Nokia Siemens Networks Bangladesh Ltd (Part 2)

Indirect purchasing

Indirect purchasing refers to all items that are not sold by Nokia Siemens Networks but are used by Nokia Siemens Networks employees. For example: laptops, phone, office supplies, facility services, software used by employees for daily office work etc.

 Internal purchasing

Internal purchasing refers to all items that can be sold by Nokia Siemens Networks to its customers but are used inside the company for Research and Development (R&D) material, investment or demo purposes. For example: base stations, cables, OEM items, software used for NSN equipment (eg. labs and testbeds). As opposed to customer orders, internal purchasing do not require a previously defined contract and there is no sales mode specified.

The following types of orders are considered to be internal:

• R&D:
  Product deliveries for R&D own use, charged to R&D cost center. Experimental (delivery of pre-commercial products, not yet reaching E5 milestone, to customer site in order to test and develop the products with the customer) is one type of R&D delivery.
• INVESTMENTS:
  Local company investments: internal investments for local company own use (to be remained in local company and used for demonstration, training or testing purposes)
  Investment via NSNAM Oy to NSN Oy’s cost center: items purchased if CSM/Split mode project need to order a product for its own use from Hub or NSN factory plant.
• DEMO:
  Delivery of products to demonstrate pre-commercial and commercial products in exhibitions, fairs, or at the customer premises.
• PROTOTYPES:
  Products still under development, not available for customer sale yet, used for R&D purposes.

Direct purchasing

Direct purchasing refers to all items that are sold by Nokia Siemens Networks to its customers, covering hardware, services and software.

Strategic procurement activities such as supplier selection, management and development, including contractual arrangements, are done by Global Procurement within Operations.

General Process for indirect purchase:

Indirect Procurement: Indirect Procurement is responsible for selecting, managing and developing the supply base for the indirect goods and services consisting of Travel & Fleet, Manufacturing & Test Equipment, Facility Services, External workforce, and Professional Services (Marketing Services, Corporate Services, Consulting & Training, Auxiliary Supplies).

Indirect purchasing are done in two ways

• End to end
• Order based purchase

End to end purchase procedure:

The end to end procurement order process is split in six steps:

Step1:  Demand – the requirement coming from the end users

Step2:  Approval – for the costs related to the requirement

Step3:  Supplier selection and negotiation

Step4: Operational Purchasing – purchase request and order creation

Step5: Goods/Service receiving – related costs booking

Step6: Invoice payment

Demand: The requester is responsible for specifying the demand (need) in a clear and detailed way.

Approval process: The approvers shall follow the Nokia Siemens Networks approval policy. All updated Approval Limits (AL) policies are available in the Global F&C intranet pages Global F&C Approval Limits. In case more stringent unit or country specific rules apply, they ought to be obeyed as well.

Supplier selection and negotiation: Procurement organization is responsible for:

Supplier selection and negotiation

• Operative purchasing

Supplier selection is fully described in the SBM process (Supplier Base Management which is almost similar for Indirect and direct procurement and discussed in direct purchase process in details). The negotiation phase is one of the steps of that process.

Only to the purpose of this document, the negotiation step can have different results:

• A single purchase order
• A frame agreement with or without a price list

The negotiation can be executed in different time frames:

• During the standard purchase order cycle, for each purchase request
• During the normal sourcing activities, to the scope of signing a frame agreement with a price list included and before issuing any purchase order.

Operational purchasing

The operational purchasing can be classified to 3 main cases:

• Order based (also called „standard purchase order‟ process)
• Invoice based
• Frame agreements with fixed price elements based

Order based process is the preferred one to be used in all cases.

Operational purchasing – Order based process

• Order based process is the preferred process and it should be used for the majority of the categories. NSN employees use myOrders as the tool supporting this process. Exceptions are separately defined.
• For standardized commodities, this process is also supported by the use of catalogues, which are released by the procurement category area in charge. The usage of these catalogues is mandatory and independent from the order value.

In case of non-catalogue purchase request (the so-called “free text” request), the negotiation is done at a single purchase request level.

This process is applicable to most indirect purchases, such as all software items, laptops, mobile phones, IT equipment, promotional goods, office supplies, (indirect) external temporary labor, etc.

