LOGO NAME of Organisation LOGO

Doc. No. XXX/PUR/SOP/01

Rev. No. 01
TITLE: Procedure for Purchase Date. 01.05.2018
Page No. Page 1 of 6

1. Objective:
A. Procurement of best quality products at optimum cost as per desired delivery
schedule.
B. Defines the fundamental quality system and procedures required for
suppliers who provide production raw material.
2. Scope of application:
A. The scope of this procedure covers all raw materials, spares and other
miscellaneous items required in Apar Industries Limited, Khatalwada.
B. Defines and describes the requirements for suppliers since purchased
material can directly impact the quality of products.
3. Responsibility:
A. HOD, Purchase
4. Cross reference:
A. ISO 9001:2015 & IATF 16949:2016 & TL: 9000.
5. Procedure:
A. External Provider Selection & Evaluation
i. For developing new supplier purchase department searches the reliable
sources for locating the suppliers address. After getting the address formal
inquiry floated through e-mail clearly mentioning our requirement. Free
sample was requested from the suppliers.
ii. On receipt of free sample from different supplier purchase department
forwarded the same to testing lab for evaluation.
iii. If evaluation results found to be meeting desired requirement then the
supplier is considered for putting in approved vendors list.
iv. Before putting on the approved list, the supplier is evaluated by visit of a
team decided by HOD, (Purchase), for conforming their ability to meet the
specified requirements as per the relevant company’s specification. For
overseas suppliers, the supplier evaluation form (AIL/PUR/RD/04) send to
supplier & ask him to do self assessment.
v. Other supplier selection criteria that should be considered;
1. Volume of automotive business
2. Financial stability.
3. Purchased product material or service complexity
4. Required technology
5. Adequacy of available resources.
6. D&D capabilities
7. Change Management Process
8. Business continuity plan

PREPARED BY: APPROVED BY:

LOGO NAME of Organisation LOGO

Doc. No. XXX/PUR/SOP/01

Rev. No. 01
TITLE: Procedure for Purchase Date. 01.05.2018
Page No. Page 2 of 6

9. Logistic Process
10.Customer Service.
vi. Alternatively, the suppliers QMS certifications are to be checked. If it is in-
line, a trial order is placed before the approval is given. Then the
purchased material lot inspected as per the company specification. If it is
found satisfactory, then supplier is put on the approval list.
vii. The Supplier Performance Evaluation of existing supplier is done on the
basis of purchasing and quality data such as QC rating, Delivery schedule
performances, Customer returns & recalls, Premium Freight & Response
performances of supplier in once in a three month.
viii. Acceptance /Grading of supplier will be decided on below quality stand
point;
Grade Rating (%) Grading
A > 95 BEST
B 85-95 BETTER
C 75-85 GOOD
Poor <75 POOR
ix. For the supplier graded “B” assured to be for improvements, the supplier
graded “C” should be required to take corrective action at their end &
submit the same before next lot supply. The supplier graded “Poor” shall
be deleted from Approved Supplier List. The Approved Supplier list is
revised once in a year.
x. The purchase order of the company clearly mentions the specification No.
and description of the quality specifications of the items, quantity required,
and delivery dates etc. The purchase of the product is ordered in writing
in the prescribed purchase order. The PO is verified and approved by GM
Purchase himself prior to release.
xi. Rejected Material is to be return to supplier.

B. Planning & Procurement

i. For Raw Material, a 3-monthly rolling plan is made and procurement is
made based on the current month plan. The planning is based on a 12-
month rolling average for such items.
ii. It is attempted, subject to feasibility, to maintain a 1-month inventory for
all key raw material and consumables and a 10-day inventory for
packaging. Although as per policy the inventory should be kept at the
optimum minimum. The PO should be raised based on requisition received
from planning department.

PREPARED BY: APPROVED BY:

LOGO NAME of Organisation LOGO

Doc. No. XXX/PUR/SOP/01

Rev. No. 01
TITLE: Procedure for Purchase Date. 01.05.2018
Page No. Page 3 of 6

iii. For other consumables, packaging, services the procurement is done

based on user requisition from respective locations.
iv. The requisition is directly entered in SAP by the user department and is
approved by the user HOD and the purchase HOD.
v. Based on the requisition, supplier identification is done.
vi. A purchase order (PO) is then released to the approved supplier from the
SAP. In case of service order (SO) the same are made manually, but
details are entered in SAP.
vii. The purchasing information provided must include the following
information as a minimum, as applicable.
1. The description of the goods or services including specifications,
quantities and other relevant information
2. The method and location of delivery and expected timelines
3. Documentation expected from the supplier
4. Inspection/ Testing results related to the goods or services
5. Competence of personnel.
6. Payment terms
7. Liabilities
8. Any other information necessary
viii. The PO/ SO are then released to the supplier for confirmation, and a
confirmation or acknowledgement sought. In case the supplier fails to
acknowledge within 3 working days, the PO is considered to be accepted
by the supplier.
ix. For import items, the relevant payment instruments (LC etc) and the
import documentation are carried out through approved agents/ CHA and
the same are negotiated with the supplier.
x. In case the supplier reverts with any changes, the same can be made only
through authorization of HOD purchase.

C. Material Follow up & Receipt

i. Once the PO is placed the purchase department / user follow up with the
supplier for delivery of goods/ services.
ii. Upon receipt, the same are verified by the user department and entered
into SAP (Refer Stores Process).
iii. For certain items where a pre-shipment sample is to be received before
the supplies are made, the same is coordinated by the purchase and plant
teams. Based on the QA response the same are accepted.
iv. Successful completion of delivery and quality entitles the supplier for
payment as per terms and the same are effected by the purchase
department, as appropriate.

