Report on Study of Supplier Satisfaction Survey done at

BHEL- Ranipet

PROJECT REPORT

Submitted by

LIVIN SEBASTIAN

REGISTER NUMBER: 16397057

In partial fulfilment for the award of the degree of

MASTER OF BUSINESS ADMINISTRATION

DEPARTMENT OF MANAGEMENT STUDIES

School of Management, Pondicherry University,
Pondicherry – 605 014
Supplier satisfaction survey bhel-ranipet

 DEPARTMENT OF MANAGEMENT STUDIES
SCHOOL OF MANAGEMENT
PONDICHERRY UNIVERSITY
PONDICHERRY-605014

CERTIFICATE

This is to certify that this project report entitled “Report on Study of

Supplier Satisfaction Survey ” done for BHEL- Ranipet is
submitted by LIVIN SEBASTIAN, 2nd MBA of DEPARTMENT OF MANAGEMENT
STUDIES, SCHOOL OF MANAGEMENT, PONDICHERRY UNIVERSITY in partial
fulfilment of the requirements for the award of the degree of MASTER OF BUSINESS
ADMINISTRATION and is certified to be an original and bonafide work done under the
guidance of Dr. T. NAMBIRAJAN, Professor, Department of Management Studies. This
report has not formed the basis for the award of any degree, diploma, associateship,
fellowship or other similar title to the candidate and that the report represents an independent
and original work on the part of the candidate.

Dr. T. NAMBIRAJAN
Professor & Guide
Department of Management Studies

Date: Dr. CHITRA SIVASUBRAHMANIAN

Puducherry Head of the department
Department of Management Studies

1
 2
 DECLARATION

This is to certify that this report of a “Report on Study of Supplier

Satisfaction Survey done at BHEL- Ranipet” is submitted by
me as a part of the requirements for the degree of Master of Business
Administration, Department of Management Studies, School of Management,
Pondicherry University, Pondicherry.
I declare that this is an original record of an Observation Study on an
entrepreneurial venture, conducted by me during the period 9 May 2017 to 6 July
2017

Date: 07.07.2017 Signature:

Puducherry Name of student: LIVIN SEBASTIAN

3
Acknowledgements

I thank the BHEL management and HRDC for giving me this opportunity to carry out this
Study.
My heartfelt thanks to Mr. Cyril R Fernandez, General Manager/MM, BHEL who guided me
to complete this project.
I owe sincere gratitude to Mr. Krishnamoorthy, Sr. Engineer, Material Planning, without
whom this project would have never been possible.
I express whole hearted gratitude to Prof. T N Nambirajan who guided me to complete this
project.
I am extremely grateful to Dr. R Chithra Sivasubramanyan, Head, Department of
management studies Pondicherry University for her guidance and valuable support.

4
 TABLE OF CONTENTS
CHAPTER DESCRIPTION PAGE NO
CERTIFICATE FROM THE DEPARTMENT 1
CERTIFICATE FROM ORGANISATION 2
DECLARATION 3
ACKNOWLEDGEMENTS 4
TABLE OF CONTENTS 5
TABLE OF TABLES AND CHARTS 6
1 INTRODUCTION 7

INTRODUCTION TO THE TOPIC 8

PROFILE OF THE COMPANY 10
REVIEW OF LITERATURE 19

2 METHODOLOGY OF STUDY 21
OBJECTIVES OF THE STUDY 22
PERIOD OF THE STUDY 23
3 ANALYSIS 26
4 CONCLUSIONS 61
FINDINGS 62
CONCLUSION 63
APPENDIX 64
QUESTIONNAIRE 65
REFERENCES 71

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 LIST OF TABLES & CHARTS

SERIAL DESCRIPTION PAGE

NO CHARTS NUMBER
3.1 Number of Respondents 29
3.2 Summary of Process Rating 30
3.3 Summary of Overall Rating 31
3.4 Overall rating 32
3.5 Preference for pre-dispatch Inspection 33
3.6 Area of improvement in ratings 34
3.7 Cross tabulation between average rating 35
3.8 Summary of factor rating 36
3.9 ANOVA charts 37-50
TABLES
3.1 Response Counts 51
3.2 Reliability Statistics 51
3.3 Classification of the Respondents 51
3.4 Summary of Process Rating 52
3.5 Summary of Overall Rating 53
3.6 Overall rating 55
3.7 Preference for pre-dispatch Inspection 55
3.8 Factor analysis tables 55-59

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 INTRODUCTION

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CHAPTER 1

INTRODUCTION TO THE TOPIC

Suppliers are the value creators for the organization. Suppliers have emerged as a value-
adding partner in industrial relationships. These values can be derived effectively if the
buying organization keeps a long term strategic relationship with suppliers. Long term and
sustainable partnership is the essence of the current business trend. One of the prominent
drivers of this relationship is supplier satisfaction. Supplier satisfaction is defined as a
supplier’s feeling of fairness with regard to buyer’s incentives and supplier’s contributions
within an industrial buyer–seller relationship as relates to the supplier’s need fulfillment.

Satisfied suppliers can substantially contribute to the manufacturing flexibility, production

life cycle compression, cost advantage and innovations to the original equipment
manufacturer (OEM). If we will analyze our business pattern we will and that we are too
much concerned about our customer and very little about the supplier. Very few companied
do supplier satisfaction survey but we must remember supplier satisfaction can be linked to
supply chain effectiveness, customer satisfaction, buyer supplier relationship and more over a
management tool for strategic positioning of the supply chain. As seen by manufacturers,
suppliers have become true partners of value creation as opposed to mere deliverers of parts
(Ulaga and Eggert, 2006). Buyer-supplier relationship must work to get the technical and
financial advantages by concentrating mutual strength and weaknesses.

When it comes to and the small scale suppliers satisfaction many parameters of the supplier
selection criteria and expectations of the buyers needs to be reviewed very closely. In other
words the role of buyer plays a major role in SSI supplier satisfaction. Buyers must review
their expectations with the capacity and capability of the small scale supplier. Buying
organization must understand the existing circumstances prevailing in small scale industries
with which relationship is in progress.
Supplier Satisfaction has become a topical issue to improve processes by having working
relations with suppliers. Donath (1991) expands on supplier satisfaction to be some- thing,
which is just discovered in companies. And the change towards it starts with our individual
attitudes toward suppliers.

8
As evidence some reports are available about companies running their own supplier
satisfaction surveys, probing the organization’s purchasing underbelly Donath (1991). Barrier
(1994) continues with the same subject. ‘A business that is genuinely concerned itself about
its own customers may still be a terrible customer itself making life hellish for its suppliers’
wrote Michael Barrier in Nation Business. In the same article Barrier refers to the late W.
Edwards Deming, who stated: "How can a Supplier be innovative and develop economy in
his production processes, when he can only look forward to short- term business with a
purchaser?" Instead of a long-term relationship -loyalty and trust between a business and its
suppliers.

