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Raaj Unocal Standard Operating Procedures Procurement.

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Presentation on theme: "Raaj Unocal Standard Operating Procedures Procurement."— Presentation transcript:

1 Raaj Unocal Standard Operating Procedures Procurement

2 Standard Operating ProceduresPage 2 Buying Vendor Management Ordering Procedures Receipt of Material Payment Key Sub-Processes

3 Standard Operating ProceduresPage 3 Legend

4 Standard Operating ProceduresPage 4 Procurement Organogram

5 Standard Operating ProceduresPage 5 BuyingVendor ManagementOrdering ProcedureReceipt of MaterialPayment 1. Process Flow: Procurement Planning Start Basis expected sales order for n+1 month, material requirement is calculated Chief Executive Officer Indent based planning is done. Refer to indenting process for details Production In-charge Stop Expected Sales PlanAverage Lead Time Report Procurement Plan A For key materials: Plan is created basis MDM norms and current lead time. Chief Executive Officer Is the material a direct material? A Yes No Current MDM Levels 3 3

6 Standard Operating ProceduresPage 6 BuyingVendor ManagementOrdering ProcedureReceipt of MaterialPayment 1. Process Flow: Vendor development List of materials for vendor development A List of potential vendors B No Start Identifies materials for which vendor development procedure needs to ne carried out. Chief Executive Officer Identifies vendors for the list of material from both internal and external sources. Purchase Officer Receives a list of preliminary information such as price, specs, quality etc Production In-charge Quality audit for vendor is performed. Report is sent to GM commercial Post approval, submits list of potential vendor to CEO. Indent for new materialProcurement Plan A 1 2 Is it a packing material or raw materials ? Approves Stop B Yes 2 1

7 Standard Operating ProceduresPage 7 1. Process Flow: Vendor Code Creation Vendor creation form A No Start Fills in vendor code creation form for creation of new vendor code and sends to CEO for approval. Materials Manager Post approval send it to Finance Executive for code creation Production In-charge Resends request to the purchase officer with details of missing information Finance Executive Creates vendor code in tally Finance Executive Vendor Code Creation Form A 1 2 Reviews adequacy of form ? Reviews to ensure there is no existing codes Stop Yes 1 Approves ? No Yes BuyingVendor ManagementOrdering ProcedureReceipt of MaterialPayment

8 Standard Operating ProceduresPage 8 1. Process Flow: Vendor Evaluation Vendor evaluation A No Start Basis input reports Materials Manager creates vendor evaluation form. Materials Manager Adds quality score and sends the same to CEO Quality Head Files the vendor evaluations Materials Manager Vendor service quality file 1 Is any rating below satisfactory ? Stop Yes 1 No BuyingVendor ManagementOrdering ProcedureReceipt of MaterialPayment Quality Reports / NCR Sends form to quality department for overall quality score Materials Manager 2 2 Moderates and gives final score. Sends it to the Materials Manager CEO A Vendor identification process

9 Standard Operating ProceduresPage 9 1. Process Flow: Vendor Evaluation Vendor evaluation A No Start Basis input reports Materials Manager creates vendor evaluation form. Materials Manager Adds quality score and sends the same to CEO Quality Head Files the vendor evaluations Materials Manager Vendor service quality file 1 Is any rating below satisfactory ? Stop Yes 1 No BuyingVendor ManagementOrdering ProcedureReceipt of MaterialPayment Quality Reports / NCR Sends form to quality department for overall quality score Materials Manager 2 2 Moderates and gives final score. Sends it to the Materials Manager CEO A Vendor identification process

10 Standard Operating ProceduresPage Process Flow: Order Process Approved Indent A Start Prepares an indent for required material and sends to stores in charge Production In Charge Evaluates if it is to be purchased from approved vendor or from new vendor Materials Manager Invites minimum 3 quotations for material. Materials Manager Stop Yes No BuyingVendor ManagementOrdering ProcedureReceipt of MaterialPayment Checks availability of the stock. Approves Indent if stock is not available and forwards to purchase officer Stores In Charge A Approved Vendor ? Prepares comparative statement. Materials Manager Endorses vendor and comparative statement and sends to CEO. Materials Manager Selects vendor in consultation with quality and sends it to Materials Manager CEO Raises PO and sends to CEO along with previous PO price. Materials Manager Signs off PO. CEO Raises the PO and updates PO File Materials Manager Request for Quotations B Comparative Statement C Approved Purchase Order D B C D

11 Standard Operating ProceduresPage Process Flow: Open PO Monitoring List of Open POs A Start Generates a list of pending purchase orders at the end of the month Materials Manager Forwards file to CEO Materials Manager Sends list to Materials Manager for follow-up with vendors CEO Stop Yes No BuyingVendor ManagementOrdering ProcedureReceipt of MaterialPayment Performs root cause analysis for all open PO. Materials Manager A CEO evaluates if PO Has to be closed? Sends list to Materials anager for short closure of PO. Materials Manager

12 Standard Operating ProceduresPage Process Flow: Receipt of Material Approved Indent A Start Prepares a gate entry for material Security Guard Transfers material to goods under inspection area Stores in Charge Files quality report in along with one copy of MRN in a material wise file. Quality Executive Stop Yes No BuyingVendor ManagementOrdering ProcedureReceipt of MaterialPayment Post unloading of material performs quantity check and prepares a material receipt note (3 copies) with actual quantity Stores In Charge A Is material Quality Passed ? Puts quality approved stamp on 2 MRN copies and send s to Store Incharge Quality Executive Attaches one copy of MRN to Accounts and one copy of MRN to Materials Manager Stores In Charge Updates inventory status sheet basis duplicate copy of the MRN Materials Manager Material Receipt Note B Updated Inventory Status Sheet C B Receipt of Material 1 1 RTV is formed. Refer Quality SOP – Rejection Process C

13 Standard Operating ProceduresPage 13 Material Receipt Note 1. Process Flow: Vendor Payment Start Receives Approved MRN from Stores-in-Charge Accounts Executive Processes invoice in Tally Accounts Executive Yes No BuyingVendor ManagementOrdering ProcedureReceipt of MaterialPayment 1 1 Is material Quality Passed ? Processes invoice in Tally for partial amount and passes debit note for balance amount Accounts Executive Stop

14 Standard Operating ProceduresPage 14 Vendor’s Ledgers from Tally 1. Process Flow: Balance Confirmation Start Sends a mail to all vendors asking for their ledger books in hard / soft copy Accounts Executive Discusses with the vendor and resolves variances CEO Yes No BuyingVendor ManagementOrdering ProcedureReceipt of MaterialPayment A 1 1 Is there a variance? Gets balance confirmation from the vendor Accounts Executive Stop Balance confirmation in done by comparing the vendor ‘s ledger and ledger as per the books Accounts Executive Rectifies books if required and gets confirmation from the vendor. Accounts Executive B Mail record for Balance Confirmation A Balance Confirmation B


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