, Milestone 12 - Provisional Customer Acceptance

(PCA) milestone is received.


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4.1.3. Warranty:

This phase indicates the period in the project management life cycle where the

plant/system project moves into its warranty. During this phase, the project has been

handed over to the clients. Thus, Siemens is only indirectly involved in the project

from now on till the end.

xiii. Warranty Phase (Milestone 13Final Customer Acceptance):

When the project has been handed over to the customer, there are still many tasks

remaining that have to be completed by the Siemens project team.

First, they have to work on reducing outstanding points in collaboration with the

customer, so as to close the remaining loops in the project. Second, they have to

create the final customer documentation. Since the only documentation that hasbeen provided to the customer till now is provisional, the Siemens team now has

to make this final customer documentation as detailed and analyzed as possible.

Third, the Siemens teams have to archive the project. This is essential for efficient

record-keeping as Siemens works on a great many projects over the years. Thus,

this would make it easier to access the work, data, facts and other key points

about the project, and would come in handy in future projects that tote the same

lines as this project.

Fourth, the project team now has to create a final project report. This report would

detail each and every aspect faced along the project management cycle of the new

plant/system. All the aspects of every stage, including the project scope, plan,

design, manufacturing, building, erection, installation, commissioning and

warranty, are detailed in the report. This also makes it easier to document lessons

learned from the project.

Fifth, once all the above steps are accomplished, Siemens dissolves the project

organization, and the project manager and his team can then be redistributed to

other projects and departments. This can be termed as another milestone within

this stage known as Project Closure.


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Sixth, at the end of the warranty period, Siemens concludes its warranty. Seventh,

finally, once everything is completed satisfactorily and as per the requirements of

the client, Siemens requests the client to sign and provide the Final Acceptance

Certificate (FAC), which states that the client is now fully accepting all the

responsibilities of the product in all means from now on.

The key deliverables in this stage are:

1) Final Acceptance Certificate (FAC) signed and provided by the customer to

Siemens.

2) Bank bonds obtained from the customer.

3) Final customer documentation prepared and given to the customer about the

plant/system.

4) Final project report prepared and archived at Siemens.

Once Project Closure is achieved, and Siemens has completed its warranty, the

final milestone of this stage, and hence of the entire PM cycle is Milestone 13

Final Customer Acceptance.

4.2. PRODUCT OPERATIONS MANAGEMENT IN RESPONSE TO A SPECIFIC

ENQUIRY:

The operations model for a product at Siemens, in response to a specific enquiry for a pre-

defined and agreed upon type of product catering to a specific problem, follows the following

stages:

4.2.1. Marketing - Problem, Solution and Client interaction:

This is the first step of the process wherein a product is deemed sellable. This phase is

conducted for all the three types of products at Siemens irrespective of their design

needs. Additionally, the phase is conducted entirely by the marketing department at

Siemens. The process follows the following phases:

i. Phase IFinding the Problem:

This phase may also be called as Lead Management, where Siemens tries to

generate the leads for a potential business clientele through various marketing

activities.


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This stage starts with the marketing team at Siemens conducting an extensive

market research to gauge the existing market, technologies and products.

Additionally, towards this end they also have to keep a constant watch on the

competitors as well as new technologies entering the market. The marketing teams

at Siemens have to keep themselves abreast through internet, publications, industry

exhibitions, seminars etc. Moreover, the market research is more often than not

conducted by a visit by Siemens team to the potential clients location. This is

needed in order to understand the current scenario and how things are handled over

there. It can also give an idea of the problems involved with the current situation,

along with the ways in which it can be solved or just improvised upon.

Thus, the results of this market research and analysis are used in order to find

a). Existing demands or

b). Problems with the potential market.

These existing demands and problems can be in the form of potential needs based

on inefficiencies within the operations of different organizations that can justify the

sale of a Siemens product. Thus, the product concept would fulfill the demand

created by this need and tend to improve the current processes within organizations,

providing them with a ROI that can be measured on various aspects, such as time,capital, labor etc.

ii. Phase IIDeveloping a solution:

Based on the problems or demands found during the previous phase, Siemens now

postulates a standard, customized or specially developed product that can act as a

solution catering to this requirement. At this stage, the product has defined end-user

functionality that provides a solution to the problem and is the means towards an

end. Moreover, in case of standard products, it has clearly-defined specifications

like its physical or performance attributes and requirements. Again, in case of

customized or specially developed products, only the functionality is defined. Other

aspects such as physical attributes and specifications are estimated using the


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experience of Siemens technical expertise, estimated available labor, capacity and

time required that can validate the scope of the product.

iii. Phase III - Client Interaction:

This phase of the process starts with teams from Siemens interacting with the

potential client organization and briefly pitching in the crux of the product idea

before them. The interaction can be done in many ways like: a.) Industry

exhibitions, b.) Formal/Informal dinners and lunches, c.) casual conversation and

direct emails etc. Once the client seems interested after the brief, a detailed

presentation of the idea is conducted for the client. This presentation outlines the

problem with current processes and the estimated numbers that portray the extent to

which this problem is hampering the profits, performance or efficiency of the

organization.

