COMSATS University Islamabad

Sahiwal Campus

Kot Addu Power Company limited (KAPCO)

Tehseel Kot Addu, Distric Muzaffar Garh

Supervisor Name: Muhammad Waheed Akhter

Designation of Teacher: Lecturer

Student Name: Abdul Qudoos Bhatti

Student Registration No: CUI SP16-BBA-009 SWL

Submission Date: 28 November 2019

COMSATS University Islamabad, Sahiwal Campus

COMSATS Road, off G. T Road, Sahiwal.
Phone: 040-4305001-7
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Acknowledgement

All Praises be to Allah, the Beneficent, the Merciful, the Gracious, the Creator and
Sustainer of the Universe, the Lord of All Lords, who gave me strength, power and
courage to complete this project.

I believe that successful completion of my internship and this report has become
possible only due to the support, love and kindness of all the people who encouraged
me throughout this time period.

I am very thankful to the Management of KAPCO especially to Mr. Rana Qaisar Iqbal and Mr. M.
Idrees. I am also grateful to Contract and Procurement Team for encouraging me during my
internship.

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Executive Summery

In bachelor of Business Administration, Internship is an important

matter which gives opportunity to students in practical field the
most important point in Internship is that the student should spend
their time ion practical field in a true manner and with the spirit to
learn practical orientation of theoretical study framework

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Table of Contents
1 CHAPTER 1: BACKGROUND OF HOST ORGANIZATIO ................................................... 5
1.1.1 Historical background of the organization ...................................................................... 5
1.1.2 Share Capital Structure & Liability of Shareholders ..................................................... 5
1.1.3 Power House Complex .......................................................................................................... 5
1.1.4 Agreement Between WAPDA & KAPCO ........................................................................... 6
1.1.5 List of Competitors................................................................................................................. 7

1.2 Strategic Orientation ............................................................ 7

1.2.1 Vision Statement ..................................................................................................................... 7
1.2.2 Mission Statement .................................................................................................................. 7
1.2.3 Objectives ................................................................................................................................. 8
1.2.4 Core Values .............................................................................................................................. 8
2 CHAPTER 2: Business Operations ........................................................................................ 9
2.1.1 Board of Director .................................................................................................................... 9
2.1.2 Organizational Structure..................................................................................................... 13
2.1.3 Number of employees ......................................................................................................... 14
2.1.4 Introduction of all the Departments ................................................................................. 14

2.2 Structure of the Supply Chain Management department 16

2.2.1 Department hierarchy .......................................................................................................... 16
2.2.2 Number of Employees ......................................................................................................... 17
2.2.3 Operation of Procurement Department .......................................................................... 17

2.3 SWOT ANALYSIS ................................................................. 19

2.4 Function of Supply Chain Department .......................... 20
2.4.1 Function of supply chain Department: ........................................................................... 20
2.4.2 Raw Material Inventory Planning and Forecasting ...................................................... 21
2.4.3 Purchasing of raw material and selection of supplier ................................................ 21
2.4.4 Inbound Logistics strategies (delivery of raw material inventory or
transportation policy for raw material) ........................................................................................... 21
2.4.5 Warehouse Management and Record Keeping of Raw Material .............................. 21
2.4.6 Issuance of Raw Material Policy ....................................................................................... 22
2.4.7 Record Keeping of Finished Goods Inventory ............................................................. 22
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2.4.8 Issuance of Finished Goods .............................................................................................. 22

2.4.9 Outbound logistics strategy (whether company has own logistics or outsource)
22
2.4.10 Outbound logistics (domestic and international logistic whichever is applicable)
22
2.4.11 Value Chain Strategy (Distribution Channel E.g. Manufacturer to Customer,
Manufacturer to Retailer to Customer, Manufacturer to Distributor to Retailer to
Customer) ............................................................................................................................................... 24

2.5 Supply Chain Department’s SWOT Analysis ............... 25

3 CHAPTER 3: Learning as a Student Intern......................................................................... 27

3.1 Duties ...................................................................................... 27

3.2 How was My Experience as an Internee? ..................... 27

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1 CHAPTER 1: BACKGROUND OF HOST ORGANIZATION

1.1.1 Historical background of the organization

The KAPCO Power plant was worked from the Pakistan Water and Power Development
Authority (WAPDA) in five stages somewhere in the range of 1985 and 1996 at its present
area in Kot Addu, District Muzaffargarh, Punjab. In April 1996, KAPCO was consolidated as
an open constrained organization under the Companies Ordinance, 1984 with the target of
obtaining Power Plant from WAPDA. The central exercises of KAPCO incorporate the
proprietorship, activity and upkeep of the Power Plant. Kot Addu Power Company Limited
(KAPCO) was joined in 1996 with the reason to contribute monetary capacity to the national
matrix. KAPCO has indicated excellent outcomes in the zone of plant upkeep, accessibility,
quality gauges and money related execution. In April 2005 KAPCO was officially recorded on
all the three Stock Exchanges. KAPCO is focused on adding to Pakistan's economy by driving
the lives of its kin by persistently improving its exhibition through proficient frameworks, skilled
workforce and great administration. The Kot Addu Power Company (KAPCO) runs a 1600
MW combined cycle Power plant at Kot Addu, a community.

