prm deepak

7/29/2019 Prm Deepak

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PROCUREMENT PROCESS

IN LARSEN & TOUBRO EPCBy

Deepak Bhatt063015


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L&T EPC An Engineering & Construction major is the largest and most reputed

companies in Indias pvt sector.

Business of ECC division is divided in six business sectors.

ECC division are headquarters in Chennai & Kolkata with 7 regional offices

and 250 project sites. Specialized functions in

Highways & Roads

Airport

Bridges

Hydroelectric Dams & Bridges Structural Engineering

Quality Systems etc.


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MATERIAL MANAGEMENT Includes procurement from both indigenous as well as

oversees markets, storage, logistics, inventorymanagement at regional stores, disposal etc.

Materials department at HQ deals with allpolicy matters, imports, exports, capital procurement,project procurement, high value purchases, rate

contracts, system development & implementation, etc


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RESOURCES PLANNING Takes care of allocation, distribution and movement of Staff and

Plant & Machinery to meet the requirements for deployment invarious regions and overseas across the company.

Resources department as a focal point helps the OperationalUnits to optimize the productivity by maintaining a balancebetween the availability and the requirement of resources (Staffand Plant & Machinery).

It also facilitates the process of decision and deployment ofequipment from external agencies as needed.


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SUB CONTRACTS MANAGEMENT Subcontracting is one of the major inputs in the execution of projects.

The main areas of focus are streamlining / standardizing ofsystems/procedures, registration, making available the track record

and rating of the subcontractors based on their performance through asuitable on-line system.

Importance is given for training of subcontractor labour to suitrequirements.


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VICAT SUGAR CEMENT PLANT SCOPE OF WORK Construction of civil structures, structural fabrication and mechanical

equipment erection including supply of TMT, structural steel and

cement for setting up a green field dry process cement plant having acapacity of 7500TPD .

The project commenced in October 2010 with a duration of 22 monthswhich was later amended to 29 months due to significant addition inthe scope of work.


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CHALLENGES FACED Quality Problem-The elevation of the pre heater was

165m, erection of cyclones and mechanical structuresin parts could lead to quality problems in terms ofwelding and alignment.

locational challenge-One of the locational challengesthat were faced by the project team was the nature of

soil condition, which was black clayey soil that madevehicular movement very difficult.


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2.44 MTPA Thin slab caster &

Rolling Mill (TSCR) Scope of Work

installation, testing and commissioning of different capacities oftransformers, HT/LT system switchboards.

cable laying

automation system, field instruments,

associated earthing and lighting system etc., for different substationsand process areas.

Challenges Faced

The primary and most critical challenge at the RMHS site is that thelocation is very scattered throughout the plant, measuring about 16 sq.km and installation of equipment are in either 60 to 70 m height or 10to 20 m in depth.


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Overcoming Challenges Good resource and logistics planning.

Different gadgets were used for working at height & below groundlevels such as-Rope grab type fall arrestor & electroguards.

Necessary training was provided to workmen for working at height.

Equipment was lifted through crane upto certain elevation and thebalance height was covered using chain pulley block.

Emergency lights and torches were provided to the workers to avoidentrapment due to power failure during work.


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Challenges Faced By L&T ECC Decision Modelling

Bidding phase decision

Decision: What is the Bid Price?

Alternatives: Contract Bid Price/ Reject Bid Request

Parameters: Project Specifications/ Project Schedule

Performance Measures: Extended ContractProfit/Financial Risk


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Procurement Phase Decisions

Decisions

When to Buy

What to buy

Where to buy How much to order

Alternatives

3 months in advance/ 1 month inadvance/Same day

Majormaterial/commodities/consumables

Local supplier/non localsupplier/VMI

An estimated/less than

estimated/more than estimated


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Risks Pre tender stage Post bid stage Execution stage

Political risks Political stability of thecountry;change in governments

Delay inapprovals &land acquistion

-

Environmentalrisks

Environmentalapprovals

Unfavorableclimatic

condition

Technical risks Insufficient primaryresearch, techrequirement leading toinaccurate time & cost

estimations.

Designchanges/inadequacies, resourceavailabilty, site

conditions

Unfamilarity wthterrain,resettlement, utilityshifting

Financial risks Cost estimates &financing assumptions

Liquidity andcredit shortage

Forex & interestrate fluctuation

Contractual/legalrisks

- Economicdownturn

Delay inpayments etc

Stage of EPC Contract


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Kraljic matrix for L&T ECC

Bottleneck: land acquisition, scarcity ofmanpower. A construction associationsinteraction with construction industryparticipants reveals that construction

projects are getting delayed due to

around 40% shortage of skilledconstruction workers

Leverage: IT technology, pricefluctuations in raw materials like

cement, steel, coal etc.

Routine: Consumables like stationery,etc.

Strategic: partnerships withother agencies for long termbenefits.


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THANK YOU

prm deepak

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