Post on 16-Feb-2018
0 | P a g e
Purchasing Policy & Procedure
Toyota Boshoku Automotive India P Ltd
Purchase Department
TOYOTA BOSHOKU
We contribute to society by developing leading-edge technologies
and manufacturing high-quality products
1 | P a g e
� SocietySocietySocietySociety The Company will promote corporate growth while fulfilling the following responsibilities as a good corporate citizen: (1) Maintain ethical values, ensuring that our corporate activities are fair and transparent; (2) Supply safe products that do not harm the environment; Promote corporate activities that help protect the global environment; (3) Create a better society as a member of our local communities.
���� CustomersCustomersCustomersCustomers The Company will develop innovative technologies and products to deliver quality that satisfies our customers.
� ShareholdersShareholdersShareholdersShareholders The Company will promote innovative management policies that ensure future corporate growth and the trust of our shareholders.
� EmployeesEmployeesEmployeesEmployees The Company will build and maintain positive labor-management relations, respect the individuality of its employees and create safe and comfortable workplaces.
� Business Business Business Business partnerspartnerspartnerspartners
The Company will promote open and mutually beneficial relationships with its business partners in pursuit of long-term growth and prosperity.
� We meet challenges with courage and creativity, to realize our dreams.
� We carry out Kaizen continuously, aiming to achieve higher goals.
� We practice Genchi Genbutsu by going to the source to analyze problems and find their root causes.
� Once a decision is made, we move quickly to carry out the plan, with passion and a sense of mission.
� We seek to do our best, act professionally, and take responsibility for our actions.
� We respect the values of other cultures and accept differences, with an open mind and global perspective.
� As a good corporate citizen, we do what is right and contribute to society.
� We respect the individual and use teamwork to produce the best result.
Corporate Philosophy
TB Way The values, patterns of conduct, and philosophies that Toyota Boshoku must maintain and observe
We contribute to society by develoWe contribute to society by develoWe contribute to society by develoWe contribute to society by developing leadingping leadingping leadingping leading----edge technologiesedge technologiesedge technologiesedge technologies and and and and manufacturing highmanufacturing highmanufacturing highmanufacturing high----quality products.quality products.quality products.quality products.
2 | P a g e
Table of Contents
1 Mission Statement
2 Need for Purchasing Policy
3 Guidelines
4 Policy
4 a Procurement of In Direct Materials
4 b Procurement of Direct parts
4 c Procurement of Imported Materials
4 d Procurement of Machineries
5555 Policy for Utility works
6666 Policy for Supplier Selection and Evaluation
7777 Policy for SPTT & HVPT
8888 Policy for Localization
9999 Policy for Cost Reduction
10101010 Policy for Scrap Disposal
11111111 Procedure for Internal control
12121212 Documents Life
Toyota Boshoku India – Purchasing Policy & Procedure
1 | P a g e
The mission of the Purchasing member is to procure the highest possible quality of
goods and services for the Company at the lowest possible cost. We assist
departments in identifying best source for procuring the materials within the
stipulated time.
To accomplish our mission, certain Guidelines and Procedures have been
established. These Guidelines & Procedures must be adhered to in order to ensure
compliance with applicable Central and Local government regulations. Utmost care
is taken to ensure that unlawful activities are not allowed and fundamentals of best
business practises are followed.
1 Mission Statement
Purchasing Policy & Procedure - Mission
2 | P a g e
2 Need for Purchasing Policy
Purchase Department is committed in setting up of efficient, effective, economical
& sustainable policy procedure in all Purchasing activities. This policy covers:
a. Procurement of Goods or Services subject to contract including consultants
b. Asset purchases
c. General Operating services / expenditure items including Direct and In-Direct
materials, Imported materials, Sub-contracting, Machineries and Equipment
hiring
d. Ensuring that Purchasing transactions are carried out in a fair and
transparent manner
e. Strengthens Integrity and Confidence in the Purchasing system
f. Ensuring that Value for Money in its Purchasing
g. Considers the Environmental impact of the procurement process across the
life cycle of goods and services
h. Full accountability shall be taken for all purchasing decisions
Purchasing Policy & Procedure - Need for Purchasing Policy
3 | P a g e
Purchase Department has the authority to place order for direct materials, In-direct
materials, Capital Goods, Imported materials and may be made with the vendor
using a Purchase Order.
