Vendor Meet - 8th Feb 2010 : Piping Centre, Chennai.

Vendor Meet - 8th Feb 2010 : Piping Centre, ChennaiVendor Meet - 8th Feb 2010 : Piping Centre, Chennai

OBJECTIVEOBJECTIVEBHEL has grown very large and is committed to fulfill delivery commitments to Various Projects on a fast track.Turn Over increased by 85% from 2007-2008 to 2009-2010, and expected grow in similar scale.

This meet is planned to appreciate the preparedness required by the partnering Vendors, understand the need of delivering faster for meeting various project schedules.

Customers expect short time deliveries apart from meeting Quality requirements.


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2007-08 2008-09 2009-10B 2010-11P 2011-12 P

Physical Turnover Growth

MTs

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PHYSICAL TURNOVER GROWTH


YEAR

FINANCIAL TURNOVER GROWTH


PURCHASE POLICYPURCHASE POLICY

BHEL is Governed by Very strong Purchase Policy, and Vigilance Guidelines paving way for -

Transparency

Equal Opportunity for participation

Efficient Vendor management

Defined Rules for Delegation of Power

Classification of Purchases and Rules to be followed


Purchase ProcessPurchase ProcessIndent

Enquiry

Clarifications and Confirmations - MOU

Opening Technical BID

Clarifications and confirmations

Opening of Price Bid Reverse Auction

Negotiation

OrderingVendor Meet - 8th Feb 2010 : Piping Centre, ChennaiVendor Meet - 8th Feb 2010 : Piping Centre, Chennai

INITIATIVESINITIATIVESIn order to meet the Deliveries to More Projects in a short time, BHEL has revamped and introduced new strategies in Purchase processes

Rate contracts for Majority of Items-e.g. Fittings, Cut To size items, Tie rods, Insulation Clamps, Control Valves, Ball Valves, Thermowells etc., introduced

Action taken for Stocking of Items consumed in large quantum - e.g. Hanger Forgings

Bunching and BULK ordering of systems -e.g. PRDS, Dosing Pump, Control Valves


INITIATIVESINITIATIVESBuying finished Products instead of Raw materials - e.g. Welded Fittings, Adoptors, Pipe Cap with Drain Stub, IBR Piping, LP Piping etc.

Standardizing items - e.g. Fully threaded Tie Rods with 3000 mm long, Insulation Clamps and Lugs, Pipe Cap with drain stub etc., Stubs and components

MOU with Vendors for Techno Commercial conditions - for Fittings, Pipes, Insulation, Aluminium Sheets to reduce cycle timeVendor Meet - 8th Feb 2010 : Piping Centre, ChennaiVendor Meet - 8th Feb 2010 : Piping Centre, Chennai

INITIATIVESINITIATIVES

Pricing with FOR destination to Project sites saving the delays due to Transporters.

Price finalization by Reverse Auction - eliminating negotiation Time and resulting in reduction of time for releasing Purchase orders.


VENDOR EMPANELMENTVENDOR EMPANELMENT

Requirements of additional / New vendors is hosted in web site

Applications are received and scrutinized

Evaluation team visits vendor works

After evaluation Vendors meeting the guide lines only will be empanelled.

After successful completion of trial order Vendor is taken to Permanent status


Vendor Management SystemVendor Management System

To achieve the desired speed and fulfill the Delivery commitments, BHEL is equipped with a Strong Vendor Management System

The Objectives are to have :

A wide base of Capable Vendors

Transparency

Healthy Competition

Sustained Performance

Timely delivery to sitesVendor Meet - 8th Feb 2010 : Piping Centre, ChennaiVendor Meet - 8th Feb 2010 : Piping Centre, Chennai

VENDOR PERFORMANCEVENDOR PERFORMANCE

Only vendors meeting the Delivery requirements and Good perfomance can be considered for sending enquiry.

