Purchase sop

AL SHIFA HOSPITAL PVT.LTD.

STANDARD OPERATING PROCEDURE

ASH/PRCHSE/SOP-11

INDEX

SL. NO. PARTICULARS PAGE NO.1 PURPOSE 22 SCOPE 23 RESPONSIBILITY 24 PROCEDURES

i. Reasons for purchaseii. Collection of quotation

iii. Replacement of existing Itemiv. New Purchasev. Purchase committee

vi. Purchase order preparationvii. Evaluation of suppliers

viii. Approval of purchase orderix. Ordering the materialx. Local purchase

xi. Receiving and accepting goodsxii. GRN entry

xiii. Documents verificationxiv. Storage of goodsxv. Tracking of goods

xvi. Stock updatingxvii. Stock verification

xviii. Stock maintenancexix. Expiry checkingxx. Material issue

xxi. Returning of materialsxxii. Disposal of damaged or expired items

3-11

5 PROCEDURE FOR CONTROL OF RECORDS 126 ANNEXURES

1. ORGANIZATION CHART - Organization chart (ASH/ADM/HRD-09) Revision no.:01, revised on 01/01/2012has attached as annexure-1

2. ACTIVITY FLOW CHART-1 (ASH/PRCHSE/FCHRT-10)

3. ACTIVITY FLOWCHART-2 (ASH/PRCHSE/FCHRT-11)

REVISION NO DATE PAGE NO

00 01.06.2011 of 14

Safety through quality, service with commitment



ASH/PRCHSE/SOP-11

4. APPROVED LIST OF SUPPLIERS (ASH/ADM/STR-03)

5. SUPPLIER EVALUATION REPORT(ASH/ADM/STR-05)

1. PURPOSE

To lay down a procedure for purchasing and to evaluate suppliers, rate and develop them so as to select suppliers on the basis of their ability to meet the quality requirements.

2. SCOPE

This procedure covers,

a) Purchase of items such as Equipments, Instruments, Furniture, Office Stationary, Spares, and Consumables.

b) Registration of Potential suppliersc) Evaluation and development of existing suppliers.

3. RESPONSIBILITIES

Collection of quotation – Purchase Assistant

Preparation of purchase order – Purchase Manager


00 01.06.2011 of 14




ASH/PRCHSE/SOP-11

Approval of purchase order – Managing Director / Finance Director

Evaluation of suppliers – Purchase Manager

Storage of items – Store Incharge

4. PROCEDURES

1. Reasons for purchaseAn item purchase request is raised with different intentions such as :

A new item to replace an existing obsolete /damaged item. An item which is already in use but additional ones are needed to meet the

complete requirement. A new item to facilitate a function that was done manually/ not done till date.

2. Collection of quotation

a) A user/user department raises a request for an item, which shall be furnished with the

proposed use, users, functional specifications, safety specifications if required, as well

as the brands available in certain cases.

b) The purchase manager scrutinizes the requirement in terms of cost, criticality of the

requirement, quality of product, service and spares availability, vendor/supplier

status, and initiates the communication with the vendors. Where the cost comes

within his authorization for initiating purchase orders, he initiates the process. Where


00 01.06.2011 of 14




ASH/PRCHSE/SOP-11

the cost exceeds his authority to decide, he puts it up to the purchase committee and

finance department to decide.

3. Replacement of an existing item: If the intention of purchase is replacement of an item which was in use, the condemnation note is verified. If the condemnation note is not submitted, it is prepared. The condemnation note is submitted to the condemnation committee. If the committee approves, and gives it in writing, then the purchase manager proceeds with the purchase order. If the committee rejects condemnation, then the user is informed the same, in writing explaining this as the ground of denial in purchasing the requested item.

4. New purchase: Where the item is a new purchase, the specification report is put for approval from the purchase committee. The committee considers the requirement for discussion in the meeting thereafter convened, scrutinizes the requirement against set parameters and accepted practices, and if found necessary, approves the requirement. The purchase manager subsequently prepares the purchase order. If the committee rejects the requirement then the user is informed the same, in writing explaining this as the ground of denial in purchasing the requested item.

