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SUMMER INTERNSHIP REPORT

A STUDY OF: CUSTOMER SATISFACTION IN PROJECT BUSINESS
Submitted by
Shefali Aggarwal
A0101913102
MBA Class of 2015
Under the Supervision of

Dr. Shalini Trivedi
Assistant Professor
Department of Economics

In Partial Fulfillment of the Requirements for the Degree of
Master 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 A study 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
MBA GEN (Class of 2015)









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CERTIFICATE

This is to certify that Shefali Aggarwal student 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 Administration general 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 me
a 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 the
Companys 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. As they 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 and
completion 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 on
road 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 to small Siemens 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 the product
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 product
operations 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 company
inventory. 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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The concept of customer satisfaction, how it should be measured, and its implications for an
organization have been studied extensively in the context of traditional product-oriented
industries such as consumer goods and in the context of mass-produced services such as hotel
services or air travel services (Storbacka, Strandvik, & gronroos, 1994). Numerous studies and
publications have almost unanimously concluded that measuring customer satisfaction can lead
to several benefits for the organization applying it:
CSM results can be used to discover important strengths and weaknesses in
product/service offerings and more effectively focus improvement efforts towards these
issues (Lin & Jones, 1997)
Depending on the industry context, CSM results may be used to estimate the degree of
customer loyalty which is vital for long-term revenues (Gronholdt, Martensen, &
Kristensen, 2000).
CSM enables the supplying organization to compare the performance of its different
business units in different time periods and locations (Jones & Sasser, 1995).
CSM is useful for assessing the effectiveness of efforts to redesign elements of the service
delivery system (Chase & Bowen, 1991).
Customer satisfaction can be used as a basis for customer segmentation
(Athanassopoulos, 2000).
According to (McColl-Kennedy & Schneider, 2000), measuring customer satisfaction is
not a neutral act, but an intervention. The opinions of the customer whose satisfaction is
measured can be affected by the measurement process
CSM can be used by the supplier as a symbolic activity for demonstrating customer-
oriented behavior (Kujala & Ahola, 2004).
Striving for high customer satisfaction can be considered important, since increased
customer satisfaction has been linked to customer behaviour that positively affects business
results (e.g. Kotler, 1994; Rust & Oliver, 1994; Vavra, 1997; Lam et al., 2004).


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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 a
dependency 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 conned 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 renement 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


20

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 a
national 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. In
this 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


21

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 1 Acquisition 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


24

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 Compliance
Matrix 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 3 Bid 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


26

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 documentation
requirements 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 4 Project 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


29

bidding and trying to get projects. For instance, if Siemens lost the bid despite
being the lowest bidder, this situation has to be analyzed as to why this happened.
The results would then have to be documented.
The key deliverables during the Project Handover phase are:
1) A Project Manager and a Commercial Project Manager are appointed.
2) All the complete and updated contract and bid documents handed over to
Project Manager.
3) Changes between contract and bid documented.
4) Scope of delivery and cost calculation finalized and adapted for the project.
5) Risk analysis for the project. Again this would contain the potential risks to
the project, their assessment, likelihood of occurrence and actions to reduce
risk.
6) Final dialog held with Bid Manager and analysis of won/lost projects. This is
documented to help in such endeavors in the future.
At the successful completion of this phase, the Start Project milestone is
reached.
4.1.2 Project Execution:
This stage during the project management cycle at Siemens indicates the actual life of
the project, when it occupies the maximum resources labor, time and money. This
stage starts from the Project Start and clarification of order receipt, and goes all the
way to implementation and then on to customer acceptance.
vi. Project opening and clarification (Milestone 6 Entry Order clarified):
After reaching the Start Project milestone, the project now moves on to the
project opening and clarification phase. The first task performed by a project
manager in this phase is to set up the project organization. This would mean
bringing people in the project team to perform a variety of tasks, and then define
their roles and responsibilities.