Non-responding vendors or Vendors not agreeable to BHEL requirements need not be considered.

Vendors quoting consistently very high prices also need not be considered for sending enquiry.Vendor Meet - 8th Feb 2010 : Piping Centre, ChennaiVendor Meet - 8th Feb 2010 : Piping Centre, Chennai

Vendor Management SystemVendor Management System

Vendor Directory (PMD) is a dynamic one

Vendors are empanelled by an approved sound procedure for enlisting or delisting

Vendors are evaluated in a systematic way

Vendor Performance is monitored for the sustained Quality and Delivery

Sending of enquiries can be limited to only Performing Vendors

Non-responding Vendors for three or more enquiries can be put on Hold or delisted


Specific requirements for Foreign Vendors

Specific requirements for Foreign Vendors

Documents , Invoice, BL, Packing List, Test Certificates shall be submitted as a full set.

Advance scanned copy of the same by Email to be furnished for preparation before receiving the items avoiding delay - GR, Costing, Import License

Documents avoiding following discrepancies:

- Incorrect P.O. and Sl.No.

- Incorrect material specification, Melt No.

- Non compliance to drawing : e.g. Stub not welded whereas drawing calls for


Specific requirements for Foreign VendorsSpecific requirements for Foreign Vendors

To meet project schedules shorter deliveries are required (3 to 4 months)

Develop capacity to source raw materials to meet the above requirement


SUBMISSION OF OFFERSSUBMISSION OF OFFERS

Offers shall be made in accordance with Enquiry in two parts wherever asked for.

Confirmation shall be furnished for acceptance of All the conditions as per enquiry like Delivery time, payment terms, submission of Bank Guarantee etc. very clearly.

Offers shall be submitted on time as per Tender.

Price details shall be indicated legibly without any overwriting etc.


CHECK LIST FOR INDIGENOUS RATE CONTRACTSCHECK LIST FOR INDIGENOUS RATE CONTRACTS


CHECK LIST FOR FOREIGN RATE CONTRACTSCHECK LIST FOR FOREIGN RATE CONTRACTS


CHECK LIST FOR FOREIGN RATE CONTRACTSCHECK LIST FOR FOREIGN RATE CONTRACTS


PROBLEMS NOTICED IN BIDS SUBMITTED PROBLEMS NOTICED IN BIDS SUBMITTED

Non submission of signed checklist of acceptance of the Technical conditions - Deviating dimensions, Material Grade, Size

Technical deviations

Deviating delivery requirement: e.g. indicating 3-6 months against 3 months called for

Non acceptance of payment terms.

Non acceptance for Reverse Auction

Non confirmation of acceptance of BHEL Quality requirements

Non enclosure of Un-priced price formats/Check list

Non enclosure of Quality plans and data sheetsVendor Meet - 8th Feb 2010 : Piping Centre, ChennaiVendor Meet - 8th Feb 2010 : Piping Centre, Chennai

PURCHASE ORDERPURCHASE ORDER

Acknowledge PO immediately on receipt and understand the requirements thoroughly. Any discrepancy or issues to be taken up immediately.

Submit Schedule for completion of the P.O. – This is required for monitoring

Before dispatch all amendments are to be obtained

Ensure meeting Drawing and technical requirements

Carry out inspection as per the TDC / Quality Plans indicated in PO.

Get POs validated by verifying with latest amendments through VISVendor Meet - 8th Feb 2010 : Piping Centre, ChennaiVendor Meet - 8th Feb 2010 : Piping Centre, Chennai

Technical Spec accepted but deviation sought after ordering: e.g. Painting Scheme

Delivery Date not maintained – Extension sought

Production schedule not furnished and no commitement made for delivery

Inspection Calls not raised

Not attending review meetings



PACKING, DESPATCH AND DOCUMENTATION


Follow despatch instructions clearly.

Proper Cleaning, Painting and Identification marking by Punching and Stenciling Melt No., Work order and DU clearly.

