AL SHIFA HOSPITAL PVT.LTD.

STANDARD OPERATING PROCEDURE

ASH/PRCHSE/SOP-11

INDEX
SL. NO. PARTICULARS PAGE NO.
1 PURPOSE 2
2 SCOPE 2
3 RESPONSIBILITY 2
4 PROCEDURES 3-11
i. Reasons for purchase
ii. Collection of quotation
iii. Replacement of existing Item
iv. New Purchase
v. Purchase committee
vi. Purchase order preparation
vii. Evaluation of suppliers
viii. Approval of purchase order
ix. Ordering the material
x. Local purchase
xi. Receiving and accepting goods
xii. GRN entry
xiii. Documents verification
xiv. Storage of goods
xv. Tracking of goods
xvi. Stock updating
xvii. Stock verification
xviii. Stock maintenance
xix. Expiry checking
xx. Material issue
xxi. Returning of materials
xxii. Disposal of damaged or expired items

5 PROCEDURE FOR CONTROL OF RECORDS 12

6 ANNEXURES
1. ORGANIZATION CHART - Organization
chart (ASH/ADM/HRD-09) Revision no.:01,
revised on 01/01/2012has attached as annexure-1
2. ACTIVITY FLOW CHART-1
(ASH/PRCHSE/FCHRT-10)
3. ACTIVITY FLOWCHART-2
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STANDARD OPERATING PROCEDURE
ASH/PRCHSE/SOP-11

(ASH/PRCHSE/FCHRT-11)
4. APPROVED LIST OF SUPPLIERS
(ASH/ADM/STR-03)
5. SUPPLIER EVALUATION
REPORT(ASH/ADM/STR-05)

1. PURPOSE

To lay down a procedure for purchasing and to evaluate suppliers, rate and develop
them so as to select suppliers on the basis of their ability to meet the quality requirements.

2. SCOPE

This procedure covers,

a) Purchase of items such as Equipments, Instruments, Furniture, Office Stationary, Spares,

and Consumables.
b) Registration of Potential suppliers
c) Evaluation and development of existing suppliers.

3. RESPONSIBILITIES

Collection of quotation Purchase Assistant

Preparation of purchase order Purchase Manager

Approval of purchase order Managing Director / Finance Director

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STANDARD OPERATING PROCEDURE
ASH/PRCHSE/SOP-11

Evaluation of suppliers Purchase Manager

Storage of items Store Incharge

4. PROCEDURES

1. Reasons for purchase

An item purchase request is raised with different intentions such as :
A new item to replace an existing obsolete /damaged item.
An item which is already in use but additional ones are needed to meet the
complete requirement.
A new item to facilitate a function that was done manually/ not done till date.

2. Collection of quotation

a) A user/user department raises a request for an item, which shall be furnished with the
proposed use, users, functional specifications, safety specifications if required, as well
as the brands available in certain cases.
b) The purchase manager scrutinizes the requirement in terms of cost, criticality of the
requirement, quality of product, service and spares availability, vendor/supplier
status, and initiates the communication with the vendors. Where the cost comes
within his authorization for initiating purchase orders, he initiates the process. Where
the cost exceeds his authority to decide, he puts it up to the purchase committee and
finance department to decide.

3. Replacement of an existing item:

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If the intention of purchase is replacement of an item which was in use, the

condemnation note is verified. If the condemnation note is not submitted, it is
prepared.
The condemnation note is submitted to the condemnation committee. If the
committee approves, and gives it in writing, then the purchase manager proceeds with
the purchase order. If the committee rejects condemnation, then the user is informed
the same, in writing explaining this as the ground of denial in purchasing the
requested item.
4. New purchase:
Where the item is a new purchase, the specification report is put for approval from the
purchase committee. The committee considers the requirement for discussion in the
meeting thereafter convened, scrutinizes the requirement against set parameters and
accepted practices, and if found necessary, approves the requirement. The purchase
manager subsequently prepares the purchase order. If the committee rejects the
requirement then the user is informed the same, in writing explaining this as the
ground of denial in purchasing the requested item.

