Institutional Strengthening 7 Supply Chain Management

Chapter 7:
guid e
Supply Chain
Management
Cover photo: A man fleeing the border. Catholic Relief Services is responding
to the urgent needs of Sudanese refugees in Chad who have fled escalating
conflict in western Sudans Darfur region. Photo by Kevin Hartigan/CRS.
2011 Catholic Relief Services United States Conference of Catholic Bishops
228 West Lexington Street
Baltimore, MD 21201 USA
[email protected]
Download this and other CRS publications at www.crsprogramquality.org.
TABLE OF CONTENTS
Procurement Process Map................................................................................2
Purpose of This Guide.........................................................................................3
What Function Does Procurement Perform?....................................................3
Summary of This Guide.......................................................................................3
Key Principles......................................................................................................5
Procurement Business Process 7.1 Planning............................................ 10
Step 7.1.1 Demand Planning........................................................................... 11
Step 7.1.2 Supply Planning.............................................................................. 14
Step 7.1.3 Balancing Supply and Demand..................................................... 17
Step 7.1.4 Plan Logistics Network................................................................... 20
Procurement Business Process 7.2 Sourcing............................................ 23
Step 7.2.1 Request........................................................................................... 24
Step 7.2.2 Purchase and Acquisition.............................................................. 27
Step 7.2.3 Contracts......................................................................................... 31
Step 7.2.4 Manage Shipping............................................................................ 34
Step 7.2.5 Manage Payments.......................................................................... 38
Step 7.2.6 Manage Suppliers.......................................................................... 42
Procurement Business Process 7.3 Fulfillment......................................... 45
Step 7.3.1 Warehouse and Inventory Management....................................... 46
Step 7.3.2 Distribution..................................................................................... 53
Step 7.3.3 Fleet Management......................................................................... 56
Procurement Business Process 7.4 Reporting.......................................... 59
Step 7.4.1 Reporting and Record Keeping...................................................... 61
Compliance Checklist for Procurement......................................................... 64
Glossary............................................................................................................ 75
References....................................................................................................... 84
Appendix A: Sample Inventory Report Form....................................................... 85

Appendix B: Sample Waybill................................................................................ 86
Appendix C: Sample Goods Received Note........................................................ 87
Appendix D: Sample Commodity Status Report................................................. 88
Appendix E: Sample Recipient Status Report.................................................... 89
Appendix F: Sample Bed-Net Supply and Distribution Report ......................... 90
Appendix G: Sample Procurement Officer Job Description............................... 91
Appendix H: Sample Assistant Procurement Officer Job Description............... 93
Appendix I: Sample EFR Logistics Officer Job Description................................ 95
ii
Chapter 7:
Supply Chain
Management
Karl Grobl for CRS
Missionaries of Charitys
Gandhiji Prem Nivas Leprosy
Centre near Kolkata, India,
where leprosy patients receive
treatment and learn how to live
and work with their disabilities.
Started by Mother Teresa in 1958.
P r o c u r e m e n t P r o c e ss M a p
PROCUREMENT Process Map

Planning
Sourcing
Fulfilling
Process 7.1
Process 7.2
Process 7.3
Can you forecast how much

of which goods you will need?
see page 10
Do you have a system in

place to convert requests into
purchases and orders?
see page 23
How do you manage the flow

and storage of goods?
see page 45
Reporting
Process 7.4
Do you have a reporting

system that meets the needs
and regulations of donors?
see page 59
Purpose of This Guide

The guidelines presented herein are a compendium of supply chain management
(SCM) business descriptions, requirements, minimum standards, and best practices
intended to aid an organizations management and staff in the development and/or
enhancement of their SCM policies, procedures, and practices.
Organizations interested in developing or improving their business processes
and related policies and procedural manuals will use the information in this
guide in different ways. Each and every organization has its own unique
understanding, interpretation, and implementation of SCM business processes.
What Function Does

Procurement Perform?
Every organization needs to procure, store, and distribute goods, materials
(products), and services to support its activities. In addition, organizations
must manage and monitor the products as they move into and out of the store
or warehouse.
The components of SCMprocurement, transport, warehousing, and inventory
managementare important business processes that allow an organization
to obtain optimal value for resources expended on goods and services. The
effective management of resources through sound procurement, warehousing,
and inventory management processes contribute to the achievement of the
operational and strategic goals of a project and an organization. Efficient
and effective SCM processes reflect professionalism, compliance, fairness,
reliability, and transparency to the organizations constituencies (members,
donors, recipients, local authorities, and the general public). Therefore, SCM
requires considerable attention.
There is no one correct way to establish SCM policies and procedures. Factors
such as the size of the organization, the availability of vendors to supply
necessary goods and services, and the cash flow and credit of the organization
will influence the organizations approach to procurement. The size of the
organization will also impact the formation of SCM policies and procedures.
Summary of This Guide

This guide covers the procurement of goods, materials, and services and the
storage and management of inventories. It is sub-divided into four sections:
Planning, Sourcing, Fulfillment, and Reporting. Each one of these sections is
associated with specific reporting and record-keeping requirements.
The pillars of Scm

Plan
Source
Fulfill
Plan Demand
Request
Warehouse & Inventory
Operational Plans
Generate Request
Receive
Demand Forecasting
Assess Inventory
Disposition
Validate Demand Forecast

Purchase
RFQ
Plan Supply
Bid Analysis
Supply Forecasting
Create PO
Validate Supply Forecast
Stage/Store
Pick/Kit/Pack
Cycle Count
Monitor Stocking Level
Manage Inventory Age
Return/Recondition Material
Asset Management
Balance Demand & Supply
Manage Shipping
Supplier Collaboration
Secure Inbound Transportation
Match Demand/Supply
Port Receipt and Clearing
Identify Gaps
Transport to Primary Wrhs.
Resolve Variances
Distribute
Manage Payments
Route/Schedule Delivery
Process Vendor Invoices
Receipt at Destination
Plan Logistics Network

Network Design
Manage Suppliers
Plan Warehouse
Supplier/Donor Management
Plan Transport
Contract Management
Catalog/Item Management
Reporting &
Visibility
Reporting
Event Management
Fleet Management
Fleet Management
Maintenance Recording
Track & Trace
The first SCM pillar contains sections that focus on core SCM planning
processes that include demand planning, supply planning, balancing supply
and demand, and logistics planning.
The second pillar contains sections that focus on SCM sourcing processes
including requests, purchases, suppliers management, donation management,
shipping management, and payment management.
The third pillar focuses on fulfillment processes, with sections on warehousing,

inventory management, and distributions and asset management.
Reporting is used throughout each of the three pillars to facilitate transitions
and enable communication.
It is recommended to use the HOCAI assessment tool (see Chapter 2) and the
pillar questionnaires (found at the beginning of each section) before reading
the guide in order to select relevant sections for each organization or user.
Depending on the needs of the organization, it may not be necessary to read
all the sections or chapters.
Key Principles
1. Key Principles Overview
The SCM process is guided by principles that provide guidance. When properly
applied, they lead to best practices in the SCM process. The principles include:
a. Competition, Transparency, and Openness
Procurement activities will be conducted in an open and impartial manner
using transparent, open purchasing processes, adequately testing
the market, avoiding biased specifications, and treating all suppliers
consistently and equitably, so that potential vendors and donors can have
confidence in the outcome of the procurement process.
b. Value for Money
Agencies must pursue value for money purchasing outcomes (e.g., through
weighing the benefits of the purchase against the cost of the purchase)
taking into consideration the following factors:
i. The purchase meets specifications
ii. Quality assurance
iii. The capacity of the supplier (e.g., their managerial and technical abilities)
iv. T he advantages of buying locally, which may include such benefits as
better delivery times, local backup and servicing, and the availability
of spare parts
c. Compliance With All Legal and Regulatory Requirements
All procurement will be made in accordance with the legal regulations of
the jurisdiction and comply with all donor regulations.
d. Internal Controls and Risk Management Measures
To the extent possible, internal control mechanisms and risk management
measures will be put into place to safeguard resources. This is covered in
greater detail below.
e. Conflict of Interest
The organization and its staff shall at all times avoid situations in which
private interests conflict, might reasonably be thought to conflict, or have
potential to conflict with the organizations mandate. This is covered in
greater detail below.
f. Traceability
Each product that enters the supply chain needs to be individually recorded
and remain fully traceable throughout the chain, from planning to postdistribution reporting.
g. Accountability
Organizations need to ensure that they are accountable for all goods and
services they procure, store, and distribute or use. Regular reporting is
necessary to provide constituencies with a clear picture of the supply chain
status. All processes and information are subject to audit.
2. Key Principles: Detailed Internal Controls
a. Internal Control Basics
Employees conducting business transactions on behalf of the organization
hold a position of trust that dictates their actions should be governed by the
highest standards of personal and business conduct. The organization does
not purchase products or services for the personal use of its employees, except
under specific programs as approved by the Executive Board. All transactions
must be undertaken for the exclusive benefit of the organization and its mission.
b. SCM Internal Control Minimum Requirements
There is an approval authority matrix and all requisitions and
purchase orders are approved as per the matrix.
There is segregation of duty between the different functions.
Conflict of interest is declared and managed.
Gifts, donations, and gratuities are managed in the best interest of
the organization and purchase ethics.
A person does not approve his or her own requisitions or
reimbursements.
c. Segregation of Duties
There may not be enough staff members to maintain the full segregation of
duties. The minimum level of segregation of duties is as follows:
The person who
should not
prepares a purchase requisition
approve that purchase requisition.
sends out a quote request and

conducts the bid committee meeting
receive the purchase quote.
prepares a purchase order
approve that purchase order.
issues a purchase order
receive the goods.
d. Internal Control Matrix

Control Areas
Control Objectives
Control Activities
Purchases are transparent.
A Conflict of Interest clause is implemented. Purchasers and bid

committee members are required to declare any circumstance in
which there is a conflict of interest.
Transactions are reviewed and approved by an authorized approver,
have a valid business purpose, and are appropriate for the accounts
to which they are charged (e.g., department, funding source,
natural account, or project). An authority chart is put in practice and
requisitions are approved as per authority.
Purchase
Requisition &
Approval Process
Items that are being purchased

are intended for agency use
only and not driven by personal
use requirement.
Appropriate segregation of duties between the initiator, preparer,

and approver are in place.
All items procured have been received before payment is authorized,
unless an agreement to pre-pay has been arranged.
Single invoices are never paid more than once. Final payments for
goods are made only when they have been received in full and the
control processes ensure that there is no duplicate payment.
A bid committee is established.
Payment and
Linkage to Finance
Records
Maintenance
Payments are made on

completion of a procurement
process as per the agreement
with the vendor.
Single invoices are never paid more than once. Payments for goods
are made only when they have been received and the control
processes ensure that there is no duplicate payment. Payments are
made based on original purchase order and goods received notes.
There is a proper audit trail.
Each payment voucher relates to the procurement register and

controls with a valid audit trail. Each payment should contain a
requisition number.
Records are stored and

maintained as per local legal
requirements.
There is an official filing procedure and files are retained according

to the procedure. The procedure defines the naming process, the
retention period, and the place and controller of files.
Files are destroyed under proper supervision and with appropriate
approvals.
All files are backed up as appropriate.
Laura Sheahen/CRS
3. Key Principles: Detailed Ethical Standards and Codes of Conduct

Ethical standards and code of conduct policies include a statement of ethical
principles, practices, and expected behaviors adopted by the organization.
Such standards and codes differ from organization to organization but generally
set out ethical practices as well as procedures for management of conflicts of
interest, gifts and gratuities, confidentiality, and accuracy of information.
In striving to achieve an organizations mission, it is the responsibility of all
those involved in SCM activities to work to maintain the good name of the
organization, to keep good relations between the organization and its suppliers
and service providers, and to keep in mind that personal contacts are largely the
basis of the suppliers and service providers opinion of the organization.
a. Ethical Standards
In remote villages in
the Du Layna area
of Afghanistan, CRS
has established 64
schools. The bulk of the
schools are for girls, who
traditionally do not walk
long distances outside
their villages to reach
government-run schools.
In personal contacts with external parties, each employee represents the

organization and should reflect and present the interest and needs of all
functional units of the organization. Each employee must adhere to the
following ethical practices:
Consider first the interest of the organization, and adhere to its
established policies, in all transactions.
Be receptive to competent advice from colleagues and be guided by
such advice without impairing the responsibility of ones office.
Buy without prejudice, avoiding any practice preventing fair competition
while seeking to obtain the maximum value for money.
Demand full compliance with applicable business management
legislation or requirements by all parties seeking to provide goods and
services to the organization.
Demand honesty in marketing or other representations made to the
organization, whether these are in written, oral, or product sample form.
Participate in professional development programs so that ones
business knowledge and performance are enhanced.
Subscribe to and work for honesty and denounce all forms of improper
business practice.
Provide prompt and courteous reception to all who contact the
organization for legitimate business purposes.
Advise and cooperate with every functional unit in the performance of
their SCM duties.
b. Conflicts of Interest
Individuals engaged in SCM activities are expected to be free of interests
or relationships that are potentially detrimental to the best interest of the

organization. Employees who have such interests or relationships should
disclose them prior to any representations of the organization with the
parties with which they have such a relationship.
Employees shall not participate in any activity or decision that involves an
actual or potential conflict of interest unless the activity or decision has
been pre-approved by the organizations management. If such approval
has been given, any terms or conditions made by the organizations
management regarding such activity or decision must be fulfilled.
c. Gifts and Gratuities
In serving the interests of the organization, no employee shall use his
or her authority of office for personal benefit. To preserve the image
and integrity of the employee and the organization, the organizations
management should outline policies for the acceptance and disclosure of
business gifts, samples, and favors.
In addition, loans are not to be accepted from parties having prospective
dealings with the organization unless such parties are in the business of
making loans to individuals (e.g., a bank or a credit union).
d. Confidentiality and Accuracy of Information
The majority of transactions relating to SCM activities are of a confidential
nature and should be treated as such, especially regarding suppliers. It is
considered unethical as well as damaging to the organizations reputation
to allow information about one suppliers quotation to be passed on to
another supplier.
Information given in the course of ones participation in SCM activity must
be true and fair and not designed to mislead or misrepresent.
Procurement Business
Process 7.1 Planning
P r o c e ss D e scr i pt i o n
Planning for procurement and supply chain management refers to the
forecasting of goods and services, either for internal use or for distribution to
external end-users such as beneficiaries of a food distribution program. The
process determines supply forecasting: how much is needed, in what exact
specifications, and when and where the goods and services will be needed.
It also determines where and when to source goods and services and how
much inventory to carry. The planning process requires good understanding of
the logistic network and supply chain constraints, such as warehouse space,
transport options, lead times, optimal inventory carriage, and so on.
Each supply chain needs to be planned in detail to avoid problems during
implementation. Problems that need to be eliminated or minimized
include, but are not limited to, inaccurate estimation of needs, poor timing
of deliveries, poor definition of the needed specifications, insufficient or
excessive storage capacity, and pipeline jams or breaks. A well-planned supply
chain process will ensure that the right goods and services are delivered when
and where they are needed.
P r o c e ss F l o w
Process 7.1 Planning