Purchase Department has to make a PO after receipt of Purchase Requisitions /
Purchase Indents duly approved by Director Purchase / Managing Director
Purchase Department are not authorized to make capital equipment purchases
unless TBAS / TBJ approvals are obtained & submitted along with Purchase
Requisitions / Purchase Indents by user department with necessary allocation of
funds in the Budget approval sheet.
Purchase Department officials should not in indulge in any wrong practices in giving
or favoring business orders to suppliers.
Purchase Department officials to establish clarity on all Purchases in terms of Cost,
Quality and Service requirements and necessary records must be stored with
Purchase Order for all future references.
3 Guidelines
Purchasing Policy & Procedure - Guidelines
4 | P a g e
� Purchase Department to receive Purchase Requisitions / Purchase Indents with
minimum of 3 quotations from user departments.
� All Quotations should be received only in PDF format with necessary signature
and seal of suppliers and shall be in force with effect from 01.09.2011.
� Exceptions are given for all Proprietary items or items from Original Equipment
Manufacturer.
� Purchase Department to verify the quotation details and shall check the prices
with other alternate sources if any.
� Complete Vendor Registration procedure for identifying the new source for
Micro, Small or Medium scale industry to be made and necessary
documentation to be obtained from the respective source.
� The above documents to be furnished to Finance Department to ensure
Statutory requirements are completed.
� The policy shall ensure that items are obtained directly from the OE’s or OE
approved Stockiest or Distributors.
4 Policy
4 a Procurement of In Direct Materials
Purchasing Policy & Procedure - Policy
5 | P a g e
� Necessary documents for authorization shall be received from OE’s and prices
with discount shall be discussed and finalized with OE’s where ever applicable.
� Data sheet shall be made for each category of items for confirmation of prices
with discount details viz: Stationery, Electrical, Consumable, Small tools, Safety
items.
� Prices of all the above items shall be checked once in every 3 months with OE’s
and also local market condition
� Suitable Price correction shall be made accordingly and the period for
correction stands at 3 months once for above category of items
� Each PO shall be referred with Data Master for Price and Discount terms PO
with relevant documents shall be enclosed for final approval by HOD, Director
Purchase and MD
� All Purchase Orders duly approved shall be sent to suppliers and Due
acceptance for PO for all types of items procured shall be received from
suppliers for record purpose
� Any Change in PO terms should be made only thru PO Amendments
� No Hand written should be allowed on the PO except Signatures
Purchasing Policy & Procedure - Policy
6 | P a g e
� Any infrastructure development viz: Building, Plant expansion …at TBI to be
monitored, approved by a team from User department + Purchase + Finance +
Excise members before Final approval by MD
� Memorandum Of Understanding shall be made for all regular suppliers to
enforce strict norms on having Ethical business practices
� Whistle Blower Policy shall be made and informed to all suppliers and
necessary acknowledgement for having seen and noted shall be received by
purchase department
� The above activity to be monitored by Legal department
� Purchasing to be undertaken on a competitive basis in which all potential suppliers
are treated impartially, honestly and consistently
� Where a higher priced conforming offer is recommended,. there should be clear
and demonstrable benefits over and above the lowest total priced conforming
offer duly approved by MD
� Where the value of procurement of goods or services, Direct Purchase from a
single source can be made after first obtaining three verbal competing bids.
However, it is recommended to use professional discretion and occasionally
undertake market testing with more forms of quotation to ensure best value is
maintained.