 Invoiced based process is used for two main cases, one where Category area has been specified not to benefit from the consolidation of purchases: examples are membership fees, conference fees, IPR (intellectual property rights), etc another is Category area uses frame agreements where consumption is approved per invoice by the internal stakeholder, such as utilities (eg. energy expenses etc.)

 The main roles are mentioned below:

• Requester – check the content of the invoice using IAT tool, and forward to the cost center approver
• Business approver (AP) – approve the invoice according to the NSN Approval Limits (AL) policy using IAT tool and ensure the correct final approver is included in IAT flow. As a principle, no-one can approve own expenses
• Invoice posting – SAS posts the invoice in SAP P20 for paying

Goods/Services receiving

The requester is responsible for timely acknowledge the receiving of goods/services in myOrders tool. In the case of invoice based process, it is responsibility of the business approver to post approval in IAT and, by doing so, release the invoice for payment.

Invoice payment

Global F&C is responsible for the payment process. For SAP P20 countries (NSN BD), Shared Accounting Services (SAS) is responsible to execute the payment process.

 Tools supporting the Indirect Purchasing Process

The relevant tools are:

• myOrders for all the requirement/approval/goods receipt process phases
• SAP P20 for the PO creation
• IAT/P20 for the invoice based process (Invoice Approval Tool)

General process for Direct Purchasing

Direct Purchasing refers to all items that are sold by Nokia Siemens Networks to its customers, covering hardware, services and software.

The product and service that NSN purchase under direct purchasing are:

Products

1. Feeder System
2. R.A Accessories and Y Max Filters
3. Battery
4. Core power System
5. Generators
6. MDF/ DDF
7. Outdoor Raw Cable and Accessories
8. Shelter and containers Air conditioner
9. Renewable Energy system
10. Site material – Fixed Networks
11. Site material – Mobile networks
12. Standalone Power System
13. Tower

Services

1. Civil works
2. Network Operation and Field maintenance
3. Outside Plant Material and Services
4. Project  Management services
5. Site Acquisition
6. Telecom Equipments

Resources:

1. Direct external work force
2. Temporary Labor

Among these product, service and resource list NSN BD Ltd. do not purchase all of these product service and equipment. Most of them are procured globally. The job of Off shore equipment procurement and purchase the jobs generally done by  NSN Finland procurement team y and On shore or local service which mostly includes installation of equipment is done by NSN BD Ltd or via third party (sub Contractors)The Procurement team of NSN BD Ltd generally deals with

1. MDF/ DDF
2. Outdoor Raw Cable and Accessories
3. Shelter and containers Air conditioner
4. Site material – Mobile networks
5. Direct external work force
6. Temporary Labor
7. Civil works
8. Network Operation and Field maintenance
9. Outside Plant Material and Services
10. Project  Management services
11. Site Acquisition
12. Telecom Equipments

Strategic procurement activities such as supplier selection, management and development, including contractual arrangements, are done by Global Procurement within Operations. All operational procurement activities for direct materials such as purchase order management and inbound supply daily activities are done by the operational procurement teams in NSN.

The teams those are responsible for the jobs are related with direct purchasing are:

 Materials Execution teams within Operations

MEX teams within operation is responsible for securing total cost efficient on-time material availability by operational category management, and inbound logistical model implementation for factory and HUB inbound materials through supplier integration activities. Materials Execution represents the MEX function in category strategy creation and other cross functional teams. Materials Execution contributes to total cost efficient on-time material availability by proactively managing and developing supply networks in order to fulfill customer expectations. This is done by providing global visibility of the whole supply Chain (HUBs, plants, suppliers) and assuring collaboration with suppliers with a solid NSN wide MEX approach.

Regional Logistics

Regional Logistics is responsible for Order Placement to NSN vendors for Direct Purchasing of Materials and Services needed in Customer Orders related to Local Business. Regional Logistics is responsible for End to End Logistics management, which includes Order Management, Transportation, Inventory management, issuance of purchase orders, handling invoices and delivery from NSN Vendors for Direct Purchasing related Materials and Services for Customer Orders in Local Business. The order placement and delivery has to be in line with the contracts set up by Service Procurement in the region. The delivery can be to the customer warehouse or directly to the site depending on the contractual set up and/or material & service type.