Pack neatly in Boxes / Crates with Identification marks and melt No. visible clearly from outside the Box / Crate.

Prepare Legible and Clear Packing list with details of P.O. and Sl.No. with DU No., Specification, Melt No. and firmly attach a copy on the outside of the packing in a water proof cover

Follow-up despatches to ensure delivery to correct sites

Submit Despatch documents immediately – Invoice, Excise Gate Pass, acknowledged packing List and LR




Feed Pump commissioning support

Despatching Insulation requirements of multiple customers leading to MDCC apportionment problems

Wrong LRs – e.g., Despatching and Addressing LR as self


POST COMPLETION ACTIVITYPOST COMPLETION ACTIVITY

Attending to site complaints – Control valve damage / malfunction

Extending Timely commissioning Support--- Boiler feed Pumps


VENDOR INFORMATION SYSTEMVENDOR INFORMATION SYSTEM

Using VISTRY Web Site DAILY will enable -

Updated P.O. date can be seen and downloaded

Commitment can be posted

Dispatch Challan can be generated resulting in ERROR FREE DOCUMENTATION

Despatch Details will get uploaded automatically


EXPECTATIONSEXPECTATIONS

Short Delivery time commensurating with present site requirements

Bulk Production

Direct Documents to save time

Correct Test Certificates

Progress reporting

Good Product Quality

Competitive Price



QUALITY ASPECTS IN VENDOR MANAGEMENTQUALITY ASPECTS IN VENDOR MANAGEMENT

VENDORS ARE REGISTERED &

BROUGHT INTO VENDOR DIRECTORY

WITH DUE WEIGHTAGE TO QUALITY.

CONTINUANCE IN VENDOR DIRECTORY

IS BASED ON VENDOR RATING – GOOD

SCORE ON QUALITY ASPECTS VITAL

FOR CONTINUANCE.


GENERAL REQUIREMENTSGENERAL REQUIREMENTSCompliance to tender specification at initial bid.

No Undisclosed deviation during technical bid.

Fulfilling QP/TDG/TDC requirements and Inspection stages .

Coordination for CUSTOMER/NTPC/TPIA, for inspection.

Meticulous compliance to timely & error-free Call letters

Obtaining MDCCs /Customer clearances.

MDCC to be obtained cust-number-wise

Discrepancy free test Certificates in time.

Separate NDT test reports required . Statement / Declaration of conformity w.r.t, NDT is not acceptable.

Melt Number correlation – a must.

Forwarding TCs to BHEL well in-advance of material receipt for quick processing.

Type tests to be validated once in 5 years.Vendor Meet - 8th Feb 2010 : Piping Centre, ChennaiVendor Meet - 8th Feb 2010 : Piping Centre, Chennai

SPECIFIC ISSUES SPECIFIC ISSUES

COLOUR CODING TO BE METICULOUSLY FOLLOWED

PMI AT RECEIPT & DISPATCH STAGE

PUNCHING OF PGMA, DU,WO AT EXIT STAGE DURING PMI TO AVOID MIXUP

NDT CERTIFICATES TO BE SEPERATELY ISSUED (MERE STATEMENT OF CONFORMITY NOT ACCEPTABLE)

INDIVDUAL IBR TC FOR EACH PO SL NO REQUIRED (CLUBBING OF VARIOUS ITEMS, & ISSUANCE OF COMMON IBR TC TO BE AVOIDED)

BRANCH WELDING FOR TEE REALIZATION – NOT ACCEPTABLE

REQUIREMENT MAINLY SEAMLESS . WELDED FITTING ONLY IF SPECIFICALLY CALLED FOR.

BURST TEST - REPORT A MUST FOR QUALIFICATION


SPECIFIC ISSUESSPECIFIC ISSUES

RAW MATERIAL TO BE SOURCED FROM APPROVED VENDOR LIST ONLY. (Eg of problem faced: SILCOTUB,PETROTUB)

PHYSICAL CORRELATION OF MELT NO & TC TO BE ENSURED.