� All documents relating to quotation process must be saved in the hard copies
attached to the file copy of the Purchase Order
Purchasing Policy & Procedure - Policy
7 | P a g e
� For the Procurement range, the selection should not be based on the price alone
and it is strongly recommended to consider some of the qualitative factors such as
Quality, stock availability, accreditations, time for completion of delivery,
Warranty conditions, technology, maintenance requirements, Organization
capability and previous relevant experiences as part of the assessment of the
quote
� Items Purchased thru petty cash, petty cash vouchers are to be made and duly
approved by Director or MD (amount less than INR 5,000/-)
� All Records associated with purchase of materials must be recorded and retained
for a minimum of 5 years
4 b Procurement of Direct parts
� Sales Department receives RFQ from customer
� RFQ details shall be circulated to all concerned departments by Sales
� Cross Functional Team (CFT) will decide the sourcing strategy viz. In-house or
Out source
� Respective Drawings with specification shall be received by Purchase
department
� Purchase will identify suitable suppliers based on the criticality of items
� RFQ shall be sent to 2 or 3 suppliers
Purchasing Policy & Procedure - Policy
8 | P a g e
� All Quotations should be received only in PDF format with necessary
signature and seal of suppliers
� Cost study shall be made with comparison
� Standard norm, Existing norm and also conditions of cost prevailing at the
time of feasibility study shall be duly considered for arriving at final cost
� Complete Vendor Registration procedure for identifying the new source for
Micro, Small or Medium scale industry to be made and necessary
documentation to be obtained from the respective source
� The above documents to be furnished to Finance Department to ensure
Statutory requirements are completed
� Cost merits shall be sent to TBAS and TBJ where ever applicable either by
Purchase or by Sales department
� Suitable approvals shall be obtained for cost proposals
� Official LOI (Letter Of Intent) duly approved by Managing Director shall be
sent to supplier to start Tool / Mould making activity
� Each PO shall be referred with Data Master for Price and Discount terms
� PO with relevant documents shall be enclosed for final approval by HOD,
Director Purchase and MD
� All Purchase Orders duly approved shall be sent to suppliers and Due
acceptance for PO for all types of items procured shall be received from
suppliers for record purpose
Purchasing Policy & Procedure - Policy
9 | P a g e
� Any Change in PO terms should be made only thru PO Amendments
� No Hand written should be allowed on the PO except Signatures
� Memorandum Of Understanding shall be made for all regular suppliers to
enforce strict norms on having Ethical business practices
� Whistle Blower Policy shall be made and informed to all suppliers and
necessary acknowledgement for having seen and noted shall be received by
purchase department
� The above activity to be monitored by Legal department
� Purchasing to be undertaken on a competitive basis in which all potential
suppliers are treated impartially, honestly and consistently
� Where a higher priced conforming offer is recommended,. There should be clear
and demonstrable benefits over and above the lowest total priced conforming
offer duly approved by MD
� For the Procurement range, the selection should not be based on the price
alone and it is strongly recommended to consider some of the qualitative
factors such as Quality, stock availability, accreditations, time for completion
of delivery, Warranty conditions, technology, maintenance requirements,
Organization capability and previous relevant experiences as part of the
assessment of the quote
� All Records associated with purchase of materials must be recorded and
retained as per the Model Life and Annexures to be attached for all PO
� Quality evaluation of parts to be done by TBI Quality Department and Final
approval of parts with specification shall be subjected to Final approval by
Customer based on workability condition and other related parameters
� Production control department shall give monthly schedule to supplier and
supplier shall despatch the quantity as per monthly schedule given with correct
document
Purchasing Policy & Procedure - Policy
10 | P a g e
NameNameNameName G P AG P AG P AG P ATooling Tooling Tooling Tooling
AgreementAgreementAgreementAgreementM O UM O UM O UM O U
Whistle Blower Whistle Blower Whistle Blower Whistle Blower PolicyPolicyPolicyPolicy
Direct Material Direct Material Direct Material Direct Material SupplierSupplierSupplierSupplier
In Direct Material In Direct Material In Direct Material In Direct Material SupplierSupplierSupplierSupplier
SparesSparesSparesSpares
Equipment Equipment Equipment Equipment SupplierSupplierSupplierSupplier
Service Service Service Service ProvidersProvidersProvidersProviders
ContractorsContractorsContractorsContractors
Direct Material Direct Material Direct Material Direct Material Import Import Import Import
In Direct Material In Direct Material In Direct Material In Direct Material Import Import Import Import
� Any change in the Design of component shall be with prior approval thru
Instruction Memorandum duly approved by Director or thru an ECI (Engineering
Change Instruction) duly approved by the Customer
4 b.1 Mode of PaymentMode of PaymentMode of PaymentMode of Payment
� Supplier sends monthly payable statement and payment shall be made thru
RTGS transfer or thru Cheque
4 b.2 Code of EthicsCode of EthicsCode of EthicsCode of Ethics
� All Suppliers shall enter into agreement with TBI for Memorandum Of
Understanding (MOU) and Whistle Blower Policy.
� All Direct Suppliers shall also enter into General Purchase Agreement (GPA)
and Tooling Agreement where ever applicable with TBI along with above
agreements (refer Table below :)
� Gifts, Entertainment should be declined in accordance with provision of Code
of conduct.