Purchasing teams within Hardware Services

They are responsible for securing on-time material availability in Hardware Services’ distribution centers. Purchasing contributes to total cost efficient on-time material availability by proactively managing and developing repair and spare supply networks in order to fulfill customer expectations.

Repair Services procurement activities such as supplier selection, management, contracting and development are done by Hardware Services within Services. Spare part procurement tasks are completed according to Hardware Services’ requirements by Global procurement. All procurement activities inside Hardware Services are accomplished according to the guideline of procurement processes defined by Global procurement.

 Supplier Selection

For supplier selection NSN BD Ltd follow the regulations of Supplier Based Management (SBM) process following picture shows the different criteria of supplier selection for different types of product. Three types of SBM is generally used basing on importance of the product. NSN chose which process they will follow to select the supplier from

• Full SBM
• Medium SBM
• Light SBM

At Nokia Siemens Networks (NSN) Global Procurement (GPR) is responsible for the selection of new Suppliers and the management of existing Supplier base for whole NSN. The main input for the SBM process is the relevant Category Strategy which is created in GPR Category team and facilitated by the Supplier Manager for the respective Category.

The Supplier Base Management process covers the following phases:

• Supplier Pre-Selection
• Supplier Selection
• Supplier Management

Supplier Pre-Selection and Supplier Selection describe the onetime activities in order to select the best Supplier in standardized way into NSN Supplier base. Supplier Management describes the cycle based activities to manage and develop NSN Supplier base.

NSN Supplier Base Management process overview, which shows the supplier selection process of NSN.

 Supplier Pre-Selection

 The purpose of this phase is to identify new Supplier candidates for NSN. Supplier Pre-Selection consists of the following steps:

• Supplier scouting and screening
• Early Supplier evaluation
• Cost scenario modeling

Supplier scouting and screening

The purpose of Supplier scouting and screening is to gather information on potential sources for technologies, commodities, services and competences needed by NSN in the mid- to long-term. This may include follow- up of standardization initiatives, attending technical and/ or business conferences and exhibitions, performing web searches and visiting Suppliers to get updates on their    technology, products, services and roadmaps. Input for Supplier scouting & screening are:

• NSN overall strategy and other relevant strategies
• Category Strategy
• NSN SR
• Technology/ service requirements
• Technology architecture roadmaps

Early Supplier evaluation

The purpose of the early Supplier evaluation is to prescreen Suppliers based on NSN SR (supplier Requirement). It may cover the following aspects:

• Verification of Supplier’s financial status as per NSN Supplier financial and business analysis sub-process
• Preliminary validation of technology/ services the Supplier is offering
• Validation of key business fundamentals such as logistic services offered, supply capacity
• Preliminary validation of Supplier’s ability to meet NSN quality and reliability criteria.

Cost scenario modeling

The purpose of cost scenario modeling is to build up an understanding of the production and business elements that determine the cost of the technology, component, product or service. This provides a basis for cost benchmarking of different technology or service options. If cost scenario modeling is deemed necessary, the respective Supplier Manager is responsible for building the technology/ service cost scenario models in collaboration with Suppliers, cost management and technical experts in NSN. Required input:

• Expected annual Spend with this Supplier
• Production and business elements
• Total cost drivers of that industry
• Cost structure of the purchase item

The cost scenario models can help to provide an objective comparison basis for make/ buy decisions.

Minimum criteria for Potential status

After the aforementioned steps of Supplier Pre-Selection have been successfully completed (and minimum criteria have been met) to NSN’s satisfaction, the Supplier may received the status Potential. Minimum criteria for the status Potential:

• Non Disclosure Agreement (NDA) signed and available in NSN NOSS
• Supplier created in NSN NOSS, basic information about Supplier obtained, evaluated and stored into NSN NOSS
• RFI basic information of the supplier received and uploaded into NSN NOSS
• Preliminary validation of the Supplier‘s ability to meet NSN SR and technology/ service/ competence checked
• Light financial check or public investment grade credit rating stored in NSN NOSS
• Supplier Risk Assessment in Light mode stored in NSN NOSS
• Business opportunity clearly identified and documented
• “No pay” list checked

 Supplier Selection

The purpose of this phase is to evaluate, verify and confirm whether Suppliers meet NSN Supplier Requirements. Supplier Selection consists of the following steps