Demand Planning
7.1.1
Balancing Supply
and Demand
7.1.3
Start
Process
Supply Planning
7.1.2
10
Plan Logistics
Network
7.1.4
End
Process
S t e p 7. 1 . 1 D e m a n d P l a n n i n g
Step Name
Demand Planning
Step Number
7.1.1
Inputs
1. Internal data (operational plans, program

participant forecasts, actual distributions,
inventory, incoming supplies, previous demand
forecasts, technical specifications for frequently
used products, revenue forecasts)
2. External data (market intelligence, national policies
and guidelines, donor requirements, environmental
conditions, transport and storage capacity)
Outputs
1. Forecasts of required goods, materials, and

services
Organizational Roles
1. Budget and/or program managers lead the

process of demand planning
2. Executive leadership approves demand forecasts
3. Logistics officers provide logistics information
4. Consider vendor records from previous
procurement and supplies
5. Donors provide information on possible resources
Integration Points
1. Finance Unit: budget allocation and funds

availability
2. Procurement Unit: previous supply information
3. Logistics Unit: logistics and inventory information,
usual delivery schedules
4. Resource Mobilization: information on resource
forecasts
Summary
Each of the organizations program and functional

areas need to create realistic forecasts for its supply
needs. The forecasts need to be consolidated into
a demand plan and approved by the organizations
leadership.
Demand planning ensures that the organization uses a formal process for
the forecasting and validating of its requirements for goods and services
for program implementation. Ideal demand plans create a realistic forecast
of what and how much is needed, when and where, and for what specific
timeframe (such as an accounting period, or a project cycle). To accomplish
this, follow the sub-steps in the chart below:
11
Time to Forecast
Do Assessment
Determine
Requirement by
Location
Provide Budget
Feedback
Determine
Available
Budgets
Compile
Assesment
Base Demand
on Assessment
Budgets and
Standardized
Goods
Ensure a
Process of
Standardization
of Goods
Prepare
Demand Plan
Submit Demand
Plan
A demand planning process may be initiated in response to

a. project/program approval or
b. annual update of project/program.
Each program or project team and functional area of the organization needs to
review its objectives for the planning period (generally one year), in consultation
with the program and/or budget manager to determine the goods and services
needed to achieve the objectives for the period.
The definition of needed goods and services is further developed by determining
when and where goods and services are needed, and the exact specifications
of what is needed. This exercise is the initial step in the demand planning, and
results in a demand pipeline.
Each program team and functional area needs to liaise with the finance and/or
resource mobilization units regarding budget/funds allocation and availability; the
information will also be shared with the supply department for supply planning.
Procurement and supply units provide detailed product information based on
previous supply experience and any required market intelligence as well as
possible challenges regarding the products in the plan.
The inventory management unit provides information about pipeline and inventory
management capacity for the movement, handling, storage, and accountability of
the inputs.
The logistics management unit provides logistics information and assistance in
forecasting product requirements, delivery lead times, and schedules.
Demand planning is complete when the demand pipeline/forecast is rationalized
based on budget information and logistics/supply chain constraints.
12
Business Requirements:
1. Key Features
The plan integrates existing data sources through spreadsheets or other
technology.
The plan allows for the aggregation of multi-department plans.
The plan provides for simple and straightforward data analysis and
calculations supported by spreadsheets or other technology.
The plan allows for the comparison of alternative scenarios according to
variations in program participant numbers, products parameters, funding
projections, and market conditions.
The plan provides financial values for budget definition purposes.
The plan delivers aggregated and disaggregated data.
2. Minimum Requirements
All information sources are checked for accuracy and clearly referenced.
Collaborative planning and forecasting is used where appropriate to ensure
harmonization and rationalization across functional areas.
Appropriate methods are used to develop detailed forecasts and product
specifications.
A forecasting calendar is defined; adherence to the calendar is rigorous.
Frequent planning and planning reviews are completed.
3. Best Practices
Specific responsibility is assigned for ownership of the planning/forecasting
function.
Forecasting methodologies are approved and documented as standard
operating procedure (SOP).
Robust market intelligence and internal data are used to develop a longterm operational forecast, including detailed technical specifications for all
products utilized, the current and accurate inventory levels being utilized,
and current vendor data.
A formal structured process exists to collect and analyze market intelligence
and internal data from multiple sources.
Market intelligence, internal data, and forecasting assumptions are validated
and updated on a regular basis.
There is real-time exchange of information among supply chain functions.
13
S t e p 7. 1 . 2 S u pp ly P l a n n i n g
Step Name
Supply Planning
Step Number
7.1.2
Inputs
1.
2.
3.
4.
New donor/grant information

Demand forecast
Supplier master database
Market information/suppliers database
Outputs
1.
2.
3.
4.
5.
Supply forecast
Order schedule
Gap report
Inventory plan
Contingency plan
1. Logistics managers lead the process

2. Budget and/or program managers review and
approve the supply planning process
3. Vendors provide information useful for the
planning process such as earliest supply dates,
availibility of material, etc.
4. Donors provide information on possible resources
Integration Points
1. Program: Liaise with supply team for information

on availability, specifications, etc.
2. Procurement: Provide information, market
intelligence, and possible challenges for the
products in the plan
3. Inventory/logistics management: Provide
information on supply chain and inventory
requirements
4. Finance/budget management: Budget planning,
cost allocation verification, and accounting
expertise
Summary
Organizations need to have an approved supply plan in

order to respond to goods, material, and service needs
for efficient program implementation.
Supply planning ensures that the organization uses a formal system through
which supply meets the organizations demand for goods, materials, and
services; maintains minimum stock for regularly needed products; and has
a system of balancing seasonal and emergency demand fluctuations. To
accomplish this, follow the sub-steps in the chart below.
14
Time to Forecast
Warehouse
Space is
Calculated Along
with Optional
Space
Suppliers
Database is
Maintained
and Constantly
Updated
Updated Supply
Plan
Projected
Demand
Forecast
Balance
Demand vs.
Supply
At the time of demand planning (Step 7.1.1), teams from each functional area
need to liaise with the supply chain management team to obtain information on
product specification, availability, previous sourcing experience, and possible
bottlenecks or advantages of different forecasts.
The supply chain management team should provide the demand planning team
with information regarding previous supply experience and any required market
intelligence and possible challenges related to the products in the plan.
Information about the inventory management capacity and constraints will provide
a good basis for planning the supply flow, delivery and dispatch schedules,
frequency, lot sizes, and handling requirements.
The finance unit should provide necessary budget and cash flow information to
ensure timely and realistic spending on goods, materials, and services.
Often, demand and supply planning (Step 7.1.1 and Step 7.1.2) are done
simultaneously as an organization-wide collaborative effort. This results in an
exercise of balancing demand with supply (Step 7.1.3).
1. Key Features
The plan integrates with existing data sources through spreadsheets or other
technology.
The plan allows for the aggregation of multi-department supply
requirements.
The team is able to calculate minimum and maximum orders based on
demand forecasts of required goods, materials, and services.
The plan incorporates lead times (supplier, distribution time, customs
clearing, etc.) into the supply forecast.
The plan considers current stock levels, in-progress purchase orders, and
in-transit deliveries.
15
The plan provides for simple and straightforward reporting containing a

recommended purchase schedule for short-term, mid-term, and longterm forecasts of required goods, materials, and services, supported by
spreadsheets or other technology.
The market intelligence and suppliers database is able to factor in
distribution constraints to determine when, where, and how products will
be procured and stored (e.g., capacity, resources, storage space, handling
conditions, shelf life, etc.).
Specific responsibility is assigned for the supply planning function.
All data sources are checked for accuracy.
Supply planning processes are approved and documented as standard
operating procedure (SOP).
Robust market and vendor intelligence is used to develop short-term, midterm, and long-term forecasts of required goods, materials, and services.
3. Best Practices
A vendor list or database utilizing spreadsheets or other technology is
developed and maintained.
A formal structured process for collecting and analyzing market and vendor
intelligence from multiple sources is developed.
Assign separate responsibility for the maintenance of market intelligence
and the upkeep of the vendor database.
Market and vendor intelligence is validated and updated on a regular basis.
Real-time exchange of information is carried out among supply chain
functions.
Products are classified and an account coding structure is designed for easy
identification and communication by users.
Goods, material, and services requirements are balanced with storage and
transport capacity limits, inventory levels, and supply chain schedules.
Storage capacity and transport capacity are calculated and options for
additional capacity is continuously researched and documented.
Early warning systems to detect supply chain threats and adverse trends
within the supply chain are maintained.
Regular, positive, and transparent relationships with designated key vendors
are maintained.
16
S t e p 7. 1 . 3 B a l a n c i n g S u pp ly a n d D e m a n d
Step Name
Balancing Supply and Demand
Step Number
7.1.3
Inputs
1.
2.
3.
4.
Outputs
1. Procurement supply and consumption pipeline

2. Supply gap report and reconciliation
1. Procurement officer prepares the schedule of

materials as per planning needs
2. Budget and program managers review and approve
the planning process
3. Organizations executive officer or board of
directors approves the process
4. Finance officer provides information and inputs to
the forecast process
5. Administrative officer facilitates the supply function
Integration Points
1. Finance officer: Aligns financial planning to the

procurement pipeline
2. Administrative Officer: Carries out timely service
provider selection and contracting; handles
contract administration
Summary
The organization-wide consolidated and budget-aligned

demand pipeline needs to be analyzed and adjusted
to meet supply chain management constraints and
to allow for rationalization and efficiency in supply,
storage, handling, and distribution or usage.
Demand plan
Draft supply forecast
Budget and fundraising information
Supplier information
Once the organizations project needs have been estimated through demand
planning and the supply options have been identified through supply planning,
the two elements need to be aligned for the supply planning to be complete.
Often in practice, supply planning and its balancing with demand are done
simultaneously as a team effort between the requesting departments or units
and the procurement unit or officer. In this case, the supply planning process
described above (Step 7.1.2) is a theoretical step. To accomplish this, follow
the sub-steps in the chart below.
17
Projected Demand
Plant
Time to Forecast
Updated Supply
Plan Based
on Available,
Optional Space
in Suppliers
Database
Adjust Demand
Projection
Is Space Adequate?
no
yes
Approved
Demand and
Supply Plan
Can Additional
Space be Budgeted
or Donated?
yes
yes
Is the Supplier
Database Adequate?
no
Look for
More
Suppliers
Work on Additional
Funds for Space
The demand and supply plans need to be adjusted and balanced through
a cross-functional organization or project-wide collaboration in order to
complete the procurement and supply pipeline.
The finance officer should be involved in the procurement and supply
pipeline definitions in order to allow for appropriate financial resource
planning and to support the procurement process (particularly vendor and
service providers payment).
The administrative officer should be informed of the pipeline and discuss it
with the procurement officer in order to know at what point different service
providers (such as transporters) are involved in the procurement and delivery
process, as well as how much warehouse space will be required. This
information will allow for timely service provider selection and contracting.
1. Key Features
The plan integrates with existing data sources through spreadsheets or
other technology.
It allows collaboration across the organizations functions for efficient
planning.
The plan provides for simple and straightforward data analysis and
calculations supported by spreadsheets or other tools.
It allows for the comparison of alternative scenarios according to variations
in funding projections, logistics environment, and/or market conditions.
It delivers aggregated and disaggregated data.
18
David Snyder/CRS
Specific process ownership responsibility is assigned for the balancing of
the demand and supply functions.
Balancing supply and demand processes are approved and documented
as standard operating procedure (SOP).
The plan takes into consideration fluctuations in the demand and supply
cycles and in the operating environment conditions.1
The pipeline needs to be approved by the executive officer and the
program and/or budget managers.
3. Best Practices
Managers have full visibility for demand and supply over the desired
planning period.
There is flexibility and responsiveness in supply-demand balancing.
The plan provides options for meeting demand based on dynamic
operating conditions.
Substitute items and alternative sourcing and delivery options are
considered and identified.
Users have practical options for sharing with interested parties,
colleagues, and other stakeholders (it is preferable that the supplydemand balancing exercise be done using an electronic document such
as Excel).
Dr. Jon Fielder of

the Kijabe Hospital
consults with a fellow
physician over the
records of a patient.
Dr. Fielder is intricately
associated with the
Voluntary Counseling
and Testing center at
the hospital, through
which more than
300 patients are
now receiving ARV
medications provided
by PEPFAR.
1 For example, the procurement of anti-malarial medication needs to take into consideration the peak and low
times for malaria infection; the procurement of agricultural commodities needs to take into consideration that
prices are lower immediately after harvest; the procurement of items for areas that are hard to reach during
the rainy season needs to take that into consideration.
19
S t e p 7. 1 . 4 P l a n L o g i st i cs N e tw o rk
Step Name
Plan Logistics Network
Step Number
7.1.4
Inputs
1.
2.
3.
4.
5.
6.
Outputs
1. Warehousing market analysis

2. Transport market analysis
3. Storage facilities status report: Location, size,
layout, capacity, costs, throughput, security
conditions, etc.
4. Transport status report: Location, capacity, and
condition
5. Risk mitigation plan: Security, maintenance,
fumigation, pest control, etc.
6. Transport contract
7. Warehouse contract
1. Budget/program manager provides input

2. Logistics manager leads the process
3. Fleet manager provides input to logistics manager
Integration Points
1.
2.
3.
4.
5.
Summary
On the basis of the procurement and supply pipeline,

the supply chain management team needs to plan in
details the physical conditions under which the pipeline
will be realized.
Pipeline
Order schedule
Inventory plan
Contingency plan
Historical transactions (shipping)
Maintenance records of the warehouse space
Program planning
Procurement
Inventory management
Logistics management
Budget management
Logistics planning encompasses warehousing and transport planning. It

includes determining warehouse locations; capacity; and conditions, including
structural layout, security, and accessibility. It also involves planning how to
deliver products to their intended distribution points safely and on time.
When the pipeline is approved, the physical and transactional activities and
conditions for the realization of the pipeline need to be planned in detail by the
supply chain and procurement units. This includes the detailed identification
and evaluation of warehouses and other storage facilities as well as the
preliminary vendors and service providers identification.
20
Logistics planning also includes detailed step-by-step procurement, supply,

receipt, storage dispatch and distribution plans, a fleet and transport
management plan, an SCM reporting plan, and staff and contractor needs
analysis and planning.
1. Key Features
The plan integrates with existing data sources through spreadsheets or
other technology.
It provides for simple and straightforward data analysis and calculations
supported by spreadsheets or other technology.
The plan allows for the comparison of alternative scenarios according to
variations in warehousing and transport variables.
It includes conducting facilities location and capacity analyses with cost
considerations.
It includes conducting transportation needs and capacity analyses with
cost considerations.
The plan examines the logistics network alternatives.
It reacts to frequent or short-notice changes to service requirements.
The plan provides a data repository for warehousing and transportrelated data and a way to disseminate this data.
Specific responsibility is assigned for the logistics network planning
function.
Logistics networks planning processes are approved and documented as
standard operating procedure (SOP).
There is a methodology that facilitates repeatable processes.
3. Best Practices
The planning calendar is defined and adherence is rigorous.
Collaborative planning is done.
The plan utilizes existing data sources, including supply forecasts, order
schedules, gap reports, inventory plans, and contingency plans.
A formal structured process exists to collect and analyze market
intelligence and internal data from multiple sources.
Market intelligence and internal data are validated and updated on a
regular basis.
21
Real-time exchange of information is maintained among supply chain

functions.
A list of existing and potential transport service providers, their locations,
capacities, and rates is maintained.
A list of existing and potential warehouses, their locations, conditions,
and capacities is maintained.
22
Procurement Business Process