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PROFILE OF THE COMPANY

• Industry: Electrical equipment's

• Founded: 1964
• Government company
• Maharatna company
• Area served: Worldwide

Forging ahead on a sturdy foundation of over five decades of engineering excellence and
embracing the glorious next phase of its growth, BHEL is an integrated power plant
equipment manufacturer and one of the largest engineering and manufacturing companies of
its kind in India engaged in the design, engineering, manufacture, construction, testing,
commissioning and servicing of a wide range of products and services for core sectors of the
economy, viz. Power, Transmission, Industry, Transportation (Railways), Renewable Energy,
Oil & Gas, Water and Defense with over 180 products offerings to meet the needs of these
sectors. BHEL has been the bedrock of India's Heavy Electrical Equipment industry since its
incorporation in 1964.
HEL's growth has been synchronous with achieving self-sufficiency in the indigenous
manufacturing of heavy electrical equipment. Out of the available 35,000 MW per annum
capacity for power plant equipment manufacturing in the country, BHEL alone constitutes a
mammoth 20,000 MW per annum capacity. A widespread network of 17 Manufacturing
Divisions, 2 Repair Units, 4 Regional Offices, 8 Service Centers, 4 Overseas Offices, 6 Joint
Ventures, 15 Regional Marketing Centers and current project execution at more than 150
project sites across India and abroad corroborates the humungous scale and size of its
operations.
PRODUCT PROFILE

THERMAL POWER PLANTS

Steam Generators, Steam Turbines, Turbo Generators along with regenerative feed cycle up
to 800 MW capacities for fossil-fuel, and combined-cycle applications, capability to design
and manufacture Steam Generators, steam turbines with supercritical steam cycle parameters
and matching Turbo Generators of up to 1000 MW unit size.
Condensers, Condensate Extraction Pumps, Boiler Feed Pumps, Valves and Heat
Exchangers meeting above requirement of TG Sets up to 1000 MW.

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 NUCLEAR POWER PLANTS
Steam generator & Turbines and matching Turbo-Generators, Condensers up to 700 MW
capacity.
Heat exchangers
Pressure vessel
Reactor vessels

GAS-BASED POWER PLANTS

Gas turbines and matching generators ranging from 25 to 292 MW (ISO) rating.
Gas turbine-based co-generation and combined-cycle systems for industry and utility
applications.

HYDRO POWER PLANTS

Custom-built conventional hydro turbines of Kaplan, Francis and Pelton types with matching
generators, pump turbines with matching motor-generators upto 300 MW, Bulb turbine with
matching generators up to 10 MW
High capacity pumps along with matching motors for Lift Irrigation Schemes (up to 150
MW)
Electro Hydraulic Microprocessor based Digital Governor for conventional turbines
Microprocessor based Digital Controller for lift irrigation schemes
Mini / micro hydro sets with PLC based compact Digital Governor up to 15 MW
Static excitation systems for Hydro generators & motors
Brushless exciter for Hydro generators & motors
Special purpose Motor Generator sets
Spherical (rotary) valves, butterfly valves and auxiliaries for hydro stations

DG POWER PLANTS
HSD, LDO, FO, LSHS, natural gas based diesel generator power plants, unit rating of up to
20 MW and voltage up to 11 kV, for emergency, peaking as well as base load operations on
turnkey basis

INDUSTRIAL SETS
Industrial turbo-sets of rating from 7 to 150 MW.

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 Industrial steam turbines and gas turbines for drive applications and co-generation
applications.
Reheat steam turbines and matching generators ranging from 120 to 200 MW captive, utility
and combined cycle power plants.

CASTINGS AND FORGINGS

Sophisticated heavy castings and forgings of creep resistant alloy steels, stainless steel and
other grades of alloy steels meeting stringent international specifications for components of
sub critical, supercritical and ultra-super critical technology.
BOILERS
Steam generators for utilities, ranging from 30 to 800 MW capacity, using coal, lignite, oil,
natural gas or a combination of these fuels; capability to manufacture boilers with
supercritical parameters up to 1000 MW unit size.
Steam generators for industrial applications, ranging from 40 to 450 tonne/hour capacity,
using coal, natural gas, industrial gases, biomass, lignite, oil, Bagasse or a combination of
these fuels.
Pulverized fuel fired boilers
Stoker boilers
Bubbling fluidized bed combustion (BFBC) boilers.
Circulating fluidized bed combustion (CFBC) boilers up to 250 MW.
Heat-recovery steam generators (HRSG).
Chemical recovery boilers for paper industry, ranging from capacity of 100 to 1000
tonne/day of dry solids.
BOILER AUXILIARIES
Fan
Axial reaction fans of single stage and double stage for clean air application and dust laden
hot gases applications up to 200°C, with capacity ranging from 40 to 1300 m3/s and pressure
ranging from 400 to 1,500 mm of water column.
Axial impulse fans for both clean air and flue gas applications up to 200°C, with capacity
ranging from 25 to 600 m3/s and pressure up 300 to 700 mm of water column.
Single and double-suction radial fans (plate aerofoil bladed) for clean air and dust laden hot
gases applications up to 400°C, with capacity ranging from 4 to 660 m3/s and pressure
ranging from 200 to 3000 mm water column.
Air-Pre-heaters

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 Tubular Air Preheaters for industrial and utility boilers
Rotary regenerative air-Preheaters for boilers and process furnaces.
Large rotary regenerative air-Preheaters for utilities of capacity up to 800 MW.
Pulverizers

Bowl mills of slow and medium speed for coal fired thermal stations with capacity from 18 t
/ hour to 110 t/ hour catering to 67.5 MW to 800 MW thermal power stations.
Tube mills for pulverizing low-grade coal with high ash content from 30 t/ hour to 110 t/
hour catering to 110 MW to 500 MW thermal power stations.
Electrostatic Precipitators (ESP)

Electrostatic precipitators of any capacity with outlet emission as low as 17 mg/Nm3

(efficiency up to 99.97%) for utility and industrial applications including Bio mass fired
boilers, cement plants, steel plants, soda recovery boilers etc.
Guillotine Gates & Dampers

Guillotine gates with electric / pneumatic actuator. Sizes up to 6m height & 7m width (with
split) 100% leak proof with seal air.
Bi-plane dampers with electric actuator. Sizes up to 7 m height & 5 m width. 100% leak
proof with seal air.
Louver dampers (Open close / Regulating) with electric / pneumatic actuator. Sizes up to 7m
height & 5m width.
Control dampers (Regulating) with pneumatic actuator. Sizes up to 11m height (split
construction) & 4.5m width.
Bag Filters for Utility and Industrial applications.
Flue gas desulphurization (FGD) systems with sea water/ limestone slurry scrubber.
Steel Chimneys for Heat Recovery Steam Generators (HRSG), Industrial Boilers, auxiliary
boilers and other flue gas exhaust applications.
Bowl mills of slow and medium speed of capacity up to 100 t/hour.
Tube mills for pulverizing low-grade coal with high-ash content.
Electrostatic precipitators of any capacity with efficiency up to 99.9% for utility and
industrial applications.
SOOT BLOWERS
Long retractable soot blowers (LRSB) for travel upto12.2m

