Raaj Unocal
Standard Operating Procedures
Procurement
Key Sub-Processes
Page 2
1
Buying
2
Vendor Management
3
Ordering Procedures
4
Receipt of Material
5
Payment
Standard Operating Procedures
Legend
Page 3
Standard Operating Procedures
Procurement Organogram
Page 4
Standard Operating Procedures
Buying
Vendor Management
Ordering Procedure
Receipt of Material
Payment
1. Process Flow: Procurement Planning
2
1
Expected Sales Plan
Average Lead Time Report
3
Current MDM Levels
No
1
Start
2
3
Indent based planning is
done . Refer to indenting
process for details
Production In-charge
Basis expected sales order
for n+1 month , material
requirement is calculated
Is the
material a
direct
material?
Stop
Chief Executive Officer
Yes
For key materials: Plan is
created basis MDM norms
and current lead time.
A
Chief Executive Officer
A
Procurement
Plan
Page 5
Standard Operating Procedures
Buying
Vendor Management
Ordering Procedure
Receipt of Material
Payment
1. Process Flow: Vendor development
2
1
Indent for new material
Procurement Plan
1
Start
2
Identifies materials for
which vendor development
procedure needs to ne
carried out .
A
Chief Executive Officer
Quality audit for vendor is
performed . Report is sent
to GM commercial
Approves
Yes
Identifies vendors for the
list of material from both
internal and external
sources.
Receives a list of
preliminary information
such as price, specs,
quality etc
Purchase Officer
Production In-charge
Post approval, submits list
of potential vendor to CEO.
Stop
B
No
A
List of
materials for
vendor
development
Page 6
B
List of
potential
vendors
Standard Operating Procedures
Is it a
packing
material or
raw
materials ?
Buying
Vendor Management
Ordering Procedure
Receipt of Material
Payment
1. Process Flow: Vendor Code Creation
1
Vendor Code Creation Form
1
Start
2
Fills in vendor code
creation form for creation of
new vendor code and
sends to CEO for approval.
Approves
?
Resends request to the
purchase officer with details
of missing information
Finance Executive
Production In-charge
No
Yes
Yes
Creates vendor code in
tally
Finance Executive
No
A
Vendor
creation form
Page 7
Reviews
adequacy of
form ?
A
Materials Manager
Reviews to
ensure
there is no
existing
codes
Post approval send it to
Finance Executive for code
creation
Standard Operating Procedures
Stop
Buying
Vendor Management
Ordering Procedure
Receipt of Material
Payment
1. Process Flow: Vendor Evaluation
2
1
Vendor service quality file
Quality Reports / NCR
1
Start
2
Basis input reports
Materials Manager
creates vendor evaluation
form.
Sends form to quality
department for overall
quality score
Materials Manager
Materials Manager
Is any
rating
below
satisfactory
?
Files the vendor
evaluations
A
Yes
Vendor
identification
process
Materials Manager
No
A
Vendor
evaluation
Page 8
Moderates and gives final
score . Sends it to the
Materials Manager
Adds quality score and
sends the same to CEO
Standard Operating Procedures
Quality Head
Stop
No
CEO
Buying
Vendor Management
Ordering Procedure
Receipt of Material
Payment
1. Process Flow: Vendor Evaluation
2
1
Vendor service quality file
Quality Reports / NCR
1
Start
2
Basis input reports
Materials Manager
creates vendor evaluation
form.
Sends form to quality
department for overall
quality score
Materials Manager
Materials Manager
Is any
rating
below
satisfactory
?
Files the vendor
evaluations
A
Yes
Vendor
identification
process
Materials Manager
No
A
Vendor
evaluation
Page 9
Moderates and gives final
score . Sends it to the
Materials Manager
Adds quality score and
sends the same to CEO
Standard Operating Procedures
Quality Head
Stop
No
CEO
Buying
Vendor Management
Ordering Procedure
Receipt of Material
Payment
1. Process Flow: Order Process
Start
Invites minimum 3
quotations for material.
