Description
the typical supply chains in manufacturing, explains purchasing process.
PROCUREMENT
PROCUREMENT PROCUREMENT IS THE PROCESS OF ACQISITION OF REQUIRED GOODS AND SERVICES AND DELIVERING IT IN READY TO USE CONDITION .BEGINS WITH THE IDENTIFICATION OF NEED TILL RECEIPT IN BINS AND PAYMENT OF SUPPLIER’S BILL. Includes…
INCLUDES DEVELOPMENT OF PURCHASING, EXPEDITING,
SPECIFICATIONS,
INSPECTION, INBOUND
TRANSPORTATION,
PORT OPERATIONS, CUSTOMS,
VENDOR DEVELOPMENT, VENDOR RELATIONS AND COORDINATION WITH USERS, STORES,
TRANSPORTATION AND ACCOUNTS PAYABLE
SYSTEM.
TYPICAL SUPPLY CHAINS IN MANUFACTURING
.
SOURCING
INHOUSE PRODN.
Reverse Chain RECONDITIONED
PURCHASED
STANDARDISED SAME LOCATION DIFF LOCATINS
PROPRIETARY
TAILOR MADE
DEVELOPMENT
FULLY OUTSOURCED
PARTLY O/SOURCED
MATERIAL CLASSIFICATION FOR SOURCING MATERIALS
MOVEMENT
COST
CRITICALITY
USAGE (OPPORTUNITY TO CONTRIBUTE TO PROFIT)
F
S
N
Low
Med
High PROCESS
**
SAFETY
Movement CHARA CTERISTICS
OBSOLETE
INSURANCE
AVAILABILITY (DEM Vs SUPPLY)
V
E
D
®
NATURE OF USAGE
A
B
C
PERIODIC
SURPLUS
® Review Spec, Design, Replenish Policy, SOPs, SourceLocation.
** PRODUCTION, MAINTENCE, GENL STORES
A
High Med Low
B
C
F
S
N
V
E
D
TO DETERMINE F,S,N STATUS: A COMPANY DETERMINES CRITERIA DEPENDING UPON TYPE OF INVENTORY HELD. MOVEMENT MONTHS
PURCHASE CONTRACT IS A LEGAL DOCUMENT FULFILLS FOUR CONDITION
?MUTUAL
ASSSENT:
OFFER- ACCEPTANCE- ACKNOWLEDGEMENT
?CONSIDERATION:
QTY. PRICE,DELIVERY. COMMITMENT / BENEFIT
?LEGALITY ?COMPETENCE
GENERALLY COVERED UNDER THE SALE OF GOODS ACT
PURCHASING PROCESS
DEFINE SPECIFICATIONS MATERIAL SPECIFICATION PURCHASE ORDER SPECIFICATIO SELLECT SUPPLIER CONTRACT AGREEMENT ORDERING EXPEDITING PEFORMANCE EVALUATION
PURCHASE SPECIFICATIONS
? FUNCTIONAL SPECS
CAR AIR-CONDITIONER, KITCHEN KNIFE, DINNER –SET, COMMON SALT. ? AS PER SAMPLE ? DETAILED TECHNICAL SPECS QUALITY DIMENSION, MATERIAL, PROCESS, STANDARDS -- BIS, BSS, DEAN, ASTM MAKE OR BRAND DRAWING NO., INSPECTION STANDARDS INSPECTION PROCESS RICE, CHEMICALS
….SPECIFICSTIONS TESTING AND CERTIFICATION SUPPLIER’S TC, THIRD PARTY TC, DISPATCH INSPECTION CLEARANCE IF APPLICABLE. LOGISTICS QUANTITY, LOTSIZE, PACKING INSTRUCTIONS, LEGAL, ENVIRONMENT AND SAFETY FEATURES
…SPEC
YOU REQUIRE 100 NOS. BOLTS FOR MANUFACTURE OF CRANE TROLLEYS. PLEASE DRAW A SPECIFICATION SHEET FOR THE PURCHASE ORDER. BASED ON THIS SPECIFICATION THE SUPPLIERS WILL SUBMIT THEIR
OFFER PRICE FOR THE SUPPLY.