• Evaluation
• Verification & assessment of the potential Suppliers, resulting in
• Contracting for selected Suppliers

• Business opportunity clearly identified and either initial risk & security analysis based on opportunity done or Supplier scanning done
• Match with the (Category) strategy and technological requirements
• Total cost of ownership (e.g. using material cost breakdown, open book costing)
• Supplier Risk Assessment and risk mitigation plan
• Dependency (i.e. sole source; difficult technology, IPR)
• NSN’s share of the whole business volume
• Political & geographical stability in areas where Supplier has operations
• R&D support
• After sales support
• Logistical capability to support NSN globally

Supplier Risk Assessment shall be done for all new Suppliers and additionally in the Supplier Management phase whenever there are significant changes in the business environment (e.g. ownership, financial situation, business volumes, and manufacturing locations).

The relevant Category/ Sub-Category team will review the list of potential Suppliers and nominate the ones that will be taken to the Verification & Assessment phase. Depending on the Supplier financial analysis questionnaire a financial analysis shall be conducted. Required input:

• Expected annual Spend with this Supplier
• Production and business elements
• “No pay” list

The status Potential is not a permission to start delivering products to NSN. As a rule, no business commitments shall be made with a Potential Supplier.

Verification and Assessment

The purpose of the verification and assessment phase is to ensure that the Potential Supplier is capable of performing according to NSN SR with manageable and identified risk.

The NSN Supplier Audit Framework defines guidelines to all Supplier audits, and assessments, applied within all phases of the SBM process.

In the initial Supplier Selection, the assessment is based on the comprehensive NSN SR.

A Lead Auditor is nominated for all assessments and audits. The Lead Auditor is responsible for planning (including resource planning), executing, reporting and following up the assessments/ audits.

Assessment and audit reports are stored in NSN NOSS for shared visibility and traceability.

Any nonconformity identified shall be recorded in the audit report (or Supplier self assessment) and a corrective action plan shall be agreed. The Supplier is solely responsible for the creation of the corrective action plan and its execution.

Contracting

The purpose of contracting is to create a legally binding contract between the parties in order to secure the NSN business interest and to mitigate risks.

The Category Cluster/ Category team will nominate a Head Negotiator who, by default, is the nominated Supplier Manager. The Supplier Manager is responsible for contracting and contract management. The relevant parties as defined in the NSN Supplier Contracting process shall be informed about the contract content.

The Supplier Manager is responsible for Requests for Quotation and budgetary pricing for the respective Supplier.

Findings from Verification and Assessment may influence the contract with the respective Supplier, so the assessment should be conducted before finalizing the contract.

At the end of Contracting the Vendor master data management sub process need to be done in order to manage the outcome of Contracting into the Purchasing system (P20 SAP system).

Minimum criteria for Approved status

When the Supplier Pre-Selection and Supplier Selection have been completed successfully the Supplier may be granted the status Approved, for Full SBM approach.

Minimum criteria for the Supplier status Approved are:

• Potential status has been approved
• Supplier Manager agreed
• Supplier has completed the RFI and this is available in NSN NOSS
• Risk assessment done with an appropriate tool, covering level of risk arising from e.g. environmental issues, ethical issues, business dependency, political or geographical risks
• Supplier has passed NSN Supplier assessment, level of compliance with NSN SRhas been verified and Audit report is documented in NSN NOSS, if needed corrective action plan is agreed.
• Risk mitigation plan done if applicable according to the relevant NSN risk management processes
• Verification of Supplier’s financial status done
• Supplier checked against “no pay list” and against “Red Flag” Location bank account details
• NSN Frame Purchase Agreement or NSN Conditions of Purchase signed acc. Contracting sub process
• Optional or specific requirements:
• Alignment with the NSN Category Strategy verified for business and technology
• Total cost of ownership analyzed
• Validation of key business fundamentals such as logistic services offered and supply capacity completed to NSN’s satisfaction
• R&D support and/ or After sales support verified

When the Supplier has been granted Approved status, business transactions are allowed to be started.

Supplier Risk Assessment shall be done for all new Suppliers and additionally in the Supplier Management phase whenever there are significant changes in the business environment (e.g. ownership, financial situation, business volumes and manufacturing locations).