Purchasing Policy & Procedure - Policy
11 | P a g e
4 b.3 Supplier Obligation to terms & conditionsSupplier Obligation to terms & conditionsSupplier Obligation to terms & conditionsSupplier Obligation to terms & conditions
When a Supplier dispatches the Goods / Materials in response to TBI PO / Schedule
Supplier has legally complied with PO / Schedule terms & conditions and is under
no obligation of the Purchaser to accept the goods unless the Supplier has made an
error in terms of Quality or others.
In case of Error, TBI shall charge the Supplier thru Claim recovery note given from
Quality / Production Department duly approved by Head Of Department and shall
subsequently deduct the respective charge from Suppliers payment.
4 b.4 Purchasing ServiPurchasing ServiPurchasing ServiPurchasing Servicescescesces
� To make, review and sign all Procurement agreements
� Supplier Selection and Evaluation
� To establish new suppliers
� To process Purchase Order changes
� To ensure Purchases are in acceptance with requirements
� Supplier improvement activities (Quality Improvement, Annual Supplier
Awards, VA VE Meetings, Kaizen promotion activities)
Purchasing Policy & Procedure - Policy
12 | P a g e
START
PR / Recieptd
PI Approved
PO
Payment
Remittance thru'
Bank
Despatch from
Origin
Receipt of Material
at port of
destination
Clearnace
procedure
Duty Payment
Release of Goods
Receipt @ TBI
END
Document thru'
courier mode
Price
Verification
Incoterms
4 c Procurement of Imported Materials - Indirect
Flow Chart
Purchasing Policy & Procedure - Policy
13 | P a g e
START
Receipt of
Quotation from
supplier
Clearing
Disptach from
Port of destination
Receipt @ TBI
END
Dispatch of
Documents
Identification /
Evaluation of
Source by
Information to TBI
Price
Negotiation
PC Schedule
PO /
Information
to supplier
4 c Procurement of Imported Materials - Direct
Flow Chart
Purchasing Policy & Procedure - Policy
14 | P a g e
4 d Procurement of Machineries
� Due Approval / Authorization must be obtained from TBAS / TBJ before
requesting for procurement by the User Department
� Official confirmation for the above to be attached with Purchase Requisition
� Technical Evaluation sheet to be enclosed duly approved by Director and
Managing Director to be attached along with Purchase Requisition
� Purchase Department shall check and negotiate the prices with supplier and
recommendation can be made for change in sourcing wherever feasible with
consent from User Department.
� PO shall be made duly approved by Managing Director and will be processed
for payment purpose
� Mandatory requirement of obtaining Supplier acceptance for the PO to be
obtained by Purchase Department and record to be maintained for all future
correspondence
Following are examples of Procurement agreements that must be
signed by Purchasing member:
� All types of Purchase Orders
� Purchase Order Amendments
� Payment Request
� Sample Submission request
� Supplier Change Request
� Inter Office Memo
Purchasing Policy & Procedure - Policy
15 | P a g e
5555 Policy for Utility works
� All Utility work proposals by User department must get prior approval from
TBAS / TBJ w.r.t all criteria
� Joint team of Purchase member + User member + Finance member to study
supplier selection & other processes
� Joint team has the right to select supplier and commercial finalization shall
be at the discretion of HOD Purchase with Final authority and approval by
MD
� All Quotations should be received only in PDF format with necessary
signature and seal of suppliers and shall be in force w.e.f 01.09.2011
� Purchase Department to verify the quotation details and shall check the
prices with other alternate sources if any
� Complete Vendor Registration procedure for identifying the new source for
Micro, Small or Medium scale industry to be made and necessary
documentation to be obtained from the respective source
� PO with relevant documents shall be enclosed for final approval by HOD,
Director Purchase and MD
� All Purchase Orders duly approved shall be sent to suppliers and Due
acceptance for PO for all types of items procured shall be received from
suppliers for record purpose
� Any Change in PO terms should be made only thru PO Amendments
� No Hand written should be allowed on the PO except Signatures
� Memorandum Of Understanding shall be made for all regular suppliers to
enforce strict norms on having Ethical business practices
Purchasing Policy & Procedure - Policy
16 | P a g e
� Whistle Blower Policy shall be made and informed to all suppliers and
necessary acknowledgement for having seen and noted shall be received by
purchase department
� The above activity to be monitored by Legal department
� Purchasing to be undertaken on a competitive basis in which all potential
suppliers are treated impartially, honestly and consistently
� Where a higher priced conforming offer is recommended,.