13
 Furnace temperature probe (FTP) for travel length 6.9m and 8.3m
Long Retractable Non-rotating (LRNR) soot blowers with forward blowing for Air heaters
Ash discharge valve for CFBC boiler application
Soot blowers with integral starters
Soot blower Sequential PLC control panel
Rack type Long Retractable Soot blowers
Wall blowers
Rotary Soot blowers
Valves
High and Low-pressure Turbines Bypass Valves & hydraulic system for utilities and
industrial application
High and medium-pressure Valves, Cast and Forged Steel Valves of Gate, Globe, Non-
Return (Swing-Check and Piston Lift-Check) types for steam, oil and gas duties up to 950
mm diameter, maximum pressure class 4500 (791 kg/cm2) and 650 °C temperature.
Hot re-heat and cold re-heat Isolating Devices up to 900 mm maximum class 1500 and
650°C temperature.
High-capacity Spring Loaded Safety Valves for set pressure up to 372 kg/cm2 and
temperature up to 630°C, and automatic electrically operated pressure relief valves for set
pressure up to 210 kg/cm2 and temperature up to 593°C.
Safety relief valves for applications in power, process and other industries for set pressure up
to 421 kg/cm2 and temperature up to 537° C.
Reactive cum absorptive type vent Silencers maximum diameter of 2700 mm.
Direct Water Level Gauges
Angle Drain Valves - Single & Multi Stage for Turbine Drain Application
Severe Service Control Valves for RH & SH Spray Lines
Quick Closing Non return Valves for Extraction lines and Cold Reheat Non Return valves,
up to 800 mm diameter, 158 kg/cm2 pressure and 540°C temperature.

PIPING SYSTEMS
Power cycle piping, Constant load Hangers, Variable spring Hangers, Hanger components,
Low Pressure piping including Circulating Water Piping for power stations up to 1000 MW
capacity including Super Critical sets
Piping systems for Nuclear Power Stations, Combined Cycle Power Plants & Industrial
boilers and for power plants in Process Industries

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 SEAMLESS STEEL TUBES
Hot-finished and cold-drawn seamless steel tubes with a range varying from outer diameter
of 19 to 133 mm and wall thickness of 2 to 14 mm, in carbon steel and low-alloy steels to suit
ASTM/API and other international specifications.
Rifled tubes
Spiral finned tubes

CONDENSER AND HEAT EXCHANGERS

Surface Condenser:
236 MW & 700 MW for Nuclear power plants
12.5 MW Marine applications
Industrial Condensers
Feed Water Heaters (HP Heaters, LP Heaters, Drain Coolers etc.)
Thermal -07 to 500 MW (sub-critical) & 300-800 MW (super critical with single stream)
Nuclear 236 MW, 500 MW and 700 MW rating
Moisture Separator & Reheater(MSR):
236 MW, 500 MW & 700 MW Nuclear sets
Live Steam Reheater (LSR):
500 MW FBR Nuclear sets
Auxiliary Heat Exchangers for Turbo and Hydro Generators:
Air Coolers (Frame & Tube Type)
Oil Coolers (Shell & Tube Type and Plug In Type)
Hydrogen Coolers (Frame & Tube Type)
Auxiliary Heat Exchangers for Transformers :
Oil Coolers (Shell & Tube Type Single Tube or Concentric Double Tube Type) (Frame &
Tube Type)
Auxiliary Heat Exchangers for General Application
Water - Water Coolers (Shell & Tube Type)
Industrial Heat Exchangers for Refineries, Petro-Chemicals & Fertilizers industries.
Butterfly Valves ( Fabricated/ cast body & door)
Flash Tanks for thermal & nuclear sets
Service Tanks, Storage Tanks & Pressure vessels for Thermal, Nuclear sets of all ratings &
industrial applications

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 CS/SS/Non-ferrous shell and tube heat exchangers and pressure vessels (For all applications
irrespective of rating)
Air-cooled heat exchangers for GTG upto Fr-9 FE, and Compressor applications of all
ratings
Steam jet air ejectors for all condensers upto 150 MW
Deaerators from 7 MW to 800 MW
Gland steam condensers 7 MW to 150 MW
Gas coolers for all possible compressor applications
Oil coolers- STG upto 150 MW, GTG upto Fr-9 F E,
Generator Air coolers upto 150 MW STG and GTG up to 9 FA

PUMPS
Pumps for various applications to suit utilities up to a capacity of 1000 MW.
Boiler feed pumps (motor or steam turbine driven).
Boiler feed booster pumps.
Condensate extraction pumps.
Circulating water pumps. (Also known as-Cooling water Pumps)

DESALINATION AND WATER TREATMENT PLANTS

Reverse Osmosis (RO) based Desalination Plants for treating Seawater, high Brackish and
brackish water for domestic and industrial applications.
Reverse Osmosis based Demineralization (RO-DM) Plants for Power Plant to generate
Water for Service / Potable / Boiler Feed Make-up requirements.
Various types of Pre-Treatment (Membrane based / Conventional) Systems to condition
raw-water suitable for RO Application.
Sewage & effluent Treatment Plants for water re-use and re-cycling
Operation & Maintenance of plants
AUTOMATION AND CONTROL SYSTEMS
Steam Generator/ Boiler Controls
Steam Turbine Controls
Boiler Feed Pump (BFP) Drive Turbine Control
Station Control and Instrumentation/ DCS
Offsite/Off base controls/ Balance of Plant Controls
Ash handling

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 Coal Handling
Water System
Mill Reject System
Condensate on-line tube cleaning system
Gas Booster Compressor
Hydro Power Plant Control System
Gas Turbine Control System
Nuclear Power Plant Turbine & Secondary Cycle control system
Power block of solar thermal power plant
Industrial Automation
Sub-Station Automation (SAS) and Supervisory Control & data Acquisition System
(SCADA)
Electrical Control System (ECS) for Refineries
Energy Management System (EMS) for Power Plant

POWER ELECTRONICS
Excitation system
AC Drive System
Static Starters
Induction Heating Equipment

TRANSMISSION SYSTEM CONTROL

High Voltage Direct Current (HVDC) system
Flexible AC Transmission system (FACTS)
Fixed series compensation (FCS)/ Thyristor controlled series compensation (TCSC)
Static VAR Compensation (SVC) System
Controlled Shunt Reactor (CSR)
Static Compensator (STATCOM)

POWER SEMICONDUCTOR DEVICES

Diodes- Ranging from 1400-4400V/250-2000A
Thyristors- Ranging from 1400-7000V/150-4950A
Rotating Diodes for Turbo generators.

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 SOLAR PHOTOVOLTAICS
Mono/ Multi Crystalline Cells (125 and 156 mm)
Mono/ Multi Crystalline Modules (40 to 300 Wp)
PV Systems: Grid Interactive, Hybrid and stand-alone PV power plants
Space grade solar panels
Space Quality Batteries

DEFENCE ELECTRONICS
Integrated Platform Management system (IPMS)
Integrated Bridge System (IBS)
Machinery Control Room (MCR) Simulator
Training Simulator for Vehicles, platforms, radars, weapons, missiles and CBT for all
defence and para-military forces
Weapon Fire control system, Avionics, radio communication Products, Electronic warfare
system and Early Warning Systems.
Gun control System for Main Battle Tanks (MBT)

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REVIEW OF LITERATURE

Satisfaction defined as “a positive affective state resulting from the

appraisal of all aspects of a firm’s working relationship with another company” in business
relationship (Anderson and Narus, 1984). Supplier satisfaction which is something not
discovered by many companies and it starts with individual’s attitude towards suppliers
(Donath, 1991). The manufacturer and its suppliers, vendors, and customers – that is, all links
in the extended enterprise – working together to provide a common product and service to the
marketplace that the customer desired and is willing to pay for throughout the life cycle of the
product and service (Kuglin, 1998). Select suppliers who can best meet your needs from a
cost and technology stand point and might mean the difference between choosing leading
edge versus trailing-edge technology (Riggs & Robbins 1998).