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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 be
used 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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Sixth, once the OVS has been completed, the project manager, along with his
team, has to document a change and claim strategy. A change strategy, or
Change management can include a structured strategy or plan to transition the
project from the current state to the desired future level.
Seventh, the project manager now has to define the project structure that would be
used in the implementation of the project. This stage involves the organization of
different areas of the project in feasible and comprehensible chronological stages
using schedules such as Gantt charts. These schedules are used to plan and report
the progress of the project. The project planning and definition of the project
structure begins with a clear definition of the project scope and a well-defined
notion of the deliverables at the end of the project. Then the appropriate methods
to complete the project are determined.
The next step in defining the project structure is to complete the Work
Breakdown Structure. A Work Breakdown Structure (WBS) at Siemens is a
hierarchical disintegration of a project in phases and work packages for efficient
planning and control of the project. The WBS starts with projects end objective
or deliverable and then repeatedly decomposes it into manageable constituents
that can be measured in terms of cost, duration, responsibility, size and labor.
Though not defined in it, a WBS also enables efficient cost, duration and man-
hour reporting of the different phases and stages of the project. Conversely
though, the costs, duration and labor for each of the phase can be summed
backwards to give the overall statistics for the entire project.
Once the WBS has been defined by the project manager, he has to demarcate the
start dates and duration of these phases of the WBS. The WBS is then represented
in a graphical form in a Project Schedule drawn up using MS-Project. The
phases and work packages defined in the WBS are also accompanied with their
respective start dates and durations in the Project Schedule. This helps the project
manager analyze and understand the overlapping phases of the project, and would
ultimately help him in allocating labor, budget and resources to each activity
efficiently.


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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.


33

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 implementation
of 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 sourcing
options 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.


34

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 8 Dispatch 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.


35

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 9 Materials 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.


36

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 10 Erection 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.


37

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 11 Commissioning 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.


38

Third, once all the tests are conducted, i.e. the Commissioning has been
completed, the commissioning unit creates final execution documentation. The
final execution documents would include a list of all the tests that have been
performed for the commissioning of the plant/system, whether internally or
externally. Moreover, the document would contain the results of all the tests.
Fourth, once the tests have been performed and documented, the project team now
organizes customer training. Again, the duration of this training varies according
to the complexity of the plant/system. The training is required so as to enable the
customer to easily and efficiently handle the plant/system, operate it as well as
carry out minor commissioning as and when the requirements arise.
The key deliverable needed for this phase to reach its milestone are:
1) Commissioning completed. This would indicate that the tests have been
conducted on the plant/system, both internally and externally.
2) Documented list of open points. This would inform the client as to the
possible shortcomings that could arise out of somewhat limited functioning,
untested or obscure areas of operations of the plant/system.
3) Documented and detailed commissioning results/tests.
4) Updated execution documents prepared by the commissioning unit.
Once the phase is completed, the Milestone 11 - Commissioning completed
milestone is reached.
xii. Acceptance (Milestone 12 Provisional Customer Acceptance):
As the name indicates, this phase is for transferring the plant/system to the
customer. During this phase, first, the project team at Siemens plans and prepares
the Acceptance Test. An acceptance test is a black-box testing, i.e. just a test
of the external functioning of the machine performed before the client accepts the
product. This means that the client tests the inputs, outputs and functioning of the
plant/system without testing the internal components. Second, the acceptance test
that has been planned and prepared by the Siemens team is performed in front of


39

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 and
functionality 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 13 Final 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 has
been 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 I Finding 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 II Developing 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.


45

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
not specify 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


46

installation and service of large products, if chosen by the client to be performed by
Siemens ,can be extensive, complex and time and resource consuming. Thus it would
form an entirely different project in itself, and would come under the realm of project
operations instead of product operations.
4.2.5. Maintenance and Service under Warranty:
The duration of maintenance and service offered by Siemens on its products can vary
depending upon the length of the warranty period on the products. Moreover, the
warranty offered on the product can be extended based upon additional service option
purchased by the client. The service that is offered under the warranty period is
charged for from the clients. This service may include labor charges for the
replacement of the faulty parts etc. However, since the products and its parts are
under warranty, they are replaced for free.
4.2.6. Post-Warranty Maintenance and Service:
Once the warranty period is over, both the service and the parts are charged for from
the clients. Thus most of the service offered by Siemens on its products, within
warranty or post-warranty, is charged for from the clients.
4.3 PRODUCT OPERATIONS MANAGEMENT IN RESPONSE TO A GENERAL
ENQUIRY:
The product operations can be significantly altered in case of a general enquiry. Here the
client decides to open a tender in the future for getting the product. In this case, marketing
phase remains the same as already stated in product operations. However different companies
might be competing with Siemens for selling products that can perform the same
functionality and can fill the same user need as Siemens. As a result, the client organization
opens a tender to decide whose product to purchase.
The different phases in this case are stated as follows:
4.3.1. Marketing:
Marketing process remains the same as stated in Siemens product operations. First there is
Lead Management. The teams from Siemens first try to analyze the existing market,
competitors, technologies and products. Then they conduct a market analysis to analyze the


