Standard procedure  for any purchase deptt


INDENTS(purchase order requistion form ) : First  step for any purchase activity
is a clear indent fromthe user departments . The indentshould have authorised
signatory .Its should clearly metion the quantitydelivery time and specifications .


QUOTATION : Purchase executive then floats inquiry as per the details  given in
the indents.it could be given to one vendor or to any numbers as stipulated in
their organisations  standards , the best practiceis to get from one alternate
source . In case of emergency  or  in vendors reluctance to send quotation in
telephonic or verbal inquiry could be floated . Once the inquiries are sent with
clear instruction to vendors for response within stipulated time .Vendors then  
submit their  quotation to the purchase Deptt.


BID SHEET OR COMPARISON SHEET :Comparison is then made for the best  
vendors taking into account  various factors such as :


a. Price , b. Quality , c. Delivery time , d. Payment terms , e. Warranty , f. After Sales
Service



NEGOTIATIONS : Then Vendors are called for negotiations  to further
claarification and finalisation

of terms and condition of  contracts.

TIPS FOR NEGOTIATIONS


5.PURCHASE ORDER  : Purchase orders are then gnerated for the agreedupon terms
and conditions Purchase order are then either faxed  or couriered to the suppliers with
clear terma and conditions .

PO TERMS AND CONDITIONS

AMENDMENT : There is provision to amend purchase order for terms and conditions
due to some unforeseen circumstances which are beyonds vendors control .

6. FOLLOW UP : After orders are faxed the purchase executive  monitors orders for
delivery .


7. RECIEPT OF MATERIAL: Vendor then delivers  the  materials to the store and after
inspection reciepts are made for accounts to release payments for the material.


8.PAYMENTS : The purchase executive then  ensures that payments are made to the
vendors as per the agreed upon terms and
conditions .


9.IMPORTS : With integration of local economies with global market ,Import has
become  one of the method for cost reduction.

INCO TERMS  : Common terms used in international  trade.


SPECIAL  PURCHASING  SYSTEMS


Forward Buying:  Its  arrangement with vendor for future buying .Where
orders are confirmed in advance for an year  for raw material for  a fixed
price this tye of contracts are done by commodities buyer s.They hedge these
in an volatile market to make profits.



Tender Buying :Major Govt agencies and public depts opt for these type of
tendering .Bids are invited  and quote are comapred and the lowest bidders is
given contracts.


Blanket  Order:Blanket  orders are given to reduce admin expenses and issuing
limited orders .The Supplier under the system  maintain s adequate inventory
to  meet the blanket order.


Zero  Stock :Some manufacturing units have arrangement /agreement for zero
stock at manufacturer end .Usually vendor  and buyer are close to each other .



Rate  Contract: Seller and buyer enters into  an rate contract for a period  and
deliveries  are done  as per requirements of the buyer .


RATIOS /INDEX  FOR EVALUATION OF  PERFORMANCE OF  PURCHASING FUNCTION .



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