Example of documentation template for Process of Purchasing and Supplier Quality System Development.

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1.0 Process Approach of Process of Supplier Quality System Development

2.0 Turtle Diagram of Process of Supplier Quality System Development

3.0 Purchasing Policy

• PURPOSE:         

The purpose of this procedure is to lay down defined guidelines for Delegation of Purchase Order processing & procurement of materials by defining authority levels for P.O clearance for smooth running of production.

• SCOPE:  

This procedure is applicable to Procurement of all types of materials required to run Production smoothly.

• RESPONSIBILITY:

HOD Purchasing is overall responsible for this procedure

• KEY PROCESS INDICATORS (KPI’s)

1. Internal Customer Complaints ( Nos.)
2. Cost Savings ( Rs.)
3. Loss of production due to non availability of material ( Rs.)
4. Line Stoppages due to non- availability of material ( Nos.)
5. Physical v/s ERP Inventory variation ( %age)
6. Material Stock Ledger for Consumables & Raw Material

• PROCESS FLOW

Procedure of Material procurement for various categories is as follows:

1. Raw Material & BOP’s: As per customer schedule, raw material planning is done by considering the Raw Material inventory, Defined Buffer Stock, WIP of every line and Finished Goods inventory. Accordingly, indents are raised by Purchase Department for approval as per Authority Level defined in Annexure – 1. After approval of indents, P.O. is generated by Purchase Department and sent to respective suppliers through fax, mail or by hand. Once the P.O is sent to the supplier, Purchase Department regularly follows up with the supplier to receive the material as per delivery schedule to ensure there are no line stoppages and defined buffer stock is maintained.

• Job Work related to Production:  As per the production requirements, the material is sent to the supplier through Excise Annexure. Subsequently, the Purchase Department regularly follows up with the supplier to receive the material as per delivery schedule.  After completion of material as per the Annexure, the bill is raised by the supplier.

• Job Work related to Tool Room / Maintenance: Requirement is generated by Tool Room & Maintenance departments for different types of Job Work such as Slot Cutting, Spline Cutting, Shaper, Temper, Wire Cut, EDM, Grinding, CNC Milling, Gear Cutting etc. After confirming the rates, Purchase department raises the indents for approval as per Annexure – 1 and after   generation of PO, material is sent to supplier, and after completion of work, the material is received back from the supplier along with proper invoice. Rates for Temper, Wire Cut and EDM are fixed as per Qty/Hrs and for Slot Cutting and other operations, the purchase department takes the rates from different suppliers as per the job.  

• Packing Material: As per production planning, requirement of packing material is generated and after approval as per Annexure – 1, Purchase order is generated and sent to supplier. Subsequently, Purchase department follows up with the supplier to get the material on-time.

• Consumables:  There are two sub categories in this,

Items in Minimum Level

Requirement for items in Minimum Level are generated by Purchase department on daily basis to maintain the stock for the same. After approval of indents, PO is generated and sent to supplier to get the material.                                                  

Items required by different departments as and when reqd.

Respective departments fill a “Requirement Form” against their requirements and sends to the purchase department. Purchase department generate the indents after confirming the prices i.e. whether that item has been procured in the past or else, locates the suppliers and take quotations. After comparison and negotiation, Purchase department raises the Request for Rate Approval to higher authority. Once the rates are approved, indent and PO is generated

• Capital Goods: For all thecapitalmachinery and other costlyequipments, prices are negotiated by Directors and/or G.M Operations. Purchase Department only generates the Draft PO’s as per finalized terms and sends them to respective suppliers after necessary approvals. Subsequently, Purchase department follows up with suppliers for getting the material on-time.

• Purchase Order Amendment: P.O Amendment is raised in some cases due to following reasons:

1. Change in prices in Raw Material PO’s
2. Change in P.O. quantity in some PO’s

All Purchase Order Amendments are approved as per authority levels defined in ………………and after approval sent to supplier by purchase department.

4.0 Purchase Intent

ABC Pvt. Ltd.

User ID.:

Print Date :

Page No.:

Indent No

Item Name

Size

UM

Min. Level

Rep. Qty.

Stock

Order Qty

Req. Qty

Rate

Supplier

Required For

Remarks

Approved By:-

5.0 Price Comparative Statement

Sub : Approval for purchase of required for  indent No._
S.No.	Item	Qty/Unit	Party’s Name	Rate	Party’s Name	Rate	Party’s Name	Rate	Party’s Name	Rate
General Terms:-   1. F.O.R                                                        2. Packing & Forwarding                                        3. Taxes                                                                                                                                                      4. Delivery Period                                                                                              5. Payment Terms                                                                                                                                    6. Discount                                        7. Validity of Quotation                                                           Kindly accord your approval to place our order on M/S    General Terms:-   1. F.O.R                                                        2. Packing & Forwarding                                        3. Taxes                                                                                                                                                      4. Delivery Period                                                                                              5. Payment Terms                                                                                                                                    6. Discount                                        7. Validity of Quotation                                                           Kindly accord your approval to place our order on M/S                                         [Prepared  by)                                                                                  [Approved By]
DOCUMENT No.		PREPARED BY	REVIEWED BY		APPROVED BY			DATE	PAGE
		HOD Materials	MS		Director				1 OF 1

6.0 Material Requisition slip

From…………………                                                                                                             No. To: store                                                                         MATERIAL REQUISITION SLIP
Please issue the following material:
S.NO.	PARTICULARS	STOCK NO.	UOM	QUANTITY				REMARKS
				Reqd.	To be filled by store department
					Issued	Available	To be procured
(Shop Incharge)       Issued by:

7.0 Purchase Order – Verbal

PURCHASE ORDER – VERBAL							Date :
S. No.	Item Description	Material Specification	Unit	Quantity	Rate/Unit	Supplier Name	Delivery  Date
Prepared By				Approved By