… SPECIFICATION
COMMON SALT FIT FOR HUMAN CONSUMPTION. PACKED IN 100 Kg NEW GUNNY BAGS. THE FOLLOWING SHOULD BE PRINTED ON THE BAGS IN LETTERS OF SIZE 3.5” X 2” AND 1/2 “ THICK IN GREEN “COMMON SALT FOR KITCHEN” RANDOM SAMPLE SHALL BE DRAWN BY PLANT MEDICAL OFFICER TO TEST FOR SUITABILITY AS PER NORMS
SPECIFIED IN STANDARD NO “IS XXXX” / 1985” OF BUREAU OF INDIAN STANDARDS. IN CASE THE SAMPLE FAILS THE TEST, THE ENTIRE CONSIGNMENT SHALL BE REJECTED AND SENT BACK TO THE SUPPLIER AT HIS COST..
STEPS IN PROCUREMENT SYSTEM
? ? ? ?
?
?
? ?
NOMENCLATURE , CODIFICATION, SPECFN, ITEM MASTER RECOGNITION OF NEED QUANTITY, WHEN, WHERE INDENTING AND INDENTING TRIGGER WHO INDENTS, WHEN, HOW SOURCE IDENTIFICATION HISTORY,INTERNET, MANUALS, JOURNALS, SUPPLIERS’ APPROACH, CATALOGUES SOURCE SELECTION RFQ EVALUATION OF OFFERS FINALISING TERMS AND CONDITIONS
STEPS IN PROCUREMENT
? ADMINISTRATIVE APPROVALS ? NEGOTIATION
? PREPARATON OF PURCHASE ORDER
? FOLLOW UP AND EXPEDTING ? TRANSPORTATION
? RECEIPT AND INSPECTION
? INVENTORY UPDATING ? COORDINATION STORES, SUPPLIER, ACCOUNTS,
USER, CONTROLLING AGENCY.
? INVOICE AND PAYMENT PROCESS
TYPES OF CONTRACTS
? FIXED PRICE ? ANNUAL ORDER ? RATE CONTRACT ? LUMP-SUM ? COST-PLUS CONTRCT ? CONVERSION CONTRACTS ? BLANKET ORDERS ? CONTRACTS WITH PVC
WHAT ARE THE ESSENTIAL AND IMPORTANT ELEMENTS OF A PURCHASE CONTRACT
ELEMENTS OF A P O / CONTRAT SPECIFICATION PRICE QUANTTY TAX AND DUTY
PAYMENT TERMS
PACKING INSTRUCTION FORCE MAJEURE
MODE OF TRANSPORT
BONUS AND PENALTY INSURANCE IN-TRANSIT
LATE DELIVERY PENALTY
LIQUIDATED DMAGES CLAUSE
is anything missing
DESTINATION ELEMENTS OF A PURCHASE ORDER INSPECTION CLAUSE DELIVERY SCHEDULE RISK PURCHASE EXIT CLAUSE COUNTRY OF ORIGIN EXCHANGE RATE
DEFAULT OF CONTRACT LATE DELIVERY LIQUIDATED DAMAGES BONUS AND PENALTY TERMINATION CLAUSE FORCE MAJEURE PERFORMANCE GUARANTEE CLAUSE
BIDDING PROCESS
? NAGOTIATED BUYING ? OPEN TENDER SYSTEM ? CLOSED TENDERING ? TWO PART TENDERING
ADMINISTRATIVE DIMENSIONS DUE DATE AND TIME EXTENSION OF DUE DATE BID OPENING PROCESS ETHICAL DIMENSIONS ? RE-TENDER ? CONFIDENTIALITY ? SANCTITY OF PROCESS
GLOSSARY OF TECHNICAL TERMS TERMS
LETTER OF CREDIT ‘L C’ L C IS A METHOD TO CONTROL THE DOCUMENTS OF TITLE TO THE GOODS UNTILL THE MOMENT OF PAYMENT OR ACCEPTANCE OF A ‘BILL OF EXCHANGE’ PARTIES INVOLVED: BUYER – SELLER – ISSUING BANK – ADVISING BANK
BILL OF LADING ISSUED BY THE CAPAIN OF THE SHIP THAT CARRIES THE GOODS. EVIDENCE OF A CONTRACT OF SHIPPING. ALSO THE DOCUMENT OF ‘TITLE OF THE GOODS’. THE LEGAL HOLDER OF THE BILL IS ALSO THE LEGAL HOLDER OF THE GOODS SUBJECT TO THE PAYMENT OF FREIGHT. CLEAR / CONDITIONAL BILL OF LADING
GLOSSARY OF TECHNICAL TERMS LETTER OF INTENT WHAT IS A LETTER OF INTENT WHO ISSUES IT TO WHOM WHEN IS IT ISSUED
PACKING SLIP CHALLAN RR CONSIGNMENT NOTE MRO PERF GUARANTEE BANK GUARANTEE DUCUMENTS NEGOTITED THRO’ BANK BANKER’S REPORT LC BG
INCOTERMS INTERNATIONAL COMMERCE TERMS FIRST PUBLISHED IN 1936 THE NEWEST VERSION
‘Incoterms 1990’.
THEY REFER TO SOME STANDARD CONDITIONS IN CONNECTION WITH DELIVERY AND RANSPORTATION AND RISKS ATTACHED TO GOODS IN TRANSIT USING INCOTERMS MAY PREVENT
MIS-UNDERSTANDINGS BETWEEN SUPPLIER AND
BUYER. Examples for sea and other carriers : ..
INCOTERMS INCOTERMS EXW CIF FCA FAS DDU CPT FOB DDP CIP CFR DAF
EACH INCOTERM ARRANGES THE “DISTRIBUTION” Of COSTS OF TRANSPORTATION AND INSURANCE, AND THE RISKS OF LOSS OR DAMAGE IN THE PHYSICAL
DELIVERY.
TYPES OF CONTRACTS DISTINGUISHED BY INCOTERMS – SEA FREIGHT DEPARTURE EXW - Ex Works MAIN CARRIAGE (freight) UNPAID FOB, FAS MAIN CARRIAGE (freight) PAID CIF, CFR ARRIVAL DES - Delivered EX SHIP DEQ – Delivered EX QUAY
…INCOTERMS
INCOTERMS REGULATE WHICH DOCUMENTS SHOULD BE PROVIDED BY THE SUPPLIER AND WHO BEARS THE COST OF THESE DOCUMENTS. INCOTERMS DO NOT REGULATE THE LEGAL DELIVERY OR LEGAL TRANSFER OF TITLE.
…INCOTERMS
A CONTRACT REFERS TO THE INCOTERM ONLY WHEN BOTH PARTIES HAVE REACHED AN AGREEMENT ABOUT IT . PARTIES ARE FREE TO AGREE TO DEVIATIONS FROM AN INCOTERM. BUT IT IS RISKY TO ADD A WORD OR A LETTER TO INCOTERMS (AS THEN A COURT MAY GIVE ITS OWN INTERPRETATION).
ASPECTS OF PROJECT CONTRACTS MANAGEMENT SYSTEM
ASPECTS OF CONTRACTS LARGE PROJECTS
IN
PRE QUALIFICATION WHY PREQUALIFICATION TO ASSES INTEREST GENERATED IN POTENTIAL PARTIES TO ASSESS AVAILABILITY OF STATE OF ART TECHNOLOGY TO SAVE TIME IN EVALUATING AND SCREENING BIDS FROM UNQUALIFIED BIDDERS TO SCREEN OUT BIDDERS OF DOUBTFUL COMPETENCE TO ENCOURAGE INDIGENOUS PARTIES TO GROW BY FORMING Jt. VENTRES WITH INTERNATIONAL PARTIES. ...
…WHY PRE QUALIF
? BIDDERS NOT QUALIFIED TO UNDERTAKE THE WORK
HAVE BETTER CHANCE TO UNDERSTAND THE MAGNITUDE AND COMPLEXITIES AND DO NOT WASTE RESOURCES BY PARTICIPATING IN THE BIDDING PROCESS.
? WELL QUALIFIED BIDDERS KNOW THAT THERE WOULD
BE FAIR COMPETITION AMONG EQUALLY COMPETING PRTIES
ESSENTIAL CONTENTS OF INVITATION FOR PRE-QUALIFICATION BIDS
BROAD DETAILS OF PROECT
SCOPE OF WORK OF THE PACKAGE DETAILS DESIRD TO BE SOUGHT FROM BIDDERS PREQUALIFICATION CRITERIA THE
BASIC INFORMATION REQD IN PRE -QUAL PROCESS BIDDER’S PROFILE EXPERIENCE AND PAST PERFORMANCE CAPABILITY IN RESPECT OF PERSONNEL EQUIPMENT PLANT FINANCIAL STATUS BIDDER’S PROPOSAL FOR FUNDING AND IMPLEMENTATION BIDDER’S CONFIRMATION REGARDING GENL. SCOPE OF WORK OF THE CONTRACT
PRE QUALI…. PRE QUALIFICATION CRITERIA
? PROVIDES CLEAR BASIS ON WHICH PROSPECTIVE
BIDDERS WILL BE EVALUATED
? TRANSPARENCY ? BASED ON REALISTIC NEEDS OF THE CONTRACT
? MUST RELATE TO THE CHARACTERISTICS THAT ARE
ESSENTIAL TO ENSURE SATISFACTORY EXECUTION OF THE CONTRACT
? BIDDERS MUST BE PREQUALIFIED BASED ON PRECISE
“PASS/ FAIL” CRITERIA WHICH MUST BE MET SUBSTANTIALLY.
LARGE PROJECT CONTRACTS
TURN-KEY AND NONTURN-KEY CONTRACTS
? LARGE PROJECTS MAY BE BROKEN UP INTO WELL
IDENTIFIABLE “PACKAGES” TO FACILITATE PROCUREMENT, COORDINATION AND EXECUTION AS A WHOLE. ? REPETITIVE AND SMALL VALUE PROJECTS MAY BE EXECUTED IN NON - TURNKEY MODE. ? PROJECTS INVOLVING NEW TECHNOLOGY AND MAIN PACKAGES ARE PREFERRED CANDIDATES FOR TURNKEY CONTRACTS.
….. LARGE PROJECTS
? MOST OFTEN A “TWO STAGE” TENDERING PROCESS IS
FOLLOWED. ? IF TECH SPECS. ARE PRECISE WITH DETAILS OF EQUIP, DRIVES, AUXILIARIES (COMPRESSORS, PUMPS, CONTROLS etc.) “SINGLE STAGE” TENDERING IS OK.
GLOSSARY OF TECHNICAL TERMS TERMS
LETTER OF CREDIT ‘L C’ L C IS A METHOD TO CONTROL THE DOCUMENTS OF TITLE TO THE GOODS UNTILL THE MOMENT OF PAYMENT OR ACCEPTANCE OF A ‘BILL OF EXCHANGE’ PARTIES INVOLVED: BUYER – SELLER – ISSUING BANK – ADVISING BANK
BILL OF LADING ISSUED BY THE CAPAIN OF THE SHIP THAT CARRIES THE GOODS. EVIDENCE OF A CONTRACT OF SHIPPING. ALSO THE DOCUMENT OF ‘TITLE OF THE GOODS’. THE LEGAL HOLDER OF THE BILL IS ALSO THE LEGAL HOLDER OF THE GOODS SUBJECT TO THE PAYMENT OF FREIGHT. CLEAR / CONDITIONAL BILL OF LADING
GLOSSARY OF TECHNICAL TERMS LETTER OF INTENT WHAT IS A LETTER OF INTENT WHO ISSUES IT TO WHOM WHEN IS IT ISSUED PACKING SLIP CHALLAN RR CONSIGNMENT NOTE MRO PERF GUARANTEE BANK GUARANTEE DUCUMENTS NEGOTITED THRO’ BANK BANKER’S REPORT --LC BG
doc_970238982.pptx
the typical supply chains in manufacturing, explains purchasing process.