CHECK TEST ON SAMPLE TO BE DONE. SAMPLE TO BE AUTHENTICATED BY BHEL INSPECTION PERSONNEL.

CALL RAISAL FOR NTPC & OBTAINING MDCC FOR STAGES AND FINAL , IN LINE WITH QP – VENDOR’S RESPONSIBILTY.

FITTINGS IF SOURCED OUT ENSURE TCs AS PER TDC/QP

DUE CARE FOR PAINTING & IDENTIFICATION

FOR IBR SYSTEM, WHEREVER THICK>12.5MM, 100% UT WITH 5% NOTCH REQUIRED. Vendor Meet - 8th Feb 2010 : Piping Centre, ChennaiVendor Meet - 8th Feb 2010 : Piping Centre, Chennai

K Values – once in a year per type (sample authenticated by customer & BHEL)

Mesh Dimension should be as per Specification (Spec is 0.71 and offered is 0.56)

MDCC to be obtained cust no wise with correct weight.




Type test if already done to be enclosed with Bid ( eg : POD)

Any internal document referred in QP to be furnished.

Actuator Cyclic Tests Details Not Provided

Actuator inspection by Customer at Sub Vendor Works Not taken care

Painting as per spec not complied with


Non submission of Documents on Time

Documents with incomplete details and not meeting specification

Pickling and Passivation

Dynamic Balancing of Agitator not taken care

Painting not meeting customer specification

Incomplete Inspection records like non submission of NDT reports

WPS and PQR not submitted with QP



Compliance to tender at initial bid itself

Material TCs ,HT Charts, Ref Doc not enclosed

When weld is involved QP to include WPS, PQR & NDE requirements.

DPT on Machined surface not complied with

CV Test report not provided

Hydro Test not offered for witness as per QP

QP to cover sub delivered actuators also.

Painting not as per Customer specification



Material TCs not provided

Witnessing of Hydro Test not offered

RT of Castings

Dynamic Balancing

NDT Procedures

Inspection of Sub Vendor items

Painting

Noise Level

Performance testing for all points



Standard Meter Run shall be 2.85 M for OD >150mm. Else 1.35 M.

Sizing of Condensing pot as per ISO. Checks for Condensing pot to be included in QP

Calibration Test results to include Flow equation and report deviation from Theoretical values.

WPS & PQR to be made available to visiting Inspector

For P91 - Heat treatment facility to be put up by vendor



Only SLSR and Temp ratings as per specn only

FM & BASEEFA TR from country of origin required. TR to include specifically all temperature ratings as called for.

Separate QP for PDP, Power Transformer and Cables.

Accessories like Connectors, RTDs etc to be covered in main QP. Enclosure test to be given as type test.

Controller of Explosives /India, TC for offered model as type test report.

All type tests to be validated once in 5 years.



IBR certificates for Tubes, Fittings & Valve inside Rack.

Layout of instruments within rack

a) Ease of operation & Maintenance

b) Aesthetics

Makes of items as per approved list.




GENERAL INFORMATIONGENERAL INFORMATION

YEAR COMPLETED WT

COMPLETED

DUS

2007-08 13397 30632

2008-09 15996 22067

YEAR TARGET COMPLETED WT

2009-10 14000 7282

CURRENT STATUS


POINTS FOR DISCUSSIONPOINTS FOR DISCUSSION

1) Purchase Order

2) Submission of Bills

3) Shipping

4) General Points

1) Purchase Order

2) Submission of Bills

3) Shipping

4) General PointsVendor Meet - 8th Feb 2010 : Piping Centre, ChennaiVendor Meet - 8th Feb 2010 : Piping Centre, Chennai


To ensure / confirm the Rate indicated against each PO serial number is as per Rate Contract.