Minimum criteria for restricted status

When the relevant process steps for Supplier Selection have been completed successfully the Supplier may be granted the status Restricted, for Medium SBM approach.

• Minimum criteria for the Supplier status Restricted are:
• Supplier Manager agreed
• Supplier created in NSN NOSS, basic information about Supplier obtained, evaluated and stored into NSN NOSS

Supplier has completed the RFI and this is available in NSN NOSS

• Risk assessment in Light mode done with an appropriate tool, covering level of risk arising from e.g. environmental issues, ethical issues, business dependency, political or geographical risks
• Supplier has stated their compliance or otherwise acceptingly responded to the requested elements of NSN SR in a self assessment response or passed NSN Rapid assessment for SBM Medium approach successfully and potential corrective action areas identified and communicated for Supplier’s corrective actions

Risk mitigation plan done if applicable according to the relevant NSN risk management processes

• Verification of Supplier’s financial status done
• Supplier checked against “no pay” list and against “Red Flag” Location bank account details  Non Disclosure Agreement (NDA) signed and available in NSN NOSS
• Signed conditions of purchase agreement or any other applicable contract type

 Optional or specific requirements:

• Purchase Agreement signed for direct material Category Clusters
• If the Supplier is not originally selected by OPS GPR please attach evidence (as file to respective status template) e.g. the mail from the responsible Business Group Sponsor/ 2nd level GPR Approver

When the Supplier has been granted Restricted status, limited business transactions are allowed to be started.

Supplier Management

The purpose of Supplier Management is to maintain and develop NSN’s approved Supplier base and to further develop some strategic relationships to Preferred status. Supplier Management is done according to implementation matrix to ensure continuous performance improvements of Suppliers in alignment with NSN business requirements.

Supplier Management consists of the following steps:

• Relationship Management
• Performance Management
• Strategic Development
• Phase-out

Relationship Management

Good Relationship Management and hence good Supplier relationships are of key importance to NSN. Relationships are the result of all daily transactions with the Supplier by all parties involved. They are based on mutual respect, interests, understanding and prospects. GPR communication should be conducted based on External Communications rules. Both the Supplier and NSN have an equally important role in building up a good relationship – neither party can do it alone.

A good relationship with a good performance and technology/ product/ service match may lead to a strategic alliance or a close and mutually advantageous relationship.

A good relationship requires proactive collaboration from both parties, including regular meetings.

Supplier Manager acts as the escalation point in the relationship with the Supplier.

Key tasks in Relationship Management include such as, but are not limited to:

• Communications,
• Contract Management together with project contract creation,
• To choose from existing Supplier base the best Supplier for certain project,
• Supplier Business Plan creation and maintenance,
• Status update,
• Internal Supplier team

Minimum criteria for preferred status

• Status Approved given
• Strategic alignment
• Good/ outstanding performance
• Full SBM process followed/ documentation available in NSN NOSS, Supplier Business Plan maintained in NSN NOSS

Supplier performance measurements are necessary activities to enable the operational buyers, GPR Category teams and other stakeholders, such as Project Managers, R&D personnel, to assess and develop Supplier performance based on factual data collected and analyzed on an ongoing basis. It also enables Supplier Manager to give absolute and relative feedback to the Supplier, and enabling the Supplier to consider their performance versus other comparable Suppliers used throughout NSN. The output is to be utilized when planning follow up Supplier assessments and specific development projects, creating a Category Strategy and selecting Suppliers for a NSN project.Strategic Development

The potential of Supplier Base Management lies in the active development of Suppliers. Based on the Category Strategy, Supplier Performance Evaluation results and assessments a Development Plan can be created and development activities can be started. The purpose of these activities is to get the Supplier to meet NSN (short or long term) requirements in the selected area.

Should the Supplier performance and strategic alignment with NSN so justify, a Supplier may be granted the Preferred status.

A Supplier Development Plan can be created to drive Supplier performance improvements in purchasing, quality, delivery performance and technology/ service. The Supplier Manager is responsible for taking the initiative in the creation and implementation of such a plan and he/ she is supported by a cross-functional team.

 Phase-out

Some Suppliers may be phased out as a result of the active Supplier Base Management. Phase-out leads to Disqualified status.