47

existing demands or problems with the potential market. This justifies the positioning of a
Siemens product as a solution. This is followed by presentation where idea is pitched in
front of the clients, and then by follow-up via meetings and mails.
However, as other companies apart from Siemens are also vying for the same client with a
similar functioning product, the client decides to open a tender.
4.3.2. Request for Proposals:
This action stage is used to indicate the actual opening of the tender and that the client is
seeking proposals for the project from different companies. The tender document is offered
at a price, and is purchased by different companies.
4.3.3. Bid/No Bid Decision:
The tender document, along with all other supporting documentation is circulated to the bid
team at Siemens. It is very difficult to assess whether bidding for a tender is in the best
interest of Siemens, especially just from the short tender notification description or
summary. Consequently, for taking a bid/no bid decision, 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. Moreover, a contract can
sometimes contain terms that Siemens is not ready, or unable, to fulfill. For instance, terms
bordering around intellectual property may cause unwillingness on part of any company,
including Siemens.
Again, the bid team analyses the requirements to bid for the tender. For instance, the buyer
may ask for audited accounts for the past few years to show year-on-year growth. Apart
from this, they can ask for separate accreditations, like ISO certification. This may be
required to prove that the company is operating as per a defined set of standards. Moreover,
the client may ask for references from organizations for similar work done by Siemens in
the past.
Thus, overall, to check if Siemens can fulfill the requirements in the tender, a Compliance
Matrix 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.


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Moreover, before making the bid/no bid decision, the team has to assess the clients, and if
possible, competitors strengths, weaknesses and competitive positioning w.r.t. Siemens. A
SWOT (Strengths, Weaknesses, Opportunities and Threats) study can be done to achieve
this. There is no minimum limit on the deadline for tenders, but typically the timeframe
falls between two and four weeks. Depending on the type of contract and Buyer, the bid/no
bid decision can be quite straightforward or may take some consideration, balancing a set
of points for and against.
4.3.4. Pre-Bid Meetings:
Pre-bid meetings are an important part of the bidding process at Siemens. Pre-bid meetings
can be held after issue of the tender by the buyer, or after marketing itself before the issue
of the tender. They can be used for different purposes before Siemens makes the final
bid/no bid decision. For instance, they can be used for clarification about the terms and
requirements placed forth by the buyer in the tender. However, one important thing to note
is that Siemens makes sure not to disclose the price of its product during the pre-bid
meeting.
Second, a pre-bid meeting can be an essential tool for negotiations between the buyer and
Siemens. The negotiations can be about different aspects of the tender, such as the value,
terms, conditions, pre-requisites etc. Moreover, the negotiations can be about the
specifications and the functionality of the product in question, with both the parties wanting
best out of the deal for themselves. Thus, both of them might be willing to make changes to
the tender specifications, exchanging one point for another.
Third, a pre-bid meeting can be used by the buyer to gauge the expression of interest from
the supplier. For instance, more knowledge and research about the tender exhibited by
Siemens during pre-bid meetings can show that Siemens is significantly interested in
supplying the product to the buyer.
Fourth, a pre-bid meeting can also be used to acquaint the Siemens teams with the buyer,
if this has not already taken place during the marketing phase. This step is particularly
useful, as both the parties are interested in a long standing supplier-buyer relationship.


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4.3.5. Bidding:
If Siemens goes forward with its Bid decision, it would, along with other companies,
quote a price to bid for the product. In case of a standard product, the price quoted on the
bid by Siemens would be devised relatively simply by estimating the current macroscopic
market and competitor information. However, in case of customized as well as specially
developed products, the price 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 the costs of
expected man-hours, price lists of parts, materials and other costs involved. These estimates
are provided by Siemens based on its previous technical expertise in the field.
4.3.6. Tender evaluation and decision:
The client analyzes the bids based on a variety of criteria. For instance, the client can
screen the bids by placing a minimum level on the quality required for the project, as that
can underline that the bidding companies understand the problem or the quality expected
from the product. Thus, as already stated, the client would have requested different
documents, references, certifications and experience from the potential bidders as
additional documents when the tender was opened. The companies that qualify the
screening process can then be sorted on the basis of price quoted in the bid, and the project
would be awarded to the lowest bid. After the bid has been awarded, the client can have a
Bid Result project stage to report the results of a bid opening, rejection of bids, bids
received unopened, bids returned unopened, and bids "in" status. Additionally, the client
would contact the low bidder and attempt to get a firm commitment, as well as request
names of favored subcontractors, if available.
In the meantime, while the client is evaluating the bids entered for the tender, Siemens can
have client meetings, visits and presentations if they have not already been covered during
the earlier stages of the product operations process.
Moreover, once the tender decision has been taken, in favor of Siemens or not, Siemens
holds an Internal Debrief meeting. This meeting is to assess and document all the key
learning from the bidding process so as to keep continuously improving. For instance, if
Siemens wins the bid, the team documents everything for easy access and to streamline the