1.1.2 Share Capital Structure & Liability of Shareholders

On June 27, 1996, after worldwide focused offering by the Privatization Commission
Government of Pakistan (the "Privatization Commission"), the administration of KAPCO was
moved to National Power (presently International Power) of the United Kingdom, which acting
through its backup National Power (Kot Addu) Limited ("NPKAL"), purchased offers speaking
to a 26% stake in KAPCO. Afterward, NPKAL purchased a further 10% shareholding in
KAPCO expanding its all-out shareholding to 36%.

The other greater part investor in KAPCO is WAPDA with a present shareholding of 46%.

1.1.3 Power House Complex

The complex involves three squares, 1, 2, and 3. Each square is autonomous in it and can
be viewed as a different power station. There are 2 joined cycle modules in each square no.
1 and 2 while square 3 has just a single module. This is the physical dissemination. For the
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business reason the complex is separated into three squares called Energy square 1, 2, and
3. The power buy understanding gives distinctive vitality charges to the power produced and
dispatched from each square. The vitality square 1 (plant square 3) is the most recent and
was in charging stage when NP took over administration in June 1996 while different squares
were finished and authorized between 1986-1995. The plant square 3, being most recent, is
the most proficient plant and gives the least expensive power to client. Its absolute limit is
397 MW. Arranged by need, at whatever point there is age request from the client, this square
is run first. At the point when the interest surpasses then just different plants are run. The
perplexing history over recent years demonstrates that plant square 3 keeps running nonstop
during the time at greatest limit. In the event that this plant can't keep running at full limit
because of any flaw or separate of machines, the client need is made up from other
accessible plants that are generally costly yet the client pays most minimal vitality charges
(of square 3) for the shortage age. This outcome in noteworthy misfortune. Thusly, this square
is the most profitable resource of the organization. The powerhouse complex is spread more
than 280 sections of land.

1.1.4 Agreement Between WAPDA & KAPCO

WAPDA went into a concurrence with KAPCO for the acquisition of the power for next 25
years from this plant. The tax secured two sorts of installments viz. limit and vitality
installment. The limit installment is made on the accessible limit of the plant and is for the
most part utilized by the organization to meet the fixed costs and 756-million-dollar obligation
risk that it acquired from WAPDA. The vitality installment is done on the genuine dispatch
from the plant. It takes care of the fuel expense and there is scarcely and sparing from this
part.

The understanding permits 36 complex days for the planned blackouts and 500 complex
hours for the unscheduled constrained blackouts. In the event that the gathered blackout
period throughout the year surpasses the concurred remittance, the organization is obligated
to pay the sold harms at a pace of 1.6 occasions of what it gets as limit installment.

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The main year of the business went great. WAPDA was quick in making installments,
however it didn't lose exceptionally long. WAPDA just as Govt. of Pakistan were in monetary
emergencies in light of defilement and in efficiencies. At last WAPDA drew in KAPCO and
National Power in a convoluted fight in court over the tax issue by documenting petitions in
the high court. The court at long last passed a between time request in October 1998 that
confines KAPCO to get Rs 1.98 per KW of power. The target behind this legitimate wrangling
was to pressurize KAPCO National Power to concur and out of court settlement for conclusion
of tax. With the approaching of present Govt., the issues have been explained to reasonable
degree.

1.1.5 List of Competitors

 Coal Power Plant Qadrabad
 GEPCO Muzaffar Garh (General Electric Power Company)
 Bikhi power plant shekhupora 1180MW
 Uch power plant blochistan
 Nandipor Power plant
 Head baloki power plant
 Chashma power plant mianwali

1.2 Strategic Orientation

1.2.1 Vision Statement
“To be a leading power generation company, driven to exceed our shareholders’ expectations
and meet our customer’s requirements.”

1.2.2 Mission Statement

 “To be a responsible corporate citizen.”
 “To maximize shareholders’ return.”
 “To provide reliable and economical power for our Customer.”
 “To excel in all aspects relating to safety, quality and Environment.”

