Data aggregation includes the all related data relating to purchase as well as production of the organization.

The data related to the material specification as well as the data related to the suppliers of materials also accumulated under this procedure. On the basis of these data the purchase department will fix a strategy for purchase of materials. Next job for the purchase department will be selecting the source of materials. In other words, department should select the source of the material.

The term procurement means acquiring all types of goods (both scaled and nonscaled), such as equipment, stores, spares, technical literature, etc., as well as all types of services, including packing, unpacking, preservation, transportation, insurance, delivery, special services, leasing, technical assessment, consultancy, systems study, software development, maintenance, updates, PROCUREMENT:

Procurement deals with some important points such as: a. b. c. d. e. f. Price Reduction Right Vendor / Source Team Work Moral Boosting Inventory Management High Quality Material

FLOW CHART OF PROCUREMENT PROCESS:

INDENT

VENDOR SELECTION

ENQUIRY / REQUEST FOR QUOTATION

RECEIVING QUOTATION

PROCESSING QUOTATION

a. b. c. d. e.

Tabulation Clarification, if any Negotiations Recommendations User approval

RAISE THE PURCHASE ORDER

FOLLOW UP WITH SUPPLIER

PURCHASE REQUISITION: It is used to request the purchase department to procure materials, spare parts, equipments or services. Purchase requisition contains some essential information: a. b. c. d. e. f. Indent number and date Department Description of requirements Part number and Store code number Date when the material is required Date and signature of the indenter in necessary

VENDOR SELECTION: Purchase department select suppliers, supplying material, goods and services as per the following requirement: a. b. c. d. e. f. Technical capability Manufacturing capability Past performance Financial strength Total quality management Ethics

Vendors are graded based on the following ratings: GRADE Above 90% 90% to 80% 80% to 60% Below 60% RATING A B C D

At the end of every assessment year: a. D class supplier are removed from approved supplier list. b. B &C shall be intimated to improve on their quality by purchase department. c. In case of registering a new vendor, they are assessed based on track record with other companies / factory visit / trail order etc. d. After approval, trail order is given to new vendor. Then, testing is done after receipt of the material and then vendor name is included in approved vendor list.

SELECTION & PERFORMANCE REVIEW OF SUPPLIER: a. Periodic review of the performance of existing supplier is done by Head of Department (HOD). b. Potential suppliers for quality critical items are identified on the basis of published information, personal contact, information available or any other sources. c. Trial purchase order is given to supplier in consultation with the user department. d. Supplier performance is monitored through: 1. Delivered product quality 2. Delivery schedule performance e. In case of spares, consumable and general items (other than iron ore & coal), quality rating and delivery rating is done as per the following formula: Quality rating, R1 R1 = (Q1/Q) Where, Q1 Q = Quality accepted without deviation = Quality received (with & without deviation + rejected)

Delivery Rating, R2 R2 = (PO Delivery Schedule / Actual delivery time) ACTUAL PERFORMANCE RATING = ( 0.7 X R1 + 0.3 X R2 )

Range of Performance rating and course of action: 1. 90% & Above : Grade A 2. 90% to 80% : Grade B 3. 80% to 70% : Grade C Alarming 4. Less than 70% for second time : Rejected

IMPROVING VENDOR PERFORMANCE: a. This process in implemented for improving vendor performance. b. Every quarter, performance of all vendors are reviewed. c. Vendors whose performance turns to low, will be informed to improve the performance. d. Technical discussion is done with the vendor of the quality defects and laying down on action plan to improve the quality. e. As per the requirement there may be visits to the vendor works, and suggest the improvement methods to overcome the rejections to enable the vendor to achieve 100% rating. f. Visit to the vendor premises is done by Quality Assurance / Purchase / User Department.

DELETION AND RE-REGISTRATION OF SUPPLIER: Deletion and re-registration is done through 3 methods:a. Past Performance Method: This method is used for existing supplier who have been supplying over a period of time and their performance has been found satisfactory. b. Selection Method: Vendor registration questionnaire is send to supplier for assessing their capability. After receiving vendor registration questionnaire from supplier decision is taken to visit their premises or not, for ascertaining the correctness of information furnished by them. If visit is required found, then a techno commercial team is arranged to visit their premises. Techno commercial team includes Purchase / Quality Assurance / User department members. If visit is found satisfactory, trial order is given to supplier to verify quality of supplied products. If visit is not required, then also trial order is given to supplier to verify the product quality. If quality of supplied product, as per Quality Assurance / User Department is found satisfactory. Then supplier name is included in Approved Supplier list. In case, quality of supplied product, as per Quality Assurance / User Department is not found satisfactory. Then supplier name is not registered. However another trial order is given in consultation with Quality Assurance / User Department.

c. Reference Method: Supplier should be recommended based on user experience. Analysis should be done through field and market survey. Supplier has a well established Quality Assurance System certified under ISO 9000 or any other recognised Quality Assurance System. If approved, trial order is placed when required. If quality of supplied product, as per Quality Assurance / User Department is found satisfactory. Then supplier name is included in Approved Supplier list. In case, quality of supplied product, as per Quality Assurance / User Department is not found satisfactory. Then supplier name is not registered. However another trial order is given in consultation with Quality Assurance / User Department. d. Recommendation Method: Head of Purchase or Head of User can recommend the supplier to be approved, but it is to be approved by Head of Quality Assurance.

ENQUIRY / REQUEST FOR QUOTATIONS:

After selection of supplier, Purchase Department raises the enquiry to the selective supplier within 3 days from receipt of Purchase Requisition. Request for quotation includes following information: a. b. c. d. Full description of material Name and address of supplier Due date of receiving quotation Number of quantity required

RECEIVING QUOTATIONS:
Quotation is received from different suppliers (approx 7 days).

TABULATION: following basis:

Evaluation of quotation is done of different suppliers on the

Rate Terms of condition Payment terms Mode of Transportation

This evaluation is done in Microsoft-Excel software, is called Comparative Statement.

NEGOTIATION:

ORGANIZATIONAL CHART ( PURCHASE DEPARTMENT )

C.P Singh (G.MCommercial)

Dipayan Ghosh (Sr.Manager) Umesh Agarwal (Sr.Manager) Jayanta Panda Amiya Padhi

Srinivas Rao (Sr.Manager)

Sarwar Usmani (AGM)

Sanjeev Pothal

Niraj Kumar Pratap Rourtray

Mohan Mishra Rakesh Kumar

Tushar Deepak

Keshabh Rajeev Sourav

Power PLant DRI 1&2 CHP Crusher 1&2 Utility QA Environment ISO Audit For All Units: Lubricant Bearings

All units Refractory SMS-1&2 (Mech.) Oxygen Plant MIS Report

MBF Sinter Plant Coke Oven FAD Automobile Railway Sidings For All Units: Conveyor Belt Ceramic Blanket Local Logistic

Rolling Mill (Mech.)-1&2

Stores Stock Items Stationary & Printing Items HDPE Bags Admin.

All Units Plant Electrical