7.2 Sourcing
Sourcing refers to a number of processes aimed at facilitating department/unit
requests for goods, materials, and services; converting those requests into purchases
securing the delivery of products or services purchased; and in the case of products,
storing and delivering them to the requesting parties/end users.
Sourcing requires understanding supply market conditions; finding, evaluating, and
engaging suppliers and maintaining a supplier database; and tracking and managing
the movement of goods and material from vendor or donor to final destination.
Process 7.2 Sourcing

Start Process
Request
7.2.1
Manage Supplier
7.2.6
Service Contracts
7.2.3
Purchase and
Acquisition
7.2.2
Manage Shipping
7.2.4
Manage Payment
7.2.5
End
Process
23
S t e p 7. 2 . 1 R e q u e st
Step Name
Request
Step Number
7.2.1
Inputs
1. Product specifications including quantity and quality

descriptions
2. Destination for the products required and their intended
uses
Outputs
1. Approved requisition form
1.
2.
3.
4.
Requestor
Budget owner/head of unit
Procurement officer
Finance officer
Integration Points
1.
2.
3.
4.
Requestor submits request

Budget owner/head of unit is the approver of the system
Procurement officer receives requests
Finance officer receives copies of request
Summary
Procurement requests are generated based on an approved

procurement plan.
A request for supplies is triggered by an existing need in any functional unit for either
an approved project (such as food commodities or medical supplies for project
beneficiaries) or for internal consumption (such as office equipment or furniture). A
requestor is required to follow appropriate procedures to request supplies.
The requested goods, materials, or services (herein referred to as products) should
already be identified in the supply and demand plan and in the approved pipeline,
unless it is an unplanned or emergency need that is approved by the organizations
leadership. To accomplish this, follow the sub-steps in the chart below.
Approved
Demand and Supply
Plan
Beneficiary
Assessment
Identification
of Beneficiaries
and Proposed
Materials
Approved
Request
Materials Available in
Warehouse?
no
Purchase Process
24
yes
Materials Issue
Process
At the end of the planning process, a supply and demand plan is approved in
the form of a pipeline and a logistics plan (see Step 7.1.4). The execution of
the logistics plan starts with a request for procurement, which originates from
the organizations functional unit for products either for internal consumption
or for distribution to external end users (beneficiaries).
For products required for internal use, each functional unit prepares a
request for goods or a request for services (RFG/RFS), preferably once a
period (for example at the beginning of the financial year). The request is
approved by the organizations leadership and submitted to the procurement
unit for processing.
For products required for external distribution, a distribution plan is prepared
by the program unit and submitted for approval by the organizations
leadership. Within the distribution plan a number of required products are
identified and an RFG or RFS is prepared by the distribution plan owner
(requestor). The request is then approved by the organizations leadership and
submitted to the procurement unit for processing and to the SCM/logistics unit
for appropriate logistics planning.
For RFGs, the SCM or logistics officer checks for availability of goods in stock.
If the goods are in stock, the request if fulfilled from existing stock. If the items
are not in stock, a purchase process is initiated.
1. Key Features
The plan integrates with existing information sources such as market,
supplier, and product information systems.
It reflects planning information as contained in the operation plan,
approved programs, supply and demand plan, and logistics plan.
Products are identified by the requestor (budget or program manager or
other end user), who provides all relevant specifications on a purchase
requisition form or RFG/RFS. In cases of recurrent products, reference
may be made to previous deliveries to ensure that the selected products
fulfill demand expectations.
The requestor liaises with the procurement and/or logistics officer to
identify the status of product availability and any other factors that may
affect the request.
Requisition forms are verified and confirmed by the budget owner
25
and/or head of department and approved by the organizations

leadership before being submitted to the procurement department.
Requests are documented using a pre-defined record-keeping system.
Information is validated periodically.
Requests are documented using pre-approved procedures and forms.
Detailed specifications and quantities are provided.
Requests are verified and authorized by an authorizing officer (budget
owner/head of unit) and approved by the organizations leadership.
3. Best Practices
Requisition is established based on a rigorous needs and inventory
assessment and upon confirmation of the availability of products
required within and outside the organization through the purchasing unit.
The requestor completes standard purchase requisition forms and
provides exhaustive product specifications and delivery requirements.
The purchase requisition form is reviewed by the budget owner or the
head of the unit upon confirmation of the funding and the relevance of
the request, and approved by the organizations leadership.
The purchase requisition form is submitted to the procurement
department for processing with an appropriate analysis and delivery
timeframe. Frequent urgent requisitions are not a good practice.
The procurement unit provides prompt initial feedback on the submitted
request and keeps the requestor informed of request processing progress.
The requestor cannot approve his or her own request.
In cases in which the organization is requesting on behalf of a third
party partner, the partners original request needs to be included in the
requisition form submitted by the requesting officer/department.
Upon fulfillment of the requisition, the requestor provides constructive
service quality feedback for performance monitoring.
26
S t e p 7. 2 . 2 P u rc h a s e a n d Ac q u i s i t i o n
Step Name
Purchase and Acquisition
Step Number
7.2.2
Inputs
1.
2.
3.
4.
5.
6.
7.
Outputs
1. Request for quotations (RFQ)

2. Bid analysis report
3. Approved purchase order or contract
1.
2.
3.
4.
5.
Integration Points
1. Requesting unit: Initiates requisition form

2. Finance unit: Provides account coding and cash flow
information
3. Procurement committee including staff from
different units: Witnesses the process from RFQ to
order
4. Logistics Officer: Enters products into the inventory
management system
5. Compliance unit: Reviews procurement agreements
6. Organizations leadership: Grants approvals
Summary
An approved purchase request triggers a purchase

process starting with a request for quotations and ending
with a purchase order or contract with selected vendors.
Procurement policy
Approved supply and demand planning and pipeline
Approved requisition forms
Approved supplier list
List of approved/allowable items specifications
Boilerplate/sample procurement contracts
For recurring purchases, the existing contract
including previously used negotiated unit cost
The requestor
Procurement officer
Procurement committee
Suppliers
Local government authority (if necessary)
Purchase is part of the procurement process, during which approved procurement

requests are effectively processed by placing the approved purchase order with
the selected supplier. The purchase process generally follows the following steps:
1. Submission of a request for quotations based on the purchase requisition form
2. Receipt of bids from prospective vendors
3. Bids analysis and selection of a supplier
4. Submission of a purchase order or a purchase contract with the selected
supplier
27
A purchase order is created and prepared based on input from the requisition
form and the quote received from the selected vendor. Purchase of materials,
goods, and services (herein referred to as products) should be ordered either
on a purchase order form or using an approved procurement contract.
In the case of in-kind donations, the acquisition process consists of placing
a delivery request or call forward, or accepting a donation notice or transfer
authorization. In this case, the organization does not select a supplier, but might
be involved with the donor in the definition of product specification and delivery
planning. For ease of presentation, this section focuses on purchases, with the
understanding that some processes of the purchase will not be relevant to inkind donations. To accomplish this, follow the sub-steps in the chart below.
Approved
Request
Materials Available in
Warehouse?
no
Request for
Quote
Receipt of
Quote
Approved
Bid
Purchase
Order Issued
yes
Issue Process
End Process
The purchase process follows the following steps:

The purchase request is approved if required products are not available
in stock.
The purchase officer requests quotes from vendors.
A person other than the purchase officer receives quotes.
The bid committee reviews the quotes. Different levels of bid receipt
and approval may be decided by the organization based on the value of
goods. (See Risks Associated With Procurement in the Compliance
Checklist for details.)
The organizations leadership approves the bid comparison report.
A purchase order or contract is prepared by purchasing officer, verified by
the bid committee, and approved by the organizations leadership.
The purchase order or contract is issued to the selected vendors.
28
1. Key Features
An information system (manual or computerized) is in place
to record information, from approved purchase requisitions to
the actual purchase and use of the products. This is to ensure
consistency in preparing and fulfilling the purchase, as well as
adequate inventory management.
A procurement policy is in place, defining the procurement standards,
procedures, and steps to be followed. The policy determines the
fairness and transparency of the purchase of products, sets up
approval thresholds, and sets up the thresholds of procurement
values that need direct purchase without bids collection as well as
those that need to go through a Request for Quotation (RFQ) and bids
analysis process.
The purchase order approver confirms that local laws and business
practices allow purchase of the products in the manner used. (The
procurement and handling of certain types of products follow very
specific national and international rules and standards.)
RFQs are prepared from information contained in the approved requisition.
Tender procedures allow fair, equitable, and transparent competition.
The purchase order allows a description of purchase conditions and
rules with which suppliers should be in compliance to avoid any possible
conflicts during the purchase process.
The purchasing process and associated documents meet local
government and donors requirements, policies, and regulations.
Purchasing policies and SOPs are in place and provide clear guidance on
each category of purchase, including approval thresholds and matrix.
Purchasing terms of reference define the roles and responsibilities of
purchasing staff, requestors, and the approach and strategy in dealing
with suppliers.
An approved purchase order form contains the required conditions when
processing the purchase.
There is a code of conduct that includes a conflict of interest policy.
3. Best Practices
Purchase order forms and sample procurement contracts exist for
different types of procurement (e.g., local and international purchases,
service agreements, etc.) and are used in a consistent manner.
29
Richard Lord for CRS
A system to record vendors performance and any other relevant

information is in place and up-to-date, allowing management of vendors
and mitigation of risk and liability for the organization.
A purchasing threshold is approved and an authorization chart is in
place. This allows the organization to process proper purchase of goods
and services and use the appropriate purchasing categories.
Regular procurement status reports are sent to relevant staff to provide
updated information and status of each purchase order processed.
Regular coordination meetings are held between managers, procurement
and finance.
A payment process is in place and contains detailed steps to follow as well
as a list of supporting documents to attach to each payment request.
A farmer co-op
meeting in Svay Rieng,
Cambodia.
SOPs contains guidance for submission of RFQs and reception of bids

from interested vendors, including the correspondence method (e.g.,
email, fax, sealed envelopes), deadlines, and mechanism (e.g., bid box or
designation of a bids receiving officer).
A procurement tracking system is in place, providing status of the placed
order, detailed information and performance of suppliers, historical
information of the organizations business with the suppliers, quality of
items quoted and/or delivered, and duration of the delivery of goods/
services after receiving an approved purchase order.
An information system is in place to validate that purchased goods and
material can fit within supply chain constraints (warehouse capacity, etc.).
The suppliers selection procedures allow detailed information about
the treatment of quotes received and documentation of a fair and
transparent bidding competition.
A filing system allows maintenance of reviewers comments that can be
used as reference in future business with the same suppliers.
An information system allows the organization to send bid rejection
notices to suppliers whose bids have not been accepted.
The purchase order includes options to assign cost to specific cost
centers (e.g., a particular project or source of funding).
30
S t e p 7. 2 . 3 C o n tr a cts
Step Name
Contracts
Step Number
7.2.3
Inputs
1.
2.
3.
4.
Outputs
1. Request for quotations

2. Bid analysis report
3. Approved purchase order/contract
1.
2.
3.
4.
5.
Integration Points
1. Requesting unit: Initiates requisition form

2. Finance unit: Handles account coding and cash flow
information
3. Procurement committee including staff from different
units: Witness the process from RFQ to order
4. Logistics officer: Enters products into the inventory
management system
5. Compliance unit: Reviews procurement agreements
6. Organizations leadership: Issues approvals
Summary
Contracts should be developed for all procurement of

products or services.
Agreements policy
Approved requisition forms
Approved supplier list
Boilerplate/sample contracts
The requestor
Procurement officer
Procurement committee
Suppliers and service providers
Host country government - as the case might be
(Some countries require contracts to be registered)
These guidelines cover the process of creating a commercial arrangement,

during which approved products, consultancy, service, or equipment requests
are effectively processed by entering into a contract with an individual or
business supplier or service provider.
The contract process generally follows the following steps:
Submission of a request for quotations based on the purchase
requisition form and scope of work
Receipt of bids from prospective suppliers or service providers
Bids analysis and selection of a supplier or service provider
Submission of a purchase order2 or contract with the selected supplier or
service provider
2
Note: A purchase order is a contract.
31
The contract is prepared based on input from the requisition form, the
SOW, and the quote received from the selected supplier or service provider,
preferably using an approved contract template.
The purchase officer, with the assistance of the finance and requesting units,
should develop a contract every time a contractor is recruited. The contract
should be based upon local labor laws, work requirements, value of contract,
and other special requirements as necessary.
Contractors are not employees of the organization. Their contracts should
clearly state that and indicate the limitations of their association with the
organization. Please refer to Chapter 8, the Human Resource guide, for
differences between employees and contractors.
1. Key Features
An agreements and contracts register (manual or computerized) is in
place to record information on all contracts.
An approved agreement signing policy is in place and adhered to.
All contracts are based on a template that has been legally reviewed
and approved.
Contract and agreement policies and SOP are in place and provide
clear guidance on review and approval thresholds.
Agreements are supported by a clear scope of work and bill of
materials or services, with detailed specifications of the goods or
services ordered.
All contracts should be reviewed for programmatic conflicts with other
functional units in the organization.
Budgetary reviews should take place to make sure obligations are
planned for financially.
A full and proper record must be kept of all contract negotiations and
related correspondence.
Only those staff members identified in the contract signing delegations
have authority to negotiate, review, and enter in contracts on behalf of
the organization.
There is a code of conduct including a conflict of interest policy.
For contracts involving a bid, the bid process must be documented.
32
3. Best Practices
All contracts and agreements have a documented legal review to ensure
they state what they are intended to without creating unnecessary legal
burden or undue risk on the organization.
All contracts must be entered into the organizations contract register.
Every contract includes the position title of the organizations staff
member accountable for the management of the contract.
An official contract file must be established for all new contracts.
Contract drafts, amended copies, and a full copy of the signed original
are to be placed on file and retained in the relevant department.
Those staff involved in negotiating or establishing contracts must have
appropriate knowledge of contract law.
33
S t e p 7. 2 . 4 M a n a g e S h i pp i n g
Step Name
Manage Shipping (Transport and Delivery

From Suppliers)
Step Number
7.2.4
Inputs
1.
2.
3.
4.
5.
6.
Receiving warehouse(s) capacity and conditions

