Purchasing Procedure - Review appreciated

[John Broomfield]

Hi there,
My original idea when a join the company was a single page procedure, but some of the veterant people were afraid of lost know-how or information, that is the reason why I keep the part of the old approach and add new process map to make more easy to grap the information/steps for the new employees.
Thanks you for the feedback!!

I

pharmarton,

Then may I suggest you invite the Purchasing Manager to preserve all the know-how into the Training Manual for the purchasing process?

This is much better that cluttering the management system with unnecessary details that cost time and money to maintain.

Even if the Training Manual does not exist there no reason to put everything in one document. You could for example put the unnecessary details into a separate guideline where it can be quietly forgotten.

Of course, the essential detailed requirements could go into separate work instructions/forms/checklists instead of cluttering the procedure.

John

 

[pharmarton]

But include such information in the training manual for each position mean, create another level of documentation. The training requirements is only fullfill by the job description. your suggestion will be mean (correct me if I wrong) to redefine the job description and adding all training requirements/know how for each employee.
The company is trying to jump from old fashion 9000 to ISO TS, and by adding a new level of documentation I dont feel that will help in any way. The problem is, that nobody knows clearly how the things are done.
In the case of the clasification of supplier (what is done every year), They argued: 'By included 15 supplier in key supplier list, we covered the 90% of the purchase amount'
I dont see any problem in such clasification, I just suggest to the material manager to decide where he wants to reflect the criteria (meeting minutes, as a note in the AVL) what is happen now is they clasify the suppliers in two different types and nobody know which criteria and how is apply it).
thank you very much for your feedback, are very constructive indeed.
Pharmaton.

 

[John Broomfield]

But include such information in the training manual for each position mean, create another level of documentation. The training requirements is only fullfill by the job description. your suggestion will be mean (correct me if I wrong) to redefine the job description and adding all training requirements/know how for each employee.
The company is trying to jump from old fashion 9000 to ISO TS, and by adding a new level of documentation I dont feel that will help in any way. The problem is, that nobody knows clearly how the things are done.
In the case of the clasification of supplier (what is done every year), They argued: 'By included 15 supplier in key supplier list, we covered the 90% of the purchase amount'
I dont see any problem in such clasification, I just suggest to the material manager to decide where he wants to reflect the criteria (meeting minutes, as a note in the AVL) what is happen now is they clasify the suppliers in two different types and nobody know which criteria and how is apply it).
thank you very much for your feedback, are very constructive indeed.
Pharmaton.

Pharmaton,

In taking the process approach to develop your management system you are not concerned with job descriptions. By definition, processes involve several people so the procedure describes what a team does to fulfill process objectives.

What good are job descriptions? Better to avoid contradications (try never to duplicate a requirement in the system documents) and rely on procedures with work instructions as necessary.

Procedures and their work instructions can then be used to derive the specification for a person to fill a job title so this person has the necessary abilities, skills and knowledge (competence) to fulfill their roles in the applicable processes.

You need to work with managers to name the experts in each of your processes.

By working with the process owners you can accurately capture each process (in a deployment flowchart) including its interactions with supporting documents and other processes in the system.

For more on how search the Cove for SIPOC or contact me privately.

John

 

[D1nOnly]

Hi Marc,
I have been working in the Purchasing Dept. for 22 years and throughout my years with this company i have always considered my responsibilities as a Clerical Position. The Purchasing Dept. has bnever been compliant with how other Organizations run a Purchasing Dept.at least in today's world. Within the last 6 years this company went from having 250 + employess to about 100. I am the only one in the Purchasing Dept. and for the past 3 years find myself only generating PO's to pay after the fact invoices and the majority of them have been for services. In other words there hasn't been any orders for actual goods or interaction with any suppliers. The company was recently bought out and now new management have taken over and my manager is now requesting a Purchasing & Procedure Manual. I have worked with Oracle for the last 6 years up until October 2010 when the new company took and transitioned to SAP. Before we were bought out, a PO was generated for everything regardless of the dollar amount. Oppose to the new company who does not generate many PO's, everything is invoiced or paid with a corporate purchasing card. I am just learning SAP and have limited access to what i can do compared to Oracle that i was setup with manager access. Anyways, i don't know where to begin to put this manual together. I want it to be a simple manual with basic table of content and an introduction letter for each responsibility (ex: Creation of requisition, requisition approval, the generation of the PO, receipt process, invoicing, payment process) but at the same time I want it professionally written. I have searched the web but everything i found is too detailed and intellectually written. I am not looking to become the CEO of the company I just want to get my job well done. Is there anything you can recommend or provide... at least to get me started? Please advise. Thanks

 

[pharmarton]

The company for the last 5 years, is manufacturing only prototypes, and the numbers of suppliers was huge, in order to narrow the the number of controls and measurements for the suppliers, the company made this classification. But we don't have any formal process or instruction to prove this selection.

They use the definition;
Key Supplier: Those supplier with high volume of production or expensive parts Included Customer Specified Supplier.

Do you think that we have to identify in better manner the classification of such suppliers?
Thank you for your feedback.

