DMF0003(0)

PURCHASING C ONTROL
Code: DMPS - 06

Revision

Edition

C ONTENTS
1. PURPOSE.........................................................2
2. SCOPE..............................................................2
3. DEFINITIONS, ABBREVIATIONS......................2
4. REFERENCE.....................................................2
5. RESPONSIBILITIES...........................................3
6. PROCEDURE....................................................4
7. DOCUMENTS, RECORDS.................................7
8. APPENDIX........................................................8

DAEWOO MANGALIA HEAVY INDUSTRIES S.A.

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DMF0003(0)

PURCHASING C ONTROL
Code: DMPS - 06

Revision

Edition

1. PURPOSE
This procedure establishes the outstanding activities necessary to ensure that
purchased product conform to specified requirements. Its purpose is to achieve the
cost saving and quality improvement through timely supply and to enhance our
Companys international competitive power.

2. SCOPE
The procedure applies to the purchasing activities of the materials and equipment for New
Shipbuilding and ShipRepair in Procurement Department.

3. DEFINITIONS, ABBREVIATIONS
3.1. Purchasing contract a juridical document concluded between Customer and
Subcontractor, which specifies the financial, administrative, technical and quality
clauses of a product or a service. It covers the control both of non-materials,
which are to be offered by the subcontractors, such as drawings, certificates, test
reports, instruction manuals and the materials and equipment.
3.2. Specification document stating requirements.
3.3. Purchase Order Requisition P.O.R. - document, which specifies and defines the
material needs (name, code, characteristics, amount, time of delivery, reasons of
demand, price, the applicable quality requirements).
3.4. P.O.S. Purchase Order Specification
3.5. P.N.D. Production Need Date
3.6. Order Confirmation Sheet document establishing the subcontractor and
including the others purchasing data of the material specified in P.O.R.:
suppliers data, unit of currency, exchange rate, total amount, items.
3.7. P.O. Purchase Order.
3.8. GSI General Stock Items

4. REFERENCE
4.1.
4.2.
4.3.
4.4.

Evaluation and Registering Control Procedure for Subcontractors, cod DMPA- 121.
Handling and Storage Control Procedure, DMPS - 15.
Receiving Inspection Procedures.
Source Inspection Procedure, code DMPA-322

5. RESPONSIBILITIES
DAEWOO MANGALIA HEAVY INDUSTRIES S.A.

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DMF0003(0)

PURCHASING C ONTROL
Code: DMPS - 06

Revision

Edition

5.1. PROCUREMENT DEPARTMENT

The manager is responsible for:
5.1.1. Purchasing the materials/equipment specified in Purchase Order
Requisition (P.O.R.) from approved subcontractors and after the approval
of Order Confirmation Sheet (DMF0073).
5.1.2. Establishing the purchasing plan to ensure that purchased product
conforms to production schedule.
5.1.3. Establishing the channels for communication and interfaces with the
subcontractors organization for the feedback system.
5.1.4. Assuring the feedback information system with the Design Departments,
Engineering Teams, Production Planning & Control Departments, QA/QC
Department, Production Departments.
5.1.5. Analyzing and approving the purchasing orders/contracts.
5.1.6. Informing Production Planning and Control Division and Ship Repair
Division about necessary purchasing times to be considered in drawing up
of production schedules, when it is necessary.
5.2. MATERIAL CONTROL DEPARTMENT
The manager is responsible for:
5.2.1. Carrying out the quality receiving inspection of purchased products, in
accordance with proper procedures.
5.2.2. Arranging the
procedure.

source

inspections

according

to

source

inspection

5.2.3. Sending to the Purchasing Department the information regarding the

subcontractors quality performances.
5.3. DESIGN DEPARTMENTS
The managers are responsible for:
5.3.1. Preparing the materials/equipment specification (POS).
5.3.2. Where changes, updating the materials/equipment specification.
5.3.3. Supplying of all necessary drawings to Purchasing Department.
5.3.4. Completing and modification the Purchase Order Requisition (P.O.R.).

5.4.

SHIPREPAIR DIVISION

DAEWOO MANGALIA HEAVY INDUSTRIES S.A.

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DMF0003(0)

PURCHASING C ONTROL
Code: DMPS - 06

Revision

Edition

5.4.1. Production Departments Managers are responsible for necessary material

preparing according to the specification.
5.4.2. Operation Department managers is responsible for POR preparing for the
shiprepair vessel and establish of PND according to production schedules
and sending the POR to Procurement Department.
5.5. PRODUCTION PLANNING DEPARTMENT
The manager is responsible for:
5.5.1. Completing in the POR the production need date (PND) for materials and
transmitting it to the Procurement Department.
5.5.2. Considering the necessary purchasing times for different types of
materials (such as pipes, shafts, etc) when drawing up production
schedules.
5.6. Q.A./Q.C. DEPARTMENT
The manager is responsible for:
5.6.1. Establishing and revising this procedure.

6. PROCEDURE
The purchasing activity contents the following stages:
6.1. Completion of Purchase Order Requisition
A. New Building:
Design Departments prepare two copies of P.O.R. that should content the
following purchasing data:
6.1.1. The type, class, grade, code, number or other precise identification.
6.1.2. The title or other positive identification and applicable issue of
specifications, drawings, process requirements, inspection instructions and other
relevant technical and quality data, including requirements for approval or
qualification of product, procedures, process, equipment and personnel.
6.1.3. The design quantity for a product, total and unit weight.
6.1.4. The reason of requirement, the work package number;
The require reason is specified in P.O.R.: it is a new one, it is a change or a
cancel of an old one.
Attached to the P.O.R. there are supplied all valid drawings necessary for
purchasing process.