PROCUREMENT
PROCUREMENT PROCUREMENT IS THE PROCESS OF ACQISITION OF REQUIRED GOODS AND SERVICES AND DELIVERING IT IN READY TO USE CONDITION .BEGINS WITH THE IDENTIFICATION OF NEED TILL RECEIPT IN BINS AND PAYMENT OF SUPPLIER’S BILL. Includes…
INCLUDES DEVELOPMENT OF PURCHASING, EXPEDITING,
SPECIFICATIONS,
INSPECTION, INBOUND
TRANSPORTATION,
PORT OPERATIONS, CUSTOMS,
VENDOR DEVELOPMENT, VENDOR RELATIONS AND COORDINATION WITH USERS, STORES,
TRANSPORTATION AND ACCOUNTS PAYABLE
SYSTEM.
TYPICAL SUPPLY CHAINS IN MANUFACTURING
.
SOURCING
INHOUSE PRODN.
Reverse Chain RECONDITIONED
PURCHASED
STANDARDISED SAME LOCATION DIFF LOCATINS
PROPRIETARY
TAILOR MADE
DEVELOPMENT
FULLY OUTSOURCED
PARTLY O/SOURCED
MATERIAL CLASSIFICATION FOR SOURCING MATERIALS
MOVEMENT
COST
CRITICALITY
USAGE (OPPORTUNITY TO CONTRIBUTE TO PROFIT)
F
S
N
Low
Med
High PROCESS
**
SAFETY
Movement CHARA CTERISTICS
OBSOLETE
INSURANCE
AVAILABILITY (DEM Vs SUPPLY)
V
E
D
®
NATURE OF USAGE
A
B
C
PERIODIC
SURPLUS
® Review Spec, Design, Replenish Policy, SOPs, SourceLocation.
** PRODUCTION, MAINTENCE, GENL STORES
A
High Med Low
B
C
F
S
N
V
E
D
TO DETERMINE F,S,N STATUS: A COMPANY DETERMINES CRITERIA DEPENDING UPON TYPE OF INVENTORY HELD. MOVEMENT MONTHS
PURCHASE CONTRACT IS A LEGAL DOCUMENT FULFILLS FOUR CONDITION
?MUTUAL
ASSSENT:
OFFER- ACCEPTANCE- ACKNOWLEDGEMENT
?CONSIDERATION:
QTY. PRICE,DELIVERY. COMMITMENT / BENEFIT
?LEGALITY ?COMPETENCE
GENERALLY COVERED UNDER THE SALE OF GOODS ACT
PURCHASING PROCESS
DEFINE SPECIFICATIONS MATERIAL SPECIFICATION PURCHASE ORDER SPECIFICATIO SELLECT SUPPLIER CONTRACT AGREEMENT ORDERING EXPEDITING PEFORMANCE EVALUATION
PURCHASE SPECIFICATIONS
? FUNCTIONAL SPECS
CAR AIR-CONDITIONER, KITCHEN KNIFE, DINNER –SET, COMMON SALT. ? AS PER SAMPLE ? DETAILED TECHNICAL SPECS QUALITY DIMENSION, MATERIAL, PROCESS, STANDARDS -- BIS, BSS, DEAN, ASTM MAKE OR BRAND DRAWING NO., INSPECTION STANDARDS INSPECTION PROCESS RICE, CHEMICALS
….SPECIFICSTIONS TESTING AND CERTIFICATION SUPPLIER’S TC, THIRD PARTY TC, DISPATCH INSPECTION CLEARANCE IF APPLICABLE. LOGISTICS QUANTITY, LOTSIZE, PACKING INSTRUCTIONS, LEGAL, ENVIRONMENT AND SAFETY FEATURES
…SPEC
YOU REQUIRE 100 NOS. BOLTS FOR MANUFACTURE OF CRANE TROLLEYS. PLEASE DRAW A SPECIFICATION SHEET FOR THE PURCHASE ORDER. BASED ON THIS SPECIFICATION THE SUPPLIERS WILL SUBMIT THEIR
OFFER PRICE FOR THE SUPPLY.