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 “To create a work environment which fosters pride, job satisfaction and equal
opportunity for career growth for the employees.”

1.2.3 Objectives
The project has been completed to achieve the following objectives:

 “To reduce mass scale load shedding.”

 “To facilitate operation and maintenance of other power stations.”
 “To cover emergencies and power shortages with quick generation of power supply
from this power station which is the salient feature of gas turbines.”

1.2.4 Core Values

“The guiding principle of the Organization are productivity, corporate social duty,
acknowledgment and reward, greatness, trustworthiness and regard for one another.”

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2 CHAPTER 2: BUSINESS OPERATIONS

2.1.1 Board of Director

Lt General Muzammil Hussain (Retd)

Chairman

The Lt General Muzammil Hussain joined the Pakistan Army in 1976 and graduated with
distinction from PMA. Underwent his grooming in an Infantry Battalion. Having been
employed on exalted positions including his employment in Interior Sindh on anti-dacoit
operations in 1992; and the Gulf War 1 in Saudi Arabia He has attended courses in France
and Indonesia. General Hussain has been privileged to commanded his parent Unit. His
youth witnessed his distinctive representation of Army in sports like Athletics, basket Ball,
Squash and Tennis. His employment as Defense Attaché inn Jakarta exposed him to
diplomacy for over three years, He has had the privilege of being the instructor in Army
Command and Staff College. Quetta and later on also as a Chief Instructor He commanded
an Infantry brigade and then as a Maj General went on to command most prestigious division
in Gilgit Baltistan. His interest for adventure lead him to great support of Gilgit Political Govt.
and stood by them in exploring Energy Resources His fame with the people of Gilgit bestows
him with a unique distinction. He commanded 30 Corps Gujranwala and supported the
successful conduct of 2013 election in Gujranwala Division. He’s a time to time speaker in
different seminars on the topic of Pakistan, Success leading transition to democracy and
positive trajectory to a good economy in Universities in UK

Mr. Aftab Mahmood Butt

Chief Executive

Mr. Aftab Mahmood Butt has been the Company's Chief Executive since August 1, 2008.
Prior to being appointed Chief Executive, he was a Director of the Company (appointment:
July 2007). From January 2007 to July 2008, Mr. Butt held the position of General Manager

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Finance, Corporate Planning & Performance Monitoring in Pakistan Electric Power (Private)
Limited (PEPCO). His other professional experience includes the position of Member Finance
&Secretary Board in the Corporate and Industrial Restructuring Corporation, Ministry of
Finance, Government of Pakistan. Mr. Butt is a Fellow Member of the Institute of Chartered
Accountants of Pakistan. He has more than 15 years’ experience in the corporate and finance
sector in senior management positions. Mr. Butt served has previously served on the Board
of Directors of Central Power Purchasing (Guarantee) Limited, the Lahore Stock Exchange
(Guarantee) Limited, and the Lahore Electric Supply Company Limited.

Mr. Owais Shahid

Director

Mr. Owais Shahid has been a Director since September 2014. Mr. Shahidi’s Chile, Corporate
& Investment Banking Group in Allied Bank Limited (ABL) His portfolio includes Financial
Institutions, Corporate, Intonational Banking, Investment Banking, Capital Markets, Middle
Markets and Home Remittances. He joined ABL in 2005 and has led its investment banking
team as Head Syndications and then as Group Head Investment Banking He established it
as a leading investment banking outfit in Pakistan I His Corporate & Investment Banking
experience spans over 17 years and includes numerous innovative and unique transactions
in syndications M&A, listings, project financing and capital markets. With strong credit
background and substantial corporate finance & advisory experience, he has led a number
of landmark transactions and has executed over 500 investment banking transactions valuing
over USD 40 Billion with ABL being in a lead role These transactions also include various
first of its kind, largest and award-winning transactions concluded in history of Pakistan’s
investment banking industry. In recognition of ABLS market leadership in investment banking
in Pakistan ABL was honored with over 35 investment banking awards from internationally
recognized institutions. Mr. Owais also represents ABL on the Boards of Hub Power, Kot
Addu Power and Narowal Energy and is Member Trustee Member of Friends of IBA Trust
Previously, he has served on the Boards of Atlas Power and First Receivable Securitization
Company Prior to joining ABL he has worked for National Bank of Pakistan. Standard

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Chartered Modaraba and Emirates Bank International. His qualifications include BBA (Hons)
& MBA from IBA Karachi and Chartered Financial Analyst from CFA Institute, USA.