Quantity, quality, and space requirements
Anticipated storage timeframe and usage rate
Quotations, purchase order, or donation certificate
Delivery dates, terms, and conditions
Carrier information and usual transit times
Outputs
1.
2.
3.
4.
5.
Transportation orders/contracts
Waybills or goods-received notes
Goods received in good conditions
Delivery survey report
Claims for losses and damages
1. Procurement officer/logistician
2. Receiving party (warehouse officer or budget/
program manager)
3. Carriers and vendors
4. Other service providers such as clearing agents,
surveyors, or laborers
Integration Points
1. Carriers: Provide information on expected inbound

shipments and delivery time, terms, and conditions
2. Suppliers: Provide shipping details
3. Requesting party: Provides delivery information
Summary
Shipping consists of the movement and delivery of

purchased goods and material from the suppliers
warehouse to the requesting officer or the
organizations warehouse. It may also extend to the
onward delivery to the end user.
Purchased products need to be delivered from the supplier to the

requesting party. The delivery process involves transportation. In some
cases, products will be procured locally, e.g., in the same country and
either picked up by the agency or delivered by the supplier. In others,
goods will be procured internationally and need to be shipped by air, sea,
rail, road, or any combination thereof to the designated delivery point.
Internationally-sourced goods need to clear customs and are subject to
international trade and local laws related to the importation of goods.
Transport can be arranged either by the supplier/vendor or by the
34
organization/buyer. Delivery terms and associated title and risk transfer

terms must be agreed upon at the time of placing the order (see Step 7.2.2).
To accomplish this, follow the sub-steps in the chart below.
Purchase
Order Issued
no
Receipt of
Transport
Documents
Detailing Time,
Quantity, Etc.
Inform Transport
to Change
Supply Chain
Reorganize
Supply
Chain
Is Transport
Adequate?
Is Space Adequate?
yes
no
Organize
Warehouse
Space
yes
Materials
Received
Organize
Goods are shipped from the supplier and delivered to the organizations
warehouse or the requesting party as per the issued purchase order
or contract. In the case of bulky goods for storage in the organizations
warehouse, the logistician must determine there is enough space to store
the goods ahead of the purchase and delivery. If there is not enough space,
then the logistician or purchase officer should secure additional space.
Delivery should be delayed until adequate space can be made available.
If the organization is responsible for picking up the goods from the
transporters warehouse, the logistician or purchase officer must also
ensure that adequate transport options are available to facilitate the
delivery process. For a detailed explanation of the delivery terms, please
refer to the Incoterms 20003.
All deliveries must be documented using a waybill and receipt must be
acknowledged on the waybill or the goods-received note. Any discrepancy
in quality or quantity must be recorded.
For bulky or sensitive goods, the delivery process must be witnessed by
an independent surveyor and documented in a survey report. The survey
report must clearly describe the delivery conditions and record any
discrepancies between the quantity and quality ordered and delivered.
Responsibility for losses and damages must be clearly assigned for loss
reporting and claims processing.
3 Pohjola (n.d.). Incoterms 2000: Critical points in international transports. Retrieved December 14, 2010 from
http://logistics.wfp.org/documents/file/incoterms2000.pdf or PBB Global Logistics (n.d.)
35
Goods received must be stored in an orderly manner according to their specific

storage and handling guidance or best practices. Generally, the supplier or
donor will provide specific guidance for handling and storing goods.
1. Key Features
There are reliable manual and electronic systems for recording and
managing inventory information.
There is a system in place to certify quantity and quality of goods
received against the order and/or documentation, and to manage losses
and claims in the purchase order and the transport contract.
Procurement and logistics officers receive advanced delivery readiness
and shipping notices from vendors.
Procurement and logistics officers are able to determine if constraints
(warehouse capacity, resources, etc.) dictate that a scheduled inbound
shipment cannot be accommodated in time to make appropriate
corrective arrangements.
Procurement and logistics officers are in regular communication
with suppliers, carriers, and other parties along the supply chain for
delivery tracking.
Procurement and logistics officers receive the necessary documentation
such as waybills and invoices with sufficient lead time to allow for timely
customs clearing and delivery of the goods.
Procurement and logistics officers are informed of and, if possible,
consulted on transit time and desired delivery time and flow to allow for
adequate delivery and reception planning.
Procurement and logistics officers are able to maintain a list of available
carriers with rates that support a planned route and the transport costs.
When transport is arranged by the organization, the procurement
committee must tender the freight transport contract, as well as
survey and customs clearing as the case might be. The procurement
for transport, survey and customs clearance services should follow the
process described in the Purchase section.
The collection, shipping, and delivery process is documented through the
commercial invoice, delivery note or waybill, and the goods-received note
or receipt certification form.
36
There are adequate infrastructure and equipment to receive and

store deliveries. These include appropriate storage space and store
management tools/forms.
The receiving officer is informed of the estimated delivery dates and times,
as well as the delivery terms and conditions ahead of the deliveries.
Procurement and transport contracts should be clear on delivery terms,
using specific Incoterms language.
3. Best Practices
There is a complete paper and electronic inventory information system,
with good filing and retrieval options.
There is a system for certification of quantity and quality of goods
received, for managing losses, claims, and transporters payment.
If the goods are specialized and/or in large quantity, such as agricultural
commodities, it is necessary to hire a professional independent surveyor.
If the goods are imported and in large quantity, it is a good idea to recruit
a professional freight forwarder and/or customs clearance agent to
facilitate importation paperwork.
Procurement and transport contracts should specify tolerance levels in
terms of delivered quantity, quality, and delivery terms.
37
S t e p 7. 2 . 5 M a n a g e Pay m e n ts
Step Name
Manage Payments
Step Number
7.2.5
Inputs
1.
2.
3.
4.
5.
Outputs
1. Payment request
2. Payment documentation (finance)
1.
2.
3.
4.
5.
Integration Points
1. Finance unit: Provides payment verification and

processing
2. Suppliers database/market information system:
Conducts supplier and product performance
verification
Summary
Vendors invoices need to be verified against their

performance and processed promptly for payment.
Purchase requisition
Purchase order
Goods-received note
Invoice
Survey and other analysis reports
Vendors
Purchase officer
Warehouse manager
Finance officer
Organization director
Payments to vendors should only be made by the organization when all the
requirements of supply of materials, goods, or services have been met by the
vendor as per the purchase order/contract. The requirements include material
or service specification, delivery timeline, delivery terms, and condition of
goods on delivery.
The officers making and approving payments to suppliers must ensure first
and foremost that the organizations interests are protected. For deliveries
requiring a survey report, payment should only be initiated when the survey
report has been finalized. Any losses or damages due to action by the supplier
or other contractor should be deducted from payment, unless other claim
settlement arrangements have been made. To accomplish this, follow the substeps in the chart below.
38
Purchase
Order Issued
Invoice
Received
Perform
Three-Way
Check
Data Matches
Each Other?
yes
Payment
Request
Prepared
Payment
Request
Approved
Payment
Voucher
Prepared
After
Adjusting
Advance
Payment
Approved
and Paid
no
Perform
Error
Resolution
with Vendor
Advance
Paid
End
Process
The supplier sends an invoice after the receipt of goods. The person in charge
of receiving invoices does a three-way check to ensure that the goods have
been delivered and received as per the purchase order, the price quoted is as
per purchase order, and the invoice matches the final receipt count and quality
certification. If the three-way check identifies an issue with any of these, then
the invoice is returned to the supplier for adjustment.
A payment request is prepared based on the invoice with support of the
purchase order, purchase request, bid comparison, goods-received note and
any other details as may be required. The payment request is approved by the
requesting department supervisor.
The finance unit prepares payment documentation based on the payment
request after making necessary adjustments for any advance paid and any
penalty or interest that may be applicable. Payment is approved as per the
approving authority.
For finance-related guidance on procurement and accounts payable
management, please refer to Chapter 6, the Finance guide.
1. Key Features
The procurement and inventory management system integrates with
the financial system to allow verification and authorization of payment
to vendors.
The payment request initiator will perform a three-way match between
the purchase order, the goods-received note, and the invoice. The
amount invoiced should never be more than what has been stated in the
purchase order or the value of what has been received in good order as
stated on the goods-received note.
39
Matthew Breman/CRS
Invoices, with all supporting documents, should be received from the

vendors. The organization should designate the person/department/
office receiving the invoices.
All discrepancies should be noted and communicated back to the
vendor. Payment should be made to the vendor after adjusting for any
discrepancy. The vendor should only be paid the adjusted amount.
The payment requester should ensure that penalty clauses applicable
based on initial purchase order or contract are implemented if the
supplier has failed to meet the required specifications or delivery terms.
Payments should never be made before all goods have been
confirmed in good order and all services have been certified as
complete and satisfactory. No payment should be made for defective
goods, goods not received, or for services that do not meet the
A family dwelling at
Touloum, Chad. Catholic
Relief Services is
responding to the urgent
needs of Sudanese
refugees in Chad who
have fled escalating
conflict in western
Sudans Darfur region.
agreed-upon standards.
Pre-payment of material/advance to suppliers should be allowed in
select environments based on the circumstance of the purchase.
However, under no circumstance should the organization be put in a
position where greater than acceptable risk has to be accepted. The
general rule is that no advance to vendors/suppliers should have a
value that is greater than the amount of goods and/or services already
supplied and received by the organization. The organization should
never find itself in a credit position vis--vis the supplier.
Any payment request should be supported by documents including,
at a minimum, purchase requisition, purchase order, goods-received
note, and invoice. In the case of procurement requiring a survey report
and/or other quality analyses, the relevant documents should also be
attached as supporting documentation.
A person separate from the purchase officer approves the payment
request.
The three-way test is performed and reviewed upon receipt of the
suppliers invoice.
3. Best Practices
The organizations procurement policy and purchase order/contracts
should specify both delivery terms and corresponding payment terms to
avoid any misunderstanding or litigation.
No advance payment should be higher than the supply performance
level at the time of the advance. Advances to vendors should be the
40
exception, not the rule. Any advance should only partially cover the
portion of the purchase that has already been delivered.
All payments are approved based on an approved authorization matrix.
Information about payment and suppliers performance is provided to the
supplier database updater.
41
S t e p 7. 2 . 6 M a n a g e S u pp l i e rs
Step Name
Manage Suppliers
Step Number
7.2.6
Inputs
1.
2.
3.
4.
Outputs
1. Market (product and supplier) information database

2. Supplier performance reports
1.
2.
3.
4.
Integration Points
1. Finance system
2. Inventory management system
3. Market information sharing between functional
units
4. Organization leadership for vendor relations
Summary
Organizations need to maintain adequate information

on suppliers and good, open, and transparent
relationships with key suppliers.
Supplier information form

Market survey reports
Ad-hoc supplier performance review
Approval in pre-screen process
Purchase officer
Warehouse officer
Updater
Organization director
Supplier management is one of the roles of the procurement unit. It

consists of supplier, product, and market intelligence, supplier performance
management, and supplier relationship management.
Supplier, product, and market intelligence consists of an information-gathering
and storage system or database from which the market and products regularly
procured and usual suppliers are monitored and rated according to performance.
Supplier performance management includes the monitoring of delivery, userfeedback on product quality, service quality and consistency, and competitive
pricing. These and other indicators may vary by market, supplier, product, or
service, but over time those variances show clear trends.
The supplier relationship is important when the organization conducts regular
business with a supplier. An honest and transparent business relationship with
the supplier makes it possible to collect information and negotiate good deals
and ensures respect and good service. A relationship with any one supplier
should, however, not be a cause of conflict of interest, favoritism, or corruption.
At all times, officers interacting with suppliers should follow the behaviors
described in the code of conduct.
42
Certain donors and/or governments have specific guidelines for allowable

product sources and/or vendors. The organization should always ensure it is
aware of and adheres to the donor/government policies, procedures, guidance,
or restrictions related to product source, specifications, and supplier vetting or
filtering requirement. To accomplish this, follow the sub-steps in the chart below.
Start
Process
no
Maintain
Suppliers
Database
Constantly
Look
for New
Suppliers
New Supplier?
yes
Assess
Supplier
Update
Database
End
Process
1. Key Features
A manual register or an electronic database of current and potential
suppliers is maintained.
The register or database contains information such as name and
particulars of supplier, possible delivery locations (including whether
the supplier can deliver directly to the warehouse), and types of
products supplied. It also documents historical transactions with the
supplier and allows for categorization of the supplier by type of product,
location, size, and performance indicators that show the reliability of
the supplier.
A person (henceforth called the updater) other than the procurement
officer is designated to update the database. This task includes
creation, modification, and deletion of vendors and vendor information.
The procurement officer and the receiving department are required to
continuously provide data on the performance of vendors.
A person senior to the updater periodically reviews the database.
The database is able to store and extract information regarding supplier
performance.
The procurement officer and other organization officials maintain a
relationship with regular suppliers through regular communication via
meetings, phone calls, etc.
43
The procurement officer conducts regular market surveys for the

products and suppliers frequently used and update the database
accordingly.
The market information database is maintained in safe custody.
The updater is separate from the purchase officer.
A person senior to the updater reviews the database on a regular basis.
All suppliers are periodically reviewed and updated on the database.
All suppliers and their respective products are regularly verified for
compliance with any donors or government requirements. Non-compliant
vendors are banned from participating in the organizations bids.
3. Best Practices
The updater tracks performance metrics for each supplier and product
against pre-defined standards (including quality, cost, time, and service)
on a periodic basis. The maximum allowable period is one year.
The organization continuously looks for new vendors and alternate
supply modes.
A formal coding system is in place for suppliers and products.
The market information system allows for understanding of the total
and detailed cost breakdown of the products including shipping cost,
maintenance cost, training cost, serviceability, lot size/inventory cost,
obsolescence versus technology costs, government controls, etc.
44
Process 7.3 Fulfillment
Fulfillment refers to a number of steps involved in managing the flow and
storage of goods, materials, services, and related information from point of
origin to point of distribution. Fulfillment includes inbound and outbound
movements of products; stores, warehouse, and inventory management;
inspections; handling delivery; dispatches, returns, and distribution/use of
goods, materials, and or services; and disposition of damaged, expired, or
unwanted stock.
Process 7.3 Fulfillment

