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What I felt was a greatest asset was the knowledge I gained here on how to operate corporate accounting software.Internship Report-Hudaibia Tariq Siemens Pakistan Engineering Co Ltd. time. It has given me a deeper knowledge of the business world and office culture. Hussain Ismail for his cooperation and consideration in accommodating this valuable internship. Rabia Anis. I would also like to acknowledge Mr.t for giving me an opportunity to work in this prestigious organization. Acknowledgements: To begin with. the Spiridon System. Hudaibia Tariq Commercial Internee. I would like to thank to Allah s. Through this experience I acquired the unique opportunity to look deeper into my chosen career field. I would also like to particularly recognize my supervisors: Mr. OLM August 10th-September 18th 2009 Page 2 of 19 . I found the work environment to be very friendly. and the people I worked under always encouraged me to ask as many questions as possible while at the same time I was expected to learn on my own. has sharpened my IT skills and significantly improved my multi-tasking and decisionmaking capabilities. This internship has been the most fulfilling work experience I’ve undertaken. working on real assignments and shadowing commercial officers.w. Ammad Saleem and Ms. by interacting with employees and clients. and unrelenting guidance throughout my 6 weeks here. for their constant support.
...........7 Company Profile Overview: Siemens (Berlin and Munich) is a global powerhouse in electrical engineering and electronics.............................. Siemens provides innovative technologies and comprehensive knowhow to benefit customers in over 190 countries.............. Table of Contents Table of Contents.............................3 Building Management Solutions.................................................... Page 3 of 19 ............................Internship Report-Hudaibia Tariq Siemens Pakistan Engineering Co Ltd...........................
which at the moment is the chief supplier of state-of-the-art equipment to major hospitals. Information Technology and Industrial solutions. Siemens is also the single largest employer of engineering graduates in the country. and a strong international commitment have driven the company's success since its very beginnings. Automation and Control. Lahore and Islamabad Stock Exchanges. the Group has added over 2. It also boasts a significant number of women in important positions in every department and thoroughly follows a gender equality policy.500 MW to Pakistan's power generation capacity. power distribution and power transformers. The Automation and Drives Group is the only major local supplier with 35 years of experience in the local manufacture of diesel generating sets to meet customer specific demands from clients on both the domestic and international front. Medical. switchgear products and systems. The company was established in 1847. Landmark inventions. Initially it began its operations as a small precision-engineering workshop. which represents 15% of the country's installed output. The company further flourishes with its Medical Solutions Group. The head office is located in Karachi and the regional offices are Page 4 of 19 . The company then evolved to become a public limited company in 1963. and overtime grew into what is now one of the world's largest companies in electrical engineering and electronics. To date. Transportation. Company shares have since then been quoted on the Karachi. it has a monumental workforce of 1550 employees. Siemens is one of the most important employers in the country. Siemens is the country’s prime supplier of high-voltage grid stations. Siemens’ operations are divided into three main sectors: • Industry • Energy • Healthcare Siemens in Pakistan Siemens Pakistan is currently in the leading position in the country in the areas of Power. The Power Generation Group is a major player in the country. and network consultancy. an immense readiness to innovate. Siemens Engineering Pakistan was established in 1953 as a private limited company.Internship Report-Hudaibia Tariq Siemens Pakistan Engineering Co Ltd.
The firm is predominantly engaged in providing solutions that address all three sectors. Energy and Healthcare. The firm has been contributing to the Pakistani economy by channelling their tech savvy knowledge into producing contemporary solutions and products as well as services. transmission and distribution of electrical energy. The firm is centrally located in the heart of the industrial vicinity of Karachi at S. The firm was given such recognition by Siemens AG that it is now the competence centre for the entire region and has been permitted to export its high tech products and services to countries in the Middle East and Central Asia.E. based in Lahore and Islamabad.T.Internship Report-Hudaibia Tariq Siemens Pakistan Engineering Co Ltd. Furthermore. In a nut shell the company deals with manufacturing electrical and mechanical equipment. the Energy sector offers products and solutions for the generation. installation and sale of telecommunication. transportation and building systems. This corporate accounting software. The company is an essential subsidiary of Siemens AG and consists of three main divisions: 1) 2) 3) Energy Solutions Industry Solutions Healthcare Solutions The products manufactured locally are done so under license from Siemens AG. Meanwhile. and is one of the oldest and largest industrial estates. the Spiridon System (formerly known as SAP) is heavily used in the day to day business function of each business unit within the firm.I. Siemens Engineering Pakistan uses this software globally and many other successful MNC use it in order to ease the flow of Page 5 of 19 . Similarly. in Germany and thus the quality of the products are in line with the products being produced at Siemens AG factories that provide specialised technical support and back up when needed. The Industry sector aims to provide avant garde solutions to customers in the fields of production. the Healthcare Sector strives to come up with innovative products and complete solutions as well as service and consulting in the healthcare industry. Industry. household and medical equipment and mobile devices and executing projects under contract. Siemens Engineering Pakistan is one of the few firms in the country that uses the SAP/ERP Technology. the firm also boasts an ISO 9001 certification proving its high standards in manufacturing second to none in the region.
