Procurement Process Specification
1. Purpose
The purpose of this standard business procedure is to establish the necessary definitions and procedures to ensure that
----Co., Ltd.’s low-cost procurement and consistency of procurement standards.
2. Definition
PR: Purchase Request Form, used internally by the company;
PO: Purchase Order Form, used externally by the company.
3. Responsibilities
3.1 The requisitioner shall make purchase requisitions according to department needs, provide technical requirements, specifications and models of purchased materials, fill in the purchase application form and submit it to relevant personnel for approval; Receive and inspect requisitioned items and services.
3.2 The purchaser shall order goods and services at reasonable prices and in compliance with the requirements according to the purchase requisition form of the purchaser. Procurement personnel in the production department are responsible for the procurement of materials and various supplies related to production and development, or supervise the procurement work of contractors. The Administration Department is responsible for the purchase of office supplies and logistics materials for the company. Each purchasing personnel shall be responsible for the price and quality of purchased items.
3.3 Logistics
Ensure the timely and high-quality transportation of products, be responsible for customs declaration procedures for imported goods, and clear customs in a timely manner.
3.4 Production Department
The quality personnel of the Production Department are responsible for the formulation of quality assurance capability assessment standards and assessment plans for suppliers (material suppliers and contractors) and the assessment of quality assurance capabilities.
3.5 Finance Department
Check after receiving all required documents, and compare the supplier's invoice with relevant documents such as purchase requisition PR, purchase order PO, and receipt list. Compare and confirm the quantity and amount. and pay suppliers on time.
4. Scope of Procurement
4.1 Products: refers to the products outsourced by the company and delivered to customers after purchase.
4.2 Production materials: refers to materials directly related to product production. Most of the company's current production materials are purchased by product production contractors.
4.3 Fixed assets: refers to production and operating equipment with a unit value of more than RMB 1,000 and a service life of more than two years. Such as machines, vehicles, electronic equipment, etc.
4.4 Low-value equipment: refers to production and operating equipment whose unit value fails to meet the standard of fixed assets, but whose service life exceeds one year. In terms of accounting treatment, it does not need to be expensed as capital expenditure, but its management should be treated as fixed assets. Such as office desks, chairs, and laboratory tools.
4.5 Low-value consumables: refers to low-value consumables purchased in batches. Such as laboratory connectors, etc.
4.6 Long-term service customers: In addition to the above, customers who have long-term supply or labor services. Such as fast food, office stationery suppliers, telecommunications services, domain names, etc.
Other purchase applications that are not within the scope of expense reimbursement applications.
5. Detailed description of the operation process and operating procedures
5.1 Application
1) The requisitioner is responsible for providing the technical requirements, specifications and models of the purchased materials, feasibility or If necessary, recommended suppliers and prices should be given.
2) The requisitioner should fill in the purchase application form and be responsible for submitting it to relevant personnel for approval.
5.2 Approval
5.2.1 Approval of Purchase Requisition PR
All purchase requisitions must be approved strictly in accordance with the following signature authorization: All purchases Requisitions must be approved and signed by the general manager of the company; All purchase requisitions for IT equipment must be approved by the IT manager; All purchase requisitions must be signed by the financial director for budget, tax, and cash flow management needs; Any purchase requisitions related to Production-related purchase requisitions must also be approved and signed by the person in charge of the sales department and the person in charge of the operations department.
Signature flow chart:
Requisitioner--? Requisitioner department manager-? Purchaser-? Purchaser department manager---》General Manager
< p>Procurement personnel can only implement procurement after obtaining the approved purchase requisition.5.2.2 Application for purchase order PO or contract
5.2.2.1 Purchase order
If the purchaser needs a purchase order, the purchaser can For the approved purchase requisition, apply to the Finance Department to print the purchase order, which will be signed and confirmed by the department manager before being sent to the supplier. The applicant is also responsible for the supplier confirmation of the purchase order to ensure the validity of the order.
Stores of product and production material POs should note that the PO is a company's highly confidential document and cannot be accessed by unauthorized persons.
5.2.2.2 Contract
If the purchaser needs a contract, a person above the company's vice president needs to sign and stamp the contract text before it can be used externally. Important contract contents should be checked by the company's legal counsel.