To ensure that Amendments, if any are obtained before despatch.

Painting Scheme should be as per relevant QP only.


SUBMISSION OF BILLSSUBMISSION OF BILLS

To raise the bills as per PO and GMS

after completion of PO with relevant

documents like LR copy, Packing list,

Inspection Report, Delivery Challan,

etc. in 3 sets (1 set original and 2

set copies).


SHIPPINGSHIPPING

All markings shall be done with Hard Punching and Stenciling by Paint legibly. Permanent marker pen should not be used.

All small bore pipes (up to NB 50) shall be bundled (WO, DU wise) for easy unloading and identification of items.

Dus of each WO be separated with a wooden separator for easy identification and unloading. This will avoid holding of vehicle at shipping.


All small components be packed in wooden boxes (WO wise).

Packing List should be kept inside and also out side of each box.

To ensure CHP / COC are obtained for NTPC items before despatch.

SHIPPINGSHIPPING


To ensure the quantities as per the DCs are loaded before the vehicle leaves vendor works.

The representatives shall leave shipping only after identifying all the DUs unloaded and DC acknowledgement.

SHIPPINGSHIPPING


The following feedbacks / observation of

shipping should be taken care.

a. WO and project name mismatch (written as well as punched details).

b. Details like length and number of pieces

relating to particular DU shall be clearly mentioned on the job.

c. DC’s to reflect actual unit and Qty as PO.

SHIPPINGSHIPPING


GENERAL POINTSGENERAL POINTS

Vendor performance will be evaluated based on the delivery, quality, response, documentation, etc. and the loading will be based performance only.

Review meeting on production commitments will be conducted during the first week of every month.

Separate LRs should be obtained for each WO.

For despatches to Trichy Shipping, IR copy along with other despatch documents should be sent along with Transporter to avoid delay in unloading .



For NTPC projects ,MDCC should be obtained WO wise. We need - 2 sets of original MDCCs immediately after despatch.

For All Projects we need :

- Additional Copy of ED Gate Pass

- Additional Copy of LR (clear copy).

Proper link up of LR, ED Gate Pass and Packing Slip should be established.



Inspection Call Request should be given one week in advance with details of items ready for inspection (Project, WO no., PO No., PGMA, Item description, Quantity, Weight, etc.).

Road Permit Form requirement should be furnished along with monthly despatch plan.

For each Road Permit, utilisation statement indicating Projects name, PO No., LR no., Name of Transporter, Excise Invoice no., etc should be furnished every month.



Original IBR documents should be submitted for IBR items for processing Invoices.

To ensure scanned copy of despatch documents viz. LR, EDGP, Packing List, etc. are sent to BHEL immediately up on despatch.

At the end of every month, statement indicating PO / Project wise despatch details be provided for reconciliation.



SUBMISSION OF INVOICESSUBMISSION OF INVOICES

All the invoices should be routed through the Purchase Department and not be submitted directly to Finance.

All the required documents in accordance with PO should be enclosed with invoice and should come in a single set with covering letter.

Example, suppose the PO terms is: “Bills in triplicate with Excise invoice cum Delivery Challan and Inspection Report, Lorry Way Bill”, all the documents should be submitted as per the term.


There should be the “proper invoicing”

of supplies taking the following into consideration:

Payment TermsPO serial no.Input Tax implicationNo. of invoices to be submittedMaterial CodeQuantity and unit rateDate implication

INVOICINGINVOICING


PAYMENT TERMSPAYMENT TERMS

If the Payment term is 100% after the acceptance (DTS cases) by BHEL commercial engineer’s certificate is required.

If the term is 90% / 10% (DTS), separate invoices should be submitted; for 10% bills, certificate from the Commercial Engineer is required.

For 10% bills, the document date should be the date of certificate by the commercial engineer not the date of invoice.


