KPS Purchasing

Company should have a purchasing policy according to companys principle, rules and
requirements. Company pragmatizes that policy to purchase department and purchase
department always follow that policy during purchasing.
Company also should organize a Purchasing Committee, the role of Purchasing Committee
within their financial limits is to review and supervise the procurement process to ensure that;

The best interests of the Company are maintained at all times,

The provisions of this Policy are being adhered to with regard to procurement of services and
materials of all Items by the Company.

All procurement of material as well as procurement of services shall be effected through
concerned Committee.
The function of Purchase Committee shall carry out the following functions, but not limited to:
Reviewing and endorsing modes of procurement for new Purchase Requisitions.

Witnessing the opening of Quotations/Bids and recording commercial and other
essential details of Quotations/Bids and taking decisions in respect of late or irregular
Quotations/bids.

Reviewing and approving adjudications to award, proposals to re-quote or cancel the
quotation.

Review the Policy and suggest and initiate reforms and improvements where necessary.

Set the criteria for purchase of material. Formation of Committee which deemed
necessary for system enhancement, evaluation, cost effective, etc.

Emergency Purchasing procedure shall be also established by the Purchase Committee
with different level of approval authority.

Supplier Development
The Purchasing Committee can establish supplier development/chain for the procurement of
goods and services; we need strong innovative suppliers with whom we can interact in an open,
fair and long term working relationship. Preferred Suppliers chain by the Purchasing Committee
should be used for the acquisition of the specific goods and services wherever possible.
Proposal/Quotation
Purchasing Department should acquire 2, 3 or more quotations from the preferred suppliers
chain by the Purchasing Committee/different suppliers.
Evaluating Suppliers

KPS not only need to evaluate suppliers before place an order, but KPS also need to evaluate
their performance constantly. KPS can consider the following points when evaluate a supplier's
performance:
Did the supplier submit its proposal on time?
Confirm its ability to comply with the specification.
Answer all required questions?
Refrain from charging over and above fees?
Confirm its ability to provide the required quantity?
Confirm its ability to deliver to, or perform at, the desired location(s)?
Confirms its ability to comply with the specified freight terms or propose acceptable
freight terms?
Confirm its acceptance of the specified payment terms or propose acceptable payment
terms?
Confirm its ability to comply with the specified delivery/performance dates of lead time
or propose acceptable delivery/performance dates or lead time?
Confirm its ability to comply with the specified warranty or propose and acceptable
warranty?
Refrain from taking exception to your contract terms?
Provide a cost breakdown.
Comply with proposal expiration date requirements?
Provide evidence of any required certifications?
Provide any required sample.
Competitiveness of price.
Previous performance with similar orders. (if available)
Strength of financial condition
Expertise of sales representatives and technical staff.


KPS can also use a simple supplier selection criteria or evaluation of a supplier
depending on situation to choose/select a supplier as follows:
Cost Responsibility
Responsibility of Quality & Safety
Delivery Reliability
Service
Agility
METHODS OF PURCHASING
There are four methods of purchasing KPS can use:

Petty Cash

Purchasing Through Internet

Company Purchase Order

Purchase Contract

Petty Cash

Cash Purchase is means procurement of materials urgently required and / or cannot practically
be purchased through the quotation procedure petty cash money allows the respective
departments to buy their requirements direct from the market.
Cash purchases shall not be utilized to replace items held in the Companys inventory and shall
be used only for purchasing items affecting plant operation.
Petty cash procedure and limit shall be established and approved by the Purchasing Committee
or Head of Department/CEO.

Purchasing through Internet
KPS can authorize to Procurement Incharge/Department to procure through internet with the
use of Company Visa Card. Visa Card with the limit (decide by the CEO of KPS) issued to
Procurement Incharge/Department for the internet procurement. All the internet
procurements shall be approved by the concerned Committee/CEO.


Company Purchase Order
Company Purchase Orders are to be issued for all purchases except those acquired using Petty
Cash, Purchase through Internet, or Purchase contracts/Services. In some instances it will be
beneficial to establish a Company Purchase Order for contracts so that the commitment of
expenditure is entered in the finance system. It is essential that the purchase order is issued
only if the quotation requirements have been met and an officer with appropriate financial
delegation has approved the acquisition.
Purchase Contract
In some situations it may be necessary for the Company to enter into a Purchase contract for
the acquisition or provision of goods and services, especially maintenance or service
agreements. It is essential that the Purchase contract is issued only if the quotation or bid
requirements have been met and has approved the acquisition in accordance with Purchasing
Policy set. All Purchase contracts shall be signed as per the Delegation of Signing Authority on
the Approved Procurement Process after having either prepared, or reviewed, by the legal
employee (if one appointed).
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Delivery
Supplier is responsible to deliver to or perform all goods/or services at desired location(s) as per
instruction of KPS.


RECEIPT OF GOODS AND SERVICES

The person (appointed by KPS) will take the delivery of the goods and/or services will certify
(sign and date) the invoice that all of the goods were received in good order and condition or all
of the service was satisfactorily performed. If any where goods and/or services were found to
be faulty, improperly performed or not as specified, the supplier must be immediately
contacted and details noted on the invoice or order. If goods are returned to the supplier,
details must be noted on the invoice and order and the supplier should not be paid for the
returned goods.

MAIN RESPONSIBILITY OF THE REQUESTING DEPARTMENT
For Supply of Materials and Services:

When requesting department generating/submitting all requirements for procurement of all
items, verifying material need. They should take a review of specifications to ensure that
technical specifications are clearly spelt out, Specifying Estimated Cost, Specifying Delivery
Time, Technical evaluation and Commercial evaluation of the offers received, Inspection of
materials and services supplied, Proper storage of materials, provide all assistance to the
Purchase Section/Purchasing Representative in respect to Material Requisition and all technical
queries, site visits, meetings, negotiation, justification, etc., cooperate with Purchasing
Section/Purchasing Representative to define contract type and payment method, make service
release, receipt/completion entries where applicable, provide Scope of supply for the services
required, Certify the services provided, etc.


Personal Philosophy on Purchasing and Relation with OEM.

The working relationship with the supplier is based upon the philosophy of a long term, co-
operative, partnership which results in benefits for both parties.


How to organize the proper purchase system and supply chain in Daharki?

KPS can organize proper purchase system and supply chain out of Daharki, As I observed, it is impossible
to organize a proper system and supply chain in Daharki, there is so many reasons.
Illiterate people doing business here in Daharki, they dont understand tax matters even though they are
not trying to understand and it caused high price. They are also providing goods/material from Karachi
or Lahore so they add their profit margin and transportation charges. It also caused for a high prices.
How to bring the competitive bidding system?
We can bring a good competitive bidding system when we need or we are going to purchase
goods in bulk quantity. We can find Suppliers from other places like Karachi or Lahore and we
can ask them for a quotation/bid.

How to avoid the purchase failures like high price and/or quality?
Try to purchase from recognized famous markets and also try to purchase branded items from
authorized dealer/distributer. Get the quotation from 2/3 suppliers with market survey or the goods
precedent.