Purchasing Procedure

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PREPARED BY APPROVED BY
NO. NO. DATE HISTORY BY REVISED

1.0 PURPOSE
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To purchase goods from capable suppliers at the lowest possible cost, consistent with the quality
needed and delivery requirements, to meet the required standards established and approved by
the Top Management of Silca.

To obtain the best total value consistent with the operational needs.

2.0 SCOPE

This procedure is applicable to the proper and prompt procurement of goods conforming to the
specified purchase requirements and in accordance to the Quality Management System Standard
(ISO 9001).

This procedure covers from the requisition up to the delivery of the material to the using section.

3.0 DEFINITION OF TERMS

3.1 Purchase Order - a document that clearly describe ordered products, it

includes precise identification of the product and other
relevant technical data and compliance of the requirements

3.2 Major Materials - major item materials to be directly used in the project

3.3 Minor Materials - auxiliary materials that can be purchased to outsource

supplier

3.4 Emergency Order - urgently needed materials that can be purchased to

outsource supplier, to remedy or lessen the harmful effects
of any actual or threatened occurrence which may interfere
with the conduct of normal business operations

3.5 Qualified Supplier - selected supplier acquired through supplier selection

process

3.6 Nominated Supplier - existing approved supplier of the client

3.7 Outsource Supplier - approved supplier of supplementary materials of VMIS

3.8 Sales Invoice - a document that itemizes charges for the purchase of
supplies, materials, equipment or services which have
been furnished; it is the means by which the vendor informs
the seller of its obligations and should contain the same
basis information as the purchase order

3.9 Petty Cash - relatively small amount of cash kept at hand for making
immediate payments for miscellaneous small expenses

3.10 Using Section - the requesting section of a company where the product
ordered will be utilized within their work area

4.0 REFERENCE DOCUMENTS

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4.1 Quality Manual

4.2 Control of Records
4.3 Control on Non-Conforming Products and Services Procedure
4.4 Corrective Action Procedure

5.0 SAFETY REQUIREMENTS

Not Applicable

6.0 EQUIPMENT AND MATERIALS

6.1 Computer
6.2 Telefax Machine
6.3 Filing Cabinet
6.4 Folders/Envelopes
6.5 Logbook

7.0 PROCEDURAL FLOW

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RESPONSIBLE Start REFERENCE

Material Requisition
Requesting Section Receives Material Request Form

Purchasing Supervisor Verifies Material Material Requisition

Requisition Form

Material Requisition
Purchasing Supervisor Identifies Classification of
Form
Item

Purchasing Supervisor Identifies Appropriate Masterlist of Nominated

Suppliers Suppliers (PUR4-001)
Masterlist of Outsource
Suppliers (PUR4-002) &
Purchasing Supervisor Selects from List of Masterlist of Qualified
Suppliers Suppliers (PUR4-003)

Prepares and Submits Purchase Order Form

Purchasing Supervisor
PP
Purchase Order for Review (PUR4-008)
and Approval

Purchase Order Form

Sends Purchase Order to
Purchasing Supervisor
SENDS
Supplier
(PUR4-008)

Confirms Date of Delivery Purchase Order Form

Purchasing Supervisor
SENDS
and Mode of Payment (PUR4-008)

Purchase Order Form

Finance Supervisor Requests for Payment (PUR4-008)

Delivery Receipt and

Warehouse Section RECREIVE
Receives Delivery
Sales Invoice

Purchasing Supervisor Logbook

Records Delivery

End

8.0 PROCEDURE
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8.1 Requisition of Material

8.1.1 Requisitions shall originate in the user department at the level where the purchase is
to be used and proceed to the designated approval authority prior to being sent to
the Purchasing Supervisor.

8.1.2 Requisitions must be prepared far enough in advance to permit the Purchasing
Supervisor to obtain competitive prices and to allow sufficient time for deliveries to
be made. It is mandatory to indicate a delivery date on each requisition to indicate
the need or desire for delivery within a specified period of time.