Start
Process
Warehousing and
Inventory
Management
7.3.1
Distribute
7.3.2
Asset Management
7.3.3
End
Process
45
S t e p 7. 3 . 1 Wa r e h o u s e a n d I n v e n t o r y M a n ag e m e n t
Step Name
Warehouse and Inventory Management
Step Number
7.3.1
Inputs/Outputs
1.
2.
3.
4.
5.
1. Procurement officer: Processes procurement until

products are received
2. Receiving party (warehouse officer or budget/
program manager): Handles inventory receipt and
management
3. Vendors: Supply products
4. Service providers including transporters, clearing
agents, surveyors, laborers, etc.
5. Auditors: Assess compliance regulations and policies
Integration Points
1. Finance unit: Carries out inventory and asset

valuation and depreciation, handles claims
processing
2. Program unit: Completes program activities progress
and final reports
3. Service providers including transporters, surveyors
and health officials, etc.
Summary
Warehouse and inventory management are two closely

related functions which when combined ensure safe
and adequate management of products purchased,
stored, and dispatched for use by end users.
Purchase order
Waybill/packing list/delivery note
Survey report
Inventory status report
Warehouse layout/map
The warehouse management section defines the requirements for the

storage and movement of all stored products, including all associated
transactions related to products being received into the warehouse or
shipped out of the warehouse.
In this section, warehouse designates any area where products are stored.
Whatever the size and location of the warehouse, the organization must
ensure that products can be safely received, adequately stored, and efficiently
dispatched for program activities. Quality inspections, space/storage
optimization, and inventory tracking systems and practices are regularly
analyzed to improve efficiency. Depending on the type and usage of products
handled by the organization, the warehouse and inventory management
operations may be as simple as managing a small office materials store or as
complex as managing large quantities of various sensitive medical products. In
any case, the basic principles and business requirements are the same.
46
The term inventory designates the products held available in stock. Inventory
management is comprised of handling functions related to the tracking and
management of products. This includes the monitoring of products received
into, stored in, and dispatched out of storage locations and reconciling the
inventory balances, setting targets, providing replenishment techniques, and
reporting actual and projected inventory status.
Warehouse and inventory management is a process that allows the
organization to have adequate management of its products and to make
decisions and take actions to ensure enough products are available to
support program activities in a timely and efficient manner. The process
provides necessary and adequate guidelines and instruction for:
Warehouse management: How the organization prepares and acts to ensure
that warehouse facilities are ready, in adequate conditions, and with a clear
layout, and that all necessary documents and equipment (e.g., store ledger,
bin card, pallet) are in place.
Time to
Forecast
Receive
Materials
Requisition
Materials
Compare
Materials
to
Purchase
Order
Assess
Condition
of
Inventory
Notify
Project
Manager of
Variances
Dispose
Materials
Approve
Variances
and
Deviation
Initiate
Claims
Process
Update
Inventory
Data
Kit and
Put
Away
Payment
Process
Manage Inventory
Inventory management: Procedures and instructions for product reception,

storage, and dispatch are developed and implemented; control and inspection
system is in place; product stacking rules and procedures are in place and
adhered to; and product movement and storage documents (e.g., waybill,
requisition form, dispatching form) are in place and used.
47
Materials
Below
Replenishment
Time to Review
Inventory
Identify
Materials Below
Replenishment
Point
Count
and Audit
Inventory
Initiate
Requisition
Dispose of
Damaged
or Expired
Materials
Identify
Inventory
Discrepancies
Update
Inventory
Record with
Explanation
Notify
Donor if
Required
Enter in
Finance
Books
End Process
Different inventory management techniques (such as ABC analysis, lot tracking,

cycle counting support, etc.) can be used. These tools help efficiently manage
the stock and flow of products, effectively utilize people and equipment,
coordinate internal activities, and communicate with customers/users.
1. Key Features
There is a simple and consistent filing system for recording receipts, inventory
records, daily internal movements, dispatches, losses, and disposals.
There is a general products ledger showing all transactions for all items and lots
maintained. The general ledger will allow the organization to obtain accurate
and detailed information of products movement and stock at any time.
Regular (periodic) inventory and transaction reports are prepared and
submitted to the procurement officer. The report allows the organization and
its procurement/logistics unit to take appropriate timely actions to respond
to product requests and to place new orders if needed to complete and/or
replenish the warehouse based on demand and supplies planning.
Minimum criteria (location, accessibility, storage capacity, structure layout and
conditions, security, etc.) are developed to select warehouse(s) that ensure
products are stored safely and in good condition.
Warehouse and inventory management procedures allow the organization to
adequately store products in an orderly fashion in safe stacks that are easily
accessible and separated by type, nature, packaging, lot, intended use, source
and destination, required storage condition, etc. The system should allow easy
inventory control, inspection, and counting and ensure adequate and proper
stock rotation. Management procedures include all necessary equipment
48
needed for commodity movement in the warehouse as well as equipment to

maintain the warehouse facilities. The procedures also provide guidelines
and instructions and necessary control documentation on what should
be performed during the receptions of products, storage of products, and
dispatch/distribution of products.
An approval process is in place to ensure that all products in and out of the
warehouse are pre-approved by the organizations authorized officials. The
pre-approval can be on the dispatch request form or on the waybills or delivery
order. Clear standards for stock movement are in place and contain instructions
and guidelines for each type of product stored in the warehouse. The most
common systems used are First In, First Out (FIFO); Last in, First Out (LIFO),
and First Expired, First Out (FEFO). These systems allow the organization to
safeguard products and maintain a priority list of products to be dispatched.
Reconditioning/repackaging procedures are developed as part of the
warehouse and inventory management procedures. The procedures
allow the organization to safeguard products and reduce risk of loss by
taking appropriate actions such as reconditioning or repackaging and
report discrepancies.
Regular inventory count is conducted to reconcile documented
information with physical reality. This procedure allows the organization
to be up-to-date on the physical products available and to make
decisions to purchase additional products to ensure that program
requests can be supported without delays. A sample inventory report
form is shown as Appendix A.
The warehouse has specific spaces for packing, kitting, and shipping.
This allows the organization to pack and kit products prior to dispatch.
There is a specific space for hazardous items and items requiring special
care (avoid interaction between/cross-contamination of items).
All product stocks are recorded in the inventory recording documents
(e.g., stock ledger, bin cards, asset register). This recording system
(paper or electronic) allows the organization to obtain accurate updated
inventory status at any given time. The system allows financial valuation
for all products.
The inventory management system (paper or electronic) provides
guidance and procedures on how to maintain adequate information
related to product specifications, expiry date, shelf life, etc. This system
allows the organization to take timely action to safeguard products and
to plan for distribution and disposal. Product specifications are clearly
shown. For items with expiry dates, the shelf life is clearly recorded.
49
The inventory management system provides for cross-verification of

available stock. An independent counter is necessary to documents the
adequacy of the stock recorded in the warehouse documents (e.g., ledger,
bin cards) as well as to ensure internal control for the use of products.
Inventory management allows the organization to prepare and submit
regular inventory status reports. Frequency of the reports depends on
the organizations, donors, or regulatory authorities requirements and
requests from the program unit.
Stock movements are recorded in an agreed-upon manner defined in the
standard operating procedures (SOP).
The inventory management system allows for recording of inventoried
products at their real value for accounting purposes.
All forms and documents such as waybills, GRN, bin cards, etc., are prenumbered and used sequentially.
The stock levels (maximum, minimum, and operating stock) are
monitored and recorded periodically. Counting ensures that physical and
existing products are matched with warehouse records (using a store
ledger, bin cards, etc.). Any discrepancy is investigated and adjusted.
Consistently updated and correct inventory records are properly
maintained.
Protocol for physical count is in place and effective physical count is
conducted as per the SOP.
Losses are recorded properly using surveyor reports, pictures, laboratory
analyses, etc. Losses are verified and certified independently by persons
other than the storekeeper, such as independent surveyors or auditors.
Discrepancies and losses are recorded and approved by the organization
authorized officer as defined in the SOP.
For products such as food, when partially damaged or when there are torn
containers, their reconditioning should be pre-authorized by the organizations
leadership and independently witnessed (generally by an internal auditor or
a budget/program manager). A reconditioning report indicating quantity and
quality at the beginning, losses, and quality and quantity recovered should be
drawn. All present parties should sign the reconditioning report.
Disposals for damaged or unfit goods are authorized by the
organizations leadership, witnessed by persons other than the
storekeeper, and are the subject of a disposal report signed by all
present parties.
50
The organizations leadership develops and approves an incoming and

outgoing inventory plan.
Detailed product specifications are provided in the classification of items,
and each stack is clearly labeled with its specifications (e.g., lot number,
production date, use by date, chemical composition, packaging details)
on the bin card.
Relevant SOP are developed and fully implemented.
The warehouse is well lit and well ventilated. It is inspected regularly for
insects, dirt, dust, and other unwanted elements. It should ideally be
treated with a surface insecticide. Appropriate storage space is in place
and meets all minimum storage conditions to safeguard products and
tools such as palettes, scales, sacs, boxes, and ladders.
The warehouse has adequate fire protection with clearly visible
and accessible flame retardant equipment, both in and outside the
warehouse. There should be no smoking in or around the warehouse.
The warehouse has adequate sanitary facilities with access to a toilet
and water point.
All warehouse visitors are screened and registered in a visitors book.
Visitors sign in on entry and out on exit. All non-warehouse staff should
be accompanied at all times.
Signs indicating safety rules and expected behavior are displayed in and
outside the warehouse, and visitors are required to read and agree to the
rules prior to entry.
3. Best Practices
There is a complete paper or electronic inventory information system
with good filing and retrieval options. It is fully implemented and
updated daily.
There is a system for certification of quantity and quality of goods
received and for managing losses and transporters payment.
Inventory management policies and a procedures manual are in place
and include inventory valuation procedures.
Standard forms for all processes (e.g., receipt, dispatch, losses, disposal)
are developed, approved by the organizations leadership, and used.
All receipts are confirmed by a goods-received note or receipt waybill. Any
discrepancy between what is said to be delivered and what is actually
received is properly documented. A sample waybill is shown as Appendix
B. A sample goods-received note is shown as Appendix C.
51
Warehouse inventory records are sent to Finance and administration for

budget and assets reconciliation on a regular basis, at least once yearly.
Products with the nearest expiry date should always be dispatched first.
Products suspected of degradation or damage should be physically
separated from the rest of the inventory to minimize the risk of
contamination. Questionable products should be quarantined until they
are certified safe and healthy or reconditioned or disposed.
Inventory count is conducted on a monthly basis. The entire inventory
is recorded and its value is well documented for accounting and audit
purposes.
Surprise physical counts are conducted and recorded by selected
independent persons on a regular basis.
Receiving and issuing documents are kept and electronic tools are
updated accordingly. Any discrepancies or damage in products are
documented and reviewed by organization leadership.
Clear safety measures are in place for items with special conditions
such as expiry date; light, moisture, or temperature sensitivity; and for
hazardous material.
52
S t e p 7. 3 . 2 D i str i b u t i o n
Step Name
Distribution
Step Number
7.3.2
Inputs
1. Requisition form
2. Waybill (dispatch and return)
3. Carrier list and rates
Outputs
1. Distribution and end user/recipient report

2. Inventory status report
3. Recipient receipt sheet
1. Carriers
2. Final distribution point manager: Ensures that
products are received and distributed in line with the
distribution protocol (number of recipients, ration, etc.)
3. Warehouse manager: Responsible for inventory control
4. Budget/program manager: Designs activities and
strategic objectives for which the product resources
are used
Integration Points
1. Beneficiary/recipients/end-users database
2. Finance system: Records the inventory value
3. Monitoring and evaluation: Ensures distribution is in
line with project objectives
Summary
Distribution is the last step of the supply chain.

Products are handed over to their intended end-users or
recipients, and they leave the inventory.
The organization should develop a system of distribution of products to

end-users, which ensures a fast and simple movement out of the central
warehouse to the final distribution point, and onward handover to the intended
recipients. The system should ensure that there are enough controls to
minimize risk of loss and/or misuse and create an environment of compliance.
The system should ensure that there is minimum lead time between
receipt and distribution (i.e., minimal inventory hold time), and that there
is minimum damage to goods. The distribution unit must adhere to a welldefined set of rules and requirements. The distribution system should be
linked to demand and supply planning to reduce stock-outs or excess stock
situations, and reduce carrying costs.4 To accomplish this, follow the substeps in the chart below.
4 Russell, R. S., & Taylor, B. W. (2006).Operations management: Quality and competitiveness in a global
environment (Fifth edition). New York, NY: John Wiley & Sons.
53
Inventory
Issue Waybills/Bills
of Lading/Packaging
List
Fill From
Inventory
Forward for
Shipment/
Transport
Initiate Shipping
Update
Financial
Reporting
System
Ship Material
1. Key Features
Distribution system and procedures allow the organization to adequately
control the distribution of products and plan for effective distribution of
products based on number and type of intended beneficiaries and the
approved products ration size and content per beneficiary.
The system allows for clarity, simplicity, full visibility, and traceability of
the movement of products from the warehouse to the end-user by using
approved documents (e.g., requisition form, waybill, goods-received
note, recipients receipt sheet, distribution report) and allows adequate
tracking of products returned back to the warehouse after distribution.
All transfer and distribution documents are created in multiple copies
to ensure that each party (warehouse officer, transporter, receiver,
logistics officer, finance officer) keeps a copy for his or her records. See
Step 7.2.4, Manage Shipping, for detailed guidance on rules and
documentation.
Acknowledgment of delivery to the final distribution point is required.
The distribution system takes into consideration the amount of products
requested in the pipeline (based on demand and supply planning). The
distribution system allows a system of notification from the warehouse
through which the program and purchase officers are informed of any
expected shortfall or overstock.
Under certain circumstances there may be situations in which materials
may be received and issued directly at the final distribution point without
passing through the warehouse. In these circumstances a waybill is
issued and entered in the inventory ledger and care is taken to show that
the materials did not pass through the warehouse.
Distribution officers have a recipients receipt sheet on which recipients
acknowledge receipt.
54
Distribution officers should complete a distribution report based on

the receipt sheet data and the waybill of inventory information. The
distribution report should include information on stock received,
distributed, and remaining as well as recipient and ration data.
The products request form approver is separate from the waybill
approver. The waybill approver is not the same person as the waybills
issuer.
Products are always counted at each transfer point (loading and
unloading). The count is confirmed between the warehouse staff, the
transporter, and the receiver.
Waybills need to be approved by organization leadership.
Receivers should promptly return all non-distributed products to the
warehouse. The return should be documented on a return waybill. The
return waybill should contain details of quantity and condition of the
goods returned and should reference the original waybill. The goods and
materials should be returned and entered in the inventory ledger based
on details in the original waybill and on the return note.
The inventory issue request should detail beneficiary number, distribution
location, project, and funding source. This is to enable warehouse
accounting to relate the information to beneficiary accounting, resource
accounting, and project monitoring and evaluation.
3. Best Practices
The issue of products starts with a duly approved products requisition
form. The form contains detailed information that allows the warehouse
officer to prepare adequate products (matching quantity, type, serial
number, specification, packaging needed etc.).
Products are never issued without an approved supporting document
such as a waybill, requisition form, or order form.
The organization uses a well-defined inventory rotation method (FIFO is
the most frequently used method) and a method for valuing goods and
for proper management of stocks.
The cost of maintaining the warehouse, as well as customs and other
taxes, is passed on in the inventory cost. The issue of inventory cost
shows this adjusted cost.
Products are stacked in a way that allows for fast distribution in line with the
organizations and donors distribution procedures and project objectives.
55
S t e p 7. 3 . 3 F l e e t M a n a g e m e n t
Step Name
Fleet Management
Step Number
7.3.3
Inputs
1. Vehicle file including specifications, purchase date,

value, etc.
2. Log sheets including mileage, trips, maintenance/repair,
fuel replenishment
Outputs
1.
2.
3.
4.
Organizational Role
1. Transportation officer: Coordinates transport requests

and analyzes transport expenses and fleet management
costs
2. Administration officer: Manages assets and maintenance
contracts
3. Finance officer: Records transport information in the
financial system and fleet cost analysis
4. Budget/program manager: Handles consolidated trip
planning and transport requests
Integration Points
1. Vehicle monitoring and reporting system

2. Finance unit: Plans, records, and analyzes transport cost
Summary
The organization needs to have a clear fleet management

policy with robust control systems, and needs to have a
system for tracking usage and costs.
Cost/benefit analysis for maintenance decisions

Vehicle servicing schedule
Fuel efficiency report
Depreciation report and replacement/disposal plan
Fleet management involves the management and tracking of the

organizations owned vehicles. Transport management is a process that allows
the organizations purchase of motor vehicles; analysis of all associated costs,
including maintenance, repairs, fuel, and spare parts; and all other vehiclerelated management aspects.
Motor vehicles are important assets that allow the organization to efficiently
conduct business on a day-to-day basis. Despite their importance, vehicles
cost a lot of money in purchase and running costs, and are prone to high-risk
exposure and misuse.
In order to best protect the organizations staff and assets, transport
management provides guidelines for the use of the organizations vehicles in
safeguarding the interests of the organization for good stewardship of resources.
56
Fleet management is usually primarily the function of the administration officer.