8.0 List of ISO / Non ISO Certified Suppliers

S.NO	SUPPLIER NAME	ADDRESS	ISO	NON ISO
PREPARED BY		APPORVED BY

9.0 YEARLY PLAN FOR  SUPPLIER DEVELOPMENT

S.NO.	SUPPLIERS NAME	MONTH(s)
		Apr	May	June	July	Aug	Sep	Oct	Nov	Dec	Jan	Feb	March
1
2
3
4
5
6
7
8
9
10
11
12
13
14
	Approved                           Not Approved   If not approved, attach reasons for the same Management  Representative
	Implementation Date:
	PREPARED BY:						APPROVED BY:

SUPPLIER AUDIT CHECK SHEET
Score Evaluation Criteria		“2” =  Documented System & Full Compliance “1” =Documented System & Partial Compliance-(Action plan required) “0” =No Documented System-(Action plan required) “NA” = Not Applicable
Supplier :			Audit Date :
Auditor/s :		Auditee/s :	Reason for Audit :
Sr#	Area of Evaluation	Key Check points (Guidelines to be referred)	Observations/Notes	Score	%
A	General Organisation & Management Structure
1	The Mangement Structure and resource allocation sufficient to support all necessary disciplines	Organization Chart with key positions filledResources appear adequate to fulfill all tasks
2	Responsibilities and authority are defined and evidence supports effective employee training	Job descriptions for all levels of the organizationEmployee training defined & implementedSkill matrix
3	Management defines quality and performance objectives that promote Continuous Improvement	Goals defined in the Business PlanGoals reflect continuous improvementMinutes of Management Review MeetingsEvidence of Cost of Poor Quality analysis
4	Workplace Health, Safety, Cleanliness, and Environmental Protection practices are in place and are consistently adhered to	Plant is clean, orderly and well lit5S disciplines are in placeAppropriate machine guarding and safeties are evidentNo signs of visible pollution or spills
	Total Score General Organisation & Management Structure
B	Advanced Product Quality Planning
1	System in place to define approved packaging for storage and preservation of product	Approved packaging plans Warehouse is clean & orderlyPackaging ensures protection of product
2	Product Realization Process provides clear linkages between Product and Process Design and Control Methods	Presence of PFD, PFMEA & Control Plans – Linkage between PFMEA, Control Plan and inspection/control methods
3	Organization is equipped to support necessary verification, validation and monitoring of characteristics	Presence of critical inspection equipment (i.e. CMM, laboratory equipment, etc.)Availability of 3rd party certified test facilitiesInspection/test records to validate testingResponses to out of specification conditions
4	PPAP Sign Off	SPC Studies,Process and product qualification.

Sr#	Area of Evaluation	Key Check points (Guidelines to be referred)	Observations/Notes	Score	%
	Total Score  – Advanced Product Quality Planning
C	Product Realization, Measurement, Analysis & Improvement
1	The continuous conformance of purchased product is ensured	Requalification documents Incoming inspection recordsCorrective actions to non-conformancesThird-Party validation of material certificates
2	An adequate and effective Supplier Management Process is in place	– Supplier performance records Records of supplier response to non- conformancesSupplier Development of poor suppliersProcess to ensure use of customer approved suppliers, when appropriate
3	Process & System are regularly audited to ensure compliance and continuous improvement	Internal Audit recordsAudit schedule based on process requirements
4	Adequate method for Operation Control	-Setting Approval ‘-Inprocess Inspection ‘-Final Inspection ‘-PDI Inspection
5	Adequate method for Gauge Control	-Gauge Identification ‘-Master List of Gauges & Instruments ‘-Calibration Certificates
6	Work Instructions are implemented for all employees affecting product quality, including repair and re-work operations	Evidence of Work Instructions posted on lineRe-Work Instructions are aveilable
7	Production planning and control	-Planning of production and interlink with customer requirements and sub suppliers schedules. Capacity V/s Actual UtilizationProduction Plan V/s AchievedDelivery performance is monitored
8	There is an effective Predictive & Preventive equipment maintenance system	‘-Preventive maintenance schedule & records, including downtime analysis Master List of MachinesVisual condition of equipmentNo leaks, excessive grease, etc.

Supplier :			Audit Date :
Auditor/s :		Auditee/s :	Reason for Audit :
Sr#	Area of Evaluation	Key Check points (Guidelines to be referred)	Observations/Notes	Score	%
	Total Score  –  Product Realization, Measurement, Analysis & Improvement
D	Material, Facilities, Logistics & Tooling
1	Effective material identification and control is in place. Lack of visible bottlenecks or material constraints or tight and strict control of those. Material identified at all stages of operation	Suspect material identified and segragated in a secure and segregated areaProper storage of raw & finished materialsEvidence of FIFOSystem to monitor inventory levels and to drive stock size reduction
2	Material and lot traceability is implemented	Lot traceability records Receiving records with lot numbers recordedShipping records indicating lot numbersIn-process material with lot numbersShipped product can be traced back to received materialBar code labelling
3	System ensures preservation of Customer Tooling	Proper tool storage facilitiesTool maintenance records -Preventive maintenance schedule & records, including downtime analysis Master List of Tools
4	Plant capacity planning is up to date & Emergency strategies are available	-Current capacity studies and resource planning Evidence of contingency plansPotential bottlenecks identificationsafety stock identification
	Total Score  – Material, Facilities, Logistics & Tooling
	Over all Score (A+B+C+D)			0
Auditor Signature:			Supplier Signature:

10.0 Supplier CAPA

Supplier :		Audit Date :
Auditor :	Auditee :	Reply required by :
Description of Non-compliance
Root Cause
Corrective and Preventive action
Implementation date
		Signature
		Date