8.1.3 After recognizing the need, the requesting section shall make a requisition using
the
Material Requisition Form (PUR4-004).

8.1.4 All the details of the required item shall be specified (quantity, description, date
required and the specifications if necessary).

8.2 Verification of Requested Item

8.2.1 The Purchasing Supervisor shall coordinate with the requesting section to verify the
required item(s).

8.2.2 The material shall be identified if it is considered as a major component, a purchase

order is required to facilitate the provision of the material.

8.2.3 The material shall be considered minor item wherein it can be purchased to
outsource suppliers by petty cash in cases as:

8.2.3.1 Minor Purchases

8.2.3.2 Emergency Order
8.2.3.3 Supplementary Materials

8.3 Selection of Supplier

8.3.1 The Purchasing Supervisor shall select supplier from the Masterlist of Nominated
Suppliers, Qualified Suppliers or Outsource Suppliers approved by the Top
Management.
Note : The Purchasing Supervisor shall conduct the selection and qualification of
supplier using Supplier Accreditation Form (PUR4-007). The passing score is 10
and above and shall be included on the list of Qualified Suppliers. And to monitor
the performance of the Qualified Supplier a once a year supplier’s evaluation shall
be conducted (PUR4-010) with a minimum of 4 points to retain its accreditation .

8.4 Preparation of Purchase Order

8.4.1 In cases where technical equipment, specifications, plans or design are involved, the
department concerned will indicate their requirements and the Purchasing
Supervisor shall coordinate to the Concerned Section prior to the issuance of a
Purchase Order or contract.
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8.4.2 The Purchasing Supervisor shall prepare the Purchase Order indicating all the details
which include the brand, quantity, description, terms of payment, date of delivery
and the specifications if necessary.

8.4.3 The Purchase Order shall be submitted to Top Management for approval.

8.4.4 Upon approval, the Purchasing Supervisor shall send the purchase order to the
selected supplier through electronic mail (e-mail) or fax and confirms the
acknowledgement of the supplier.

8.4.5 In case of change and/or cancellation of item and/or quantity, a change order shall
be prepared by the Purchasing Section. A new Purchase Order shall be sent to the
supplier indicating the changes made. The former Purchase Order shall be marked
“cancelled”.

8.5 Payment

8.5.1 Upon confirmation of the date of delivery, the Purchasing Supervisor shall request
for the payment to the Finance Section.

8.5.2 Payment shall be made according to the terms specified in the Purchase Order or
contract. It shall depend on the following terms of payment agreed:

8.5.2.1 COD (Cash On Delivery)

8.5.2.2 PDC (Post Dated Check)
8.5.2.3 Full Payment Before Delivery ( prepayment is required)
8.5.2.4 On Account (as per billing date)

8.6 Delivery

8.6.1 The Purchasing Supervisor shall confirm the expected date of delivery to inform the
receiving section to prepare the storage area.

8.6.2 The material delivered shall be received and inspected by the receiving section to
check conformity to the requirements.

8.6.2.1 Inspection and other activities necessary for ensuring that purchased
product meets the specified requirements shall be conducted by the
requesting section and/or the Quality Assurance section.

8.6.2.2 For non-conforming items delivered, a Material Return Request Form

(PUR4-009) shall be prepared and submitted to Purchasing Supervisor by:

a. Quality Control Engineer (not complying to specifications)

b. Department Supervisor Concern (defective or not complying to
purchase order)

8.6.3 The Purchasing Supervisor shall record the delivery as per Delivery Receipt and
Sales Invoice received.
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9.0 ATTACHMENTS
9.1 PUR4-001 Masterlist of Nominated Suppliers
9.2 PUR4-002 Masterlist of Qualified Suppliers
9.3 PUR4-003 Masterlist of Outsource Suppliers Form
9.4 PUR4-004 Material Requisition Form
9.5 PUR4-007 Supplier Accreditation
9.6 PUR4-008 Purchase Order
9.7 PUR4-009 Material Return Request