 

[John Broomfield]

The company for the last 5 years, is manufacturing only prototypes, and the numbers of suppliers was huge, in order to narrow the the number of controls and measurements for the suppliers, the company made this classification. But we don't have any formal process or instruction to prove this selection.

They use the definition;
Key Supplier: Those supplier with high volume of production or expensive parts Included Customer Specified Supplier.

Do you think that we have to identify in better manner the classification of such suppliers?
Thank you for your feedback.

pharmarton,

Yes, your classification says little or nothing about the supplier's impact on your company's reputation.

Classify your suppliers so different selection criteria, monitoring and controls can be applied according to risk.

I have seen the following categories of supplier used according to their importance according to the following scheme:

Suppliers of goods or services that:

A. Become part of our product,
B. Otherwise affect the quality of our product, or
C. Are of no consquence to our product.

...are classifed A, B or C and are selected using the criteria specified (where A is the strictest and C is normal business practice).

The degree of monitoring and control of the supplier varies according the:

1. Status of the supplier (new, problematic, customer specified, excellent)
2. Importance of supplier (see A thru C above)

Additional controls may specified in the purchase order so they are contractually enforceable.

Customer specified suppliers may be problematic because of any perceived sense of entitlement. Key suppliers could also mean suppliers that are unique with no competitors. They can be problematic too. Critical suppliers without business continuity plans may also be considered key.

John

 

[Ettore]

...... Within the last 6 years this company went from having 250 + employess to about 100. I am the only one in the Purchasing Dept.

Could you please explain the Kind of production/service of the company?

.... new management have taken over and my manager is now requesting a Purchasing & Procedure Manual.

At what kind of System your manager have intentions to referring the contents of the manual ? Quality system? Occupational Health and Safety? Which others system?

.....ex: Creation of requisition, requisition approval, the generation of the PO, receipt process, invoicing, payment process) but at the same time I want it professionally written.

. .....but probably they have just asked for instruction about the use of SAP system in this case isn't sap Manual or Help enough?
What release of SAP have installed?

 

[gpainter]

I agree with Marc-KIS

A few questions, I have been out of the QMS for a time but remember the QMS is yours to help your company:

Do you have anyone else in the purchasing department other than the Materials MGR. that may have responsibilities?
Are all your suppliers "Key Suppliers" and do they need be?
How is cost evaluated?
Do you have probationary suppliers and how are they done differently?
Is your PO a form?
Do you have internal purchase requsitions?
Does everything go thru the MM?
Can a CAPA-1 be issued as a result of the weekly or Monthly reports?
Do you do any onsite audits of suppliers?

 

[gpainter]

The company for the last 5 years, is manufacturing only prototypes, and the numbers of suppliers was huge, in order to narrow the the number of controls and measurements for the suppliers, the company made this classification. But we don't have any formal process or instruction to prove this selection.

They use the definition;
Key Supplier: Those supplier with high volume of production or expensive parts Included Customer Specified Supplier.

Do you think that we have to identify in better manner the classification of such suppliers?
Thank you for your feedback.

If the Customer specifies a certain supplier that should be addressed in the SP

 

[michellemmm]

pharmarton,

Yes, your classification says little or nothing about the supplier's impact on your company's reputation.

Classify your suppliers so different selection criteria, monitoring and controls can be applied according to risk.

I have seen the following categories of supplier used according to their importance according to the following scheme:

Suppliers of goods or services that:

A. Become part of our product,
B. Otherwise affect the quality of our product, or
C. Are of no consquence to our product.

...are classifed A, B or C and are selected using the criteria specified (where A is the strictest and C is normal business practice).

The degree of monitoring and control of the supplier varies according the:

1. Status of the supplier (new, problematic, customer specified, excellent)
2. Importance of supplier (see A thru C above)

Additional controls may specified in the purchase order so they are contractually enforceable.

Customer specified suppliers may be problematic because of any perceived sense of entitlement. Key suppliers could also mean suppliers that are unique with no competitors. They can be problematic too. Critical suppliers without business continuity plans may also be considered key.

John

Excellent Post, as usual!!

Here is my

If we are looking for a "management system" we need to take a step back.... Why not use the PDCA (or DMAIC) approach at the management level?

If we try the PDCA approach, we need to start with planning phase. We need to DEFINE, re-DEFINE, and re-re-re-define... e.g.:
a) The classification of commodity
b) The classification of suppliers
c) The supplier development plan for custom/tooled parts
d) The companies plan to implement "mutually beneficial relationship" with outsourced partners. There are programs that could be implemented to activate the suppliers' conscientiousness towards the "quality" of services and align objectives.
e) ......
etc.

The "DO" phase is covered well. I would structure the document in to two levels. Level 1 to describe "what" and level 2 to describe "how". What is a management responsibility and how is the employee's responsibility...

The "Check" phase is to start with decomposition of quality objectives and factors/requirements and action plan that fulfill the quality objectives and setting "health monitor". There should be "macro" and "micro" measurement system that provides "the line of sight"...

The "ACT" phase should capture the system that collects "lesson learned" and prevent problems from recurrence.