Manufacturing Page 6 of 19 . • Commission Based Business. The system is used to generate quarterly returns. they outsource and receive commission.Internship Report-Hudaibia Tariq Siemens Pakistan Engineering Co Ltd. business units may require each other’s services and thus are treated as clients hence charged the same.This is the business generated from within the company. period-wise. separate reports may be generated for transactions carried out at arms length (those transactions whose terms are similar to that of the knowledgeable and willing unrelated parties in the ordinary course of business) or otherwise. Intra Company Business. However if a business unit requires services form another division the reporting is done under Direct Business. default budgets and forecasts which are then submitted to business units.Refers to commission based income where the business units act like a third party.The business from external clients. There are three main types of businesses that get reported by Siemens worldwide and they are: • • Direct Business. Thus Siemens Pakistan receives commission as the ‘middle-man’ in the case where a business unit may not be able to provide a particular product or service. Furthermore. The fiscal year at Siemens Engineering Pakistan runs from October through till September and annual closings take place on the 31st of September. The Spiridon System is generally used to compile transactions with related parties separately for each related party with complete analysis product-wise. It does deal with it especially concerning Lahore offices and regional deals. orderwise. At Siemens the Spiridon System is used to produce Financial Statements and record important data related to clients and vendors. information in their worldwide divisions. Although Siemens Pakistan doesn’t receive hefty amounts of commission based business. Sales & Marketing 2. nature of transaction wise etc. Engineering & Design 3. Principal Business Functions at Siemens Engineering Pakistan: 1.
Services Products & Services Energy and Power Solutions • • • • • • • • Energy Automation Generating sets High Voltage Sub-stations Power Generations Power Transmission & distribution services Solar power Switch boards Transformers Industrial Solutions • • • • • • Engineering & Construction Motors & Alternators On call Logistic. Installation & Commissioning 5. 4. Repair service & Maintenance Process Industries Automation Standard Products UGS PLM Software Transportation Solutions • • • Automotive Telemetric Solutions Transport Systems Building Management Solutions • Building management solutions Communication Solutions • Communication Networks Information Technology Solutions Page 7 of 19 .Internship Report-Hudaibia Tariq Siemens Pakistan Engineering Co Ltd.
one being a commercial head and the other a technical head. • • SAP Academy SAP Solutions Health Care Solutions • Medical Solutions Home Appliances • Siemens Home Appliances Corporate Structure: The corporate structure at Siemens Engineering Pakistan is such that each division has several separate business units.Internship Report-Hudaibia Tariq Siemens Pakistan Engineering Co Ltd. Both subsequently work together towards achieving operational efficiency. The Commercial heads are Page 8 of 19 . Each business unit has two heads.
LogisticsRepair Services & Maintenance (OLM) Business Unit where I was placed for my Internship. Hussein Ismail is the General Manager of the OnCall-.Internship Report-Hudaibia Tariq Siemens Pakistan Engineering Co Ltd. the business unit heads report to the divisional heads who then in turn report to CFO. Mr. Mr. Overall. Mr. Page 9 of 19 . A flow chart has been given below: Siemens AG Germany Siemens Engineering Pakistan Divisions Business Units The organisational chart of Siemens Engineering Pakistan is on the following page. commerce related persons holding an MBA and Technical heads are the Executive Engineers. Sohail Wajahat Siddiqui of Siemens Pakistan. Gerhard Wilcke. Mr. The hierarchy is such that each commercial head of a business unit reports to the commercial sector head who then reports directly to the CFO of Siemens Pakistan. The chart shows how each division is divided into separate business units and will help explain the hierchachical flow of the firm. Gerhard Wilcke and CEO. Mr. Mohammed Mehdi is the DGM of OLM.