5. Purchase committee
The purchase committee Members are,
1) Medical Equipments and Machineries
1) Managing Director / Finance Director
2) Purchase Manager
3) Store Incharge
4) Biomedical Engineer
5) End user / Indenter

2) Maintenance & Electrical Equipment and Machineries

1) Managing Director / Finance Director
2) Purchase Manager
3) Store Incharge
4) Maintenance Engineer
5) End user / Indenter
6. Purchase order preparation

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STANDARD OPERATING PROCEDURE
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a) Purchase Manager prepares the purchase order.

b) Purchase order is placed only for suppliers from the approved list.
c) Purchase order contains the following information
Clear description of goods/services to be procured
Quantity rate and value
Requirement of test certificates, if any
Delivery schedule
Mode of dispatch and payment terms
Inspection clauses
d) Purchase order is verified and reviewed for its completeness by Finance Director if the
cost exceeds Rs 10,000 and then approved by CMD.
e) Copies of purchase order are distributed to Stores and Accounts Departments.

7. Evaluation of suppliers

a) The Store Incharge makes a note about the quality of the product and delivery
performance of the vendor for Vendor rating.
b) The supplier is evaluated once in six months with reference to the Vendor Evaluation
Rating Criteria.
Existing suppliers are evaluated based on their past performance generally according to
the following parameters
Quality Rating (QR) = Quantity / No. Accepted
80 = 80 Max.
Quantity / No. Supplied
Delivery Rating (DR) = 10/15/20 = 20 Max.
20 = Supply total quantity of materials on or before the agreed date.

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15 = Supply total quantity/number of materials within 7 days from the expiry of agreed
date.
Those who score (QR+DR) equal to or greater than 70 will find a place in the
approved list.
Those who score less than 70 require action for improvement.
Purchase Manager gives guidance to the suppliers to improve their performance.
After taking corrective measures these suppliers are evaluated again.
If the score is below 70, the names of such suppliers are removed from the
approved list.

c) If the supplier is found acceptable, then the supplier is included in the Approved Vendor
List.
d) If the supplier is not acceptable, the same is informed to the supplier through a letter.
e) Stores Incharge maintains the details of the delivery performance of the vendor such as
quality supplied, actual date of delivery and quantity accepted through Delivery challan.
f) The details are recorded in the Vendor Rating Form.
g) The acceptance rate is calculated as explained in the Vendor Rating Form.
h) Based on the Vendor Rating, the decision regarding the acceptance or removal of the
supplier from the Approved Vendor List is made by the Store Incharge, with the approval
of Managing Director.
i) The Store Incharge prepares the approved vendor list after vendor rating.
j) The list of approved suppliers is updated once in six months.
k) The vendor rating is also communicated to the supplier by the Stores Incharge.

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STANDARD OPERATING PROCEDURE
ASH/PRCHSE/SOP-11

1) Approval of purchase order

a) After preparing the purchase order it shall be submitted to FD for verification.

b) After verification that will be transferred to CMD for the approval.
c) Where purchasing cost is less than Rs 10,000/-, the purchase order will be approved by
the Purchase Manager himself.
d) Approved purchase order will be sent to the supplier or manufacturer.

2) Ordering the material

a) Materials are ordered by the Purchase Manager.
b) Orders are placed through the phone/mail/direct/courier.
c) In case of costly items order shall be given directly to the vendor/supplier.

3) Local purchase
a) Local purchases are done for less value and less quantity items.
b) In case of emergency also local purchases are done.
c) A fixed amount shall be kept in hand as cash by the Purchase Manager.
d) Local purchases are done from that cash and the bills are submitted to the Accounts
Department.
e) The expense amount is reimbursed from the accounts department.
f) The amount is by the Purchase Manager.

4) Receiving and accepting goods

a) At the time of receiving materials, all the documents like Challan, Invoice, Purchase
order, Tax receipt of check posts (if applicable) etc. are checked in order to ensure the
same are tallied with all the terms and conditions of Purchase Order, Quantity, Quality,
Bill Amount, Warranty/Guarantee Certificate etc.
b) Necessary Test Reports are received for the materials, which require such test reports are
checked by the Purchase Assistant.

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STANDARD OPERATING PROCEDURE
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c) The quality of all received items including Equipments, pre printed stationary etc. are
checked and makes sure that they are up to the standard.
d) In case of chemicals, expiry date & condition of package are checked.
e) After verification, the items received are taken into the stock and computer stock is
updated.
f) The items are placed on its proper places and issues having expiry on first in first out
basis (FIFO).
g) In case of furniture & fixtures the quality of the items like gauge of the sheets used, types
of wooden materials used, painting quality, lock and key etc. are checked.