It is economically reasonable to focus on supplier satisfaction, since supplier satisfaction

indicates the quality of the buyer–seller relation-ship from the supplier’s perspective (Essig,
Amann, 2009). As a result research related to the study of establishing, developing and
maintaining successful business relationships between customer and supplier firms has grown
considerably. Within this domain, a construct that has received particular attention within the
domain of b-to-b relationships is trust (Ganesan, 1994). Trust, by infusing predictability
(through enhanced information sharing) and mutual understanding into a relationship,
provides a cushion against uncertainty (Luhmann, 1995).

When one organization try to understand the level of supplier satisfaction through any
medium, the buying company basically sends a strong signal of trust, tries to improve and
strengthen existing relationship (Spence, 1976). Trust and commitment are not only drivers of
supplier satisfaction; they are stated to be the premises of relationship quality, which, in turn,
can be classified as the object of a supplier’s satisfaction statement (Walter, 2003; Maunu,
2003). Communication and feedback, Communication of requirements, Customer credibility,
Early supplier involvement and purchasing power are the drivers of effective buyer supplier
relationships (Lascelles and Dale ,1989). These are also factors of supplier satisfaction.
Loyalty is a focal point in a long- term relationship, implying both a favorable attitude and
customer relation. Satisfaction evolves as a consequence of one party's experience with the
other's ability to fulfil norms and expectations (Harald Biong ,1993).

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According to Biong ́s (1993) profitability and support have a strong impact on satisfaction
and loyalty. Business value chain and the total cost of ownership linked together and the
importance to each other, including the supplier value chain. Business value chain thinking
has bene t both in money and time, which can be considered as elements of the supplier
satisfaction concept also (Riggs & Robbins 1998). Supplier satisfaction measurement gives
us opportunity to develop supplier relations in a way that both parties are willing and capable
to do it. This approach is supported by Wong (2000). Wong’s (2000) study explores the role
of suppliers in improving customer satisfaction and finds that companies can make use of
their suppliers in achieving high customer satisfaction. (Hult , 1997) aimed to respect the two
dimensions of supplier satisfaction. These are three cognitive (reputation, skill and
transaction specific investments) and three behavioral (communications, coercive, power and
flexibility)

Within the SME domain it is argued that most SMEs who want to build relationships often
lack track record in terms of notable credibility signaled by reputation and character
endorsements (Prahalad and Hamel, 1990) According to Blois (1999), flexible conditions
enable the creation of tolerance towards behavioral and environmental uncertainty and
engender trust, which in turn gives room to the relationship to continue. There is positively
co-relation between cooperation and satisfaction (Dwyer, 1980). The cooperation factor
results in to trust, commitment and efficiency among buyer and supplier. Service quality and
satisfaction linked with each other (Parasuraman, 1994). The behavioral attributes of
manufacturing organizations also deliver satisfaction (Moorman, 1992). Firms must
understand their chain partners in all respects, including comprehension of the sources,
imbalances, and consequences of power such that the most beneficial use (or disuse) of this
power can be directed to achieve supply chain performance and member satisfaction (Benton,
Maloni, 2005)

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 METHODOLOGY OF STUDY

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OBJECTIVES OF THE STUDY
Primary objective

ü The primary objective was to find the overall satisfaction level of the suppliers
with BHEL, Ranipet.

Secondary objectives

ü Finding the causes of supplier discontent considering the factors of supplier

satisfaction
ü Finding methods to reduce dissatisfaction of the suppliers of BHEL Ranipet.

METHODOLOGY

Pilot Study:

A pilot study with 10 samples were conducted prior to the survey. This helped further
refining the questionnaire. Certain items were made mandatory and some optional based on
their applicability. Pilot study has enhanced the dependability, accuracy and adequacy of the
instrument.

Method:

Self-administered method of study was used.

Population:

The target population for the study were suppliers of BHEL, Ranipet, which comes to a
size of 800 (approx.)

Duration of study:

Survey was conducted from 9 May 2017 to 6 July 2017

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Sample Definition

First I found out the active suppliers who got purchase order for the past 2 years, from
which I eliminated the traders and one time suppliers. In total unique suppliers were 797.
For study I separated the MSME and Non-MSME suppliers, which in turn subdivided as
given below. In each sub-category I used Random sampling using Excel. The result was
sorted and analyzed.
The population of suppliers consists of,
(i) Micro Small and Medium Enterprises (MSME) supplier
(ii) Non-Micro Small and medium Enterprises (Non - MSME)
Each Population consists of various product groups,
ü Desalination (DS)
ü Raw Material(RM)
ü Gates and Dampers(LD)
ü Sub delivery (SD) items
ü Utility (UT)
ü unclassified items suppliers

Sample size:

With a confidence level 95%, confidence interval 5% and population size 800 sample
size calculated was 260. However, considering the time limitation “fair” sample size of 200
was selected.
I expect a response rate of 50%, for achieving the target the survey was mailed to 400
suppliers by sending questionnaire through official e-mail of BHEL, Ranipet.

Sample Selection:

Stratified sampling technique was used to draw the samples. Strata were based on
MSME and non MSME. Simple random sampling was adopted to draw samples and was
done using MS-Excel.

23
Tools used:

A carefully drafted, pre-tested and structured closed ended questionnaire was used to
collect response.
The highest level of satisfaction is graded as 5 and the lowest is graded as 1 on a five
point Likert scale as given below:
1 – strongly disagree
2 – disagree
3 – neutral
4 – agree
5 – strongly agree
Two general questions were added:
ü Asking the suppliers how they would rate BHEL as their customer and how they would rate
BHEL as: “Best”, “One of the Best”, “Neutral”, “One of the Worst” or the “Worst” customer.
ü Asking the supplier for their preference of pre-dispatch inspection; whether they prefer BHEL
themselves or a third party inspection agency.
This questionnaire was hosted on google forms and mailed through BHEL, Ranipet. A
bar chart is provided at the bottom of each page to graphically show the percentage
completion along with the actual numerical value of the percentage completion. Provision for
backward navigation is also provided on each page.

Process adopted in conducting the Survey:

Step 1: A study of the entire procurement process of BHEL was carried out with a focus

on identifying the periods and areas of interaction of BHEL as a Buyer.

Step 2: Based on the study questionnaire was prepared.

Step 3: The population of suppliers was identified.

Step 4: The sample size is defined.

Step 5: The sampling process is selected.

Step 6: Administering the Questionnaire and collecting the response.

24
 Step 7: Coding the response.

Step 8: Carrying out the statistical analysis.

Step 9: The results of the statistical analysis are tabulated and interpreted.

Data collection

ü The data was collected through the online questionnaire. Intimation about the same was given
to the suppliers through e-mail.
ü Since the initial response was sluggish, reminder was prepared and sent to the suppliers on a
regular basis.
ü The invitee-respondents were contacted over the telephone and were asked to visit the web-
page and fill in the questionnaire.
ü In this process, once 200 responses were received, the data was taken up for study.