… SPECIFICATION
COMMON SALT FIT FOR HUMAN CONSUMPTION. PACKED IN 100 Kg NEW GUNNY BAGS. THE FOLLOWING SHOULD BE PRINTED ON THE BAGS IN LETTERS OF SIZE 3.5” X 2” AND 1/2 “ THICK IN GREEN “COMMON SALT FOR KITCHEN” RANDOM SAMPLE SHALL BE DRAWN BY PLANT MEDICAL OFFICER TO TEST FOR SUITABILITY AS PER NORMS
SPECIFIED IN STANDARD NO “IS XXXX” / 1985” OF BUREAU OF INDIAN STANDARDS. IN CASE THE SAMPLE FAILS THE TEST, THE ENTIRE CONSIGNMENT SHALL BE REJECTED AND SENT BACK TO THE SUPPLIER AT HIS COST..
STEPS IN PROCUREMENT SYSTEM
? ? ? ?
?
?
? ?
NOMENCLATURE , CODIFICATION, SPECFN, ITEM MASTER RECOGNITION OF NEED QUANTITY, WHEN, WHERE INDENTING AND INDENTING TRIGGER WHO INDENTS, WHEN, HOW SOURCE IDENTIFICATION HISTORY,INTERNET, MANUALS, JOURNALS, SUPPLIERS’ APPROACH, CATALOGUES SOURCE SELECTION RFQ EVALUATION OF OFFERS FINALISING TERMS AND CONDITIONS
STEPS IN PROCUREMENT
? ADMINISTRATIVE APPROVALS ? NEGOTIATION
? PREPARATON OF PURCHASE ORDER
? FOLLOW UP AND EXPEDTING ? TRANSPORTATION
? RECEIPT AND INSPECTION
? INVENTORY UPDATING ? COORDINATION STORES, SUPPLIER, ACCOUNTS,
USER, CONTROLLING AGENCY.
? INVOICE AND PAYMENT PROCESS
TYPES OF CONTRACTS
? FIXED PRICE ? ANNUAL ORDER ? RATE CONTRACT ? LUMP-SUM ? COST-PLUS CONTRCT ? CONVERSION CONTRACTS ? BLANKET ORDERS ? CONTRACTS WITH PVC
WHAT ARE THE ESSENTIAL AND IMPORTANT ELEMENTS OF A PURCHASE CONTRACT
ELEMENTS OF A P O / CONTRAT SPECIFICATION PRICE QUANTTY TAX AND DUTY
PAYMENT TERMS
PACKING INSTRUCTION FORCE MAJEURE
MODE OF TRANSPORT
BONUS AND PENALTY INSURANCE IN-TRANSIT
LATE DELIVERY PENALTY
LIQUIDATED DMAGES CLAUSE
is anything missing
DESTINATION ELEMENTS OF A PURCHASE ORDER INSPECTION CLAUSE DELIVERY SCHEDULE RISK PURCHASE EXIT CLAUSE COUNTRY OF ORIGIN EXCHANGE RATE
DEFAULT OF CONTRACT LATE DELIVERY LIQUIDATED DAMAGES BONUS AND PENALTY TERMINATION CLAUSE FORCE MAJEURE PERFORMANCE GUARANTEE CLAUSE
BIDDING PROCESS
? NAGOTIATED BUYING ? OPEN TENDER SYSTEM ? CLOSED TENDERING ? TWO PART TENDERING
ADMINISTRATIVE DIMENSIONS DUE DATE AND TIME EXTENSION OF DUE DATE BID OPENING PROCESS ETHICAL DIMENSIONS ? RE-TENDER ? CONFIDENTIALITY ? SANCTITY OF PROCESS
GLOSSARY OF TECHNICAL TERMS TERMS
LETTER OF CREDIT ‘L C’ L C IS A METHOD TO CONTROL THE DOCUMENTS OF TITLE TO THE GOODS UNTILL THE MOMENT OF PAYMENT OR ACCEPTANCE OF A ‘BILL OF EXCHANGE’ PARTIES INVOLVED: BUYER – SELLER – ISSUING BANK – ADVISING BANK
BILL OF LADING ISSUED BY THE CAPAIN OF THE SHIP THAT CARRIES THE GOODS. EVIDENCE OF A CONTRACT OF SHIPPING. ALSO THE DOCUMENT OF ‘TITLE OF THE GOODS’. THE LEGAL HOLDER OF THE BILL IS ALSO THE LEGAL HOLDER OF THE GOODS SUBJECT TO THE PAYMENT OF FREIGHT. CLEAR / CONDITIONAL BILL OF LADING
GLOSSARY OF TECHNICAL TERMS LETTER OF INTENT WHAT IS A LETTER OF INTENT WHO ISSUES IT TO WHOM WHEN IS IT ISSUED
PACKING SLIP CHALLAN RR CONSIGNMENT NOTE MRO PERF GUARANTEE BANK GUARANTEE DUCUMENTS NEGOTITED THRO’ BANK BANKER’S REPORT LC BG
INCOTERMS INTERNATIONAL COMMERCE TERMS FIRST PUBLISHED IN 1936 THE NEWEST VERSION
‘Incoterms 1990’.