Organizations need to have in place a fleet management policy with associated
control systems and procedures that are in line with the organizations, donors,
and governments laws and regulations. These include but are not limited to
naming who is authorized to drive vehicles; conditions of carriage; and safety
instructions such as use of seat belts, speed limits, and driving hours limits.
The organization should have for each vehicle a file including all relevant details
for the tracking of a vehicle throughout its useful life, and for audit purposes.
The fleet management system should have the following features:
1. Key Features
The system captures fuel and maintenance expenses by vehicle and by
program activities.
It complements other tools used to record and track other organization
expenses.
The system identifies and plans for expected major transport costs,
including maintenance costs, repair costs, and fuel costs.
It defines a preventative maintenance schedule for motor vehicles to
ensure timely service.
The plan includes a motor vehicles depreciation and replacement/
disposal plan.
The plan is in compliance with local government laws, rules, and
regulations in the use of motor vehicles. It outlines a system for timely
processing of the payment of any required local fees such as insurance,
road fitness, and licenses.
An inventory list of motor vehicles is in place and is updated regularly.
The inventory should identify each vehicle and match the vehicle file
information.
Motor vehicle and driver allocation and use procedures are clear and
followed. This is to ensure that the allocation of motor vehicles and
drivers for any travel request adequately responds to the requests
received. In particular the vehicle allocated should meet the road
conditions and the number of travelers.
There is a system for tracking and analyzing transport costs. This will
provide information on the actual total expenses for transport versus
approved budgets.
57
The motor vehicle servicing schedule is followed to ensure timely

maintenance and to ensure adequate support for program activities.
The organization should adopt transport request procedures to ensure
adequate internal control of allocation and use of motor vehicles.
3. Best Practices
A computerized vehicle management system allows recording and
analysis of all information related to the motor vehicles, authorized
drivers, users, type of use (business or personal), expenses by project
and budget code, conditions, maintenance and repairs, and performance
and fuel consumption.
There is a regular (monthly) fuel consumption and maintenance costs
analysis report per vehicle, per project, per user, and per budget code.
The organization obtains contracts with filling and service stations that
allow the organization to get fuel discount and credit facilities and avoid
carrying cash for fuel, and priority in servicing and repairs.
There are vehicle incident and accident report procedures that inform the
organization leadership on time of any motor vehicle incidents/accidents
and assist drivers and users in taking appropriate actions.
Pre-numbered vehicle logbooks contain information related to the use
and movement of the vehicle. The logbook supports all transport costs
and is used as a supporting document for the vehicle management
system and financial system/budget management.
Consolidated monthly trip planning is prepared by the transport
coordinator, taking into consideration trip requests from each functional
unit. The schedule contains at least the following information: travelers
names and functional unit, departure and return dates/times, drivers
name, vehicle type and registration number, destination, purpose, and
the project and budget codes for the trip.
A vehicle checklist ensures good and proper handover between drivers. It
is also used as supporting document for vehicle repair and maintenance.
A motor vehicle replacement/disposal plan approved by the
organizations leadership is in place and followed.
58
Process 7.4 Reporting
All organizations are required to account to their constituencies for resources
with which they are entrusted. They are accountable to recipients, donors,
board members, partners, governments, and the general public. In particular,
development and relief organizations that use donor funding to carry out
projects have an obligation to their donors and recipients to achieve project
objectives using allocated resources appropriately.
In most development projects, products that are procured, transported,
stored, and distributed to recipients are the largest proportion of the project
budget and constitute the most significant loss, fraud, and misuse risk.
Throughout the supply chain, donors and recipients as well as
organizational leadership need to be informed and assured that
adequate care is taken by the project managers and supply chain
managers to ensure efficient delivery of products to their intended
recipients. Regular product inventory and recipients reports are required
to maintain clarity and visibility and to integrate with the monitoring and
evaluation reports, the finance reports, and the general program reports.
For reporting and record keeping consistency, please refer to the M&E
guide (Chapter 10) and the Finance guide (Chapter 6).
Inventory and recipients reports must be based on accurate source
documents. Primary paper and electronic records must be kept securely
for audit purposes and archiving. Organizations must keep a systematic
filing system to allow for easy retrieval and verification. The quality of
data must be verified on a regular basis.
Different donors, governments, and organizations have specific reporting
and record keeping requirements. The organization must ensure that
its reporting and record keeping systems and policies adhere to these
requirements. Sample inventory and recipient reporting and record
keeping regulations are include the US code of federal regulations
(22 CFR 211.10, Records and Reporting Requirements5). A sample
Commodity Status Report and Recipient Status Report as well as sample
Bed-Net Supply and Distribution Report are attached as Appendix D, E,
and F.
5 USAID, retrieved from http://www.usaid.gov/our_work/humanitarian_assistance/ffp/reg11p.
htm#211.10
59
Finance
Team
Process 7.4 Reporting
60
Reporting and
Record Keeping
7.4.1
Step Name
Reporting and Record Keeping
Step Number
7.4.1
Inputs
1.
2.
3.
4.
Outputs
1. Monthly purchase reports

2. Purchase filing system
Organizational Role
1. Transportation officer maintains fleet reports

2. Administration officer maintains asset and
maintenance reports
3. Finance officer maintains all original purchase
documents
4. Budget/program manager maintains all requests
and expense updates
5. Purchase officer maintains all purchase files
Laura Sheahen/CRS
S t e p 7. 4 . 1 R e p o rt i n g a n d R e c o rd K e e p i n g
Purchase file
Purchase request documents
Fleet management logs
Supply chain planning file
Integration Points
1. Budget reports
2. Finance: Plan, record
3. Purchase log
Summary
Organizations need to have clear reporting hierarchy

and a record management policy with proper control
systems, in order to have a system for tracking usage
and costs.
Children in the village

of Tagha-e-Timor,
Afghanistan, which
has been plagued by
drought and hunger.
In remote villages in
Afghanistan, CRS pays
men to fix canals that
bring melted snow from
the mountains to fields
in the early spring.
Start Process
Records
Reports
Inspection and
Audit
End Process
61
The following is a sample of US regulations governing record keeping, as

described in a document commonly known as 22 CFR 2116.
(a) Records
Cooperating sponsors and recipient agencies shall maintain records and
documents in a manner which accurately reflects the operation of the program
and all transactions pertaining to the receipt, storage, distribution, sale,
inspection, and use of commodities and to receipt and disbursement of any
monetized proceeds and program income. Such records shall be retained for a
period of three years from the close of the U.S. fiscal year to which they pertain
or longer upon request by A.I.D., such as in the case of litigation of a claim or
an audit concerning such records. The cooperating sponsor shall transfer to
A.I.D. any records, or copies thereof, requested by A.I.D.
(b) Reports
Cooperating sponsors shall submit two copies of audits performed in
accordance to Sec. 211.5 (c). In addition, cooperating sponsors shall submit
to USAID or the Diplomatic Post, and to AID/W such reports as A.I.D. may
reasonably request. The following is a list of the principal types of reports that
are to be submitted at least annually:
(1) Periodic summary reports showing receipt, distribution, and inventory of commodities and proposed schedules of shipments or calls
forward.
(2) Reports relating to the generation of monetized proceeds and program income and the use of such funds for purposes specified in the
operational plan or TA. See Sec. 211.5 (l).
(3) Reports relating to progress and problems in the implementation of
the program.
(4) Reports shall be submitted in sufficient detail to enable USAID or the
Diplomatic Post to assess and to make recommendations as to the
ability of the cooperating sponsors to effectively plan, manage, control
and evaluate the Food for Peace programs under their administration.
(5) At the time that an emergency program under Public Law 480, title II7
is initiated, whether by a governmental or nongovernmental cooperating sponsor, USAID or the Diplomatic Post should
6 U
S Code of Federal Regulations. (2010). Title 22, Foreign Relations. Chapter II Agency for International
Development. Section 211.10 Records and Reporting Requirements Washington, DC: U.S. Government
Printing Office.
7 T itle II Food Aid of the Agricultural Trade Development and Assistance Act of 1954 (Public Law 480).
Retrieved from http://www.usaid.gov/policy/budget/cbj2009/101430.pdf
62
(i) Make a determination regarding the ability of the cooperating

sponsor to perform the record-keeping required by this Sec.
211.10, and
(ii) In those instances in which those specific record-keeping
requirements cannot be followed due to emergency
circumstances, specify exactly which essential information will
be recorded in order to account fully for title II commodities and
monetized proceeds.
(c) Inspection and Audit
Cooperating sponsors and recipient agencies shall cooperate with and assist
U.S. Government representatives to enable them at any reasonable time to:
(1) Examine activities and records of the cooperating sponsor, recipient
agencies, processors, or others, pertaining to the receipt, storage,
distribution, processing, repackaging, sale and use of commodities
by recipients;
(2) Inspect commodities in storage or the facilities used in the handling
or storage of commodities;
(3) Examine and audit books and records, including financial books
and records and reports pertaining to storage, transportation,
processing, repackaging, distribution, sale and use of commodities
and pertaining to the deposit and use of any monetized proceeds
and program income;
(4) Review the overall effectiveness of the program as it relates to the
objectives set forth in the Operational Plan or TA; and
(5) Examine or audit the procedure and methods used in carrying out
the requirements of this Regulation. Inspections and audits of title II
emergency programs will take into account the circumstances under
which such programs are carried out.
63
Compliance Checklists for

Procurement
Procurement is the acquisition of appropriate goods and/or services at the
best possible total cost of ownership to meet the needs of the purchaser in
terms of quality and quantity, time, and location.
Procurement is one of the processes most vulnerable to abuse.
Mismanagement of procurement can take many forms and can occur at all
stages of the procurement cycle from the initial decision to receiving and
paying of goods or services. To minimize mismanagement it is important to
use procurement compliance checklists.
Objectives of procurement compliance checklists
Procurement compliance checklists are used to effectively monitor procurement
processes and identify fraud and corruption risks at all stages of the procurement
cycle. They are used to check on compliance with existing standards and
requirements with the goal of ensuring adherence to an agencys procurement
policies and guidelines. Checklists enhance procurement guidelines and policies
by providing detailed and clear expectations at all stages of the procurement
process. They can serve as a comprehensive tool for reviewing procurement
processes and assessing compliance with existing guidelines.
There are often many risks associated with procurements; the compliance
officer should take note of the following inherent risks and seek to determine
the existence of these risks in the organization.
Risks Associated with Procurement
Unauthorized purchases
Buying goods when they are not needed/justified
Overspending budget
Failure to achieve value for money; waste of resources; duplication of
resources
The supplier going bankrupt/failing to deliver
Consignment (e.g., number of parcels) registered as received is not what
was actually received
Goods wrongly certified as received; not getting the volume/type of goods
ordered; paying for goods not received; misappropriation of goods
Payment against services not performed or performed inadequately
(particularly vulnerable where sub-contractors are used)
64
Payment made before goods received; payment made in excess of

delivery value; inaccurate payment made
Payment to an incorrect supplier, supplier account or branch
Payment for more than has been received
Possibility of duplicate and overpayments that were not agreed upon as
part of the original purchase order
Not getting the work done because the contract terms were not clear and
properly controlled; paying excessive amounts
Payment for incomplete work
Work is not up to standards; payment for inadequate work
Re-letting of contracts to unsatisfactory supplier
(Adapted from The Crown Prosecution Service. (2010). Procurement guide for
managers. Retrieved from http://www. cps.gov.uk)
1. Procurement Checklists
The following checklists will be used to assess the adequacy of the
procurement setup and compliance with written policies and procedures and
local laws, donor rules, and regulations. The checklist questions are intended
to mitigate the risks listed above.
Is there a code of conduct for procurement staff?
Do involved staff members read and sign the procurement code of conduct?
How are credit facilities reviewed?
What is the policy on quotations?
Do these meet donor regulations and organization and award
requirements?
What happens if required quotes cannot be obtained?
Are there independent checks on supplier quotes?
Are quotes worded so that they include any liability for import duty, taxes,
and limitations on price increases?
Is an annual purchasing schedule produced as part of the budget process?
Are the local purchasing rules clearly defined?
How are quotes reviewed before they are accepted?
Are the procedures in accordance with the procurement policy and donor
regulation?
Are supplier/vendor lists maintained so that quotes are obtained from
previously approved suppliers?
65
Is there a list of frequently purchased items and prices?

Is the list of frequently purchased items regularly updated?
Are stock levels and stock movements reviewed as part of the purchasing
procedure to ensure that excess stock is not purchased?
Who is authorized to approve purchase orders?
Are goods-received notes issued?
On delivery, are goods checked to purchase orders and goodsreceived notes?
Are supplier invoices, purchase orders, quotes, and goods-received notes
batched together for those approving the invoice to review?
Do staff members show alertness for transactions that appear unusual
in the circumstances and may indicate the existence of related parties?
Examples are as follows:
Transactions with abnormal trade terms
Transactions lacking business logic
Transactions in which substance differs from form
Transactions processed in an unusual manner
Unrecorded transactions
2. Property Management Checklists
Organizations should establish standards for the procurement of supplies
and other expendable property, equipment, real property, and other services
with donor or private funds. These standards are in place to ensure that such
materials and services are obtained in an effective manner and in compliance
with the provisions of applicable policies and procedures, donor requirements,
and local law.
The following checklist should be used in supplies and property management
to assess adequacy of controls.
Stock count (physical to stock cards):
Perform a test count and trace to the relevant stock cards to ensure the
items have been correctly included.
Select a number of stock items from the stock cards and perform a test
count.
Select high value items.
Review the location of the stock counted above:
Is the stock stored in a secured place?
66
Karl Grobl for CRS
Does the method of storage mean that regular and accurate counts
can be made?
If applicable, are the gauges and weighing machines accurate?
When was the accuracy of the measuring devices last checked?
Is the stock kept in well-labeled locations?
Is the stock kept in clean and dry conditions under temperature
control?
Ensure that fuel stock is kept in such a manner that does not
represent a fire risk.
Note: Each stock line should be clearly labeled at its location and should
be identified by a card indicating which stock line the goods represent. This
will reduce errors, limit the reliance upon the skill of identification by the
storekeeper, and help to keep stock types separate.
Review of stock cards:
Review a number of stock cards, selected from each category of stocks
At a health center in
Kdol Tahen, Cambodia,
health staff provide
medicine to the patients
and teach them how to
use the medicine.
(e.g., drugs).
Note the dates when these were last reviewed by a supervising officer
(e.g., accounting, commodities specialist, or finance manager)
Ensure that each stock line and each stock card have unique identifying
numbers.
Trace a selection of balances brought forward on the stock cards to the
previous cards.
Stores handover reports:
Review the stores handover reports relating to the previous months.
Ensure these have been signed and dated by the individuals between
whom the responsibility for the stores has been passed.
When control of the stores is passed from one person to another
there should be some form of handover report to formalize the
passing of responsibility.
Conduct half yearly/yearly stock counts.
Trace a number of items from the last yearly stock count summary to the
relevant entry on the stock card.
Ensure the stock card was signed for these checks.
Review the previous count.
67
Was it adequately documented?