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 ANALYSIS

26
CHAPTER 3

Data Analysis

ü The correlation between the average satisfaction level (arrived at taking the simple average of
each respondent in the satisfaction set) and the overall rating given by the respondent grading
BHEL as their customer, was calculated.
ü A simple average for each question (column-wise) and for each respondent (row-wise) and
the standard deviation of each is calculated.
ü The frequency percentage of rating given by the suppliers about their perception of BHEL as
their customer is computed.
ü Item-analysis is done to check whether the questionnaire is able to discriminate between the
two extreme levels of satisfaction.
ü Analysis of variance is done between different categories of suppliers and individual sub
processes.
ü The correlation, averages; percentages are computed using MS Excel and the factor analysis
was done using SPSS.
ü ANOVA is done using SAS.

Validity of the tool:

Cronbach’s alpha was used to measure the internal consistency and the average correlation of
the items to gauge the reliability of the instrument. The overall Cronbach’s alpha value of the
instrument for 36 items was 0.967 which is “excellent” cut-off value as the minimum
acceptable level is only 0.60.
The Reliability Statistics are given in Table-2.
Factor analysis was used to determine the extent to which group of measures share
common variance. The Classification of the Respondents is given in Table-3 and Chart-1.
The researcher made use of this analysis to identify the underlying structure of the data in
which large number of variables may be small in number of basic characteristics of the
sample taken.

27
Data Output

Summary of the data analysis, average ratings are given in Table-4 and Table-5. The
same are provided as Chart-3 and Chart-4. The overall average is found to be 4.05.
Rating given by the suppliers about BHEL as a buyer is given in Table-6 and Chart-4.
The correlation between the satisfaction score and rating given by each respondent is found to
be 0.45.
62 % of the respondents prefer inspection by BHEL officials. This is given in Table-
7 and Chart-5.
ANOVA is done between the variables and different categories of suppliers and it is
represented in the charts from 8 to 21.
ANOVA is done between the variables and different types of suppliers and it is
represented in the chart 22.

The output of the factor analysis is given in Table-8, Table-9, Table-10 and Table-11.

Summary of factors rating is given in Chart-7.

Table-8 shows the sampling adequacy which was found to be 0.934.
Table-9 Shows the communalities extracted. Payment mechanism is recorded to be
the highest 0.630, and the least recorded is pre dispatch inspection 0.012.

Table-10 shows that five factors are extracted and 48% of the variance is explained by
one factor.

Table-11 shows that there are five factors identified from the analysis and the
combination of each column of factor loadings represent the factors.

28
Chart-1
Number of Respondents

INFERENCE: This bar chart represents the classification of suppliers according to items
as well as categories. The labels on the top of bar chart are standard deviation and average of
responses. From the bar chart we can infer that Gates and Dampers suppliers shows more
variation in their response.

29
Chart-2
Summary of Process Rating

Summary of process rating

Bidding Process
4.5
Terms and Conditions 4 Enquiry Process
3.5
3
Relationship Process 2.5 IT –enabled procurement
2
1.5
1
Pre Dispatch Inspection 0.5 Ordering Process
0

Post Order Process Overall Feedback

Post Inspection Process Payment Mechanism

Post Dispatch Process Performance Rating Process

INFERENCE: This radar chart represents the summary of different process rating. In that
we can identify that bidding process got the highest average value of 4.44 and terms and
conditions got the least average value of 3.60.

30
Chart- 3
Summary of Overall Rating

Summary of overall rating

BHEL routinely shares their …

The purchase order/s are …5 Liquidated damages
The enquiry is full-received … BHEL involves you in new …
Orders are received with … 4.5 Comfort level with the …
The bidding process is fair … 4 The time taken by BHEL for …
3.5
The enquiry specifications, … Payment terms
3
The time given for bidding … 2.5 Risk purchase
2
Post tender clarifications … 1.5 Performance rating …
1
The inspectors are … 0.5 Clarifications if any for …
0
Dealing officers are … Order delivery extensions, …

Post tender clarifications … Material receipt vouchers, …

Senior officers are … Adequacy level of data / …

BHEL treats you as … The time taken by BHEL to …
The time taken by BHEL for … The performance rating …
The delivery period given … The time taken by BHEL in …
The process of raising pre-… BHEL organizes the …
Issue of dispatch clearance
… …
How would you rate BHEL The documents to be
e-procurement system … …

INFERENCE: This Radar Chart represents the summary of overall rating given by the
suppliers. There are a total of 36 questions and in that 35 are represented here. From the
Radar Chart we can infer that the question which got the highest average rating as “The
purchase order/s are clear and unambiguous received in full in the first instance” with a
average value of 4.57 and the question which got the least average rating is “BHEL routinely
shares their business plans” with a average value of 3.35.

31
Chart-4
Overall rating

Overall rating
120
100
100

80
61
60

40 28
20
0 0
0
The worst One of the Average One of the The best
worst best

INFERENCE: This bar chart represents the response of suppliers considering BHEL as a
customer. From the chart we can see that hundred suppliers mentioned BHEL as “one of the
best”, 61 suppliers mentioned BHEL as “the best” supplier and none of the supplier
mentioned BHEL as “the worst” or “one of the worst” customer.

32
Chart-5
Preference for pre-dispatch Inspection

Preference for pre-dispatch Inspection

38

62
By BHEL nominated/agency By BHEL officials

INFERENCE: This pie chart represents the response of suppliers regarding preference for
pre-dispatch inspection. From the chart we can infer that 62% of suppliers prefer BHEL
officials for pre-dispatch inspection and rest prefer BHEL nominated agency for pre-dispatch
inspection

33
Chart-6
Area of improvement in ratings

Areas need improvement

BHEL routinely shares

their business plans.
The performance 4
3.9 Liquidated damages
rating system of …
3.8
The time taken by 3.7 BHEL involves you in
BHEL to convert … 3.6 new product …
3.5
3.4
Adequacy level of 3.3 Comfort level with
3.2
data / information … 3.1
the process of …
3

Material receipt The time taken by

vouchers, shortage … BHEL for processing …

Order delivery
Payment terms
extensions, for …
Clarifications if any
Risk purchase
for processing the …
Performance rating
feedback is given …

INFERENCE: This Radar chart represents the areas which needs improvement. In all these
areas the average response of suppliers was below four. From the chart we can see that there
are 14 areas were the rating went below four.

34
CHART 7
Cross tabulation between average rating

INFERENCE: The above bar chart represents the average rating given by different categories
of suppliers. From the chart we can infer that highest average rating is given by non-MSME
Raw Material suppliers.

35
Chart-8
Summary of factor rating

Summary of Factors rating

4.4

4.3

4.2

4.1

3.9
4.32
3.8

3.7 4.01

3.6
3.70
3.5

3.4

3.3
Operational factors Personal factors Strategic factors

INFERENCE: The above bar chart represents the summary of operational, personal and
strategic factors rating. From the graph we can infer that personal factors got the highest
rating with an average of 4.32 and strategic factors got the least rating with an average of
3.70.

36
CHART 9
ANOVA

INFERENCE: From the two diagrams we can infer that there is no significant difference
between different category of suppliers in case of Tender process(TDP).

37
CHART 10
ANOVA

INFERENCE: From the two diagrams we can infer that there is no significant difference
between different category of suppliers in case of Bidding process(BIP).