� There should be clear and demonstrable benefits over and above the lowest
total priced conforming offer duly approved by MD
� For the Procurement range, the selection should not be based on the price
alone and it is strongly recommended to consider some of the qualitative
factors
such as Quality, stock availability, accreditations, time for completion of
delivery, Warranty conditions, technology, maintenance requirements,
Organization capability and previous relevant experiences as part of the
assessment of the quote
� All Records associated with purchase of materials must be recorded and
retained as per the Model Life
� Joint team to monitor the progress of work
� Any Increase/Decrease in measurement of work carried should be
authenticated by Joint team and final approval by MD is mandatory before
amending the Purchase Order
� Necessary Statutory obligation viz. PF, ESI for onsite member working to be
obtained by supplier & HR
� Department reserves the right to approve
Purchasing Policy & Procedure - Policy
17 | P a g e
� Disposal of Old items recovered during execution of project to be auctioned
and final authority on price and supplier shall be made by MD
� Any change in the specification of Design during execution of project should
be notified to TBAS / TBJ if applicable and final changeover to happen after
approval by MD
� Before start of any Utility work, User department shall provide complete
details of work and other specification details (BOM) to Purchase and to Joint
team
� Primary responsibility of Execution of work lies with User department and
Purchase shall have Secondary Responsibility
� All Inward & Outward movement of Goods during execution of work should
be thru correct documents duly approved by Concerned authorities
� Any Discrepancy in movement of Materials shall be subjected to verification
by Joint team and final authority on action to be initiated in case of any
fraudulence shall be made by MD
Purchasing Policy & Procedure - Policy
18 | P a g e
6666 Policy for Supplier Selection and Evaluation
START
Identify TBI requirement
Source
Identification
Existing /
New
Supplier Quessionaire
Supplier Assessment /
VisitRequest for
Quotation (RFQ)
Cost Feasability
Source
Finalization
Add in approved
supplier list
Commercial Negotiation
/ Scheduling
LOI / PO
(Tool / Mould / Part)
SPTT / HVPT
Sample Receipt
QC Inspection , Testing
& Evaluation
Sample
Approval
50% Tool Payment
Pilot Ordering
PCR 1, 2 and 3
Final Production trials /
Confirmation
MASS PRODUCTION
Balance 50% Payment
END
<NG>
<New>
<Existing>
<New>
<Existing>
<OK>
Purchasing Policy & Procedure - Policy
19 | P a g e
7777 Policy for SPTT & HVPT
• To purchase better control part with lower cost
• To establish supplier base to supply out sourcing parts with Quality, Quantity
and Cost in timely manner
Suppliers Parts Tracking Team is a virtually organized team who manages
production preparation and countermeasure issues systematically.
The entire concept of SPTT shall be done in accordance with Global Purchasing
Dept. of Toyota Boshoku and made by Mr. Masayuki Sakai.
Three visits shall be made and dept. representing would Purchase, Quality, PEDD &
PC.
Complete process plan with production preparation activity schedules will be
checked and suitable countermeasures shall be taken for any items deviated from
originally set targets.
Mission Statement
Concept
Purchasing Policy & Procedure - Policy
20 | P a g e
Resp: Resp: Resp:
Resp: Resp:
PCR Trail List at TBI /TKMLV-V stop ordering after PCR II
approval from TKMLSVP / Implementation
Part Development / SPTTSample Submission to
TBI QCD
Final Evaluation Approval
from
TBAS/TBJ/TMAP/TAB/TKML
Sub Supplier change request
to TKML with ECR / ScheduleLOI / PO with Advance
Pur/Sales/PED/PEDD Purchase
TBAS Approval to start
Localization
Technical Feasibility study
Purchase / QCD
Cost Feasibility study
Purchase
TBI Management Approval
MD
8888 Policy for Localization
Following procedure is adopted to localize:
Actual Localization benefit to be taken for 1 full year (12months) from the date of
Implementation. This shall be taken for Cost Reduction annually.
8 1 Benefits of Localization
Purchasing Policy & Procedure - Policy
21 | P a g e
Purchase Department official can propose to give financial assistance to supplier in
case of urgency.
Complete supporting document to be made and final decision to be taken by
Director & Managing Director.