5.3 Quotation and Negotiation
5.3.1 Procurement of Goods and Services
Wherever possible and applicable, the purchaser shall negotiate for the same level in accordance with the following principles Obtain different quotations for items or services:
Minimum quotation quantity for purchase amount
Less than RMB 500 1
Less than RMB 2000, greater than RMB 1000 2
More than RMB 2000 3
After negotiating with suppliers, buyers should make comparison records, mainly considering quality, price, discounts, packaging, delivery date and payment terms. Where necessary, the buyer and the requisitioner shall participate in discussions with the supplier.
When the quality of goods and services are the same, in principle, the supplier with the lowest quotation will be selected. Only in special circumstances, if the lower price has quality problems, the supplier with a higher quotation can be selected. But the reasons must be detailed for future reference.
5.3.2 Development and selection of sub-suppliers (only applicable to product and production material procurement)
Procurement personnel from the production department will use the bill of materials provided by the development department before purchasing. , initially identify those suppliers that are considered capable as sub-suppliers, and add them to the list of qualified suppliers after being reviewed and countersigned by quality assurance personnel and the development department.
If you are a preliminary supplier, you can only accept the mass production products provided by the sub-supplier after the quality personnel of the production department and the development department have qualified the first batch of samples.
The production department evaluates the supplier's ability to meet requirements on a quarterly basis based on the sub-supplier's item delivery, quality performance, cooperation attitude, etc., and investigates, analyzes, and summarizes.
5.3.3 Development and selection of third-party logistics
The personnel responsible for logistics shall provide more than 3 freight forwarders through bidding while ensuring the timely and high-quality transportation of products. Make your selection. Logistics personnel evaluate the freight forwarder's ability to meet requirements on a quarterly basis based on the freight forwarder's delivery time, service quality, cooperative attitude, etc., and investigate, analyze, and summarize.
5.4 Ordering
Suppliers should be selected based on price, quality and service. If the supplier selected by the buyer is inconsistent with the one recommended by the requisitioner, a confirmation should be sent to the requisitioner. If the requisitioner still insists on using the recommended supplier, it must be approved by the general manager.
Ordering items may take two forms: Directly from the supplier with an approved purchase requisition. Issue purchase orders to suppliers (if necessary, apply to the Finance Department for issuance of purchase orders) or contracts (important contract contents should be verified by the company's legal counsel).
For frequently purchased items, such as stationery, daily necessities, lunches, etc., you can order directly according to the terms and conditions by signing an annual agreement with the selected supplier.
The selection of such suppliers should be based on competitive bidding (if possible, there should be at least three competitors) and such agreements should be reviewed at least annually, both to obtain new quotes from different suppliers, and renegotiate the content of the current agreement.
5.5 Acceptance After the ordered non-production items are delivered, they must be accepted, and the acceptor and the purchaser cannot be the same person. After passing the inspection, you should sign the purchase requisition or the customer's delivery note. For production raw and auxiliary packaging materials, quality inspection should be carried out by the production department. If an item arrives substandard, the buyer should contact the supplier for resolution.
5.6 Payment
The purchaser is responsible for the payment application for purchased items. After paying the subpoena, he must attach the following purchase requisition PR with approved documents, invoices and receipt of goods, such as Please also attach a purchase order PO, a copy of the contract and a customer delivery list.
If it is a prepayment, a full invoice can be attached when the balance is paid; if there are special circumstances, the delivery note can be supplemented later, such as full prepayment for DELL equipment purchase.
For frequently purchased items, such as stationery, daily necessities, lunches, etc., you should negotiate the monthly settlement with the supplier upon request and pay by transfer.
Where possible, payment should always be by bank transfer and not by cash.
Where possible, buyers should always request VAT invoices from suppliers.
6. Records
For each purchase, the buyer should keep the following documents:
1) A copy of the purchase requisition
2 ) Quotation
3) Price comparison record
4) Copy of purchase order or contract
5) Copy of payment subpoena
6) Receipt of goods Copy of order
7. Attachments
1) Purchase requisition and attachments
2) Purchase order
8. Other provisions< /p>
No employee may accept gifts, invitations and similar benefits.
Any attempt by a supplier to improperly influence purchasing decisions must be reported immediately.