38
CHART 11
ANOVA

INFERENCE: From the two diagrams we can infer that there is no significant difference
between different category of suppliers in case of Ordering process(ODP).

CHART 12

39
ANOVA

INFERENCE: From the two diagrams we can infer that there is no significant difference
between different category of suppliers in case of Of standard terms and conditions
process(STC).

40
CHART 13
ANOVA

INFERENCE: From the two diagrams we can infer that there is no significant difference
between different category of suppliers in case of Post-order process(POP).

41
CHART 14
ANOVA

INFERENCE: From the two diagrams we can infer that there is no significant difference
between different category of suppliers in case of Pre- dispatch inspection(PDI).

42
CHART 15
ANOVA

INFERENCE: From the two diagrams we can infer that there is no significant difference
between different category of suppliers in case of Post inspection process(PIP).

43
CHART 16
ANOVA

INFERENCE: From the two diagrams we can infer that there is no significant difference
between different category of suppliers in case of Post-dispatch process(PDP).

44
CHART 17
ANOVA

INFERENCE: From the two diagrams we can infer that there is no significant difference
between different category of suppliers in case of Payment mechanism(PYM).

45
CHART 18
ANOVA

INFERENCE: From the two diagrams we can infer that there is no significant difference
between different category of suppliers in case of Relationship process(RSP).

46
CHART 19
ANOVA

INFERENCE: From the two diagrams we can infer that there is no significant difference
between different category of suppliers in case of Performance rating process(PRP).

47
CHART 20
ANOVA

INFERENCE: From the two diagrams we can infer that there is no significant difference
between different category of suppliers in case of IT enabled procurement(ITP).

48
CHART 21
ANOVA

INFERENCE: From the two diagrams we can infer that there is significant difference
between mean of supplier’s average response in the case of opinion about overall
feedback(OFB). All the raw material suppliers responded above four and majority of
unclassified items suppliers responded below four.

49
CHART 22
ANOVA

INFERENCE: From the two diagrams we can infer that there is significant difference
between overall satisfaction of MSME suppliers and non-MSME suppliers, MSME suppliers
are more satisfied than non-MSME suppliers.

50
Table 3.1
Response Counts

Response Status Number of

Suppliers
Online Respondents 185
Offline Respondents 4
Total no. of 189
Respondents

INFERENCE: The above table represents the method of data collection. From the table we
can find the 185 respondents were online respondents and only four were offline respondents.
Table 3.2
Reliability Statistics

Cronbach's Alpha
Cronbach’s Alpha No. of Items
(Based on Standardized Items)

0.967 0.967 36
Scale: ALL VARIABLES

INFERENCE: The above table shows the reliability statistics of the survey. Cronbach’s
alpha is used to measure the internal consistency and the average correlation of the items to
gauge the reliability of the instrument. The overall Cronbach’s alpha value of the instrument
for 36 items was 0.967 which is “excellent” cut-off value as the minimum acceptable level is
only 0.60.

Table-3.3
Classification of the Respondents

Number of
Sl. No. Class Type Percentage
Respondents

1 MSME 1 0.5
Non-
2 DS MSME 12 6.3
3 MSME 7 3.7
Non-
4 LD MSME 12 6.3

51
 5 MSME 6 3.2
Non-
6 RM MSME 17 9.0
7 MSME 12 6.3
Non-
8 SD MSME 64 33.9
9 MSME 5 2.6
Non-
10 UT MSME 25 13.2
11 MSME 28 14.8
Non-
12 Unclassified MSME 0 0
13 189 100

INFERENCE: The above table represents the classification of suppliers according to items
as well as categories. In this MSME (micro small and medium enterprises) and non-MSME
suppliers categorized into six types of suppliers Desalination(DS), Gates and Dampers(LD),
Raw material(RM), Sub Delivery items(SD), Utility(UT) and Unclassified items suppliers.
From the chart we can see that Sub Delivery items suppliers are highest in number a total of
76 and the least is desalination items suppliers 13.
Table -3.4
Summary of Process Rating

S. no Process Ratings
1 Bidding Process 4.44
2 Enquiry Process 4.43
3 IT –enabled procurement 3.87
4 Ordering Process 4.34
5 Overall Feedback 4.17
6 Payment Mechanism 3.85
Performance Rating
7 Process 3.88
8 Post-Dispatch Process 3.99
9 Post Inspection Process 4.18
10 Post Order Process 4.22
11 Pre Dispatch Inspection 4.26
12 Relationship Process 3.94
13 Terms and Conditions 3.60

52
INFERENCE: The above table represents the summary of different process rating. In that
we can identify that bidding process got the highest average value of 4.44 and terms and
conditions got the least average value of 3.60.

Table-3.5
Summary of Overall Rating

Question
Description Ratings
No.
The purchase order/s are clear and unambiguous received in full in
35 the first instance . 4.57
The enquiry is full-received with all annexures and attachments
34 (drawings etc.) 4.53
Orders are received with the agreed conditions only and no new
33 conditions are imposed by BHEL in the purchase order. 4.46
The bidding process is fair and transparent – (both sealed bid first
32 price method and reverse auction method.) 4.44
31 The enquiry specifications, tender terms are clear and unambiguous. 4.39
30 The time given for bidding (techno-commercial / price) is sufficient. 4.38
29 Post tender clarifications replied are to the fullest satisfaction. 4.38
The inspectors are knowledgeable and carry out the inspection as per
agreed specification and no new requirement is added at inspection
28 stage. 4.35
Dealing officers are prompt in answering phone calls / replying /
responding to mails / give clarifications and are courteous in their
27 dealings. 4.33
26 Post tender clarifications sought are replied immediately. 4.33
Senior officers are available, approachable and they quickly solve
problems faced. They are sensitive to your needs and visit your works
25 periodically. 4.26
24 BHEL treats you as business partners and not as suppliers / vendors. 4.25
23 The time taken by BHEL for pre-dispatch inspection is reasonable. 4.22
The delivery period given in the enquiry is reasonable and in the
22 order, is in line with the offer. 4.22
21 The process of raising pre-dispatch inspection call is simple and easy. 4.21
Issue of dispatch clearance and documents for dispatch such as road
permit forms, project authority certificates etc. are provided on
20 timely basis. 4.18
19 How would you rate BHEL as your customer? 4.17
e-procurement system implemented by BHEL will enhance the
18 procurement process efficiency. 4.14

53
 The documents to be submitted for processing payments are simple
17 and easy. 4.08
BHEL organizes the logistics immediately for lifting of the items and
16 gives dispatch clearance immediately on inspection clearance. 4.05
The time taken by BHEL in approving documents like quality plan,
15 drawings, and data sheets is reasonable. 4.05
The performance rating system of BHEL is fair, transparent, robust
14 and scientific. 3.97
The time taken by BHEL to convert their enquiry into an order is
13 reasonable, is within the validity offered by us. 3.95
Adequacy level of data / information provided online by BHEL through
12 their SCM web-site. 3.94
Material receipt vouchers, shortage / damage / rejection advises and
11 rejection returns if any are made in time. 3.93
Order delivery extensions, for reasons attributable to BHEL are given
10 promptly. 3.84
Clarifications if any for processing the bills and return of documents
9 like Bank guarantee are done in timely manner by BHEL. 3.80
8 Performance rating feedback is given regularly. 3.78
7 Risk purchase 3.75
6 Payment terms 3.69
5 The time taken by BHEL for processing the bills is reasonable. 3.68
4 Comfort level with the process of reverse auction. 3.50
BHEL involves you in new product development / product
improvement / your design and manufacturing capability
3 improvement. 3.50
2 Liquidated damages 3.37
1 BHEL routinely shares their business plans. 3.35

INFERENCE: This above table represents the summary of overall rating given by the
suppliers. There are a total of 36 questions and in that 35 are represented here. From the
Radar Chart we can infer that the question which got the highest average rating as “The
purchase order/s are clear and unambiguous received in full in the first instance” with an
average value of 4.57 and the question which got the least average rating is “BHEL routinely
shares their business plans” with an average value of 3.35.