50

bidding process during future tenders. On the other hand, if Siemens loses despite being the
lowest bidder, the team tries to understand the reasons why it lost the tender, documents it
so that the mistakes can be avoided in the future.
4.3.7. Design:
Design phase is ambiguous in its positioning in the product operations in case of tendering.
This is because some of the design phase has to be completed before Siemens actually bids
for the tender, or even before the pre-bid meetings start, whereas a majority of the design is
still completed after the bid has been placed and Siemens has won the bid.
As stated earlier, the design phase is held mainly for customized or specially developed
products. Therefore, completing some of the design process before bidding is done for
many reasons. For instance, in the case of both customized as well as specially developed
products, the client may want to view some of the design before it acknowledges Siemens
bid as legitimate. Moreover, a part of the design completed before actual bidding may
show appreciable effort on the part of Siemens, and the client may gauge this as Siemens
expression of interest. (Siemens. Siemens Ltd., 30 Jun. 2013)
Along the same lines, the design that has been completed before bidding can play an
essential role during negotiations in pre-bid meetings. This is because now both the parties
will have a slightly clearer picture of what is to be expected in terms of product
specifications, features and functionalities. Thus the negotiations now would make more
sense.
The rest of the design process follows the same structure as in normal product operations,
albeit it is conducted after the bid has been won by Siemens. It follows the same stages, vis.
a vis. R&D, capability research, actual design and client approval.
4.3.8. Sales:
Once Siemens has been awarded the tender and the design phase has been completed, the
product operations process now moves into the sales phase. This stage is the same as the
one in Siemens product operations without tendering. Depending on the nature of the
product as well as the time when the sale is going to be committed (present vs future),
a sales contract or a sales agreement is drawn. As noted earlier, a sales agreement is


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merely a promise to provide a product at a future date, and the sales contract refers to
actual transfer of the ownership of the product now. Thus, the sales agreement does not
specify the quantity of the product whereas a sales contract does. Moreover, if a sales
agreement is drawn, future sales contracts can be drawn on the basis of that.
4.3.9. Installation:
The installation and service phase starts after the sale is committed, and is again same as
product operations without tendering. The installation is only offered for Siemens small
products, sub-parts and spare parts. Moreover, the features may come bundled in with the
product or may be optional for the client to choose in addition to the warranty.
4.3.10. Maintenance and Service under warranty:
The duration of maintenance and service varies according to the warranty and additional
service option purchased by the client. Moreover, even though the service is charged for
from the clients by Siemens, the product, equipment and parts replaced during warranty are
free.
4.3.11. Post-Warranty Maintenance and Service:
In continuation to its commitment towards excellent technology and service offered to the
clients, Siemens provides post-warranty maintenance to its clients. Once the warranty
period is over, both the parts as well as the service is charged for from the clients.

(Understanding the various tools used in Siemens Limited and how they help in performing day
to day task)

NEXUS TOOL
NEXUS is used in Siemens Ltd. which consists of different tools that require approvals from the
higher authority. It is internal and Siemens specific software.



52



Some of the functions performed using this software are tools are:
File Note System


53

The company prepares the File Note for the amendment or deletion of any PO Cost in the
project, or if the chosen vendor is to be changed.

Bank Payment Order
At the time of the supply, the company gives some amount to the vendor in advance, some of the
amount is paid after the material has been supplied or the service has been rendered, and some
amount is held as retention. This tool is used when the company is paying off the retention dues
or Site Cash or when preparing an EMD.

Attendance Register Form
This tool maintains the attendance of the employees.

Journal Voucher
In different projects, numbers of employees are involved and on monthly basis, we received the
debit entry to our cost center. So, Journal Voucher (JV) is made, which segregates the employees
on the basis of the different projects. It is about to transfer the cost from cost center to a
particular project. (Cost Center means where the cost of the employees or project takes place).
From cost center, the cost of various projects shifted to their respective projects, so that the
company can analyze about the Cost of the respective project. To transfer the cost from the cost
center to a particular project, we can debit (Dr) the particular project WBS Element and credit
(Cr) the cost center of the project.