Page 11 of 19 . The OLM department consists of three main executionary sub-departments. They are: • • • Sales & Marketing Services Commercial OLM consist of three main branches Karachi. The department then carried out extensive market research in order to calculate market potential. Although there is a branch in Multan it is reported in Lahore. NDI & Oil Analysis) Spare Parts Management Call Centre for customer support and after sales services. the department is also involved in providing business based maintenance and technical support. Lahore and Islamabad. Logistics-Repair Services & Maintenance (OLM) Business Unit The OLM department is under the Industry Division. The Industry division consists of two segments and OLM is in the first segment. Repairing. Vibration Analysis. The initial stages of marketing activities begin with the gathering of information through the internet. a thorough marketing strategy is defined and the clients are contacted via telephone.Internship Report-Hudaibia Tariq Siemens Pakistan Engineering Co Ltd. The OLM department is generally involved in: • • • • • Providing Operation & Maintenance Service for Industrial and Power Plants. letter or where appropriate conduct site visits. OnCall-. After the research results have been analysed. Overhauling & Maintenance of Motors & Alternators Condition Monitoring (Thermography. email. Sales & Marketing The sales and marketing department handles the marketing related activities and is heavily involved in the Bid Offer Preparation process. Furthermore. newspaper. industrial associations and market intelligence data.
Clients often ask for discounts and the department reviews the request and tries to accommodate in order to receive further business. who then open the orders. The client then sends a revised offer with the revised amount and prices. 5. The commercial department gives it inputs at various stages. after accepting the revised offer from Siemens Pakistan then sends a purchase order. 4. the turnover is then booked and an invoice is generated for the customer signifying the completion if the job. The renewed quoted prices are then sent back to the client who then either accept or reject the quoted prices. Page 12 of 19 . Once the order is received. 3. Based on this. As soon as the job has been fully completed a job completion note and dispatch note is sent with the client’s authorised approval. The client. Commercial The general business flow at the OLM Commercial Department is given below: 1. in the relative department dealing with the services needed. The inquiry is basically sent to find out whether the company can provide the manufacturing and or servicing of a particular product or service.Internship Report-Hudaibia Tariq Siemens Pakistan Engineering Co Ltd. The inquiry is then received by the client and an offer is generated. After the order is booked onto the system. 2. At this stage the terms and conditions usually remain the same. It is at this stage where the orders are booked onto the Spiridon System using a system generated number. The offers are received by the Commercial officers. Through this process I learnt how and when each new order is placed onto the system and once it is executed it is recorded as sales turnover and communicated to the entire industry sector. the commercial department is responsible for sending back quotations. Initially a prospective client sends and inquiry to Siemens Pakistan. 6. cost calculation sheet and calculating the Return on Capital Employed (ROCE). the commercial department is responsible for checking the proposals. these are the prices Siemens Pakistan will charge. 7. the job is executed. During the Offer Processing stage. 8.
This form is signed and checked for commercial and technical workings and is then forwarded to the purchase department. A Spiridon generated purchase order number is then raised and sent to the selected vendor (internal or external). the OLM Commercial staff strives to ensure that the actual cost remains lower than the planned cost. Page 13 of 19 . Once a Purchase Order has been initiated and booked onto the system. A loss order occurs when the actual cost exceeds the order value. There are two main types of purchases: • • Local Purchases And Imports Local Purchases: The local purchases follow a particular procedure which is listed below: • Material Requisition-A material requisition form is received from the Industry Store. or within the parameters of the planned costs. During the order processing stage. The quotation that is most viable to the business unit is then selected. All the materials that are needed and not in inventory are put on the Material Requisition form. • Purchase Order-The Purchase Department then issues a purchase order. The cost of the items to be procured is also checked with the planned cost of those items. various costs are incurred. who in turn arrange for the best quotations for the business unit in question with different vendors. The Industry sector has a centralized purchase department and a separate payables and stores department. • Once procurement is made from the vendor a Materials Received Report is generated by the Industry Store. purchase department.The comparative statement is made by the Business Unit or externally from a vendor. purchasing starts. • • Quotation.Internship Report-Hudaibia Tariq Siemens Pakistan Engineering Co Ltd.A quotation is received either internally from another Comparative Statement. The different quotations are then reviewed on a comparative statement. The commercial staff is responsible for making sure that the planned cost remains greater than the committed cost. Through the execution phase. the OLM commercial staff remains in touch with the clients’ right through to the execution process.