Table -3.6
Overall rating

Sl. Overall
Percentage
No. rating Entries
54
 1 The worst 0 0
One of
2 the worst 0 0
3 Average 28 15
One of INFERENCE: This above table represents
4 the best 100 53
the response of suppliers considering BHEL as
5 The best 61 32
189 100 a customer. From the chart we can see that
hundred suppliers mentioned BHEL as “one of the best”, 61 suppliers mentioned BHEL as
“the best” supplier and none of the supplier mentioned BHEL as “the worst” or “one of the
worst” customer.

Table-3.7
Preference for pre-dispatch Inspection

Sl. No. Options Percentage

By BHEL
1 nominated/agency 38
By BHEL
2 officials 62

INFERENCE: This above table represents the response of suppliers regarding preference
for pre-dispatch inspection. From the chart we can infer that 62% of suppliers prefer BHEL
officials for pre-dispatch inspection and rest prefer BHEL nominated agency for pre-dispatch
inspection.

Table – 3.8
KMO and Bartlett's Test

KMO and Bartlett's Test

Kaiser-Meyer-Olkin Measure of Sampling Adequacy. 0.934
Bartlett's Test of Sphericity Approx. Chi-Square 5455.280
df 630
Sig. 0.000

INFERENCE: The above table shows output of Kaiser-Meyer-Olkin measure of sample

adequacy and Bartlett’s test of sphericity. The KMO statistic varies between 0 and 1. A value
close to 1 indicates that patterns of correlations are relatively compact and so factor should
yield distinct and reliable factors. Here the value is 0.934 and it is superb: so we can infer that
factor analysis is appropriate for these data.

55
Table – 3.81
Communalities
Communalities
Initial Extraction
TDP1 1.000 0.590
TDP2 1.000 0.749
TDP3 1.000 0.486
BP 1.000 0.646
OP1 1.000 0.756
OP2 1.000 0.777
OP3 1.000 0.723
OP4 1.000 0.647
OP5 1.000 0.718
OP6 1.000 0.632
OFST1 1.000 0.631
OFST2 1.000 0.725
OFST3 1.000 0.689
POP 1.000 0.643
PDI1 1.000 0.705
PDI2 1.000 0.764
PDI3 1.000 0.706
PIP 1.000 0.643
PDP1 1.000 0.680
PDP2 1.000 0.675
PM1 1.000 0.754
PM2 1.000 0.797
PM3 1.000 0.779
PM4 1.000 0.626
RP1 1.000 0.576
RP2 1.000 0.724
RP3 1.000 0.722
RP4 1.000 0.724
RP5 1.000 0.748
PRP1 1.000 0.662
PRP2 1.000 0.736
ITEP1 1.000 0.718
ITEP2 1.000 0.464
ITEP3 1.000 0.756
OVFB 1.000 0.416
Extraction Method: Principal Component Analysis.

56
INFERENCE: The above table shows communalities before and after extraction. From the
table we can infer that 59% of variance associated with first variable is commion.
Table – 3.82 Total Variance Explained
Total Variance Explained
Initial Eigenvalues Extraction Sums of Squared Loadings Rotation Sums of Squared Loadings
Component Total % of Variance Cumulative % Total % of Variance Cumulative % Total % of Variance Cumulative %
1 16.974 48.498 48.498 16.974 48.498 48.498 7.068 20.193 20.193
2 2.898 8.280 56.778 2.898 8.280 56.778 6.374 18.211 38.404
3 1.567 4.478 61.256 1.567 4.478 61.256 5.201 14.859 53.263
4 1.241 3.545 64.801 1.241 3.545 64.801 3.211 9.174 62.438
5 1.108 3.167 67.968 1.108 3.167 67.968 1.936 5.530 67.968
6 0.996 2.845 70.813
7 0.849 2.426 73.238
8 0.770 2.201 75.439
9 0.736 2.103 77.542
10 0.636 1.816 79.358
11 0.588 1.679 81.037
12 0.566 1.618 82.655
13 0.515 1.471 84.127
14 0.477 1.362 85.488
15 0.440 1.256 86.745
16 0.428 1.223 87.967
17 0.390 1.115 89.082
18 0.352 1.006 90.088
19 0.338 0.966 91.055
20 0.331 0.945 92.000
21 0.310 0.886 92.885
22 0.285 0.814 93.699
23 0.265 0.757 94.456
24 0.257 0.736 95.192
25 0.233 0.667 95.859
26 0.216 0.617 96.476
27 0.199 0.568 97.044
28 0.178 0.509 97.553
29 0.167 0.478 98.031
30 0.143 0.408 98.439
31 0.142 0.406 98.845
32 0.129 0.368 99.214
33 0.113 0.323 99.536
34 0.093 0.266 99.803
35 0.069 0.197 100.000
Extraction Method: Principal Component Analysis.

INFERENCE: The eigenvalues associated with each factor represent the variance explained
by that particular linear component and in the table factor 1 explains 48% of total variance.

Table – 3.83
Rotated component matrix
Rotated Component Matrix a
Component
1 2 3 4 5
OP1 0.805
TDP2 0.804
OP3 0.793
OP2 0.774
OP5 0.742

57
 BP 0.725
OP4 0.663
TDP3 0.659
OP6 0.652
TDP1 0.650
PM2 0.769
PM3 0.740
PM1 0.700 0.406
OFST1 0.662
PIP 0.650
PM4 0.605
POP 0.591
PDP2 0.586
PDP1 0.585 0.412
RP5 0.563 0.494
RP4 0.401 0.522 0.449
RP3 0.790
RP2 0.785
PRP1 0.668
PRP2 0.648
OVFB 0.570
RP1 0.550
ITEP2 0.476
PDI3 0.682
PDI2 0.485 0.626
ITEP1 0.512 0.589
PDI1 0.415 0.411 0.568
ITEP3 0.515 0.545
OFST2 0.436 0.669
OFST3 0.645
Extraction Method: Principal Component Analysis.
Rotation Method: Varimax with Kaiser Normalization.a
a. Rotation converged in 12 iterations.

INFERENCE: From the above tables we can identify that there are five factors. The
combined each row gives a factor. Factor1 represents the strategy, factor 2 represent the
operation and factor 3 represents the personal factors.

