ISO 9001-2008 Purchasing controls ? Issuing POs Without Specific Approvals

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Eric Edstrom

#1
ISO 9001-2008 Purchasing controls – Issuing POs Without Specific Approvals

I’m the Quality Manager of a small metal fabrications job shop. We have from around 30 to 50 employees based on workload. We do the full range of operations from laser cutting, stamping, forming, welding/assembly, powder coating through local delivery. The company has been in business for over 45 years.

We are creating a QMS that will eventually audited and certified to the ISO 9001-2008 standard, with Clause 7.3 Design and Development exempted, as we work from customer specs only.

There is no purchasing agent here. The President and three engineers/operational group managers do all the buying. We use a dedicated ERP tool that allows us to port from accepted quotes to purchase orders, which are then emailed directly from the ERP tool. No requisitions, no system for approvals. For the time being we plan to keep it this way. Of course, once we get the ISO cert there are many doors that will open for us, and we believe we can increase our customer base and grow the company. And a purchasing agent would be part of that growth.

It’s my belief that we can demonstrate the requisite level of control through a Signatures Authority policy, where limits are assigned for each of the purchasers, except the President, of course. The policy would be issued by the President and require acknowledgement by the purchasers through sign-off and date.

Anyone have any thoughts or opinions on this? I have considerable experience as an internal auditor, and have been through many external audits. But I’ve never seen this situation before, so I’m flying blind here.

Thanks in advance for any insights you may have.

Eric
 
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Reg Morrison

#2
It?s my belief that we can demonstrate the requisite level of control through a Signatures Authority policy, where limits are assigned for each of the purchasers, except the President, of course. The policy would be issued by the President and require acknowledgement by the purchasers through sign-off and date.

Anyone have any thoughts or opinions on this?
Welcome to The Cove.:bigwave:

The issue about Signatures Authority policy has to do with the fact that constrains expenditures, based on dollar amount. It has nothing to do with the intent of what ISO 9001 calls for review of the adequacy of the requirements in the purchasing documents. ISO 9001 is not concerned with the $ amount of the PO, but to make sure the people with the proper competence has reviewed and approved the requirements stipulated in the PO that can affect product quality.
 
E

Eric Edstrom

#3
Hi Reg,

Excellent point. Reviews for adequacy related to customer requirements are a part of our quoting and order acceptance process, and POs cannot be generated prior to the receipt of a customer PO. Within the ERP system the accepted quote is used to generate our PO(s), which is then reviewed by the purchaser before sending to the supplier.

All purchasers are the same folks who create the quotes and accept orders, and they are mfg engineers with decades of experience. So it can be demonstrated that each person is a subject matter expert, by evidence of experience and training. The SA doc will include categories of competence that define not only costs but what each person is allowed to purchase.

Does this make sense?

thx,
Eric
 
E

Eric Edstrom

#5
:thanks:

Reg and pjservan,

Thanks for the feedback. The documentation of the concept is obviously key. I'm working my way through the Signature Policy now. This is one of those times when you have to very careful about the exact wording. I'm sure we'll have some 'splaining to do when we sit down with the auditor.

We are planning to have a pre-assessment audit, and that should give us the opportunity to see how this will be interpreted.

Thx,
Eric
 
J

Jamie_

#6
I am also in metal fabricating, albeit a larger shop so we do have a purchasing department, but no requisition process either and everything goes through our ERP.

In our procedure I designated that "buyers" have purchasing approval. If you're designated as a buyer in our system that's your "signature" for approval - if someone who is not a buyer needs something ordered which is covered by QC procedures they can either request via email or verbally to a buyer.

Just spell out how material is controlled so it meets specs and is inspected before it hits production and you should be okay.

The heavy lifting of our purchasing procedure is the PO generation specs and receiving control plans.

PO generation specs are controlled documents with our specs and tolerances which are attached to every PO when applicable. Sheets, precision blanks, flat rolled steel, etc. which meets 7.4.2.

Good idea on having a pre-assessment audit. It was one of the smartest things I've ever done.
 
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E

Eric Edstrom

#7
Jamie,

Thanks much for the info, It's great to hear there are others in a similar situation. It sounds like you are doing something very like our approach. Did you use a policy to detail the authorization of "automatic" approval?

I'm not sure I understand the concept of PO Generation Specs. Is that something like a source control drawing? Usually those are for OTC product purchases.

We buy tons (literally) of steel in all sorts of forms, sheet, coil, pre-cut blanks etc. We do not purchase stock, only for customer orders. So we always have the requirements info in the quote, which ports to the PO in our ERP. Consequently we don't use SCDs or other spec docs, unless the customer gives them to us.

Thanks again for helping me out here. I came into this from the Wireless Telecom industry, after 35 plus years away from heavy industry. So I'm a little behind the curve for small metal fab business QMS.

Eric
 
J

Jamie_

#8
No problem. I didn't detail automatic approval, just that anyone can request but below the level of department manager they need manager approval (their own or purchasing manager.) I outline that "requisitions" can be verbal or email - as long as the buyer (or designee) documents it - which in our practice is by cutting a PO in the ERP. The action of cutting a PO is approval since we limit who can do this in the system.

I attached my procedure if you want to take a look at it.

We differ in that we purchase to stock as well as directly to job, but it's the same principle. Our specs are just general tolerances which apply if there are no specific tolerances for a particular job. If specific tolerances differ they wouldn't send the standard spec sheet - just the specific tolerances.

I'll pull my company data off and attach our PO specs for sheets, precision blanks, and as an example. So whenever we order these this is sent along with the PO to the vendor so they are always notified of what our expectations are. We don't have sheets like this for other material - the tolerances are shorter so the people buying just pop them in the comment field on the POs.

Edited to add - my stuff isn't fancy but we've not had any issues with the procedure itself (users using uncontrolled versions is another story - lesson learned there) Edited again because apparently I'm the worst at sanitizing documents. :)
 

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E

Eric Edstrom

#9
Hi Jamie,

Very helpful info. Thanks much for your assistance.

I tried to PM you but I guess I need more posts before I can do that.

You can ping me through my LinkedIn page, or if you have enough posts you can PM me here.

Thx,
Eric
 
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