5. Purchase committee

The purchase committee Members are,

1) Medical Equipments and Machineries

1) Managing Director / Finance Director

2) Purchase Manager

3) Store Incharge


00 01.06.2011 of 14




ASH/PRCHSE/SOP-11

4) Biomedical Engineer

5) End user / Indenter

2) Maintenance & Electrical Equipment and Machineries

1) Managing Director / Finance Director

2) Purchase Manager

3) Store Incharge

4) Maintenance Engineer

5) End user / Indenter

6. Purchase order preparation

a) Purchase Manager prepares the purchase order.

b) Purchase order is placed only for suppliers from the approved list.

c) Purchase order contains the following information

Clear description of goods/services to be procured

Quantity rate and value

Requirement of test certificates, if any

Delivery schedule

Mode of dispatch and payment terms

Inspection clauses

d) Purchase order is verified and reviewed for its completeness by Finance Director if the

cost exceeds Rs 10,000 and then approved by CMD.

e) Copies of purchase order are distributed to Stores and Accounts Departments.


00 01.06.2011 of 14




ASH/PRCHSE/SOP-11

7. Evaluation of suppliers

a) The Store Incharge makes a note about the quality of the product and delivery

performance of the vendor for Vendor rating.

b) The supplier is evaluated once in six months with reference to the Vendor Evaluation

Rating Criteria.

Existing suppliers are evaluated based on their past performance generally according to

the following parameters

Quality Rating (QR) = Quantity / No. Accepted

80 = 80 Max.

Quantity / No. Supplied

Delivery Rating (DR) = 10/15/20 = 20 Max.

20 = Supply total quantity of materials on or before the agreed date.

15 = Supply total quantity/number of materials within 7 days from the expiry of agreed

date.

Those who score (QR+DR) equal to or greater than 70 will find a place in the

approved list.

Those who score less than 70 require action for improvement.

Purchase Manager gives guidance to the suppliers to improve their performance.

After taking corrective measures these suppliers are evaluated again.

If the score is below 70, the names of such suppliers are removed from the

approved list.


00 01.06.2011 of 14




ASH/PRCHSE/SOP-11

c) If the supplier is found acceptable, then the supplier is included in the Approved Vendor

List.

d) If the supplier is not acceptable, the same is informed to the supplier through a letter.

e) Stores Incharge maintains the details of the delivery performance of the vendor such as

quality supplied, actual date of delivery and quantity accepted through Delivery challan.

f) The details are recorded in the Vendor Rating Form.

g) The acceptance rate is calculated as explained in the Vendor Rating Form.

h) Based on the Vendor Rating, the decision regarding the acceptance or removal of the

supplier from the Approved Vendor List is made by the Store Incharge, with the approval

of Managing Director.

i) The Store Incharge prepares the approved vendor list after vendor rating.

j) The list of approved suppliers is updated once in six months.

k) The vendor rating is also communicated to the supplier by the Stores Incharge.

1) Approval of purchase order

a) After preparing the purchase order it shall be submitted to FD for verification.

b) After verification that will be transferred to CMD for the approval.

c) Where purchasing cost is less than Rs 10,000/-, the purchase order will be approved by

the Purchase Manager himself.

d) Approved purchase order will be sent to the supplier or manufacturer.


00 01.06.2011 of 14




ASH/PRCHSE/SOP-11

2) Ordering the material

a) Materials are ordered by the Purchase Manager.

b) Orders are placed through the phone/mail/direct/courier.

c) In case of costly items order shall be given directly to the vendor/supplier.

3) Local purchase

a) Local purchases are done for less value and less quantity items.

b) In case of emergency also local purchases are done.

c) A fixed amount shall be kept in hand as cash by the Purchase Manager.

d) Local purchases are done from that cash and the bills are submitted to the Accounts

Department.

e) The expense amount is reimbursed from the accounts department.

f) The amount is by the Purchase Manager.

4) Receiving and accepting goods

a) At the time of receiving materials, all the documents like Challan, Invoice, Purchase

order, Tax receipt of check posts (if applicable) etc. are checked in order to ensure the

same are tallied with all the terms and conditions of Purchase Order, Quantity, Quality,

Bill Amount, Warranty/Guarantee Certificate etc.

b) Necessary Test Reports are received for the materials, which require such test reports are

checked by the Purchase Assistant.


00 01.06.2011 of 14




ASH/PRCHSE/SOP-11

c) The quality of all received items including Equipments, pre printed stationary etc. are

checked and makes sure that they are up to the standard.

d) In case of chemicals, expiry date & condition of package are checked.

e) After verification, the items received are taken into the stock and computer stock is

updated.

f) The items are placed on its proper places and issues having expiry on first in first out

basis (FIFO).

g) In case of furniture & fixtures the quality of the items like gauge of the sheets used, types

of wooden materials used, painting quality, lock and key etc. are checked.