INPUT TAX IMPLICATIONINPUT TAX IMPLICATION

EXCISE DUTY CENVATTABLE: Material delivered to stores, Trichy.NON CENVATTABLE: Material directly delivered to Site. (DTS) Export Incentives- Mega Power Project & Captive ConsumptionInvoicing with ED - (Reimbursement of Excise Duty)Invoicing without ED- (Terminal Excise Duty) Other than Incentives- Other than Mega Power Project and Captive consumptionCST: Inter State SaleIf delivered to Stores: Our company, as a registered dealer, will issue ‘C’ Forms each quarter on the basis of requisition from the supplier.If delivered Direct to Site: Same as above, but ‘E1’ Form is required from the suppliers against ‘C’ Form.


VAT: Intra State SaleVATTABLE: If delivered to Trichy Stores and sites of the registered states

Tamil Nadu VAT- Delivered to Trichy stores & sites in TamilNadu.Other state VAT- Delivered to the sites of Registered states which includes the following-

West Bengal TIN19675372040 Maharastra TIN27060300130V Andhra Pradesh TIN28061908732 Chattisgarh TIN22204202882 Punjab TIN3802058147 Madhya Pradesh TIN23573600001.

NON VATTABLE: If delivered to sites of non- registered states.

NOTES: The time limit for claiming VAT credit is end of Accounting year or 3 months from the date of invoice, whichever is later.

Hence the vattable invoices up to March of the previous year, should be submitted before March, so as to enable us to take credit for VAT, otherwise those amount will be recovered from the supplier.

INPUT TAX IMPLICATIONINPUT TAX IMPLICATION


No. of invoices to be submittedNo. of invoices to be submitted

Original for BuyerExtra Copy, if required or as per PO terms

Photocopy of the aboveFor instance, if the PO indicates, “Three copies of INVOICE with original signature to be submitted.”, the same should be submitted.


DATE IMPLICATIONDATE IMPLICATION

Invoice Date: Invoice Date should be mentioned correctly as it has direct impact on the tax rate.

LR No. and Date: LR no. and LR date must be mentioned in the invoices correctly, which will enable us to check the applicability of LD provision.


BANK GUARANTEEBANK GUARANTEE

All the Bank Guarantee should come through the Purchase department; not from the suppliers directly.

All the Bank Guarantees should be followed by the confirmation from the relevant bankers.

Requisition for getting back the expired Bank Guarantees should be given through Purchase department.

All the expired BG will be collected by the suppliers from the purchase department, not from finance.


CLAIMING FOR FREIGHTCLAIMING FOR FREIGHT

For the claiming of the freight ;the original money receipt should be enclosed with the invoice.

Freight bills should be invoiced in accordance with the rate contract and it should be duly certified by the authorized person in purchase.

Service Tax upon Freight will be paid only on the submission of proof of payment .


AMENDMENT AMENDMENT

The amendment for the PO

delivery date extension must

be reflected before the date

of processing bills.


FOREIGN VENDORSFOREIGN VENDORS

BG should be furnished by the vendors as per the format furnished by BHEL – Purchase before commencement of supplies.

LC’s opened based on the request of the vendors are not being utilised fully. Materials should be shipped before the shipment date.

Delivery date extension should be sought before commencement of despatches.


FOREIGN VENDORSFOREIGN VENDORS

Supplies under different PO’s should not be clubbed and claimed in one single invoice.Original and copies of the invoice should be readable and clear. Documents should reach for our bankers for bankers atleast 7 days prior to the arrival of vessel at our port.


End of PresentationEnd of Presentation

Thank YouThank YouVendor Meet - 8th Feb 2010 : Piping Centre, ChennaiVendor Meet - 8th Feb 2010 : Piping Centre, Chennai

Vendor Meet - 8th Feb 2010 : Piping Centre, Chennai.

Documents

chennai slide

piping centre

cycle time vendor meet

control valves vendor

permanent status vendor

ibr piping

lp piping

purchase policy bhel