International Travel Claim Form
This is related to the travelling expense of the employees within the country. When the
concerned authority approves it, the employee gets the expense claim.

Stationary Requisition System
This is a request made for the stationary that is used by the employees. So approval from the
concerned authority is required.

Accommodation Requisition Form


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If an employee needs the accommodation facility, he has to take the approval from the concerned
authority.

Timesheet Management System Form
This gives the details of the employees related to their working hours that are spent in the office.

Finance
In this credibility of the customer is assessed and verified.

HR Process
This deals with the requests sent by the employees for the business cards and also with the
employee separation process.

SAP TOOL
As a global company present in more than 190 countries, Siemens aims to pool its services and
skills in all Groups and Regions and combine them into successful, profitable and innovative
solutions. This requires globally standardized structures, processes, applications and
infrastructures that create sustainable cost savings as well as business excellence. As part of its
worldwide standardization and cost cutting initiative Siemens implemented the SAP system -
Spiridon; modified to reflect the internal processes in the company.
Spiridon is a global program for harmonizing processes throughout the enterprise on the basis
of a highly integrated standard IT platform (SAP R/3). SAP is an ERP (Enterprise Resource
Planning) software system that integrates all business activities like manufacturing, supply chain
management, customer service and customer relationship management, finance and human
resources in a single database.


55





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Main objectives of implementation are :
Standardization of business process
Minimizing of global IT costs
Worldwide use of best practices
Improved data and information quality resulting in more transparency and better
controlling
Consistent master data requiring minimal maintenance efforts.
The solution enables Siemens to standardize its processes in the areas of finance, logistics,
production planning, human resources and internal transactions based on the following SAP
modules:
Sales and Distribution
Materials Management
Production Planning
Quality Management
Customer Service
Human Resources
Financial Accounting
Controlling
Assets Management
Project Systems
Warehouse
Business Warehouse

The process of acquiring and sharing knowledge about the SAP system is facilitated through
local key user networks. Key users are experienced professionals who have detailed knowledge
in certain SAP modules. They adapt various system specific documentations to the local needs;
share their knowledge to new users and help solving practical problems in the daily work with
the system.


57

The Spiridon system is vast system connecting all the sectors, divisions, business segments,
business units together and view all the information needed.
It helps the management to view and study any information they want and open it anytime,
anywhere they want.
SAP also helps them to book various projects and other processes which were earlier done on
pen and paper. Helps save time and efforts and leave zero space for error.
The success of SAP is based on the accuracy of the master data created by the company. The
master data includes all the information regarding Siemens vendors, customers, material, tax
codes, company codes, factory codes etc.
SOME OF THE PROCESSES DONE IN SAP ARE:-
1. GRN process
2. PO creation
3. Sales order creation
4. Invoicing to customers etc.
Some of the operations conducted by Siemens in SAP are :
I. Purchase order creation: Purchase order is a written document created in SAP system
containing all the terms and clauses in a contract of procurement of goods or services from
Siemens vendor.
It contains all the necessary and unavoidable terms like payment terms, delivery clause, price of
the product, liability clause, freight, insurance, packaging and many more. Purchase order is a
documented proof which binds the vendor to Siemens for supply of products, raw material, or
service required by Siemens and avoiding of which would invite penalties.
Quotation evaluation sheet (QES): QES is an internal document in Siemens which flows
through the NEXUS tool for approval of the management. In Siemens no material is procured
without making a QES. It contains all the information provided by the vendor to Siemens related
to the product to be procured.


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To prepare a QES minimum of three vendors are mandatory for comparison and choose the best
possible alternative among them.
PO is created on the basis of a QES passed by the management.
Steps involved:
1. ME23N command in SAP system to create PO
2. Put in the vendor code (i.e. the code of the vendor in SAP from whom material is to be
procured)
3. Under header ORGANISATION DATA Enter purchasing organization code Enter purchasing
group code Enter company code (Siemens code)
4.Under header SIEMENS ADD ON AWV enter n & n which means vendor is not blocked
Enter the customer code (for whose project the goods are being procured)
5. Under header CONDITIONS Create Line Item No. Material Code Description of the Project
PO Quantity Price Tax Code to be used WBS element attached to it G/L code Terms and
Conditions QES number And then create and print.
II. Goods Receipt Note (GRN): When a PO is created and received by the vendor. Siemens
accounting data show the goods are to be received from the vendor as an open PO
As and when goods are received and invoices are received for the payment of the goods
received. GRN is done.
GRN is basically keeping in record the goods received, and reducing the PO amount from the
goods received and at end closing it with a zero figure.
GRN also helps to initiate the payment process to vendor in accordance to the payment terms in
PO. Siemens does not initiate the payment process of a good received until a GRN for such
goods is passed.
Steps involved:


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1. ME23N Command to check whether the invoice received is in accordance to the PO issued
earlier. Press Shift + F5 and enter the PO code
Items to be checked are: - The amount of invoice and the correct line item in the drop box Taxes
are appropriately charged
Compare the open amount and the GR Qty. under the header Delivery Schedule. If invoice is
correct continue with the GRN process or else ask for a correct invoice.
2. MIGO is the command used to do the billing in SAP
3. Enter the vendor code and the line item number
4. Fill in the Posting Date, Billing Date, Invoice no., Bill of Lading, Text etc.
5. Enter the quantities under the header QUANTITIES and the location under the header
WHERE.
6. After that click on ITEM OK and finally post it.
If all the information filled above is correct and matches the PO the invoice will be booked in
system.
A GRN number is created and noted





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CHAPTER 5


5.1. Conclusion and Recommendations:
The report presented here has focused on customer satisfaction and quality in the project
business. Because of increasing competition, greater attention continues to be given to customer
relationships and satisfied customers. Companies use various approaches to customer satisfaction
in developing and monitoring product/service offerings in order to manage and improve
customer relationships and quality. Measuring customer satisfaction also has several benefits for
organisations, for example, in improving communication between parties, enabling mutual
agreement, evaluating progress towards the goal, and monitoring accomplished results and
changes. Customer satisfaction surveys also bring contactors valuable information about their
customers. In order to achieve customer satisfaction, companies must understand what their
customers need and how contractors meet those needs. (Storbacka, Strandvik, & gronroos, 1994)
emphasises that customers also have certain wishes regarding how they want to be treated;
furthermore, he notes, the service or physical product purchased has to fit the customers internal
value-generating processes. The objective of the study was to explore customer satisfaction in
Project business. Customer satisfaction can be seen either as a goal or as a measurement tool in
the development of the quality of construction process. Analysis was conducted to deepen the
understanding of this project success factor which has been stated to be under-researched so far.
Analyses was done in order to get information about the concept of customer satisfaction as such
and different features of it. The subgoals of the study were related to identify customer
satisfaction factors and examine the interrelationships between factors. The study also describes
the utilization of customer organization in the organizations and creates the model for assessing
the mutual performance in the project business. The results highlight the need to design the
service product from the customers perspective. Typically, customers were satisfied with the
contractors abilities to co- operate and the skills of the contractors workers and supervisors,
whereas low satisfaction could be identified in the items related to quality assurance and
handover. This result could indicate that the contractor and customer have not planned the
completion stage, or that it has been poorly designed. It could also indicate that there is a


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problem in managing schedules, which also requires mutual co-operation between parties. In
terms of criteria in need of improvement, customers considered correction of defects the priority.
However, this situation could also be derived from the customers subjective perceptions of the
project: The customer might overemphasise the later stages of a project because of its long
duration and because the defects found during the hand-over period stay clearly in the customers
mind. As mentioned earlier, a positive experience of some attributes of the project seems to
reflect strongly on the customers overall sense of satisfaction. Competitive bidding is usually
based on price criteria, and therefore contractors do not have enough incentive to exceed the
customers expectations, and may see customer satisfaction as insignificant. In project business,
customer satisfaction does not guarantee loyalty (future work with that customer). According to,
(Athanassopoulos, 2000) The criteria of selecting a contractor are mainly based on price, but
also on the contractors technical and financial capability and on previous experiences of the
contractors competence. Satisfaction is therefore reflective of customers experiences of and
confidence in the contractors abilities and co-operation capability. A dissatisfied customer will
not work with that contractor in the future, but a satisfied customer would not necessarily
guarantee future projects for the contractor. Therefore, the main benefit of high customer
satisfaction for a contractor is the opportunity to remain a customers potential partner in the
future. However, the essential objective in improving customer satisfaction is to achieve
customer loyalty, which can lead, for example, to partnering arrangements.










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"Siemens Annual report 2012" Siemens. Siemens Ltd.. 30 Jun. 2013
<http://www.siemens.com/investor>.
"Siemens I&S PM Guide" Siemens Ltd.. 10 Jul. 2013
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