Mr. Aqeel Ahmed Nasir

Director

Mr. Aqeel Ahmed Nasir has been a Director since March 2015. Mr. Nasir is the Company
Secretary & Chief Legal Counsel of United Bank Limited (UBL). Mr. Nasir has to his credit 20
years’ experience in the legal and financial sector of both the public and private sector. Mr.
Nasir is a Master of Laws (LL.M.) from the University of London, England. He is a director on
the Board of Directors of the United Executor and Trustee Limited (a wholly owned subsidiary
of UBL). is also a director of the Pakistan Institute of Corporate Governance? His previous
employments include Sui Southern Gas Company Limited, and Pakistan PTA Limited - ICI
worldwide Group Company.

Mr. Saad Iqbal

Director

Mr. Saad lqbal was appointed Director on November 4, 2016. Mr. Iqbal is a graduate of Curry
College, USA in Business Communication. He also holds a Postgraduate Diploma in
"International Business Management" (2009) from Kingston University, United Kingdom Mr.
Iqbal is the Chief Executive of Gul Ahmed Bio Films Limited, Swift Textile Mills (Private)
Limited and Metro Solar Power Limited. His other directorships are on the Board of Directors
of Millat Tractors Limited, Metro Property Network (Pvt.) Limited, Gul Ahmed CBMC Glass
Company Limited, Metro Power Limited, Metro Wind Power Limited and JDSN Electric
Limited.

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Mr. Muhammad Arshad CH

Director

Mr. Muhammad Arshad Chaudhry has been Director since October 10, 2017. He is the
Member (Power) WAPDA Mr. Arshad has more than 30 years’ experience as Professional
Engineer in Planning, Construction Development, Rehabilitation and Operation &
Maintenance of Hydel Thermal power plants under the flag of Pakistan Water and Power
Development Authority (WAPDA) Mr. Arshad is a B.Sc. Engineering (Mechanical). He also
attended various trainings short courses in China and Germany He also a Member on the
Board of Directors of Neelam Jhelum Hydropower Company Limited.

Mr. Muhammad Ikram Khan

Director

Mr. Muhammad Ikram Khan has been Director since April 3, 2018. Mr. Khan is Member
Finance of the Pakistan Water and Power Development Authority (WAPDA). He is also a
Member on the Board of Directors of Neelam Jhelum Hydropower Company Limited. He has
more than 30 years of experience in the field of budget, accounts and audit. Mr. Khan joined
Pakistan Audit and Accounts Service Group and has served in various senior positions in
Audit and Accounts field including Member Finance in Pakistan Railway, Rector in Pakistan
Audit & Accounts Academy Deputy Auditor General (Admin & Coordination), Director General
PT & T Audit, Director General Audit Customs & Petroleum and Director General Income Tax
Audit. He also holds an LL. B degree. He has attended numerous professional trainings both
locally and internationally in the field of Audit Accounts and Budget.

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2.1.2 Organizational Structure

Figure 1: Hierarchy of Organization

Figure 2: Hierarchy of Organization

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2.1.3 Number of employees

 Permanent Employees: 800
 Contract Base Employees: 660
 On daily wages: 143

2.1.4 Introduction of all the Departments

Organizations Departments:

 Finance

 Procurement

 HR, OD & CS

 Operations

 Project Management

 Information Technology

Finance Department:

Finance is a craftsmanship and study of dealing with the bookkeeping and fund is the
workmanship or study of computing, estimating, and speaking with the consequences of
financial works whether you are covering for the telephone tab, efficient dealing with your
checkbook, setting up your annual expense form or a working with bookkeeping. Records
worldwide organization, you are Manager settles on the significant money related choices
with conference of Director and Chief official of organization Record of all divisions like import
office, Export office, Purchase and deal office, are kept up here. Along these lines, this
division feels a weight of work. Bookkeeper is especially bustling individual who offers
directions to six individuals from money division and checks their work time-to-time. His ten-
year experience has made the work simpler for him. A wide range of expense rates, ongoing
changes in duty approaches, various codes, organizations' names are on his fingertips. The
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Finance Department's answerable for the whole bookkeeping procedure of the association
in regards to the account of exchanges. Without the branch of records, there is no plausibility
of performing immediately shortcomings from the side of the office can genuinely change the
presentation of all the association.

Human Resource Department:

KAPCO with its vision of Human Resource Management imparts life-long career
development opportunities for qualified, competent and hard-working professionals. All of the
KAPCO employees are very hard working, innovative and committed to their duties. KAPCO
is an equal opportunity employer. KAPCO maintains a strict induction standard and uses a
merit base when hiring new employees to ensure the concept of the "Right Person for the
Right Job". HRD programs are developed, from time to time, with a view not only to enhance
essential business and professional skills but also to focus on the personal development of
employees.

