PURCHASE FINANCE

The purchase department must work closely with finance and accounting to ensure that the
company's cash is used wisely. The primary function of purchase finance department is to
acquire the parts and materials needed, in the proper quantity and on time. Secondary
considerations are maintaining minimum inventory (just enough to avoid shortages) and keeping
costs down. Procurement professionals understand the relationship between cost and supplier
quality, reliability and performance, and constantly strive for the perfect balanceamong these
factors. Purchase Finance deals with Finance Concurrence of all Purchase Files.Purchase
Requisition / Material Requirement summary are verified with the final proposal quantity.
All business functions must work together to achieve maximum efficiency and thus optimal
profit. Purchasing must work with the accounting and finance departments to secure funds and
track payments for material purchases. In addition, purchasing must work closely with the
production and forecasting teams to ensure timely delivery of materials. Understanding the goals
of various departments, including marketing, sales and research and development, can help
improve efficiency and develop better processes to ensure goals are met.
COMPANY PROFILE
Bharat Electronics Limited, was established at Bangalore, India by the Government of India
under the Ministry of Defence in 1954 to meet the specialized electronic needs of the Indian
Defence services. Over the years, it has grown into a Multi-Product, MultiTechnology, Multi-
Unit Company manufacturing from Small Components to present day System of Systems. 80%
of BEL’s turn over comes from Defence. In this regard it is pertinent to understand the nuances
of Defence requirement. 1.2. The requirements of Defence Customers are becoming increasingly
influenced by latest armament technology, military doctrines and sometimes by evolving
technologies. There is an enormous cost associated with development of such technologies, with
costs also allocated to skilled scientific manpower and subsequent production infrastructure.
Acquisition Time frames tend to be longer and qualification procedures are complex. Platforms
have given way to complex systems. Weaponry, electronic suite and command and control
systems need to be looked at in totality. Thus what may appear as a single discrete item in the
purchase request would be part of the entire system and its criticality would depend upon where
it fits into the whole. The components/sub systems used in Equipments/Systems need to be
qualified for use in Military applications. Any new item, getting introduced in the Equipment/
System during the production stage, warrants qualification trials. This is time consuming and
hence delivery of the final product may get affected. Technological obsolescence is faster which
results in a big challenge in supporting the customer for more than 20 years after the delivery of
the equipment/system. 1.3. The optimal use of complex platforms would depend on the training
which the user undergoes and this requires years of diligent work. This combination of man and
machine is what matters in times of war. User preference therefore needs to be accorded a very
high priority. It can make the difference between winning or losing a battle. In case the
requirements of such material cannot be met indigenously then they need to be imported and
here pure commercial terms do not always matter as defence material exports are subject to a
whole host of control regimes and export clearances imposed by the sovereign states from which
the material is sourced. Such control regimes exist not PURCHASE PROCEDURE Page 6 of
282 only for components/ equipment but also for the production technology, resulting in
suboptimal transfer of technology. 1.4. In a typical non-defence procurement, a buyer examines
the available products, requests competitive bids for purchase or manufacture from a number of
contractors, selects a bid based on quality and price and signs a one-step contract for delivery on
a specified date. Such a market depends on having complete information of products and,
producers, a standardized off-the-shelf product, predictable cost of products, and minimal
concern about the viability of maintaining the product or losing the source of supply. 1.5.
Procurement for Defence is more complicated in terms of Limited Vendors supplying the Mil
qualified Components/ subsystems. Hence developing alternate Vendors is more challenging. In
this scenario the Purchase Procedure is revised keeping in mind the latest developments in
purchasing activity, e-procurement, compliance to Vigilance and Audit requirements etc. 1.6.
Bharat Electronics outsources Products & Services requirements on need basis from different
categories of business partners viz., PSUs, Private Firms, MSMEs, Foreign companies and
Government Organizations as well. The outsourcing is governed by the following procedures:

 Purchase Procedure
 Sub-Contracts Procedure
 Work Contracts Procedure
Bharat Electronics outsources Products & Services requirements on need basis from different
categories of business partners viz., PSUs, Private Firms, MSMEs, Foreign companies and
Government Organizations as well. The outsourcing is governed by the following procedures:
 Purchase Procedure
 Sub-Contracts Procedure
 Work Contracts Procedure

The establishment and location are as follows:

Serial Year Of Establishment Location

No.
1. 1954 Bangalore
2. 1972 Ghaziabad
3. 1979 Pune
4. 1979 Taloja(Maharashtra)
5. 1984 Hyderabad
6. 1984 Panchkula(Haryana)
7. 1985 Chennai
8. 1985 Machhilipathnam (A.P.)
9. 1986 Kotdwara(U.P.)