For any additional Financial support to supplier, Director and MD reserves the right
to charge Interest or not.
8 2 Financial Assistance to Suppliers’
Purchasing Policy & Procedure - Policy
22 | P a g e
As a part of our ongoing commitment to improve the environment, this policy
seeks to reduce the environment impacts of our operations and promote
sustainable development by the integration of environment performance
considerations in the procurement process.
We are committed to the integration of environment performance considerations
in the procurement process including planning, Procurement, use and disposal. We
are committed to considering the environmental aspects, potential impacts and
costs, associated with the life cycle assessment of goods and services being
acquired
Green procurement or environmentally preferable purchasing is the practice of
procuring products and services that are less harmful to the environment (land, air
and water) and all species including humans that depend on environment for
survival. Green products are those that are made with less harmful materials or
which when produced or used/consumed would have a minimal impact on the
environment. Listed below are a few ways through which we aim to integrate the
green procurement policy with the Toyota environment policy.
GREEN PROCUREMENT POLICY
GREEN PROCUREMENT
Purchasing Policy & Procedure – Policy “Green Procurement Policy
23 | P a g e
� We shall encourage and prefer eco-friendly products, which are more power
efficient.
� We shall prefer to purchase from a source that is less polluting or uses clean
technology
� We shall encourage and prefer vendors who use recycled packaging
material. The possibilities of further reuse and/or recycling shall be explored
with the user based on needs and other conditions
• All parts made for Toyota should be free from SOC – Substance Of Concern.
SOC items are Lead, Cadmium, Mercury and Hexavalent Chrome (as per
Toyota Standards)
• Suppliers are providing certificates for SOC free supply and record to be
maintained at Design Department
• Suppliers should supply parts free from V O C
• All parts made for Toyota should be free from Toyota Banned Chemical
items.
• All Suppliers have been requested to obtain ISO 14001 certification and road
map to achieve is made
Mandatory Requirement
Purchasing Policy & Procedure – Policy “Green Procurement Policy
24 | P a g e
START
PO Creation
SAPPurchase Member
1st PO
Approval
SAP
Purchase HOD
Final
Approval
SAP
Managing Director
Director
Sr. Director
Purchase Order
print out
END
Purchase Order Approval Procedure
Purchasing Policy & Procedure – Policy
25 | P a g e
START
Management target on material cost
Official request to
all suppliers ( Direct
Negotiation
Making cost reduction data
PO amendment
Supplier feedback
Management Information
Credit not if any
END
9999 Policy for Cost Reduction
Purchasing Policy & Procedure – Policy
26 | P a g e
The Purchasing Department will be responsible for the disposal of TBI Purchased,
owned, surplus and obsolete material, goods, equipment, Motor Vehicles,
Production scrap, trail material, free samples, E Scrap by the method which obtains
Best Value for money including:
� Auction thru notice at TBI
� Transfer to other department
� Return to the supplier for refund or credit
� Trade in on the purchase of replacement equipment
� Donation to Charitable purpose
Before sending the scrap material, they have to be first declared unserviceable or
scrap by the competent authority. For most of the materials Respective
Department Heads / Director of the Departments are competent to classify the
materials as unserviceable or Scrap.
MD approval is a must before an Item is classified as scrap and final commercial
price to be approved by Director and Managing Director.
Utmost care shall be taken by the supplier / TBI to ensure that the purchased scrap
material will be disposed in a proper way and will not have any effect on
Environmental Pollution.