5) GRN entry
a) Once the material is accepted Goods Received Note (GRN) is entered based on the type
of material.
b) There is separate provision in software for GRN entry.
c) Purchase assistant ensures whether the material is an asset item or consumable item.
d) Entry is made based on that.
e) Following columns are filled by the Purchase Assistant.
(i) Serial number
(ii) Product name

6) Documents verification

a) Goods receipt note is attached to the in warded documents and the bill send for
verification to the Purchase Manager / Assistant HOD.
b) Assistant HOD, after verifying the documents posts the items to stock.
c) After the verification the Assistant HOD / Assistant Purchase Manager sends the bills to
the Purchase Manager for passing the bill for payment to Accounts Department.

7) Storage of goods
a) Store Incharge is responsible for the storage of goods.
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STANDARD OPERATING PROCEDURE
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b) Accepted materials are taken into the stock and to be placed in proper location.
c) Temperature controlled items are stored at the specified temperature.
d) Chemical shall be stored in separate place.

8) Tracking of goods
a) Storage place is labeled for each item.
b) Goods items list is hanged on every rack.
c) Goods are arranged in alphabetical order in each shelf.

9) Stock updating
a) Stock updating is done by the Store Incharge.
b) Only verified stock is entered in to the stock.
c) Inward stock shall be kept in under inspection area.
d) Store Incharge verifies and signs the inspected items documents and that shall be
forwarded to the Purchase Manager for further verification and submission to Finance
Department for payment.

10) Stock verification

a) All received goods are kept under inspection.
b) Store keeper verifies all the items.
c) Any damaged or mismatching items are rejected.
d) Rejected items are transferred to the rejected items area.

11) Stock maintenance

a) Store Incharge is maintains the stock level.
b) Store Incharge takes necessary stock reports periodically and counter verifies the physical
stock with system stock.
c) He monitors the re-order level and gives proper intimation to purchase in charges for
material to be procured on daily basis.
d) The items, which are very urgent in nature, are intimated to the Purchase Manager
immediately on getting the request from the indenter.

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STANDARD OPERATING PROCEDURE
ASH/PRCHSE/SOP-11

e) Minimum stock level shall be maintained for the short period stable materials.
f) Physical verification of stock is carried out and the periodicity of the verification is in
accordance with the classification of the items.

i. Item A- High value items- every month

ii. Item B- Moderate value items- once in 2 months
iii. Item C- Low costs items- Once in 3 months

12) Expiry checking

a) Store Incharge assigns the staff for expiry checking.
b) Expiry of items is checked at the end of month.
c) Entire items are checked for out of date.
d) Before opening new kit/reagent, expiry is checked.
e) Near expiry items are send back to the supplier.
f) The period of near expiry shall be defined and prefixed.

13) Material issue

a) Ready stock items are issued to the indenters based on their indents within the time limit.
b) Materials are issued on FIFO basis.
c) Old stock/useless items are removed from the storage place.
d) Materials are issued based on the consumption of the end user.
e) Consumption patterns are monitored periodically and proper alerting measures to be
taken on that department, to avoid improper utilization.
f) Reports which are essential to monitor the consumption pattern are taken periodically.

14) Returning of materials to stores

1. If any material is returned to stores by departments, the materials received are visually
inspected, received and the Stock Register is up dated.
2. The reason for return of material is specified in Stock Register.

15) Disposal of damaged or expired items

a) Damaged and expired items are disposed in time.

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STANDARD OPERATING PROCEDURE
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b) Disposal is done with the permission of Managing Director.

c) Near expiry items are replaced from the supplier if possible.

1. PROCEDURE FOR CONTROL OF RECORDS

SL NO. RECORDS NO.

1 Purchase Indent ASH/ADM/STR-01
2 Local Purchase Order(Large) Comparative Statement ASH/ADM/STR-02L
3 Local Purchase Order(Small) ASH/ADM/STR-02S
4 Approved List of Suppliers GRN ASH/ADM/STR-03
5 Supplier Capability Report ASH/ADM/STR-04
6 Supplier Evaluation Report ASH/ADM/STR-05
7 Comparative Statement ASH/ADM/STR-06
9 Electronic Media Records are maintained for GRN and Stock Register.

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