THEY REFER TO SOME STANDARD CONDITIONS IN CONNECTION WITH DELIVERY AND RANSPORTATION AND RISKS ATTACHED TO GOODS IN TRANSIT USING INCOTERMS MAY PREVENT
MIS-UNDERSTANDINGS BETWEEN SUPPLIER AND
BUYER. Examples for sea and other carriers : ..
INCOTERMS INCOTERMS EXW CIF FCA FAS DDU CPT FOB DDP CIP CFR DAF
EACH INCOTERM ARRANGES THE “DISTRIBUTION” Of COSTS OF TRANSPORTATION AND INSURANCE, AND THE RISKS OF LOSS OR DAMAGE IN THE PHYSICAL
DELIVERY.
TYPES OF CONTRACTS DISTINGUISHED BY INCOTERMS – SEA FREIGHT DEPARTURE EXW - Ex Works MAIN CARRIAGE (freight) UNPAID FOB, FAS MAIN CARRIAGE (freight) PAID CIF, CFR ARRIVAL DES - Delivered EX SHIP DEQ – Delivered EX QUAY
…INCOTERMS
INCOTERMS REGULATE WHICH DOCUMENTS SHOULD BE PROVIDED BY THE SUPPLIER AND WHO BEARS THE COST OF THESE DOCUMENTS. INCOTERMS DO NOT REGULATE THE LEGAL DELIVERY OR LEGAL TRANSFER OF TITLE.
…INCOTERMS
A CONTRACT REFERS TO THE INCOTERM ONLY WHEN BOTH PARTIES HAVE REACHED AN AGREEMENT ABOUT IT . PARTIES ARE FREE TO AGREE TO DEVIATIONS FROM AN INCOTERM. BUT IT IS RISKY TO ADD A WORD OR A LETTER TO INCOTERMS (AS THEN A COURT MAY GIVE ITS OWN INTERPRETATION).
ASPECTS OF PROJECT CONTRACTS MANAGEMENT SYSTEM
ASPECTS OF CONTRACTS LARGE PROJECTS
IN
PRE QUALIFICATION WHY PREQUALIFICATION TO ASSES INTEREST GENERATED IN POTENTIAL PARTIES TO ASSESS AVAILABILITY OF STATE OF ART TECHNOLOGY TO SAVE TIME IN EVALUATING AND SCREENING BIDS FROM UNQUALIFIED BIDDERS TO SCREEN OUT BIDDERS OF DOUBTFUL COMPETENCE TO ENCOURAGE INDIGENOUS PARTIES TO GROW BY FORMING Jt. VENTRES WITH INTERNATIONAL PARTIES. ...
…WHY PRE QUALIF
? BIDDERS NOT QUALIFIED TO UNDERTAKE THE WORK
HAVE BETTER CHANCE TO UNDERSTAND THE MAGNITUDE AND COMPLEXITIES AND DO NOT WASTE RESOURCES BY PARTICIPATING IN THE BIDDING PROCESS.