10101010 Policy for Scrap Disposal
Purchasing Policy & Procedure – Policy
27 | P a g e
Sl# Item
Sell to Local
Market as
Scrap
Auction @
TBI
Transfer to
other
Department
Return to
Supplier
Trade In with
Dealer /
Agent
Charity
1 Obsolete Material(Carpet, PVC &
Others)
2Used Goods (Furniture
& Other General items)
(Asbestos sheet
& others)
3Non-useable goods
(Furniture, general items)-
3 Used Equipment (AC & Other s)
4 Used Motor Vehicles -
5Used Production scrap
( Hazardous / Non -
6 Used Trail Material -
7 Used Free Samples -
8 Coconut -
2 3 14
1 23
12
� All Suppliers to give Deposit amount returnable on termination of agreement
and is interest free
� All Suppliers to give Demand Draft issued by Nationalized Bank in favor of
Toyota Boshoku India and to be handed over to Finance Department before
lifting the scrap from TBI
� Frequency of lifting to be periodically evaluated based on need and
requirement
� All other terms and conditions to be as per agreement terms agreed mutually
10 1 Procedure for scrap Disposal of Production parts
Purchasing Policy & Procedure – Policy
28 | P a g e
� In case of any issues arising out of non-compliance with regards to disposal
of scrap, Supplier has the responsibility to meet all statutory and Legal
proceedings
� Agreement shall be terminated if Supplier does not meet required terms and
conditions of TBI
� The Price Contract shall be for a period of 1 year and subjected to change
after 1 year. The authority on Price contract shall be with MD Actual items to
be disposed as per agreement terms shall be the responsibility of Production
control and Stores
� Scrap materials shall not be dispatched if insufficient funds are available with
TBI and in case of any urgency discretion to despatch shall solely lies with
Director and MD
� Required Documentation to be given by Stores / Excise within 1 hour of
submitting the final papers by supplier
� Supplier shall not take any other item other than mentioned in Scrap
Agreement and any issues arising out shall be decided by TBI Management
and suitable action would be initiated. MD has the authority to take final
decision
� Any sort of Gifts, Entertainment and other illicit activities to select or to
award Scrap business is strictly prohibited and in case if found guilty is
punishable and final authority shall be with MD
� To dispose any other item except other than agreement item Purchase to
make feasibility study after obtaining the scrap note from user department
and will report to management. MD approval is a must before selecting
supplier and commercials
Purchasing Policy & Procedure – Policy
29 | P a g e
Sl# ItemIn Direct Material
Direct Material
Utilities Spares Import Machineries Service
1 MSMED
2 Quote in PDF
3MD Approval for PR /
PI
4Vendor Master
Creation (Authorised Purchase member)
5Multi Level approval
in SAP
6Amendment thru
Verison Management
7No Hand writing on
PO
8No Regularisation of PO after receipt of
Material / Job
9Minimum 3 Quotation
in PDF format
10Scrap Disposal News
paper
11OE Price check for
all B/O parts
12Joint team
monitoring for Utility work
13 Check sheet for PO
143 Months once Price
check / review
15
Price Increase / Decrease proposals
(MD approval) before PO Amendment
16Air Freight
proposals (MD approval)
Director
or MD
need to
approve
11111111 Procedure for Internal control
Purchasing Policy & Procedure – Policy
30 | P a g e
Item Documents to be kept for Document Mode
PO Direct Material Model Life of Vehicle Soft + Hard copy
PO In Direct Material 5 Years Soft + Hard copy
PO Spares 3 Years Soft + Hard copy
PO Capital Items 5 Years Soft + Hard copy
PO Utility work 3 Years Soft + Hard copy
General Correspondence 3 Years Hard copy
Anytime that a modification needs to be made to a Purchase Order the purchasing
department must notify via one of the models as stated below:
Item Mode Means Approval Final Approval
Price change Thru version
Management SAP HOD Managing Director
Tax Condition
change
Thru version
Management SAP HOD Managing Director
Cancellation /
Deletion
Thru Blocking in
system Document HOD -
Short Closure Thru version
Management SAP HOD Managing Director
Other Terms &
Condition change
Thru version
Management SAP HOD Managing Director
12121212 Documents Life
PO Modifications / Cancellations / Closure
Purchasing Policy & Procedure – Policy
31 | P a g e
The following PO numbering system applies:
Purchase Order Type PO number begins
with Followed by
Blanket 1 XX 55 00000
Regular 1 XX 45 00000
Service 1 XX 63 00000
Sub Contract 1 XX 66 00000
Imports 1 XX 48 00000
Item By Final approval Document Receipt
at Purchase by
Proposal Introduction User Department M D H O D
Purchase Requisition User Department M D H O D
Advance Payment Request Purchase M D H O D
Payment Request Form Purchase H O D -
For questions or comments about Purchasing Policy & Procedure contact:
TBI Purchase Department
Purchase Order Numbering System
Internal Requisitions
Purchasing Policy & Procedure – Policy
32 | P a g e
“Toyota Boshoku India – Purchasing Policy & Procedure”
Established < January> <2011>
Toyota Boshoku Automotive India Pvt Ltd.
Purchase Department
<Conceptual design & edition: Information Systems Dept.>
Purchasing Policy & Procedure
TOYOTA BOSHOKU