Control Department for posting by the payables division & release of payments. All the materials that are needed and not in inventory are put on the Material Requisition form. & forwarded to Industry payables for the preparation of bill sticker. the vendor (internal & external) by the Industry Payables section. Comparative statement and Purchase order. Purchase Order.A Spiridon generated purchase order is then raised and sent to the selected vendor or internally to the business unit (in this case the OLM Page 14 of 19 .A quotation is received either internally from another Comparative Statement.A material requisition form is received from the services department. • • • • • Material Inspection Report. on a comparative statement. divisional management is involved for approval and settling the misbalance. Imports The process of imports is very much similar to that of the processes of Material requisition.A material inspection report is generated Goods Received.Internship Report-Hudaibia Tariq Siemens Pakistan Engineering Co Ltd. This form is signed and checked for commercial and technical workings and is then forwarded to the purchase department. an Invoice is received from Verify-This vendor invoice is then verified by the responsible engineer Bill Sticker-Duely signed Bill sticker is then forwarded to Financial once all the materials have been checked. • Material Requisition. • business unit).The different quotations offered are reviewed Business Unit or externally from a vendor. a goods receipt is entered in the Invoice-Following the goods receipt note. system by the Industry Store. Quotation. The quotation that is most viable to the business unit is then selected. In the case where a committed cost (the actual cost of procuring all the raw materials needed to perform or execute a particular job/order) is greater. The commercial staff is responsible for making sure that the planned cost remains greater than the committed cost.. The cost of the items to be procured is also checked with the planned cost of those items. who in turn arrange for the best quotations for the business unit in question with different vendors. • • Quotation.After MRR & MIR.
the Importer (Applicant). This binding document allows the buyer (through his/her respective bank) a guarantee that the payment for goods will be transferred in fact be transferred to the seller and the goods will arrive on the date agreed. known as the Issuing Bank.Internship Report-Hudaibia Tariq Siemens Pakistan Engineering Co Ltd. The central imports department then deals with banks directly who create the LC or Bank Contract. customs or political uncertainty. promising to effect payment in favour of the Exporter (Beneficiary) up to a stated sum of money. An internal system generated number is then arranged by the Central Imports Department which is eventually communicated to the respective business unit. In short. • Material Receiving Report. • Order Acknowledgement. It is often used in international trade to eliminate risks such as unfamiliarity with the foreign country. on behalf of its customer. A Letter of Credit is a written undertaking by the Importer’s bank. the seller has to present the bank with the necessary shipping documents confirming the delivery of goods within a given time frame.The supplier then dispatches an order acknowledgement or Performance Invoice which serves as the part of the Agreement for the establishment of a Letter of Credit or a bank contract. In order for the payment to occur. Page 15 of 19 .A material receiving report is generated once the goods have been received. The Centralised Imports Department receives the respective business unit’s request for the establishment of an LC or Bank Contract. At Siemens the Imports department is centralised. It also further gives the beneficiary the basis for clearance. • Letter of Credit/ Bank Contract. The Centralised Imports department organises for a respective clearing agent who is responsible for the customs clearance and dispatching the shipment to the respective business unit’s ware house/store. • Central Imports. They are responsible for handling all the Letters of Credit and dealing with banks.Clients dealing with Siemens or vice versa may often require an LC or Bank Contract.During this phase the Letter of Credit or Bank Requisition is forwarded to the Central Imports department. through an LC or Bank Contract establishment form.Consignment is sent by the seller after which the necessary shipping documents are delivered to the Centralised Imports department through an agent for the clearance of the consignment. • Clearance. within a prescribed time limit and against stipulated documents.