? WELL QUALIFIED BIDDERS KNOW THAT THERE WOULD
BE FAIR COMPETITION AMONG EQUALLY COMPETING PRTIES
ESSENTIAL CONTENTS OF INVITATION FOR PRE-QUALIFICATION BIDS
BROAD DETAILS OF PROECT
SCOPE OF WORK OF THE PACKAGE DETAILS DESIRD TO BE SOUGHT FROM BIDDERS PREQUALIFICATION CRITERIA THE
BASIC INFORMATION REQD IN PRE -QUAL PROCESS BIDDER’S PROFILE EXPERIENCE AND PAST PERFORMANCE CAPABILITY IN RESPECT OF PERSONNEL EQUIPMENT PLANT FINANCIAL STATUS BIDDER’S PROPOSAL FOR FUNDING AND IMPLEMENTATION BIDDER’S CONFIRMATION REGARDING GENL. SCOPE OF WORK OF THE CONTRACT
PRE QUALI…. PRE QUALIFICATION CRITERIA
? PROVIDES CLEAR BASIS ON WHICH PROSPECTIVE
BIDDERS WILL BE EVALUATED
? TRANSPARENCY ? BASED ON REALISTIC NEEDS OF THE CONTRACT
? MUST RELATE TO THE CHARACTERISTICS THAT ARE
ESSENTIAL TO ENSURE SATISFACTORY EXECUTION OF THE CONTRACT
? BIDDERS MUST BE PREQUALIFIED BASED ON PRECISE
“PASS/ FAIL” CRITERIA WHICH MUST BE MET SUBSTANTIALLY.
LARGE PROJECT CONTRACTS
TURN-KEY AND NONTURN-KEY CONTRACTS
? LARGE PROJECTS MAY BE BROKEN UP INTO WELL
IDENTIFIABLE “PACKAGES” TO FACILITATE PROCUREMENT, COORDINATION AND EXECUTION AS A WHOLE. ? REPETITIVE AND SMALL VALUE PROJECTS MAY BE EXECUTED IN NON - TURNKEY MODE. ? PROJECTS INVOLVING NEW TECHNOLOGY AND MAIN PACKAGES ARE PREFERRED CANDIDATES FOR TURNKEY CONTRACTS.
….. LARGE PROJECTS
? MOST OFTEN A “TWO STAGE” TENDERING PROCESS IS
FOLLOWED. ? IF TECH SPECS. ARE PRECISE WITH DETAILS OF EQUIP, DRIVES, AUXILIARIES (COMPRESSORS, PUMPS, CONTROLS etc.) “SINGLE STAGE” TENDERING IS OK.
GLOSSARY OF TECHNICAL TERMS TERMS
LETTER OF CREDIT ‘L C’ L C IS A METHOD TO CONTROL THE DOCUMENTS OF TITLE TO THE GOODS UNTILL THE MOMENT OF PAYMENT OR ACCEPTANCE OF A ‘BILL OF EXCHANGE’ PARTIES INVOLVED: BUYER – SELLER – ISSUING BANK – ADVISING BANK
BILL OF LADING ISSUED BY THE CAPAIN OF THE SHIP THAT CARRIES THE GOODS. EVIDENCE OF A CONTRACT OF SHIPPING. ALSO THE DOCUMENT OF ‘TITLE OF THE GOODS’. THE LEGAL HOLDER OF THE BILL IS ALSO THE LEGAL HOLDER OF THE GOODS SUBJECT TO THE PAYMENT OF FREIGHT. CLEAR / CONDITIONAL BILL OF LADING
GLOSSARY OF TECHNICAL TERMS LETTER OF INTENT WHAT IS A LETTER OF INTENT WHO ISSUES IT TO WHOM WHEN IS IT ISSUED PACKING SLIP CHALLAN RR CONSIGNMENT NOTE MRO PERF GUARANTEE BANK GUARANTEE DUCUMENTS NEGOTITED THRO’ BANK BANKER’S REPORT --LC BG
doc_970238982.pptx