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DMF0003(0)

PURCHASING C ONTROL
Code: DMPS - 06

Revision

Edition

After completion of P.O.R., design department has to send one copy to

Production Planning Department.
B. Shiprepair:
Production Departments - necessary material preparing according to the
specification and issuing them to Operation Department.
Based on the necessary material, Operation Department prepares POR.
6.2. Decision of production need date (P.N.D.)
For New Building - The Production Planning Department shall lay down the
production need date of materials and equipment according to schedule and send
it to Procurement Department.
For Ship Repair The Operation Department shall lay down the production need
date of materials and equipment according to the production schedule and send it
to Procurement Department.
6.3. Settlement of purchasing quantity
The Procurement Department shall settle in P.O.R. the purchasing quantity after
reviewing the status of stocks.
6.4. Selection of subcontractors
The subcontractors evaluation is done according to Evaluation and Registering
Control Procedure for Subcontractors, cod DMPA- 121.
6.4.1. P.O.R. is completed with the stock quantity, the purchasing quantity, the
estimate negotiation period and is reviewed by purchasing section chief
and department manager and approved by Division Director.
6.4.2. After P.O.R. approval, Procurement Department shall send the related
material specification with Inquiry Sheet DMF0072, (if is nesessary) to
more than three companies (except where is an only subcontractor).
Within required response date, the companies that received the inquiry
should submit their quotation, specification, reference records, etc.
6.4.3. The Procurement Department relays the subcontractors technical proposal
to the Design Departments for technical evaluation.
The Procurement Department prepares the Order Confirmation Sheet
(DMF0073). Order Confirmation Sheet is, mainly, prepared before
purchasing, but the approval after purchasing is possible in case of
purchasing from overseas companies and in case of urgent material and
equipment purchasing.

DAEWOO MANGALIA HEAVY INDUSTRIES S.A.

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DMF0003(0)

PURCHASING C ONTROL
Code: DMPS - 06

Revision

Edition

The subcontractors are selected in consideration of the result of technical

and economical evaluation, of the efficiency, of the quality control and
quality assurance system.
6.5. The Purchase Order
After selecting the subcontractor, Procurement Department shall to draw up the
purchase order, which is approved by the manager of Procurement Department
6.6. Purchase Contract
6.6.1. Content of contract
The content of contract shall specify clear data such as technical
characteristics, quantity, yard need date, applicable issue or specifications,
inspection instructions, requirements for approval or qualification, quality
assurance requirements, in accordance with P.O.R. and POS.
6.7. Verification of purchased product
Verification of purchased product is carried out according the Material
Receiving Inspection Procedure, drawn up by material receiving inspection
teams.
Where specified in the vessels contract, the Client or his representative shall be
afforded the right to verify at the subcontractors premises and in Daewoo
Mangalia Heavy Industries S.A. that the subcontracted product conforms to
specified requirements. Such verification shall not be used by supplier as
evidence of effective control of quality by the subcontractor.
Verification by the Client shall not absolve the supplier of the responsibility to
provide acceptable product, nor shall it preclude subsequent rejection by the
Client.
The storage of the purchased product is carried out according Handling and
Storage Control Procedure for Material, code DMPS 15.
6.8. Changes of purchasing information
6.8.1. P.O.R. are modified only by or with written approval of in charge
department which prepared the POR.
6.8.2. Subcontractor who performs the order is notified at once about any order
or drawing change; if drawing changes took place, valid revisions of
drawings should be sent to subcontractor.
6.8.3. The treatment of change and cancellation of specification

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DMF0003(0)

PURCHASING C ONTROL
Code: DMPS - 06

Revision

Edition

Where changing or cancellation of specification, the content of contract

shall be changed or cancelled too, on the basis of the new P.O.R.

7. DOCUMENTS, RECORDS
7.1. The purchasing documents are drawn up, completed and distributed as follows:
A. New Building:
POR

Design Dept.

Production Planning

Changes

P.N.D
.

Stock
review

Purchasing
Section

Inquiry, Order Confirmation Sheet

Subcontractors

Purchasing Section

Purchasing Order

b. Ship Repair:
Production
Departments

Nec. mat.

Purchasing
Section

Operation Department P.OR.

P.N.D.

Purchasing
Section

Stock
review

Inquiry, Order Confirmation Sheet

Subcontractors
Purchasing Order

7.2. Inquiry Sheet - is drawn up by Procurement Department and sent to the

subcontractors in order to receive quotations and tenders.
7.3. Order Confirmation Sheet - is drawn up, approved through, filled in and retained
by Procurement Department.
7.4. Purchase Order (P.O.) - is approved by Procurement Department manager and it
is sent to the subcontractors; a copy is retained by Procurement Department.
7.5. The purchasing contract is received in two copies from the subcontractors, it is
reviewed in order to resolve all the differences between the contract and the
order, it is approved by the Procurement Department manager and one copy is
sent back to the subcontractor.
7.6. During receiving inspections, the person in charge from Procurement Department
has to present to the inspectors team the purchasing documents: P.O.R.,
technical specification, P.O/contract to be checked the conformity of products.

DAEWOO MANGALIA HEAVY INDUSTRIES S.A.

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DMF0003(0)

PURCHASING C ONTROL
Code: DMPS - 06

Revision

Edition

8. APPENDIX
8.1. Flow chart
8.2. Forms: - P.O.R. - Purchase Order Requisition, code DMF0071/1/2 (for New
Building, exclusive GSI materials)
8.3. Status of POR code DMF0490 for GSI mat. and Shiprepair
8.4. Order Confirmation Sheet, code DMF0073.
8.5. Purchase Order -P.O., code DMF0074
8.6. Inquiry Sheet, code DMF0072.

DAEWOO MANGALIA HEAVY INDUSTRIES S.A.

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