Purchase Procedure
3 Procedure
Some general information is compiled here to assist the subsequently described procedure for purchase.
• It is to be ensured that all the purchased material of PPF is in compliance with Government Legislation in terms of safety, hazardous, environmental, electrical, electromagnetic and other consideration.
• It is also to be determined whether new purchase orders are to be issued or the existing orders are to be amended for purchase of materials/items to meet the production schedule.
• The In Charge Purchase ensures that all items ordered are adequately defined through specifications, drawings and parts wherever applicable and listed to guarantee that the requirements are met.
• The items received in inferior quality by In Charge Store are returned to the In Charge Purchase if so required.
• The Central Stores staff performs incoming inspection (with the assistance of Quality Control Department/user if required).
• The In Charge Purchase prepares the Purchase Order (PRD-4-PO) for purchases.
3.1 Approved Vendor List
The In Charge Purchase surveys potential vendors/sub-contractors if required, rates them on the basis of survey and/or previous history and selects those capable of meeting the requirements with respect to quality, delivery time, and cost of the ordered goods and services. Two kinds of lists are prepared. These are as follows:
a) Approved Vendor List for Local Items which is composed of Vendor/sub-contractor of material/product and Vendor/sub-contractor of services.
The In Charge Purchase maintains the lists at the Head Office. Both the approved vendor lists specify company names, materials and services for which the vendors/sub-contractors have been approved.
3.2 Vendor/sub-contractor Qualification
Vendors/sub-contractors are qualified for the Approved Lists based on one or more of the following:
• ISO 9000 certified, means automatic qualification.
• Vendor/sub-contractor Assessment (including self-assessment).
• Vendor/sub-contractor performance history and quality record.
• Sample qualification
• Site survey if required.
The In Charge Purchase qualifies and approves Vendors/sub-contractors. A vendor/sub-contractor who is ISO 9000 certified qualifies for the Approved Vendor List. A vendor/sub-contractor is disqualified from the list by a repeated supply of inferior quality materials/items. The vendor is monitored through supply performance.
The In Charge Purchase rates the vendor’s history on the Vendor Assessment Form using non-conformities, late deliveries and cost of goods as criteria, from the records of previous purchase orders. Each year, vendors/sub-contractors are reassessed and the list is modified.
3.3 Purchase Requisitions
Heads of Departments will issue the purchase requisition and send it after stock verification from the store to the In Charge PPF for approval. The purchase requisition is then released to the purchasing department for processing.
3.4 Quotations
The In Charge Purchase contacts potential vendors from the Approved Vendor List for quotations and requests rates, delivery period, etc. from the vendor/sub-contractor as and when necessary.
The In Charge Purchase compiles comparative statements with the complete vendor bid information as and when required. The In Charge Purchase evaluates the bids based on these statements where possible.
3.5 Purchase Order Approvals
In Charge Purchase completes the Purchase Order as and when required. The Executive Director approves the Purchase Order. If an engineering change causes a revision to the specification of an item the In Charge Purchase contacts the vendor and enters the change onto Purchase Order. The order is verified by final signatures
3.6 Purchasing Data
The Purchase Order clearly indicates product name, specifications, quantities, delivery time, price and conditions are specified in the general conditions of purchase. If the purchase is off the shelf from market, the head name/cataloge number is referred to on the Purchase Order wherever possible. Specifications are attached to the Purchase Order wherever required. The In Charge Purchase checks data/specification drawings attached to Purchase Order for the correct revision level. For special orders, a detailed drawing of tooling and components may accompany the Purchase Order.
3.7 Verification of Purchased Product
Upon receipt of purchase order copy, In Charge Central Stores, verifies the quantity.
Upon receipt of the material/items, Central Stores staff/user/Quality Control Department (when requested) verifies the quantity and quality of the material/items. This verification involves one or more of the following:
• Document review including inspection and test certificate (if) submitted by the vendor.
• Inspection of incoming material (where necessary by using the Inspection and Test Plan).
• Inspection and tests performed at sub-contractor premises.
The Central Stores staff completes GRN. The In Charge Central Stores keeps the GRNs and a copy is sent to Accounts which is maintained for 5 years.
The Quality Control department/user/Stores staff identifies the receiving status on the received material/items by affixing green(conforming) or red(non-conforming) tag/marking (See QP-4.10 for detail).
If Material/items or services are found to be nonconforming by Central Stores staff, it completes the GRN. In Charge Purchase in turn negotiates with the vendors and asks to furnish a corrective action proposal.
The In Charge purchase reviews critical defective supply and the vendor performance and completes the Vendor Assessment Form. The vendor’s rating for the Approved Vendor List is affected.
3.8 Supplier Verification at Subcontractor’s Premises
Senior staff from PPF Quality Control Department and or Purchase Department shall verify the purchased material/items at subcontractor site and assess subcontractor's performance of processes, product and system when required. In such a case the visiting staff will complete the Vendor Assessment Form. Vendor Assessment Form is maintained as a quality record.
3.9 Acceptance/Selection Criteria of a Supplier is:
Accepted= 50 and + marks obtain in Supplier Evaluation
Rejected= Less than 50 marks obtain in Supplier Evaluation