PREPARED BY: APPROVED BY:

LOGO NAME of Organisation LOGO

Doc. No. XXX/PUR/SOP/01

Rev. No. 01
TITLE: Procedure for Purchase Date. 01.05.2018
Page No. Page 4 of 6

v. In case of any issues with the quality, delivery, quantity or service with the
supplies, the same are intimated by the user department to the purchase
team. The purchase team intimates the supplier for taking appropriate
actions including replacement, discounting/ debiting or discontinuing
supplies etc.
vi. Records for such issues are maintained in a supplier monitoring record

D. Supplier Performance Monitoring & Re- Evaluation

i. Based on the on-going transactions of the suppliers, a Supplier
performance Rating is established on a quarterly basis. The rating is made
based on quality, delivery, service and documentation.
ii. Suppliers who provide material that does not impact product quality or
delivery are not covered under monitoring. Similarly, suppliers whose net
business is less than Rs. 1 Lakh per quarter are also not included.
iii. Annually a re-evaluation is done for all suppliers and suppliers with
following issues are reviewed for continuity by the top management team,
and if found unsuitable are removed from the registered suppliers list in
SAP.
1. Supplier performance less than 50% over 4 quarters in the previous
FY.
2. Suppliers who have causes severe monetary damage due to service
issues.
3. Supplier engaging in unethical practices.
iv. All other suppliers are continued by default as approved suppliers

E. Second Party Audit;

i. In month of March, Head purchase will prepare External provider
(Supplier) audit plan AIL/PUR/RD/09
ii. The scope for second party audit will be done for, one or combination of
following points;
1. Supplier risk assessment
2. Supplier Monitoring
3. Supplier QMS Development
4. Product Audit
5. Process Audit
iii. The Criteria for audit is review & verification of define scope of the audit &
motivation of the organization for QMS development.
iv. For Overseas suppliers, the External Provider Audit checklist will be sent to
external provider & feedback will be taken with supporting documents.
Based on received self assessment form, the rating will be carried out.

PREPARED BY: APPROVED BY:

 LOGO NAME of Organisation LOGO

Doc. No. XXX/PUR/SOP/01

Rev. No. 01
TITLE: Procedure for Purchase Date. 01.05.2018
Page No. Page 5 of 6

v. For other suppliers as pre criteria point ii, the audit plan prepared.
vi. In start of the month, the intimation letter with tentative dates will be sent
to external provider & ask for confirm dates for the audit.
vii. Based on received dates, the auditors will be selected as per auditor
criteria & availability of auditor.
viii. The intimation will be given to auditors & administrative arrangements will
be carried out.
ix. The audit results will be retained.

6. Documented Information Management:

Type of
Informatio
Identification Disposit
Name of n (Hard / Storage Retention
Method / Title ion Access till
Information Soft / Method Period
for Information Method
Scanned /
Other)
Procedure for File/ Scrap/ Purchase Team
Hard/Soft AIL/PUR/SOP/01 2 Years
Purchase Server Delete & MR
External Provider File/ Scrap/
Hard/Soft AIL/PUR/RD/01 2 Years Purchase Team
Registration form Server Delete
External Provider
Inspection Hard AIL/PUR/RD/02 File 2 Years Scrap Purchase
Report
External Provider
Performance Soft AIL/PUR/RD/03 Server 2 Years Delete Purchase
Monitoring
External Provider
Hard AIL/PUR/RD/04 File 2 Years Scrap Purchase
Audit Checklist

External Provider 2 Years / Purchase&

Corrective Action Soft AIL/PUR/RD/05 Server As per IATF Delete Store & QA/QC
Form 16949 & MR
External Provider
Soft AIL/PUR/RD/06 Server 2 Years Delete Purchase Team
Letter
List of External
Provider & IMS Soft AIL/PUR/RD/08 Server 2 Years Delete Purchase
Status
External Provider
Soft AIL/PUR/RD/09 Server 2 Years Delete Purchase
Audit Plan
Purchase/Service Server/ Delete/
Soft/Hard AIL/PUR/RD/10 2 Years Purchase Team
Order File Scrap

PREPARED BY: APPROVED BY:

 LOGO NAME of Organisation LOGO

Doc. No. XXX/PUR/SOP/01

Rev. No. 01
TITLE: Procedure for Purchase Date. 01.05.2018
Page No. Page 6 of 6

Type of
Informatio
Identification Disposit
Name of n (Hard / Storage Retention
Method / Title ion Access till
Information Soft / Method Period
for Information Method
Scanned /
Other)
External Provider Server/ Delete/
Soft/Hard AIL/PUR/RD/11 2 Years Purchase Team
Risk Assessment File Scrap
7. Process Map:
INPUTS PROCESS OUTPUTS
Purchased Material and Services
Material and Service
Supplier Evaluation, Performance
Requirements Purchase
Monitoring
Supplied Material/ Services
OBJECTIVES
PROCESS INTERACTIONS PROCESS OWNER
MEASURE FREQUENCY
Timely Delivery
Stores
of Material
Production HOD, Purchase Monthly
Maintain above
90%

8. Change Control
Sr. Section Brief description of revision
New Revision status Approved By
Number &
(Initials)*
No Page No. Date

5/E
01 01 01.05.2018 Second Party Criteria added as per stage 1 AOC Subrat Ray
Page 4 of 6

PREPARED BY: APPROVED BY: