electronics group - engg.hbl.in

Procedure for Purchase

Procedure No. EG-PU-PR-01

Revision No. 02

Page No: 1 of 13

1 | P a g e

HBL Power Systems Limited

Hyderabad – TS, India

Electronics Group


Procedure No.: EG-PU-PR-01, Rev.No.: 02

Details Name Signature Date

Prepared By P Manjula

Approved By Varaprasad SSM

CONTROL OF CONFIDENTIALITY

The information contained in this document is the property of HBL, which reserves the

right for distribution, application or reproduction for any usage.

manjula P (Aug 20, 2021 16:28 GMT+5.5)manjula P Aug 20, 2021

Aug 20, 2021

https://in1.documents.adobe.com/verifier?tx=CBJCHBCAABAAXgSzwYRnZmrcJ0khvfQK5D2S7HqCkQDw

https://in1.documents.adobe.com/verifier?tx=CBJCHBCAABAAXgSzwYRnZmrcJ0khvfQK5D2S7HqCkQDw



Revision No. 02

Page No: 2 of 13

2 | P a g e

Revision History

Distribution List

This Documented Information will be uploaded in QMS application for reference.

List of Abbreviations

# Abbreviation Meaning

1 AON Acceptance of necessary

2 AVL Approved Supplier Master List

3 BOM Bill of Materials

4 BTP Build to print

5 BTS Build to Specifications

6 COC Certificate of Conformity

7 CSO Central Standards Office

8 DCH Digital Control Harness Project

Date of

Revision

Details of

Changes Reason for Change

Rev.No

From To

00 01.12.2016 All Pages Initial Version - 00

01 31.07.2019 All pages Implementation of Procedure 00 01

02 31.07.2021 Page No.

7,11,12, and 13

Organization Chart Modified

along doc no added in the

given pages

01 02



Revision No. 02

Page No: 3 of 13

3 | P a g e

9 DOA Delegation of Authority

10 EG Electronics Group

11 ERP Enterprise Resource Planning

12 GRN Goods Receipt Note

13 HOD Head of the Department

14 IQC Incoming Quality Control

15 LC Letter of Credit

16 LOI Letter of Indent

17 MIS Monthly Information System

18 NC Non Conformance

19 PE Power Electronics

20 PO Purchase Order

21 PR Purchase requisition

22 PU Purchase

23 QA Quality Assurance

24 QCS Quotation Comparison sheet

25 QM Quality Manual

26 RE Rail Electronics

27 RDSO Research Designs and Standards Organization of railway

28 RFQ Request for Quotation

29 SCAR Supplier Corrective Action Report

30 SO Service order

31 STO Stock Transfer Order



Revision No. 02

Page No: 4 of 13

4 | P a g e

Contents

1.0 PURPOSE ................................................................................................................................. 5

2.0 SCOPE OF PURCHASE DEPARTMENT ............................................................................. 5

3.0 RELATED DOCUMENTS ........................................................................................................ 5

4.0 OBJECTIVES ........................................................................................................................... 5

5.0 CORE FUNCTIONS ................................................................................................................. 5

6.0 ORGANIZATION CHART ....................................................................................................... 7

7.0 ROLES & RESPONSIBILITIES .............................................................................................. 8

8.0 PROCESS FLOW CHART ...................................................................................................... 9

9.0 PROCUREMENT PROCESS ................................................................................................ 10

9.1 Purchase Requisition .................................................................................................... 10

9.2 Request for Quote (RFQ) .............................................................................................. 10

9.3 Processing of quotes .................................................................................................... 10

9.4 Letter of Intent (LOI) ...................................................................................................... 11

9.5 Purchase Order (PO) ..................................................................................................... 11

9.6 R & D, Job works ............................................................................................................ 12

9.7 Quality of purchased material ..................................................................................... 12

9.8 Supplier Quality .............................................................................................................. 12

9.8.1 Supplier Selection and Assessment…………………………………………………..……12

9.8.2 Supplier Corrective Action Request (SCAR)……………………………………………..13



Revision No. 02

Page No: 5 of 13

5 | P a g e

1.0 PURPOSE

1.1 This procedure describes the purchasing process which ensures that the

purchased product conforms to requirements.

2.0 SCOPE OF PURCHASE DEPARTMENT

2.1 The Purchase department for Electronics Group is responsible for procurement

of materials needed for various business units like PE, RE, DCH and Electric

Drive Trains.

3.0 RELATED DOCUMENTS

4.0 OBJECTIVES

4.1 The primary objectives are procurement of required materials and services

from approved Sources at targeted price at the required time with an optimum procurement process cost and continually develop suppliers’ capability and quality to meet HBL needs

Sl.NO Document No Revision Description

1 EG-PU- FT-01 Rev1 Supplier Registration

2 EG-PU- FT-02 Rev0 Supplier Assessment

3 EG-PU- FT-03 Rev0 List of Approved

Suppliers

4 EG-PU -FT-04 Rev1 Supplier Evaluation

5 EG-PU -FT-05 Rev0 Supplier Audit Report

6 EG-PU- FT-06 Rev0

List of Out sourced

Processes & Control

Methods

7 EG-PU- FT-07 Rev0 SCAR



Revision No. 02

Page No: 6 of 13

6 | P a g e

5.0 CORE FUNCTIONS

Procurement

Sourcing

(Identifying suppliers, approval process, continual rating )

Negotiation & OrderingFollow-up, payment

processing, Data Management & MIS



Revision No. 02

Page No: 7 of 13

7 | P a g e

6.0 ORGANIZATION CHART

Head - Purchase & Projects

(GM Purchase)

RE - IPS, EI, PMM (EDT) and R&D

(Sr.Manager)

Rack-level, Systems soft & hardware, IPS services

& TMKT Plant Capex and Civil

(Engineer)

PCB components

(Engineer)

R& D, EDT PCB components, Hundi and

GST complainace

(Executive)

RE - TCAS , TMS DCH , EIS, RAIL R&D (LTE)

(Manager)

TCAS Electrical and Mechanical

(Engineer)

TCAS/TMS/DCH Electronic components

(TBD)

Industrial Electronics and R & D

(Sr.Manager)

Switchgear, Power & Mechanical + PE Capex

(Engineer)

PCB Components

(Engineer)

All Mechanical/Electrical/ANR / R& D devep, ISO Doc and

DCH Sevrices

(Engineer)

DRE

CHA, FF , Logistics, LCs & Admin purchases

(Sr.Executive)

EDT Mech Development, Sourcing and

Kaizen Projects

(Engineer)

EDT CAPEX/Old Trucks sourcing

(Engineer)



Revision No. 02

Page No: 8 of 13

8 | P a g e

7.0 ROLES & RESPONSIBILITIES

HOD

The Head of Procurement is responsible to achieve the Electronic

Group’s procurement Objectives. Responsibilities include:

Organizing the Purchase department and assign roles and

responsibilities to managers

Defining appropriate procurement procedures for various contexts

Ensuring compliance to the defined procedures

Developing a framework for monitoring and measuring the

performance of Purchase department and communicating with

other stakeholders in the company

Mentoring the employees for their career growth

Manager

Each manager is responsible for procurement activities of an assigned

business unit.

Responsibilities include:

Supplier identification and development

Competitive bidding and price negotiation

Issue resolution

Performance measurement and reporting

Development of team

Executive/

Engineer

Each executive is responsible for procurement activities of an assigned

business unit.

Responsibilities include:

Obtaining quotations, preparing comparison statement and

purchase proposal

Creating PO as per approval

Initiating supplier payments as per PO terms

Tracking material receipt as per PO schedule

Issue resolution at inward QC and stores



Revision No. 02

Page No: 9 of 13

9 | P a g e

8.0 PROCESS FLOW CHART

Receive PRs, consolidate items

and float RFQ

Prepare comparative statement of offers

received

Negotiate prices and payment terms with shortlisted suppliers

Create & Release Purchase Order as

per DOA

Follow up with suppliers and

organise clearances for shipment

Organize logistics

Coordinate with QC for Inward inspection and acceptance of

materials

Resolve issues with supplier non-conformities

Organize supplier payments

Periodic supplier performance

assessment & feedback



Revision No. 02

Page No: 10 of 13

10 | P a g e

9.0 PROCUREMENT PROCESS

9.1 Purchase Requisition

Purchase process starts with the receipt of a PR, generated through SAP, by

the indenting department. PR shall have the following minimum details.

Material Number / Description and specifications

Quantity

Delivery date

Job number/Tracking/Valuation/Costing/Budget if any

9.2 Request for Quote (RFQ)

RFQ shall be sent to selected suppliers through e-mail enclosing drawings,

specifications, etc. RFQ shall also indicate the quantities and lead times

required for the components.

Suppliers shall be selected on the basis of recommendation by the indenting

department, or from the approved supplier list.

9.3 Processing of quotes

After the quotes are received, a comparative statement of received quotes shall

be prepared. The comparative statement shall include comparison of prices,

lead times and payment terms, along with any other relevant details.

The most suitable supplier shall be determined based on the

Comparative statement of prices, prices and lead times,

Tax payment history of the suppliers,

Past record of quality and delivery times etc.

Further negotiation shall be done with the selected supplier for price, payment

terms, delivery period etc. Wherever needed, the indenting department shall be

involved in the supplier selection decision.

The following delegation of authority (DOA) shall apply to all first-time purchase

orders.