Operations:

All the functions related to operations are taken under this department in the organization,
they do not perform only single action, but this department is also responsible for different
actions. As this is the thermal power plant the operation includes operations of machine and
its daily performance record. The manager of operations is competent authority of this
department and manage all functions of the department.

Project Management:

They are responsible for aligning the project portfolio to KAPCO strategy, navigating risk,
driving benefits realization, enhancing governance and accountability. They identify the
expected benefits of a project and strive to maintain them past the project wrap-up. It is
considered that scope, time and cost are no longer enough to measure success, and that
expected benefits are the missing piece.

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Information Technology Department:

Whole organization is connected by networking. This department is managed by the Manager

IT, System Administrators, system support staff. The primary objective of this department is
to design and buy software for the organization and keep the system running for efficient
operations.

2.2 Structure of the Supply Chain Management department

2.2.1 Department hierarchy
Contracts and Procurement Department:

Senior Manager C&P

Manager
procuremnet Manager C&P
Foreign

Assistant
Manager Assistant Assistant Assistant
Foreign Manager Manager Manager
Store Inventory Purchasing

Assistant Assistant Assistant

Supervisor S-1 Supervisor S-2 Supervisor S-3
Purchasing Purchasing Purchasing

Figure 3: Hierarchy of Department

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Introduction of Contracts & Procurement Department:

Procurement is the securing of products or administrations at the most ideal all out expense
of possession, in the correct amount and quality, at the ideal time, in the perfect spot for the
immediate advantage or utilization of governments, companies, or people. Simple
procurement may include repeated purchases. Complex procurement could include looking
for long term members or also dual destiny suppliers that might basically join one party to
another.

Purpose of procurement Department in KAPCO:

This procedure sets out the operational modalities for implementing the policy referred to on
the title page and is applicable in accordance with the scope documented therein. This
Manual encompasses stand-alone procedures titled "Purchasing and Contract Procedure"
(FIIN PRC LP 001-01), "Purchasing of Fuel Oil, Lubricants, Greases and Additives" (FIN PRC
LP 002-00), "Use of WAPDA Services Agreement (FIN PRC LP 004- 00), "Use of
Consumables Call Off Contracts" (FIN PRC LP 005-00), "Disposal Procedure (FIN PRC LP
006-00) and "Foreign Payments and Letters of Credit" (FIN PRC LP 007-00) in addition to
clauses pertaining to Procurement in other such guidelines of C&P Department All such
guidelines will stand superseded on the day this Procurement Procedures Manual becomes
effective.

2.2.2 Number of Employees

Sixteen Number of Employees are working in Contracts and Procurement Department.

2.2.3 Operation of Procurement Department

1. Request for Quotations (RFQ)
Once all necessary information pertaining to a requisition has been obtained,
Purchasing Section will prepare enquiries for issue to the relevant selected tenderers
suppliers on the Active Supplier List. During the tendering period it is likely that the

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tenderers will need to discuss technical aspects of the requirement. C&P will facilitate
this inquiries process.
2. Evaluation
Manager Purchasing will hand over all quotations to the TO for technical evaluation.
However, the prequalification assessment of new Suppliers will be carried out by C&P
as per submitted SAQ Only the quotes from tenderers successfully completing the
prequalification assessment will be evaluated. The TO will make the technical
evaluation and record observations and recommendations on the specified space.
Once the technical evaluation is completed, the guoties will be sent to Purchasing
Section for commercial evaluation Quotes are evaluated on following basis
 Compliance with the goods and services specification for Quality, Quantity,
Timelines and Delivery standards; depicting clear understanding of the
requirements.
 Acceptance of the established standard Terms and Conditions for the
transaction.
 Fulfilment of requirements of the tendering process.
 Additionally, for Services; elaboration of work approach, milestones and
deliverables in alignment with Company requirements.
3. Negotiation:
C&P may further negotiate down the value quoted by the selected supplier. However,
all such negotiation will be formally conducted and without any concessions on the
criteria through which the quote has been selected or the offerings already made.
These negotiations might have the effect of securing Value-Added Services or product
service warranties or enhancing these.
4. Ordering:
Once Negotiation is completed, Purchasing Section will raise a Purchase Order
addressed to the selected tenderer in the system or manually. The PO is required to
contain all necessary purchase specifications agreed to and concluded with the
tenderer.

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5. Import Transaction:
Letter of credit (LC) is the preferred method to make foreign payments. However, other
payments methods will be used as appropriate.