Was appropriate follow up action taken for any discrepancies?
Ensure that any subsequent stock adjustments were appropriately
authorized.
Select items from the current years stock count summary and perform
the following:
Trace the total amount and/or quantity (if applicable) of the inventory
to the notes on the accounts.
Trace items to the relevant date on the stock card to confirm the
accuracy of the quantity.
Review the pricing of the selected items.
For stock movement issues, select a number of stock issues from the stock
cards and test as follows:
Trace to the relevant stores issues voucher.
Ensure the stores issue voucher number is noted on the stock card.
Ensure the issuer and the recipient sign the voucher.
Ascertain that the dates and quantities are in agreement with the stock card.
Trace to the relevant stores requisition voucher.
Ensure that the requisition is appropriately authorized.
Select a number of stock requisitions from the requisition vouchers and
test as follows:
Ensure that the requisition is properly authorized.
Trace to the related stock issue voucher, ensuring that details,
quantities, and dates correspond.
Ensure that the issuer and the recipient sign the voucher.
Trace to the stock card entry and ensure that the card was updated
on the day of the issue.
Review and identify old stores requisitions, if any, which have not
been matched to stores, and issue vouchers.
Select a number of the unmatched requisitions and investigate why
they are still outstanding.
Determine the method for dealing with requisitions, which are not
completely matched by issues.
Test a selection of these items to see how the unmatched requisitions
are fulfilled.
68
Stock movements receipts:

Select a number of goods received notes and trace to the relevant
stock card.
Confirm the dates with the advice note and purchase invoice from the
supplier.
Ensure the goods-received note has been signed by the storekeeper to
confirm the goods were received in good order.
Check that the goods-received note agrees to the information on the
purchase order.
Select a number of receipts from the stock cards and trace to the goodsreceived notes.
Confirm the dates with the advice note and purchase invoice from the
supplier.
Notes: Every stock movement should show a reference number of the
goods issued or goods-received note in the stock card. No issue should be
made from stores without an authorized stores requisition note or purchase
requisition. The store manager should compare the items in the purchase
requisition against the waybill raised for quantity and specifications. This
should be signed as received by the person who made the request or the
authorized representative receiving the goods.
On receipt of goods from a supplier, a delivery note should be obtained from
the supplier and compared to the actual goods received and to the purchase
order form. A goods-received note should be completed and signed by the
person receiving the goods and attached to the supplier delivery note. A copy
of the goods-received note should be sent to the accounts department to be
attached to the subsequent invoice for payment.
Stock obsolescence:
Review the goods in the stores and make a note of items that appear to
be contaminated, damaged, slow moving, or in any way obsolete.
Ensure that these items are written off.
If they are not written off, obtain reasons.
Note explanations as to why these items have not been removed from
the stores.
Select a number of stock cards and review as follows:
Obtain explanations for items that have not moved for six months
or more.
69
Ensure that any stock write-offs or other adjustments have been

properly authorized.
Reasons should also be given why stock became damaged or
obsolete as this may help to tighten control procedures.
Accounting procedures:
At the end of the year, all stocks should be counted, compared to the
stock card quantities, and summarized.
Any discrepancies should immediately be investigated and disposed.
All donated commodities remaining in the warehouse should be counted,
valued, and included in the note to the accounts.
There should be monthly stock reports to indicate stock levels.
For fixed assets, determine the following:
The organization maintains proper records for equipment and adequately
safeguards and maintains equipment.
Disposition or encumbrance of any equipment or real property is in
accordance with donor requirements.
Obtain entitys policies and procedures for equipment management and
ascertain if they comply with the entitys policies and procedures.
Select a sample of equipment transactions and test for compliance with
policies and procedures for management and disposition of equipment.
Inquire if a required physical inventory of equipment has been acquired
under donor regulations.
Test whether any differences between the physical inventory and
equipment records were resolved.
Fixed asset verification:
Review the fixed asset register or supporting documentation for evidence
that management has performed a physical verification of the assets held.
Note the frequency of such checks. These checks should be performed in
accordance with the policies and procedures manual monthly, quarterly,
semi-annually, or annually.
Verify that asset management complies with donor regulations.
Confirm management has taken action to investigate any variances or errors.
Review the repairs and maintenance nominal ledger accounts for items over
the predetermined monetary threshold included in the fixed assets register.
70
Depreciation (if applicable):

Test the calculation of depreciation on a selection of assets according to
the depreciation policy.
If depreciation is applicable, depreciation should be charged using the
method outlined in the organizations finance manual.
Ensure that an appropriate official reviews the depreciation calculations
and the journals to the ledger.
Verify that the accumulated depreciation charge in the fixed asset
register is in agreement with the ledger.
Ensure that all obsolete assets have been written off.
Disposal of assets:
Review the ledger and fixed asset register for any disposals during the year.
On disposal of fixed assets the sale proceeds should be accounted for as
per donor regulations.
Verify that the disposal was properly authorized.
Verify that donor permission to dispose was received.
Verify that donor conditions have been met.
The policies and procedures manual should include authorization
procedures for disposal.
Confirm that the method of sale ensure the best price was obtained.
Disposals should be carried out by the following tendering process (depending
upon the value of the asset):
Independent valuation
Public notice of tender
Date for tender
Mail opened by tender committee constituted as per regulations
Tender committee members not to bid for the goods
Documentation retained
Accounting treatment should follow the procedures laid out in the
policies and procedures manual and conforms to donor rules
Trace from the sales invoice to the receipt of cash on bank statement.
Investigate any reasons for delays in this process.
Ensure that the appropriate authorities have been informed of the disposal
(e.g., motor insurance companies, vehicle registration authorities, donors).
71
Review the fixed asset register for items that have outlived their useful
life to the program and assets that no longer physically exist and should
be written off (for example, motorcycles scrapped for spares, obsolete
computer hardware, items lost to theft or robbery, etc.)
Inquire about the accounting treatment of motorcycles and any other
motor vehicles which have been scrapped or dismantled for spares.
1. Fleet Management Checklists
Vehicles are important assets in the organization. It is critical to safeguard
vehicles from misuse and loss.
Review objectives
To establish that the vehicles are maintained and used properly and vehicle
fleet is adequate for the organizations operations.
The following checklist is useful in the review of vehicles management.
Vehicle usage checklist and questions:
Is there a policy on vehicle use?
Is a vehicle logbook issued for each vehicle?
Is it possible to use a donor-funded vehicle on another project?
Is it possible to charge different donors/projects/departments based on
logbook details?
Are donors/projects/departments charged accordingly?
Do all staff members who drive vehicles hold legal driving permits as
required by local laws?
Is the validity of driving permits checked annually?
Select a number of mileage log books for testing.
Verify that the last months mileage (private and official) is in agreement
with the vehicle report.
Verify that the last recorded mileage is in agreement with the vehicle
odometer reading.
Trace private mileage, if any, to the relevant payroll deduction, staff
contribution, or staff debtors account. Ensure that it was calculated correctly.
Ensure the logbooks are properly completed, showing the users
and drivers of the vehicles, mileage and fuel consumption, and the
destination and purpose of each trip.
Check the calculations and additions of the mileage recorded in the
logbooks.
72
Review the logbooks for evidence that the appropriate supervisor has
reviewed them on a monthly basis and that recorded mileages are
compared to the mileage meter or gauge.
Logbooks should be reviewed monthly by an independent member of
staff (e.g., a financial or internal auditor). Private mileage, if applicable,
should be extracted for recharging through the payroll or staff debtors.
Periodic reviews should also compare mileage with fuel consumption
over time.
For the logbooks selected, ensure all the vehicles have road licenses,
insurance, are registered, and are serviced regularly.
Select a number of records of private mileage use from the logbooks and
ensure that it has been properly authorized.
Private mileage should be authorized in advance, either when a vehicle
is assigned to someone or when an unassigned vehicle is used for a
personal use.
Review the private mileage agreement, if applicable, and ensure this
policy is reasonable and is followed by the program.
Ensure that the drivers selected above are properly licensed, as use of
unlicensed drivers would invalidate an insurance claim.
Review the private mileage rate, if applicable.
Compare the private mileage rate to fuel and other transport costs.
When was the mileage rate last updated and is it reasonable?
Obtain a sample of vehicle fuel bills and verify that a selection of entries
are in agreement with the relevant log books.
How many vehicles does the organization have?
How are they allocated to staff and projects?
Is there a policy on private and official use?
Do staff members undergo driving tests before they are allowed to drive
the organizations vehicles?
Where are the vehicles parked overnight? Is this location secure and
covered by insurance?
Are licenses examined before staff members are allowed to drive?
Do the drivers use seat belts, helmets, and protective clothing as
appropriate?
Does each vehicle have a separate logbook?
Verify that each logbook shows the following:
73
Beginning and ending mileage each day