Delegation

Level

Job title of

the employee

First-time Purchase

Order approval, Rs

A1 Executive Up to 75,000

A2 Manager 75,000 to 10,00,000

A3 HOD More than 10,00,000



Revision No. 02

Page No: 11 of 13

11 | P a g e

When procurement is repeated, the new price of components shall be

compared with the last procurement price. The following DOA shall apply,

based on price variation.

9.4 Letter of Intent (LOI)

After a purchase decision is made, an LOI may be issued to the selected

supplier, if a delay is anticipated in releasing a formal purchase order for

administrative reasons. This is done in order to get the delivery time clock

started.

9.5 Purchase Order (PO)

Purchase Order is a legally enforceable Contract placed on a supplier with

mutually agreed price, terms and conditions on acceptance of the valid offer for

supply of the items/services stated therein.

All the purchase orders shall be issued through SAP only, and shall include

Description & Quantity of material / component / job work activities

Drawing number / specification number / standard

Requirements for inspection, CoC, test reports etc

Delivery schedule and payment terms

In case of any change in quantity, price, delivery or any other terms and

conditions mentioned in the PO, an amended purchase order shall be prepared

and issued to the suppliers.

Purchase

Order

value, Rs

Price is same

or less than

last purchase

price

Price is higher

than last

purchase price

by, up to 1%

Price is higher

than last

purchase price

by, 1 to 3%

Price is higher

than last

purchase price

by more than

3%

Up to

75,000 A1 A2

A3

A3 + Respective

Project or

Product Head +

EG Finance

Head

75,000 to

10,00,000 A2

A3 More than

10,00,000 A3



Revision No. 02

Page No: 12 of 13

12 | P a g e

9.6 Job works

R&D or Operations team may decide to get some works sub-contracted. HBL

provides raw materials for such works, and the suppliers perform the required

operations. The periodic quality assessment is not applicable until unless

recommended for one time supply, Job work and services,.

Purchase department shall release a sub-contract order to an approved

supplier, after analyzing the work content and costing it appropriately. The

selection of the supplier is done in consultation with the indenting department.

List of out sourced processes & control methods will be updated in format table

EG-PU-FT-06 Rev0.

9.7 Quality of purchased material

Purchased materials shall be subject to quality and quantity checks, during

incoming inspection at HBL.

In some cases, the indenting department may require quality checks prior to

shipment from the supplier’s works. Purchase department shall organize such

inspections through HBL’s QC department or through a third party inspection

agency, as recommended by the indenting department.

Any non-conformances observed during the inspection shall be managed as

required by HBL’s QC procedures.

Purchase department shall indicate the inspection and documentation

requirements for all purchased materials in the PO. Documentation

requirements shall include requirement of CoC, test report, inspection data etc.

9.8 Supplier Quality

9.8.1 Supplier Selection and Assessment

Purchase department shall engage actively in carrying out supplier

capability assessment, prior to taking any new supplier on the approved

supplier list. Purchase department will do necessary Supplier

assessment report as per format EG-PU-FT-02 Rev0.

Based on the above report, Purchase will request for Vendor registration

using the Format EG-PU-FT-01 Rev 1,

Upon approval and registration of new vendor in the HBL SAP vendor

master, Supplier list will be updated in the format EG-PU-FT-03 Rev0

Suppliers shall be categorized on the basis of the criticality of their

supplies to HBL’s business. Based on this categorization, Vendor



Revision No. 02

Page No: 13 of 13

13 | P a g e

evaluation shall be carried out time to time as per format EG-PU-FT-04

Rev 1.

Purchase department shall do necessary supplier evaluation through

SAP system, which was implemented.

Supplier quality assessment shall be done wherever required (ref clause

9.6) by a team consisting of Purchase, Quality and Engineering

departments. Purchase department shall coordinate such team activities.

All supplier quality assessments shall be documented, using the Suppler

Audit report EG-PU-FT-05 Rev0 as Supplier Quality Assessment.

Periodic re-assessment of the suppliers shall be done by the

assessment team. Supplier re-assessment is done on the basis of using

the same format with corrective actions.

Price competitiveness

Timely delivery

Quality of supplied materials

Responses and effectiveness of any agreed supplier corrective

actions

Purchase department shall prepare the necessary ranking for the

above points for an assessment of the suppliers. Re-assessment

reports shall be shared with the suppliers for corrective action.

Purchase department shall organize an annual supplier meeting, to

communicate HBL’s purchasing priorities, requirements and strategies

to the suppliers and also receive feedback from the suppliers on their

experiences.

9.8.2 Supplier Corrective Action Request (SCAR)

Wherever there is a trend of quality non-conformances with any

supplier, a corrective action shall be requested from such supplier. The

format for Supplier Corrective Action Request (<EG-PU-FT-07 Rev0

SCAR>) shall be used for documenting the trend of non-conformances

and the corrective actions proposed by the supplier.

Supplier corrective actions shall be reviewed and approved by the

supplier assessment team.

electronics group - engg.hbl.in

Documents