2.3 SWOT ANALYSIS

Strengths:

I. KAPCO is a combined cycle power plant which runs on multiple fuel. It is considered
one of the best power plants in Pakistan.
II. It has the standards set of ISO, 9001, 14001, 18001
III. All the procedures have been Transferred to Computerize.
IV. All Employees of KAPCO are hardworking and sharp minded and specialize
workforce.
V. HR Department working on Computerize and communication skill in lower staff.
VI. The price of share in stock exchange market is greater than price of share offered for
the first time in market.
VII. KAPCO has advantage of Oil Storage and in Pakistan no any other power plant has
storage place for oil.
VIII. KAPCO organize Training Sessions for Employees. And have trained employees for
any kind of Emergency.
IX. As KAPCO is located in middle of Pakistan, so it has edge of Location Benefits.
X. KAPCO is plant running on multiple fuels. it operates on Furniss oil, Diesel, Gas, and
Coal. Such Power Plant are rare in Pakistan.

Weakness:

I. According to the Agreement Company is bound with suppliers (WAPDA) and Buyer
(PSO).
II. Company is now paying tax after 2006, but first 10 years company did not pay any
kind of tax
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III. No expansion during last 10 years for power generation.

IV. In lower staff deficiencies of Communication and lack of Computer skills.
V. Large gap between lower staff and Management.
VI. KAPCO Generate Electricity from Furniss oil and it is Costly Process.

Opportunities:

I. Whole Country is faced with the problem of Electricity in Pakistan so the value of
KAPCO has been increased and it affects its share value.
II. According to Contract (Power Purchase Agreement), All the extension of KAPCO is
Tax free.
III. KAPCO is planning to extent its capacity of 400 MW project.

Threats:

I. As on Contract base KAPCO supplies only WAPDA so Company completely depends

of the payments of WAPDA.
II. Change in Contracts Terms and Conditions with WAPDA in 2021.
III. Due to possibility of terms of contract in 2021, KAPCO facing high Turnover.
IV. KAPCO is started new Project in 2018, threat is that if this project is not completed in
2021 then KAPCO is out of market on the base of Technology.
V. As Current Government of Pakistan Banned Imports of Furniss Oil, KAPCO has facing
deficit of Fuel Supply.

2.4 Function of Supply Chain Department

2.4.1 Function of supply chain Department:
Functions are performed by Procurement Department.

I. Identify the Requisition

II. Verification of stock inventory
III. Selection of potential Supplier
IV. Sending Invitation for Quotations
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V. Tender Opening
VI. Send Quotations to Technical officer for Authorization
VII. Ordering
VIII. Payment against Invoices (including Taxes)
IX. Data entry for Record

All KAPCO Employees did not buy anything related to Plant without involving the department
of procurement.

2.4.2 Raw Material Inventory Planning and Forecasting

KAPCO is forecasting the need of raw material according to power generation requirement.
For Example, KAPCO would buy specific amount of raw material from PSO according to need
of power generation. Increase in Power Generation Requirement would result in more
purchasing of Raw material and Vice versa.

2.4.3 Purchasing of raw material and selection of supplier

On the Behalf of company agreement PSO would be providing the raw material (Furniss Oil).
It is now bound that PSO must provide them with KPACO’s requirements.

2.4.4 Inbound Logistics strategies (delivery of raw material inventory or

transportation policy for raw material)

KAPCO use third party Contract for Logistics. All Oil Tankers are hired from third party.
Tankers enter in KAPCO premises with entry form (GATE PASS) and total information about
oil like litters or type. And they go to the KAPCO Storage point for unloading. After unloading
one person will check trucks and after checking of tanker, Oil Tanker can exit from company.
On the time of unloading store keeper can read the amount of litters from Digital Metter.

2.4.5 Warehouse Management and Record Keeping of Raw Material

KAPCO uses manually entry method for any kind of raw material. on the arrival of vehicle at
gate of KAPCO then Gatekeeper generates gate pass of vehicle and after the sign of Store
manager Vehicle can enter in KAPCO. Division of store is block vise so Vehicle goes to the

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related store and unloads material. After unloading Store manager sends request for
Inspection to related Technical Officer. After inspection, Report material is placed in Stores.
At last, Store manager enter the DATA in Software for Record. And Inventory Manager has
to check and maintain their Data according to Physical Appearance of material.

2.4.6 Issuance of Raw Material Policy

In KAPCO there are two types of Raw Material, one is Direct Material other is indirect
Material. After Generating the Inspection Report Direct Material is shifted to the related Block
(Department). And Indirect material is placed in inventory. On the need of Indirect material
Technical Officer send issuance mail with softcopy of his Inspection report related to needed
material, then store manager issues the material for use.