There might be several reasons to phase out the Supplier:

• Category Strategy
• Obsolete or noncompetitive technology
• Poor performance (e.g. in delivery, quality or other areas)
• Product end of life
• Business conflict (IPR conflict, Supplier has become direct competitor, serious or continuing neglect of confidentiality, strategy conflict, ownership risk, etc.)
• Brand risk or policy conflict (e.g. ethical or environmental behavior)
• Product safety failure, missing capability or serious noncompliance with NSN SR.

Specific Objective: 03

To analyze the process of ordering product using myOrder tools in indirect procurement process.

Related hypothesis

Null Hypothesis: 90% employees think that using myOrder tolls is the best way for ordering and purchasing indirect products.

Alternative Hypothesis: less than 90% employees think that using myOrder tolls is the best way for ordering and purchasing indirect products.

 Related question

MyOrder tool is the best way for purchasing good for indirect purchase.

Responses:

Table 01: Frequency distribution of related question

Source: primary

(In the range of 1to 5 from strongly agree t strongly disagree here answer below 3 are counted as agree)

At 95% confidence level testing hypothesis

For testing this hypothesis 30 out of 30 agreed and strongly agreed that MyOrder tool is the best way of purchasing goods.

This hypothesis is tested using Z test

 Z Test: The case can be summarized symbolically

pHo =. 963(Hypothesized Mean)

qHo=  (1- pHo) = 0.033

n    =30 (sample size)

= 90%

σp ={ (pHo*qHo)/ n}^0.5

      ={( 0.963* .033)/ 30} ^0.5

=  .05477

Zobserved = ( – pHo )/ σp

= {(.963-0.9)/ 0.5477}

=1.15

Zcrit           =1.64 (at 90% confidence level)

Zobserved <  Zcrit so there is no significant evidence to reject the null hypothesis

The figure below shows this hypothesis test graphically. From the figure above it can be said that the value of Zobs falls within the acceptable range

Findings: from the hypothesis testing it is found that more than 90% employee think that myOrder tool is a good way for purchasing indirect goods.

• Requester (RQ): the person who needs the goods, initiator of the purchase request
• Business Approver (AP): the person with the correct approval authority and limits, who approves the costs
• Category Manager in Global Procurement (SP): the person who negotiates for the best price and/or terms &conditions with the supplier
• Purchase Order Center (POC): the team who processes the request and creates the related purchase order into SAP, and handles the operational purchase issues with the supplier, including potential invoice clarifications.

By using this tool the requester can initiate a purchase order specifying the goods and terms of purchasing with the approval of approver (line manager) purchase order is created. Supplier is selected as per NSN’s policy by and category manager in global procurement, which is locally done by indirect procurement team. They place the order to the supplier. The requester receives the goods and then the final process of payment is completed.

By using MyOrder tool requester can directly order his/ her required product and can specify what type of product he/she needs and payment is also done after receiving the goods by requester. So there is very less chance of complain in the case of specification from requester. By this soft ware and via net the total process can be general completed within comparatively lower time period than it was done manually. So the employees of NSN thinks it’s a good way of purchasing product.

 Specific Objective: 04

To analyze the Invoice payment system for direct and indirect purchase

Related hypothesis

Null Hypothesis: 75% employees think that their policy for payment serves the interest of both vendors and organization

Alternative Hypothesis: Less than 75% employees think that their policy for payment serves the interest of both vendors and organization

Related Question         

Policy for payment serves the interest of both vendors and NSN BD LTD

 Responses

Table 02: Frequency distribution of related question

Source: Primary

Using 5point likert scale, from1-always- 5never, taking the value 3 and below are taken as positive response

This hypothesis is tested using Z Test

 Z test: The case can be summarized symbolically

pHo = 0.75 (Hypothesized Mean)

qHo=  (1- pHo) = 0.25

n=30 (sample size)

= 0.867

σp  ={ (pHo*qHo)/ n}^0.5

      = {( 0.75*0.25)/ 30} ^0.5

= 0.079

Zobs           = ( -pHo)/ σp

= {(0.867-0.75)/ 0.079}

= 1.47

Zcrit         =1.64 (at 90% confidence level tabulated value of Zcrit)

Zobs<  Zcrit so there is no significant evidence to reject the null hypothesis

From the figure above it can be said that the value of Zobs falls within the acceptable range.