5) GRN entry

a) Once the material is accepted Goods Received Note (GRN) is entered based on the type

of material.

b) There is separate provision in software for GRN entry.

c) Purchase assistant ensures whether the material is an asset item or consumable item.

d) Entry is made based on that.

e) Following columns are filled by the Purchase Assistant.

(i) Serial number

(ii) Product name

6) Documents verification


00 01.06.2011 of 14




ASH/PRCHSE/SOP-11

a) Goods receipt note is attached to the in warded documents and the bill send for

verification to the Purchase Manager / Assistant HOD.

b) Assistant HOD, after verifying the documents posts the items to stock.

c) After the verification the Assistant HOD / Assistant Purchase Manager sends the bills to

the Purchase Manager for passing the bill for payment to Accounts Department.

7) Storage of goods

a) Store Incharge is responsible for the storage of goods.

b) Accepted materials are taken into the stock and to be placed in proper location.

c) Temperature controlled items are stored at the specified temperature.

d) Chemical shall be stored in separate place.

8) Tracking of goods

a) Storage place is labeled for each item.

b) Goods items list is hanged on every rack.

c) Goods are arranged in alphabetical order in each shelf.

9) Stock updating

a) Stock updating is done by the Store Incharge.

b) Only verified stock is entered in to the stock.

c) Inward stock shall be kept in ‘under inspection’ area.


00 01.06.2011 of 14




ASH/PRCHSE/SOP-11

d) Store Incharge verifies and signs the inspected items documents and that shall be

forwarded to the Purchase Manager for further verification and submission to Finance

Department for payment.

10) Stock verification

a) All received goods are kept under inspection.

b) Store keeper verifies all the items.

c) Any damaged or mismatching items are rejected.

d) Rejected items are transferred to the ‘rejected items’ area.

11) Stock maintenance

a) Store Incharge is maintains the stock level.

b) Store Incharge takes necessary stock reports periodically and counter verifies the physical

stock with system stock.

c) He monitors the re-order level and gives proper intimation to purchase in charges for

material to be procured on daily basis.

d) The items, which are very urgent in nature, are intimated to the Purchase Manager

immediately on getting the request from the indenter.

e) Minimum stock level shall be maintained for the short period stable materials.

f) Physical verification of stock is carried out and the periodicity of the verification is in

accordance with the classification of the items.

i. Item A- High value items- every month


00 01.06.2011 of 14




ASH/PRCHSE/SOP-11

ii. Item B- Moderate value items- once in 2 months

iii. Item C- Low costs items- Once in 3 months

12) Expiry checking

a) Store Incharge assigns the staff for expiry checking.

b) Expiry of items is checked at the end of month.

c) Entire items are checked for out of date.

d) Before opening new kit/reagent, expiry is checked.

e) Near expiry items are send back to the supplier.

f) The period of near expiry shall be defined and prefixed.

13) Material issue

a) Ready stock items are issued to the indenters based on their indents within the time limit.

b) Materials are issued on FIFO basis.

c) Old stock/useless items are removed from the storage place.

d) Materials are issued based on the consumption of the end user.

e) Consumption patterns are monitored periodically and proper alerting measures to be

taken on that department, to avoid improper utilization.

f) Reports which are essential to monitor the consumption pattern are taken periodically.

14) Returning of materials to stores


00 01.06.2011 of 14




ASH/PRCHSE/SOP-11

1. If any material is returned to stores by departments, the materials received are visually

inspected, received and the Stock Register is up dated.

2. The reason for return of material is specified in Stock Register.

15) Disposal of damaged or expired items

a) Damaged and expired items are disposed in time.

b) Disposal is done with the permission of Managing Director.

c) Near expiry items are replaced from the supplier if possible.

1. PROCEDURE FOR CONTROL OF RECORDS

SL NO. RECORDS NO.

1 Purchase Indent ASH/ADM/STR-01

2 Local Purchase Order(Large) Comparative Statement ASH/ADM/STR-02L

3 Local Purchase Order(Small) ASH/ADM/STR-02S

4 Approved List of Suppliers GRN ASH/ADM/STR-03

5 Supplier Capability Report ASH/ADM/STR-04

6 Supplier Evaluation Report ASH/ADM/STR-05

7 Comparative Statement ASH/ADM/STR-06


00 01.06.2011 of 14




ASH/PRCHSE/SOP-11

9 Electronic Media Records are maintained for GRN and Stock Register.


00 01.06.2011 of 14


Purchase sop

Documents

Transcript of Purchase sop