Prepares an indent for
required material and
sends to stores in charge
Checks availability of the
stock. Approves Indent if
stock is not available and
forwards to purchase officer
Production In Charge
Stores In Charge
Prepares comparative
statement.
Evaluates if it is to be
purchased from approved
vendor or from new vendor
Yes
A
Materials Manager
Materials Manager
Materials Manager
Signs off PO.
Raises the PO and updates
PO File
No
Endorses vendor and
comparative statement and
sends to CEO .
Selects vendor in
consultation with quality
and sends it to Materials
Manager
Raises PO and sends to
CEO along with previous
PO price.
Materials Manager
CEO
Materials Manager
C
B
Approved
Vendor ?
Stop
D
CEO
Materials Manager
A
Approved
Indent
Page 10
B
Request for
Quotations
C
Comparative
Statement
Standard Operating Procedures
D
Approved
Purchase
Order
Buying
Vendor Management
Ordering Procedure
Receipt of Material
Payment
1. Process Flow: Open PO Monitoring
Start
Generates a list of pending
purchase orders at the end
of the month
Performs root cause
analysis for all open PO.
CEO
evaluates if
PO Has to
be closed?
Forwards file to CEO
A
Materials Manager
Materials Manager
Materials Manager
No
Sends list to Materials
Manager for follow-up with
vendors
Sends list to Materials
anager for short closure of
PO.
CEO
Materials Manager
Stop
A
List of Open
POs
Page 11
Standard Operating Procedures
Yes
Buying
Vendor Management
Ordering Procedure
Receipt of Material
Payment
1. Process Flow: Receipt of Material
1
Receipt of Material
1
Post unloading of material
performs quantity check
and prepares a material
receipt note (3 copies) with
actual quantity
Transfers material to goods
under inspection area
Security Guard
Stores In Charge
Stores in Charge
Puts quality approved
stamp on 2 MRN copies
and send s to Store
Incharge
Attaches one copy of MRN
to Accounts and one copy
of MRN to Materials
Manager
Updates inventory status
sheet basis duplicate copy
of the MRN
Stores In Charge
Materials Manager
Prepares a gate entry for
material
Start
A
Files quality report in along
with one copy of MRN in a
material wise file.
Quality Executive
B
Quality Executive
Stop
A
Approved
Indent
Page 12
B
Material
Receipt Note
C
Updated
Inventory
Status Sheet
Standard Operating Procedures
Is material
Quality
Passed ?
Yes
C
No
RTV is formed.
Refer Quality
SOP – Rejection
Process
Buying
Vendor Management
Ordering Procedure
Receipt of Material
1. Process Flow: Vendor Payment
1
Material Receipt Note
1
Start
Receives Approved MRN
from Stores-in-Charge
Is material
Quality
Passed ?
No
Accounts Executive
Processes invoice in Tally
for partial amount and
passes debit note for
balance amount
Accounts Executive
Yes
Processes invoice in Tally
Accounts Executive
Page 13
Standard Operating Procedures
Stop
Payment
Buying
Vendor Management
Ordering Procedure
Receipt of Material
Payment
1. Process Flow: Balance Confirmation
1
Vendor’s Ledgers from Tally
1
Sends a mail to all vendors
asking for their ledger
books in hard / soft copy
Start
A
Balance confirmation in
done by comparing the
vendor ‘s ledger and
ledger as per the books
No
Is there a
variance?
Gets balance confirmation
from the vendor
Accounts Executive
Accounts Executive
Accounts Executive
Yes
Discusses with the vendor
and resolves variances
CEO
A
Mail record
for Balance
Confirmation
Page 14
B
Balance
Confirmation
Standard Operating Procedures
Rectifies books if required
and gets confirmation from
the vendor.
Accounts Executive
Stop
B