58
 CONCLUSIONS

59
CHAPTER 4

Findings

1. The overall average rating of response lies between 4 and 5 (4.05). Hence, it is
found that Suppliers are satisfied with BHEL.
2. MSME suppliers are more satisfied than non-MSME suppliers.
3. It is found that 84% of respondent’s rate BHEL as “One of the Best” / “The Best”
Customer and no respondent is mentioned BHEL as “The worst”/ “One of the
worst”.
4. A good correlation is seen between the average rating of processes and the overall
rating given by the Suppliers.
5. From the ANOVA chart we can infer that there is significant difference between
opinions of MSME suppliers and non-MSME suppliers, non-MSME suppliers are
more satisfied than MSME suppliers.

6. Overall satisfaction of sub-delivery items suppliers is different from all the other
suppliers.
7. Areas of low score (below satisfaction levels) are seen in:
Sharing of business plan
Liquidated Damages
Product and design development
Process of Reverse Action
Duration of processing the bills
Payment Terms

Risk Purchase
Performance Rating Feedback
Clarification of bills and documents
Order Delivery
Material management advices
Adequacy of Online information
Duration to convert into order
Performance Rating system efficiency

60
 On the process level, low scoring processes are given in Chart-6
8. From the study, the strength of BHEL is seen as follows:
Suppliers commonly refer to BHEL as a large buyer, who understands them and
with a transparent system and a knowledgeable and committed work-force with
approachable higher officials.
9. It is also found from the study, the Opportunities for improvement as follows:
Most of the suppliers mentioned opportunities for improvement other than strengths,
from that some important areas mentioned are
(a) Payment:
The time taken for making the payment should be improved. Since the competition is
increasing day by day, the private sectors are giving quick payments, priority from suppliers
will be to the fast payment sector.
(b) Tendering process:
The time taken for submitting the bid online is huge, company have to improve the
tendering process with more updated technologies and the site need more updated options
and data content.
(c) Reverse auction:
Suppliers are mentioning that quit the Reverse auction process because it makes them
weak and they cannot balance quality and price

Conclusion

Recommendations:

Based on the survey findings and the feedback from the suppliers, it is recommended that:
(a) Modifying Liquidity damages and Risk purchase terms and conditions will
improve supplier satisfaction.
(b) Improved payment timing for non-MSME suppliers will help for obtaining
more co-operation with the company and competition between the suppliers
and

61
 (c) More active support for the development of suppliers in the case of
strategies and operations, which includes new product development, logistics
improvement and employee management.

62
 APPENDIX

63
QUESTIONNAIRE

Supplier satisfaction survey BHEL, BAP- Ranipet

* Required

1. Email address *

2. Enter your BHEL Ranipet supplier code *

3. Enter your BHEL Ranipet supplier name *

Tender process


4. The enquiry specifications, tender terms are clear and unambiguous. *

Strongly disagree Strongly agree

5. The enquiry is full-received with all annexures and attachments (drawings etc.) *

Never Always

6. The time given for bidding (techno-commercial / price) is sufficient. *

Strongly disagree Strongly agree

Bidding process

7. The bidding process is fair and transparent – (both sealed bid first price method and reverse
auction method.)

Strongly disagree Strongly agree

Ordering process


64
8. Post tender clarifications sought are replied immediately. *

Strongly disagree Strongly agree

9. Post tender clarifications replied are to the fullest satisfaction. *

Strongly disagree Strongly agree

10. The purchase order/s are clear and unambiguous received in full in the first instance . *

Strongly disagree Strongly agree

11. The time taken by BHEL to convert their enquiry into an order is reasonable, is within the
validity offered by us. *

Strongly disagree Strongly agree

12. Orders are received with the agreed conditions only and no new conditions are imposed by
BHEL in the purchase order. *

Strongly disagree Strongly agree

13. The delivery period given in the enquiry is reasonable and in the order, is in line with the
offer. *

Strongly disagree Strongly agree

Of standard terms and conditions

Satisfaction levels with BHEL’s standard terms and conditions and its
applications on supplies:
14. Payment terms * 


Highly dissatisfied Highly satisfied

14. Liquidated damages * 


Highly dissatisfied Highly satisfied

14. Risk purchase * 


65
 Highly dissatisfied Highly satisfied

Post-order process


17. The time taken by BHEL in approving documents like quality plan, drawings, and data sheets
is reasonable. *

Strongly disagree Strongly agree

Pre-dispatch inspection


18. The time taken by BHEL for pre-dispatch inspection is reasonable. *

Strongly disagree Strongly agree

19. The inspectors are knowledgeable and carry out the inspection as per agreed specification
and no new requirement is added at inspection stage. *

Strongly disagree Strongly agree

20. Preference for pre-dispatch inspection: * 


. By BHEL nominated agency/s By BHEL officials

21. The process of raising pre-dispatch inspection call is simple and easy. *

Strongly disagree Strongly agree

Post inspection process

22. Issue of dispatch clearance and documents for dispatch such as road permit forms, project
authority certificates etc. are provided on timely basis. *

Strongly disagree Strongly agree

Post-dispatch process

23. Material receipt vouchers, shortage / damage / rejection advises and rejection
returns if any are made in time. *

Strongly disagree Strongly agree

24. BHEL organizes the logistics immediately for lifting of the items and gives dispatch clearance
immediately on inspection clearance.

66
Strongly disagree Strongly agree

Payment mechanism


25. The documents to be submitted for processing payments are simple and easy. *

Strongly disagree Strongly agree

26. The time taken by BHEL for processing the bills is reasonable. *

Strongly disagree Strongly agree

27. Clarifications if any for processing the bills and return of documents like Bank guarantee are
done in timely manner by BHEL. *

Strongly disagree Strongly agree

28. Order delivery extensions, for reasons attributable to BHEL are given promptly. *

Strongly disagree Strongly agree

Relationship process


29. BHEL treats you as business partners and not as suppliers / vendors.

Strongly disagree Strongly agree

30. BHEL routinely shares their business plans. *

Strongly disagree Strongly agree

31. BHEL involves you in new product development / product improvement / your design and
manufacturing capability improvement. *

Strongly disagree Strongly agree

32. Dealing officers are prompt in answering phone calls / replying / responding to mails / give
clarifications and are courteous in their dealings. *

Strongly disagree Strongly agree

67
33. Senior officers are available, approachable and they quickly solve problems faced. They are
sensitive to your needs and visit your works periodically. *

Strongly disagree Strongly agree

Performance rating process


34. Performance rating feedback is given regularly. *

Strongly disagree Strongly agree

35. The performance rating system of BHEL is fair, transparent, robust and scientific. *

Strongly disagree Strongly agree

IT- enabled procurement


36. e-procurement system implemented by BHEL will enhance the procurement process
efficiency. *

Strongly disagree Strongly agree 
37. Comfort level with the

process of reverse auction.

Strongly disagree Strongly agree 
38. Adequacy level of data /

information provided online by BHEL through their SCM web-site.

Strongly disagree Strongly agree

Overall feedback


39. How would you rate BHEL as your customer? *

The best

One of the best

Average

One of the best

The best

68
Opinion matters....
40. In your opinion, what are the three best strengths of BHEL as a buyer and three areas of
improvement that they should consider to become a better buyer?

69
REFERENSES

1. A Parasuraman, Zeithaml, V. and Berry L (1994), “Reassessment of expectationsas a

comparision standard in measuring consumer perceptions of service quality: Implications for
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