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Procurement forms a vital function in the overall project management and execution
of an EPC or an LSTK contract. This function not only affects the financial aspects
of the project but also has a very strong influence on the overall schedule as
well as the performance of the project installed and hence the guarantees furnished
by the contractor.
Our worldwide sourcing capabilities are backed by effective vendor selection
and qualification programs as per ISO 9001 approved quality systems. The
Quality Assurance Program encompasses all aspects of work in the execution of
the project according to specifications and various codes and requirements ensuring
timely delivery of correct and acceptable equipment, machinery, etc. to site,
erection and commissioning of the same, adhering to the time schedule and
ensuring proper quality at all stages.
Our procurement concept is to purchase materials / components / services from
qualified, reliable and experienced vendors duly qualified under our ISO
procedures. Our procurement team works in close liaison with the project
manager and administers all purchasing, expediting, traffic / shipping services
required for the project.
With an extensive experience in executing large EPC projects in various
applications in wide ranging sectors such as refineries, petrochemicals,
fertilizers, power, cement, food and so on, procurement has been a strength
area of the E&C Division. Our task force approach incorporates a dedicated
team responsible for the procurement function of the project. This team,
which is an integral part of the project task force, works in close coordination
with the engineering team and the project manager. Some of the best practices
followed by us to result into efficient procurement are the following :
- Continuous widening of vendor base through structured and comprehensive vendor
evaluation and qualification and continuous monitoring; Adherence to ISO 9001
accredited Quality System.
- Global Sourcing
- detailed technical and commercial bid evaluation
- Full empowerment of Project Team for making ordering decisions
- Ordering in line with contract with client to ensure total compliance
- Fast track order placement through involvement of procurement team at the bidding stage
- Effective use of ERP package to result into Availability of online information
across the E & C Division facilitating effective ordering decisions and Reduced
cycle time. This also permits integration of procurement functions such as RFQ,
Bid comparison, Purchase order placement, Goods receipt, vendor invoice verification,
global sourcing database and so on.
- Introduction of E-Procurement for integrating vendors in-house system
In E&C projects, material / services cost as a function of overall project
cost varies from about 45% to 90% depending on the nature of project. Out
of this, imports constitute a sizable chunk, often exceeding 50 percent
of the project cost. The Procurement groups of E&C Division are fully
geared to handle this challenge. The track record shows that the import
content of the procurement cost of projects executed over last three years
exceeds USD 250 million. This includes goods and services imported from USA,
Japan as well as several European countries namely UK, Germany, Italy, Spain,
Belgium and so on.
SHIPPING
Procurement Group together with the Logistics Department of L&T perform the
shipping arrangement, employing international forwarders. L&T have excellent
track record to arrange transportation of goods from worldwide sources including
the specially chartered aircraft for super-urgent deliveries.
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