2.4.7 Record Keeping of Finished Goods Inventory

As KAPCO is a Power Plant so Electricity is its ultimate Finish Good. The Company uses electric
meter standby for record keeping.

2.4.8 Issuance of Finished Goods

KAPCO is Generating Electricity as Finish Good and Company does not have the ability to store the
electricity so it sends electricity to WAPDA directly.

2.4.9 Outbound logistics strategy (whether company has own logistics or

outsource)
KAPCO uses third party contract for outbound logistics. And outbound logistics only use for Disposal
Material.

2.4.10 Outbound logistics (domestic and international logistic whichever is

applicable)
All Type of Vehicles are hired from third party. Vehicles enter in KAPCO premises with entry
form (GATE PASS). And they go to the KAPCO Disposal point for loading. After loading one
person with KAPCO Security Guard will check Vehicles and after checking of Vehicles, Store
keeper sign the Gate pass than vehicles can exit from company.

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Disposal Procedure:

This procedure is designed to ensure that wherever possible any disposal of surplus goods
& materials, Solid Waste and Waste Oil (used lubricating oil, used transformer oil, used
hydraulic oil etc.) is made in accordance to environmental aspects, with best commercial
practice, balancing any income from disposal with the costs of the disposal exercise.

Types of Disposal:

Disposal of Refuse:

This is material that has no value to KAPCO’s business and is effectively useless and of no value to
others either. The principle concern here is to ensure that until such time as it is disposed of offsite,
or incinerated etc., that it is stored in a manner which minimizes adverse environmental impact.

Disposal of Waste Products:

These are items that have no use in KAPCO business processes. They may be a by-product
of a process (used lubricants for example), products that have deteriorated in use to the point
where they are of no use (air filters for example), or potentially reusable containers (oil
drums). Though of no use to KAPCO, they may have a value to an external company or
individual. The commercial consideration here is whether the value that might be obtained
through selling these items outweighs the cost involved in administering the disposal process.
If the cost would outweigh the benefit, then the items should be treated as “refuse”, but the
decision should be recorded. However, while disposal of waste products environmental
impact considerations is to be implemented e.g. hazardous waste is disposed of by dumping
in approved landfills, metal scrap waste oil and office waste to be recycled etc.

Disposal of “Specialist” Surplus or Waste.

The most obvious examples here are toxic chemicals (e.g. PCB’s), Gas Condensate and
non-ferrous metals (e.g. Turbine Hot Gas Path Components). With the former, extreme care
must be taken with temporary storage on site and selection of the likely disposal company.

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With the latter the level of income may be considerable dictating an “international” disposal
route.

2.4.11 Value Chain Strategy (Distribution Channel E.g. Manufacturer to

Customer, Manufacturer to Retailer to Customer, Manufacturer to

Distributor to Retailer to Customer)
The Inbound Strategy of KAPCO is that the PSO deliver required quantity of oil to KAPCO
and that demand of electricity is created by WAPDA, for example, if PSO deliver 100,000
liters, then KAPCO has to generate the 1000MW electricity with 100,000 liters’ oil. Then
KAPCO deliver the generated electricity to WAPDA through wires. They are using Wire for
outbound logistics. KAPCO is not using marketing and after sale services because they are
just generating electricity and buyer of electricity only one that is WAPDA.

Primary Activities

Warehouse Outbound Logistics Customer

Support Activities

Firm Infrastructure Human Resource Management

Figure 4: Value Chain of KAPCO

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2.5 Supply Chain Department’s SWOT Analysis

Strength of Department:

I. Purchasing Power
II. Inventory Turnover
III. Payment History
IV. Strength in Negotiation
V. Multiple Vendor practices

Weakness of Department:

I. Tight Credit Terms

II. Late payments
III. History of inaccurate purchasing

Opportunities of Department:

I. New inventory control Software

II. Willingness to improve in Service and Quality
III. Increase in warehouse space

Threats of Department:

I. Longer Lead time in oil Delivery

II. Material allocations forcing company to purchase well in advance
III. Facing unavailability of Raw material (Furness Oil)

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Recommendations

Everything considered there is no need of any improvement as Kot Addu Power Organization
(KAPCO) is one of the principle Power Age Organization of the country and keeps up its
name yet I have a few proposals dependent on SWOT Analysis. These are given beneath:

I. To train the work of each division like Engineering office, to counter the danger of
redesigned competition and to execute the Job viability.
II. Contractual Employees ought to need to Provided Fundamental Facilities so they hold
in organization for long time, by and large organization need to endure hardship in
case of turnover of laborers and again and again bearing planning cost for new ones
considering the way that as a result of competition in power section legitimately
Contractual Employees will be the first to switch.
III. To be mindful in case of progress in Government.
IV. Though the site conditions and work environment in different Countries are not
comparable but rather the prologue to different work space prompts period of new
musings regarding contract execution. The senior people and site chiefs may be given
preparing of site in different Countries.
V. KAPCO should choose an authentic simultaneousness with WAPDA for
reimbursements, paying little mind to whether there is one understanding of portion of
intrigue. in the event that there ought to emerge an event of concedes portions anyway
it is hazardous at whatever point conceded portion grows more than KAPCO's
portions.