Once the problem has been conveyed across the table, the presentation outlines the

Siemens product idea that could provide a potential solution. This presentation

may also outline the estimated overall cost for the client if it goes for this product,

after taking into consideration the costs that can be involved in the product R&D,

design, manufacturing, implementation and maintenance. The Siemens marketing

team also defines the expected client return-on-investment (ROI) from the product

that can be measured on various aspects, such as time, capital, labor, quality,

performance, efficiency etc. A cost vs. benefits analysis is presented along with

additional benefits, such as the advantages of Siemens technology and the extensive

after-sales service. Moreover it gives a comparison of the predicted performance of

the company with and without the product.

This presentation is followed by multiple contacts and mails to the clients to

understand their requirements and to answer their queries. The third phase of the

process involves a client visit to the Siemens AG headquarters in Germany where

the product has to be developed. A team of executives from the client organization,

accompanied by members of Siemens India, visit the manufacturing plant where the

actual physical know-how, technical specifications and functionality of the product

are detailed to the clients.


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4.2.2. Design:

Design phase at Siemens seeks to develop detailed specifications that emphasize the

physical solution for the clients requirements. During this phase, more than one

design can be developed that can provide the same functionality and usability as per

the needs of the user. It is up to the product manager and his team to decide upon the

final design that has to be implemented based upon their technical expertise,

individual experience or comparisons with the existing Siemens products.

The design phase is conducted for customized and specially developed products.

However, as already stated, the design phase is shorter for customized products as

they just need to be modified from a pre-existing base product. On the other hand, the

specially developed products have a longer design phase as they have to be designed,

developed and implemented for many parts from scratch to fulfill the demands of the

customer.

During the initial stages of the design phase, R&D is conducted to analyze the

resources required for the product design. Moreover, time and effort figures to

develop the product are estimated. This process may also include Capability

Research, i.e. the analysis of preexisting technology, knowledge and expertise at

Siemens, and estimates of the remainder to be garnered.

Once the design is deemed satisfactory, it is sent to the clients for approval. The

customer reviews the design and may suggest some changes. Depending upon the

extent and nature of the changes suggested, the process may take some time.

Moreover, the design may keep moving back and forth between Siemens and the

customer till a final design is agreed upon.

4.2.3. Sales:

Once the design phase is completed, the product moves into the sales phase.

Depending on the nature of the sale, i.e. whether it is a one-time sale or a deal for

continuous supply of the aforementioned products (existing or contingent), a Sales

Contract or a Sales Agreement is drawn.


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A sales contract is a contract whereby Siemens transfers the product to the client at a

price. It is a bilateral contract that can specify the following features and conditions:

i. Product description

ii. Price of the product

iii. Quantity of the product

iv. Payment terms and conditions

v.

Commercial

vi. Factory

vii. Tax different types of taxes, such as within a state or province, outside

the state, ED etc.

viii. The terms of delivery

On the other hand, a Sales Agreement is drawn between Siemens and the client that

defines the conditions for the sale of the product or a product line at a future time.

These conditions may include all of the above stated within a sales contract.

However, since the sales agreement is only a promise for sale at a future time, it does

notspecify the quantity of products within the agreement. Thus, it does not create any

right of the client in the product, till the product is finally sold via a sale contract.

Moreover, till the sale is finally closed via a sales contract, the risk of the product

remains with Siemens. As a result, a sales agreement can be used as a tool by

Siemens to offer better prices to the client for the product line, without committing

them to particular purchase quantities. Thus, all the future sales contracts for this

product or product line can be drawn upon using the base of this sales agreement.

4.2.4. Installation:

As discussed earlier, the installation phase occurs only for Siemens-manufactured

small products that are sold to the clients. Moreover, the installation option can come

in packaged with the product. Otherwise it can be optional, to be purchased by the

client in addition to the warranty offered on the product, as the clients may choose to

do this task themselves. The small products mentioned above can be like small spare

parts or sub-parts of a Siemens or another product. Only the installation for these

small products comes under the domain of product operations. This is because the


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installation and service of large products, if chosen by the client to be performed by

Siemens ,can be ext

Report on Siemens Project Managemenmt

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