Again from the vendor’s point of view the timing related invoice payment:

Related Question

What is the mode of payment for your supplied product?

Responses:

Table 03: Showing the frequency distribution of related question

110.010.010.0 More than one month990.090.0100.0 Total10100.0100.0

Source: primary

These data shows that in most of the cases NSN BD Ltd. takes more than one month to pay the bill. As their invoice payment process is splinted in different countries of the world, In most of the cases it takes 45days. No payment is done in cash. All the payments are done by check. When the check is issued from the concern country’s office for any vendors a mail is sent to the concern vendor also to inform that a check is issued for payment of credit purchase as per contract of payment. This way of processing and informing the vendor reduces the chances of unusual delay of payment to vendors.

The journal entries for invoice payment of direct or indirect purchase in SAP (system) are given below:

GR Creation

Cost of goods sold/ Opex                               Dr.

Goods received                                               Cr.

IR creation

Goods received                                               Dr.

Vendor                                                            Cr.

Payment process

Vendor                                                            Dr.

Bank                                                                Cr.

By auto reconciliation the cost goes to cost of goods sold is paid by bank

 Findings

By testing this hypothesis and other related information is found that payment policy of NSN BD LTD serves the interest of both parties. As they take more than a month to pay most of the bills they prepare the contract keeping vendors interest in mind

Specific objective: 05

To find out whether NSN deals with its vendor as a strategic partner or not.

 Related hypothesis

Null Hypothesis: 70% of employees say that NSN BD deals with its vendor as a strategic partner.

Alternative Hypothesis: Less than 70% of employees say that NSN BD deals with its vendor as a strategic partner

 Related question

Does NSN BD Ltd. deals with its vendor as strategic partner?

 Responses

Table 04: Showing the frequency distribution of related question

Source: primary

Z test is used to test the hypothesis statistically

 Z test:

 pHo =0.7

qHo= 0.3

n    =30 (sample size)

= .833

σp^ ={ (pHo*qHo)/ n}^0.5

={( 0.7* 0.3)/ 30} ^0.5

= 0.0836

Zobserved = (p- M)/ σp^

= {(.833-0.7)/ 0.0836}

=1.95

Zcrit         =1.96 (at 95% confidence level tabulated value of Zcrit)

Zobserved<  Zcrit so there is no significant evidence to reject the null hypothesis

From the figure above it can be said that the value of Zobs falls within the acceptable range.

The questionnaire surveys result shows that most of the employees said that that NSN BD LTD deals with its customer as strategic partner. From the survey result of the vendors, it was found that most of the vendors (70% of surveyed) also agree with the statement.

Response for the question from vendors:

Does NSN BD deal with its vendors as strategic partners?

Table 05: Showing frequency distribution of vendors survey

Source: primary

NSN BD LTD deals with a wide range of vendors from large to small in term of business. It’s not possible to deal like a strategic partner with all. The bonding with the vendor generally depend on how long they are dealing with that particular vendor, importance and availability of the product or service provided by the vendors, yearly turn over with that vendor etc. But NSN BD LTD always tries to be in good relation with all of its vendors as they are the most important parties who help NSN BD Ltd to run their business smoothly.

Specific objective: 06

To find out whether there is any relationship between good vendor management and vendor development

Related hypothesis

Null Hypothesis: There is no significant relationship between good vendor management practice and vendor development

Alternative Hypothesis: There is significant relationship between good vendor management practice and vendor development

 Related questions

Does NSN BD Ltd work for vendor management?

Current practice of vendor management is the best.

Responses

Table 06: Showing the frequency distribution in cross table

Source: primary

 Chi-Square Tests

Table 07: showing result of Chi square test using SPSS

.

 Symmetric Measures

Table 08: Showing the result of contingency coefficient

Here tabulated value of Chi-Square is at 10% significant level, (df=12) is 18.548,

Calculated value of Chi-Square > tabulated value of Chi-Square so null hypothesis is rejected.

Some are parts:

Nokia Siemens Networks Bangladesh Ltd (Part 1)

Nokia Siemens Networks Bangladesh Ltd (Part 2)

Nokia Siemens Networks Bangladesh Ltd (Part 3)