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3 CHAPTER 3: LEARNING AS A INTERN STUDENT

3.1 Duties
 Learn and Observe Safety Rules and Regulations.
 Visit plant area.
 Collect Safety equipment and join Procurement Department.
 Take instruction about Procurement procedure.
 Paper Punching, Make File against Documents, use Paper Printer.
 Sorting Documents from 10000 to 16342.
 Learn about opening Tenders.
 Making files and take lecture on negotiations, Bidding, and Auction.
 Visit the Store and check out the Inventories, is physically available in store that is
recorded in system.
 Lectures taken on Import Export learn about the procedure of opening LC and their
advantages and disadvantages.
 Opening tenders and making files against tenders.
 Visit Stores and observe In and out procedure of Material

3.2 How was My Experience as an Internee?

For being internee at KAPCO it was a very good experience for me, I worked 6 weeks in
Contracts and procurement department. During my work, I realized the importance of
Procurement department in the organizations.

I worked under Mr. Rana Qaisar Iqbal (Senior Manager C&P), Mr. Muhmmad Idrees
(Manager Purchasing), Mr. Khalid Azal (Manager Imports exports), Mr. Muhammad Akram
(Store Manager). They were very nice and kind persons. They answered to my every
Question whatever I asked even during their busy days. By working under them, I learn about
dealing with vendors. They give me a practical exposure of Procurement in organization.

I am thankful to Mr. Rana Qaisar and Mr. Muhammad Idrees and Mr. Khalid Afzal and Mr.
Akram for giving me their precious time.

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References:
Mr. Rana Qaisar Iqbal
(Senior Manager C&P)
Cell: +92 334 2229131
E-Mail: qaisar.iqbal@kapco.com.pk

Mr. Muhmmad Idrees

(Assistant Manager Purchasing)
Cell: +92 300 7379653
E-Mail: muhmmad.idrees@kapco.com.pk

Mr. Khalid Afzal

(Manager Imports & logistics)
Cell: +92 333 2301025
E-Mail: Khalid.afzal@kapco.com.pk

Mr. Muhammad Akram

(Manager Store)
Cell: +92 300 7489546
E-Mail: muhammad.akram@kapco.com.pk

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Annexures:

Figure 5: Outwards Gate Pass

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Figure 6: Inwards Gate Pass

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Figure 7: Inspection Report

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Figure 8: Detail of Stored Items

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Weekly Reports
1st Week
 Learn and Observe Safety Rules and Regulations.
 Visit plant area
 Collect Safety equipment and join Procurement Department.
 Learn Punching of Documents.
 Take instruction about Procurement procedure.
 Visit Store (Warehouse) and learn about Given Code of Equipment’s.
 Learn KAPCO strategy about Import/export.
 Sorting Documents from 10000 to 14000.

2nd Week
 Sorting documents from 14000 to 16000.
 Learn about opening Tenders.
 Work on Exert Software.
 Making files and take lecture on negotiations, Bidding, and Auction.

3rd Week
 Attend seminar on Blood Donation.
 Work on Tenders opening and making files.
 Visit the Store and check out the Inventories, is physically available in store that is
recorded in system.
 Lectures taken on Import/Export learn about the procedure of opening LC and their
advantages and disadvantages.

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4th Week
 Visit Stores and oversee the Store Management.
 Work on tenders opening and making files.
 Visit Block 3 and See how Engineers are Working and check safety Equipment.

5th Week
 Visit Stores and observe In and out procedure of Materials.
 Work on Tenders opening and making files.
 Visit Plant Area (Block 3, Main Workshop of Mechanical).
 Make Purchase Order #016067

6th Week
 Take lecture on Logistics and Imports
 Work on Tenders opening and making files.
 Visit Finance Department, and meet Senior Manager of Finance.
 Visit HR Department and Meet Senior Manager of HR and Assistant Manager of HR.
 Opening tenders and making files against tenders
 Clearance /Feed Back

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