Explain the procurement procedure in brief.

Ans. The procurement procedure has some steps that are given below:
Placement of order: after analysis of the quotations and appraisal of the vendors, the purchase department places the order on the vendor who offers the most advantageous terms. A common complaint often heard when the supply is rejected is ‘this is unfair, we were not told of this requirement when the order was placed’. Therefore, attention of details at the time of drafting of supply order saves many embarrassing and costly situations later when supplies start arriving.

Establishment of production: in the initial stages when the manufacture of the product is being established for the first time, the vendor may require lot of clarifications about the drawing and the specification. In some cases he may request for minor changes in the design and use of alternative material due to non availability of specified material. It should be taken as constructive suggestions to facilitate production and in some cases it may even result in improvement of the quality of the end product. After initial problems are overcome the vendor should asked to submit preproduction samples. If there are defects found, then the quality engineer may advise the vendor how to prevent the defects and improve the quality of the product. In such cases fresh preproduction samples will be called for and clearance of bulk production should be given only these sample units are found satisfactory.

Inspection of bulk supply: while the sources of supply of the product are being investigated, the quality control organization of the purchasing company would have formulated an inspection plan for the product and set up necessary test facilities. In the beginning the few lots are inspected completely. If the quality is found good, then use the sampling method, if quality is found low, then inspection stopped until the quality of the product improved. However an occasional sample should still be inspected to maintain some check on vendor’s quality control organization.

Quality record of purchased material: proper record of the quality of material received from various vendors should be kept in a manner that it can be referred when required in future. The quality problems experienced with the product and how they were overcome should also be recorded. In addition to the productive records, separate vendor performance folder should also be maintained. This will be useful in assessment of the vendor’s capability to execute future orders.