Internship Report-Hudaibia Tariq Siemens Pakistan Engineering Co Ltd. Payables.After MRR & MIR. entered in the system leading to a goods receipt note. to the payables department. This is then forwarded to Financial Control Department for posting by the payables division.The vendor invoice is then verified by an engineer. it is forwarded once all the materials have been inspected thoroughly. a goods receipt number is Invoice-After the goods receipt had been established an invoice is Verify.A material inspection report is generated Goods Received. received from the supplier or business unit.Once the invoice has been properly verified. Page 16 of 19 . • • • • • Material Inspection Report.
it is a form of security for the client.Advances Page 17 of 19 . In short. The process of billing and follow-up: As soon as an invoice is booked on to the system.This is to secure any claims by the buyer on the seller for reimbursements of the buyer’s advance payment on the contract price before delivery of the goods (or advance payment of the full contract price) . If not. • Advance Payment Guarantee. 500. then the guarantee can be en cashed (taken back or withheld). The formula is given below: Credit Exposure = (Turnover + Receivables) . These limits are often revised as business grows with a respective client. Credit Analysis: At Siemens Engineering Pakistan. certain credit limits are usually assigned to new customers. guaranteeing that in the event where a bid is accepted. The credit limits are assigned at the business unit level and an authority of Rs. a performance guarantee basically makes sure that the job has been executed properly as per the client’s requirements.in the event that the seller has failed to meet his or her contractual delivery obligations. This is basically given at the time of submission of the tender and is often referred to as earnest money’.Internship Report-Hudaibia Tariq Siemens Pakistan Engineering Co Ltd. after which a certain percentage or all is given as a guarantee to the client. the successful contractor will sign the contract and present a performance bond. 000 is given as a general credit limit. the recovery section is involved in making sure that the payment is released by the customer through consistent follow up. A certain formula is applied in order to obtain credit exposure. This usually occurs once the job has been awarded. • Performance Bond-A performance bond is a surety bond issued by an insurance company to guarantee satisfactory completion of a project by a contractor. The different types of Bank Guarantees’ used at Siemens Engineering Pakistan There are three main types of bank guarantees: • Bid Bond/Earnest Money-A surety bond filed by contractors.
It also further acknowledges all the costs incurred from procuring raw materials form vendors (known as committed costs) to planned costs. One particular client had an extended credit limit amounting to Rs. Each unit prepares orders relating to varying products and services. a sales document items list is prepared on a regular basis. The company reporting is then handled by the FC dept. As a rule. In this case the credit exposure of that client was greater than its prescribed credit limit. The business units in turn work hand in hand with the purchase departments and eventually submit their reports (usually on a monthly basis) to the FC Dept. credit limits need to be greater than or equal to credit exposures in order for the system to operate. Therefore using the formula given above its credit exposure would be Rs. Each division at Siemens (out of the three) basically has several business units. It is obtained from the Spiridon system and basically includes all the orders on hand. The Spiridon system restricts bookings on any such orders where the credit exposure exceeds the credit limit. The aim of the business unit is to keep the various costs during the order execution phase to a minimum. The accounting done here is at the business unit level. The sales document items list shows us which orders have been booked and for what purpose. Page 18 of 19 . Each purchase order has a special system generated number once the order is issued by the vendor.Internship Report-Hudaibia Tariq Siemens Pakistan Engineering Co Ltd. Sales Document Index: At the OLM department at Siemens Engineering Pakistan. 2 Million. or to keep the actual cost lower or within the parameters of planned costs. The document list also allows us to see which orders have been booked as a loss order. 1 Million. Through this process a committed cost automatically appears on the document list. The OLM commercial department is responsible for responsible for billing the orders. These bills are then transported to the central Financial Control Department.
Financial Reporting at Siemens Engineering Pakistan: There are many types of Financial Control based reporting done at the business unit level. Industry Infrastructure and Logistic/ Repair Services & the Quarterly & yearly forecasting & planning reporting is done in these segments. Budgeted Monitoring Reporting (BMR) General Reporting Budget Monitoring Reporting A budget monitoring report its main sheet consists of two parts of an Income Statement and Cash Flow. Pulp & Paper. At Siemens Engineering Pakistan. 2. The focal one’s being: 1. Cement. The income statement calculates the Earnings before Interest & Taxes (EBIT) at the business unit level for the actual. General Reports constitute of the following: • Regional Reports-Siemens Pakistan is divided into three regions Karachi. Budgeted Monthly Reporting is compiled at sector level and is then forwarded to Financial Controls Department. seasonal & forecasted figures for the month. Lahore & Islamabad • • • • • Budget Module-The budget module is prepared once a year.Internship Report-Hudaibia Tariq Siemens Pakistan Engineering Co Ltd. Various strategic decisions are devised on the basis of BMR at divisional level. Segments Reporting (GG wise) Divisional Reporting Siemens AG Reporting Corporate Reporting OLM BU has 5 segments defined to it which is Cross Industry. Page 19 of 19 .