All private mileage
Gallons of fuel purchased
Issues of oil
Vehicle defects
Who checks the log books and how often?
Are logbooks closed off at the end of each month?
Does the transport report include use and fuel consumption of
generators?
Does management receive the transport report?
Are vehicles, including motorbikes, regularly verified? Does this check
include a check on the engine?
Vehicle maintenance questionnaire (for organizations that have their own
mechanics):
What reviews have been performed to establish the cost effectiveness of
any in-house maintenance, if applicable?
What are the mechanics qualifications?
Are records kept to show when services are due? Are service stickers
used?
Who reviews the vehicle maintenance records?
Is the purchasing of spares kept as a separate function from that of the
mechanic?
Are used parts returned to the organization if they are replaced?
What are the replacement plans for motor vehicles?
74
Glossary
ABC Classification
Classification of a group of items in decreasing order of annual dollar volume
or other criteria. This array is then split into three classes called A, B, and C.
The A group represents 10 to 20 percent by number of items, and 50 to 70
percent by projected dollar volume. The next grouping, B, represents about 20
percent of the items and about 20 percent of the dollar volume. The C-class
contains 60 to 70 percent of the items, and represents about 10 to 30 percent
of the dollar volume.
ABC Inventory Control
An inventory control approach based on the ABC volume or sales revenue
classification of products (A items are of the highest volume or revenue, C are
the lowest volume or revenue SKUs).
ABC Model
In cost management, a representation of resource costs during a time period
that are consumed through activities and traced to products, services, and
customers or to any other object that creates a demand for the activity to be
performed.
ABC System
In cost management, a system that maintains financial and operating data on
an organizations resources, activities, drivers, objects, and measures. ABC
models are created and maintained within this system.
Acquisition Cost
In cost accounting, the cost required to obtain one or more units of an item. It
is calculated as order quantity times unit cost.
Action Message
An output of a system that identifies the need for and the type of action to be
taken to correct a current or potential problem. Examples of action messages
in an MRP system include release order, reschedule in, reschedule out, and
cancel. Synonyms: action report, exception message.
Action Plan
A specific method or process to achieve the results called for by one or more
objectives. An action plan may be a simpler version of a project plan.
Activity
Work performed by people, equipment, technologies, or facilities. Activities are
usually described in an verb-adjective-noun construction. Activities may occur in
75
Sean Sprague for CRS
a linked sequence and there may be activity-to-activity assignments. 1) In activitybased cost accounting, a task or activity performed by or at a resource, required
in producing the organizations output of goods and services. A resource may be a
person, machine, or facility. Activities are grouped into pools by type of activity and
allocated to products. 2) In project management, an element of work on a project.
It usually has an anticipated duration, anticipated cost, and expected resource
requirements. Sometimes the term major activity is used for larger bodies of work.
Activity Analysis
The process of identifying and cataloging activities for detailed
understanding and documentation of their characteristics. An activity
analysis is accomplished through interviews, group sessions, questionnaires,
observations, and reviews of physical records of work.
An anti-trafficking project
at Tra On in Vinh Long
Province in the Mekong
Delta region of Vietnam.
Many young people
have been trafficked
for marriage or work in
neighboring countries,
and this project
addresses the problem.
Bottleneck
A constraint, obstacle, or planned control that limits throughput or the
utilization of resources.
Bulk Area
A storage area for large items that are most efficiently handled by the palletload.
Bulk Storage
The process of housing or storing materials and packages in larger quantities,
generally using the original packaging or shipping containers or boxes.
Bulk Packing
The process or act of placing numbers of small cartons or boxes into a larger
single box to aid in the movement of product and to prevent damage to or
pilferage of the smaller cartons or boxes.
Business Plan
1) A statement of long-range strategy, revenue, cost, and profit objectives,
usually accompanied by budgets, a projected balance sheet, and a cash flow
(source and application of funds) statement. A business plan is usually stated
in terms of dollars and grouped by product family. The business plan is then
translated into synchronized tactical functional plans through the production
planning process (or the sales and operations planning process). Although
frequently stated in different terms (dollars versus units), these tactical plans
should agree with each other and with the business plan. See also: Long-Term
Planning, Strategic Plan. 2) A document consisting of the business details
(organization, strategy, and financing tactics) prepared by an entrepreneur to
plan for a new business.
76
Commercial Invoice
A document created by the seller. It is an official document that is used to
indicate, among other things, the names and addresses of the buyer and
seller; the product(s) being shipped; and the products value for customs,
insurance, or other purposes.
Commodity
An item that is traded in commerce. The term usually implies an
undifferentiated product competing primarily on price and availability.
Commodity Procurement Strategy
The purchasing plan for a family of items. This would include the plan to
manage the supplier base and solve problems.
Competitive Bid
A price/service offering by a supplier that must compete with offerings from
other suppliers.
Contract
An agreement between two or more competent persons or companies to
perform or not to perform specific acts or services or to deliver merchandise.
A contract may be oral or written. A purchase order, when accepted by a
supplier, becomes a contract. Acceptance may be in writing or by performance,
unless the purchase order requires acceptance in writing.
Contract Administration
The process of managing all aspects of a contract to guarantee that the
contractor fulfills his obligations.
Distribution
Outbound logistics from the end of the production line to the end user. 1) The
activities associated with the movement of material, usually finished goods
or service parts, from the manufacturer to the customer. These activities
encompass the functions of transportation, warehousing, inventory control,
material handling, order administration, site and location analysis, industrial
packaging, data processing, and the communications network necessary for
effective management. It includes all activities related to physical distribution
as well as the return of goods to the manufacturer. In many cases, this
movement is made through one or more levels of field warehouses. Synonym:
Physical Distribution. 2) The systematic division of a whole into discrete parts
having distinctive characteristics.
Ethical Standards
A set of guidelines for proper conduct by business professionals.
77
FEFO
First expiry, first out. The first expiry, first out method attempts to ensure that
perishable products are sold while they are still in good condition.
Forecast
An estimate of future demand. A forecast can be constructed using
quantitative or qualitative methods or a combination of the two. It can be
based on extrinsic (external) or intrinsic (internal) factors. Various forecasting
techniques attempt to predict one or more of the four components of demand:
cyclical, random, seasonal, and trend.
Forecast Accuracy
Measures how accurate your forecast is as a percent of actual units or
dollars shipped, calculated as 1 minus the absolute value of the difference
between forecasted demand and actual demand, expressed as a percentage
of actual demand.
Forecast Cycle
Cycle time between forecast regenerations that reflect true changes in
marketplace demand for shippable end products.
Forecasting
Predictions of how much of a product will be purchased by customers. Relies
upon both quantitative and qualitative methods. See also: Forecast
Integrated Logistics
A comprehensive, system-wide view of the entire supply chain as a single
process, from raw materials supply through finished goods distribution. All
functions that make up the supply chain are managed as a single entity, rather
than managing individual functions separately.
Inventory
Raw materials, work in process, finished goods, and supplies required for
creation of a companys goods and services. Also the number of units and/or
value of the stock of goods held by a company.
Inventory Accuracy
When the on-hand quantity is equivalent to the perpetual balance (plus or
minus the designated count tolerances). Often referred to as a percentage
showing the variance between book inventory and actual count. This is
a major performance metric for any organization which manages large
inventories. Typical minimum and best practice averages would be 95
percent and 99 percent.
78
Inventory Management
The process of ensuring the availability of products through inventory
administration.
Inventory Planning Systems
The systems that help in strategically balancing the inventory policy and
customer service levels throughout the supply chain. These systems calculate
time-phased order quantities and safety stock using selected inventory
strategies. Some inventory planning systems conduct what-if analyses that
compare the current inventory policy with simulated inventory scenarios with the
goal of improving the inventory ROI.
Key Performance Indicator (KPI)
KPIs are commonly used by an organization to evaluate its success or the
success of a particular activity in which it is engaged
Last In, First Out (LIFO)
Accounting method of valuing inventory that assumes latest goods purchased
are first goods used during accounting period.
Lead Time
The total time that elapses between an orders placement and its receipt.
It includes the time required for order transmittal, order processing, order
preparation, and transit.
Logistics
The process of planning, implementing, and controlling procedures for the
efficient and effective transportation and storage of goods, including services,
and related information from the point of origin to the point of consumption for
the purpose of conforming to customer requirements. This definition includes
inbound, outbound, internal, and external movements.
Maximum Inventory
The planned maximum allowable inventory for an item based on its planned
lot size and target safety stock.
Maximum Order Quantity
An order quantity modifier, applied after the lot size has been calculated, that
limits the order quantity to a pre-established maximum.
Order
A type of request for goods or services such as a purchase order, sales order,
work order, etc.
79
Order Cycle
The time and processes involved from the placement of an order to the receipt
of the shipment.
Order Entry and Scheduling
The process of receiving orders from the customer and entering them into
a companys order processing system. Orders can be received through
phone, fax, or electronic media. Activities may include technically
examining orders to ensure an orderable configuration and accurate price,
checking the customers credit and accepting payment, identifying and
reserving inventory (both on hand and scheduled), and committing to and
scheduling a delivery date.
Order Interval
The time period between the placements of orders.
Order Level System
The level of materials at which a new supply order should be placed. In other
words, at this level a purchase requisition is made out. This level is fixed
somewhere between maximum and minimum levels.
Order Management
The planning, directing, monitoring, and controlling of the processes
related to customer orders, manufacturing orders, and purchase orders.
Regarding customer orders, order management includes order promising,
order entry, order pick, pack and ship, billing, and reconciliation of the
customer account. Regarding manufacturing orders, order management
includes order release, routing, manufacture, monitoring, and receipt into
stores or finished goods inventories. Regarding purchasing orders, order
management includes order placement, monitoring, receiving, acceptance,
and payment of supplier.
Order Picking
Selecting or picking the required quantity of specific products for movement
to a packaging area (usually in response to one or more shipping orders) and
documenting that the material was moved from one location to shipping.
Order Processing
Activities associated with filling customer orders.
Out of Stock
The state of not having inventory available for distribution or sale to a
consumer (zero inventory).
80
Procurement
The business functions of procurement planning, purchasing, inventory control,
traffic, receiving, incoming inspection, and salvage operations. Synonym: Purchasing
Pro Forma Invoice
An invoice, forwarded by the seller of goods prior to shipment, that advises the
buyer of the particulars and value of the goods. Usually required by the buyer
in order to obtain an import permit or letter of credit.
Public Warehouse
A business that provides short or long-term storage to a variety of businesses,
usually on a month-to-month basis. A public warehouse will generally use
their own equipment and staff; however, agreements may be made in which
the client either buys or subsidizes equipment. Public warehouse fees are
usually a combination of storage fees (per pallet or actual square footage) and
transaction fees (inbound and outbound). Public warehouses are most often
used to supplement space requirements of a private warehouse.
Purchase Order (PO)
The purchasers authorization used to formalize a purchase transaction with
a supplier. Also the physical form or electronic transaction a buyer uses when
placing order for merchandise.
Purchasing
The functions associated with buying the goods and services required by an
organization.
Quarantine
In quality management, the setting aside of items from availability for use or
sale until all required quality tests have been performed and conformance
has been certified. In a best practice process, items in quarantine are tagged,
logged, and kept in a secure area pending disposition.
Raw Materials (RM)
Crude or processed material that can be converted by manufacturing,
processing, or combination into a new and useful product.
Real-Time Processing
The processing of data in a business application as it happens, as contrasted
with storing data for input at a later time (batch processing).
Receiving
The function encompassing the physical receipt of material, the inspection of
the incoming shipment for conformance with the purchase order (quantity and
81
damage), the identification and delivery to destination, and the preparation of

receiving reports.
Request for Quote (RFQ)
A document used to solicit vendor responses when a product has been
selected and price quotations are needed from several vendors.
Return Goods Handling
Processes involved with returning goods from the customer to the
manufacturer. Products may be returned because of performance problems or
simply because the customer doesnt like the product.
Service Level
A measure, usually expressed as a percentage, of satisfying demand through
inventory or by the current production schedule to a degree service meets the
customers requested delivery dates and quantities.
Shelf Life
The amount of time an item may be held in inventory before it becomes
unusable. Shelf life is a consideration for food and drugs, which deteriorate
over time, and for high tech products, which become obsolete quickly.
Supplier
1) A provider of goods or services. See also: Vendor. 2) A seller with whom the
buyer does business, as opposed to a vendor, which is a generic term referring
to all sellers and manufacturers in the marketplace.
Supply Chain
The material and informational interchanges in the logistical process stretching
from acquisition of raw materials to delivery of finished products to the end user.
All vendors, service providers, and customers are links in the supply chain.
Supply Chain Management (SCM)
As defined by the Council of Supply Chain Management Professionals (CSCMP),
supply chain management encompasses the planning and management
of all activities involved in sourcing and procurement, conversion, and all
logistics management activities. Importantly, it also includes coordination and
collaboration with channel partners, which can be suppliers, intermediaries,
third-party service providers, and customers.
Supply Planning
The process of identifying, prioritizing, and aggregating, as a whole with
constituent parts, all sources of supply that are required by and add value to the
supply chain of a product or service at the appropriate level, horizon, and interval.
82
Supply Warehouse
A warehouse that stores raw materials. Goods from different suppliers are picked,
sorted, staged, or sequenced at the warehouse to assemble plant orders.
Transit Inventory
Inventory in transit between manufacturing and stocking locations, or between
warehouses in a distributed warehousing model.
Vendor
The manufacturer or distributor of an item or product line. See also: Supplier.
Warehouse
A storage place for products. Principal warehouse activities include receipt of
product, storage, shipment, and order picking.
Warehousing
The storing (holding) of goods.
Warehouse Management System (WMS)
The system used to effectively manage warehouse business processes and
direct warehouse activities, including receiving, put away, picking, shipping,
and inventory cycle counts. Also includes support of radio-frequency
communications, allowing real-time data transfer between the system and
warehouse personnel. They also maximize space and minimize material
handling by automating put-away processes.
Waybill
A document containing a description of goods that are part of a common
carrier freight shipment. The waybill shows origin, destination, consignee/
consignor, and amount charged. Copies travel with goods and are retained by
originating/delivering agents. Used by carrier for internal record and control,
especially during transit. Not a transportation contract.
83
References
Catholic Relief Services. (2010). Purchasing Manual. Baltimore, MD.
84
Appendix A: Sample Inventory Support Form

EQUI P M EN T R E G I S T R Y F O R M
Inventory ID: CRS /
Plate No.:
Year / Make / Model:
Serial No.:
Description:
Local PR No.:
Requisitioner:
Date:
Local PO No.:
Approved by:
Date:
Vendor PO:
Date:
Date Acquired:
Vendor:
Cost (LC):
DSPN (purchase):
DSPN (after transfer):
Cost (USD):
ERF No.:
Date:
HQ PO No.:
Date:
Group Purchase ID:

FAN No.:
Chassis No.:
Date:
Form completed by:
Engine No.:
on (date):
Documents in file:
(not all may be required)
by (name):
PASTE PICTURE OF VEHICLES HERE
85
Appendix B: sample waybill
Waybill
Project: [insert title and number]
Waybill Number: __________________
1. Recipient Organizations Details
Recipient Organizations (RO) Name:
Code:
ROs Address:
Exact locality of delivery:
Approved
Recipients by
Category:
Names of the ROs Legal Representative:

Name of Alternate Authorized Receiver :
[1]
Cat 1:
Cat 2:
Total:
2. Cargo Details
Request No:
Distribution Period:
Conveyor/Transporter:
Anticipated Delivery Date:
Section to be filled in by the Logistics/ Warehousing Service of the Organization

DESCRIPTION
Items
DETAILS OF MATERIALS
PACK
Section to be filled in by the Receiver
TOTAL DISPATCHES
NPACK
G-WT
N-WT
RECEIVED QUANTITY
Sound
Packaging
Torn
Damaged
Missing
TOTAL
Notes: PCKG: Packaging (give type and weight); PR1-3: Apportion amounts by programs/beneficiaries types covered by this dispatch; NPACK: Number
of packages; G/N-W: Gross/Net Weight
3. Organization Approval
Prepared by [Name and Title]:
Approved by [Name and Title]:
Signature:
Signature:
4. Loading at Organization Warehouse

Date and place of loading:
Name of the Transporter:
Time - Beginning of loading:
Name of the Driver:
Time - End of loading:
Driving License Number:
Name of the Storekeeper:
Number Plate:
Signature and Seal of the Storekeeper
Signature of the Driver:
5. Unloading and Reception at Recipient Organizations Warehouse

Name and Title of the Receiver
Date and place of unloading:
Comments:
Signature and Seal of the Receiver:
Signature of the Driver:
NB: This Waybill is made in five colored copies, to distribute as follows: white original (Organization Logistics), blue (Organization
Programs), yellow (Warehouse), green (Recipient Organization), pink (Transporter).
[1]
Each recipient organization must have a second person, other than the Director, authorized to take delivery of the goods.
86
Appendix C: sample goods received note
<<COUNTRY>> Program
Date:
Reception Site / Warehouse:
GRN -
GOODS RECEIVED NOTE No.:

DN / WB No.:
Transport Co.:
Origin:
Driver:
Truck No.:
Trailer No.:
PO Number:
Condition Upon Arrival and Discharge
Product Description
Unit QTY
According to
DN / WB
Good
Condition
Missing /
Short-Landed
Units
(A)
Torn or
Leaking
Containers
(B)
Damaged
Units (wet,
crushed, etc.)
(C)
Empty / Light
Units
(D)
Total Losses
(A + B + C
+ D)
TOTALS:

We the undersigned declare that we witnessed the unloading of the truck identified above, and we concur that the products and
commodities listed were received in the condition as noted:
NOTE: By signing, individuals verify the authenticity of this document; it IS NOT an admission of responsibility for loss or damage.
Warehouse Mgr:
Driver:
Date:
AFTER RECONDITIONING
Product Description
QTY
Recovered
(a)
QTY Unfit or
Destroyed
(b)
Other
Losses (c)
Total Loses
(b + c)
Total
Recovered
and/or Lost
(a + b + c
Remarks / Comments
TOTALS:

Operation completed on
Signature: Warehouse Mgr:

20
at
Driver:
AM / PM.

87
Appendix D: Sample Commodity Status Report

COMMODITY STATUS REPORT
Distribution
FY06 2nd QTR JAN - FEB - MAR
AGENCY: Catholic Relief Services

Country: Bnin

Submitted Date: 5/23/06

Name: Carla Brown-Ndiaye, Country Representative

Signature:
CM
A.
MM
WSB
CSB
LENTIL
VEGOIL
RICE
GREEN
PHYSICAL INVENTORY
PHYSICAL INVENTORY - 12/31/2005
ADJUSTMENT TO INVENTORY
ACTUAL PHYSICAL INVENTORY 12/31/2005
B.
RECEIPTS
TOTAL
PEAS
10,875
10,875
ARRIVAL ACCORDING TO
PL06BJ0904,0905, 0947, 0949
IN TRANSIT
EXCESS LANDED
COMMODITIES RETURNED FROM AGENCY
675
43,175
89,900
16,371
500
18,378
179,874
675
43,175
89,900
16,371
500
18,378
179,874
349,175
99,995
323,600
772,770
COMMODITIES RETURNED FROM AGENCIES
80,000
80,000
TOTAL RECEIPTS
80,000
349,175
99,995
323,600
852,770
C.
TOTAL AVAILABLE
10,875
80,000
349,850
43,175
89,900
116,366
500
341,978
1,032,644
D.
DISTRIBUTED DURING QUARTER
FOOD ASSISTED CHILD SURVIVAL/MCH
39,800
35,000
21,206
96,006
GENERAL RELIEF/ SOCIAL ASSISTANCE
31,350
37,900
24,850
14,505
18,200
126,805
EDUCATION SUPPORT (SCHOOL FEEDING)
EMERGENCY
FOOD FOR WORK
SUB / TOTAL
71,150
37,900
59,850
35,711
18,200
222,811
REPAYMENT OF COMMODITIES TO
AGENCIES
LOANS MADE TO OTHER AGENCIES
TOTAL DISPATCHED DURING THIS QUARTER
71,150
37,900
59,850
35,711
18,200
222,811
E.
BALANCE ACCORDING TO DOCUMENTATION

(C-D9)
10,875
8,850
349,850
5,275
30,050
80,655
500
323,778
809,833
F.
PHYSICAL INVENTORY As OF 4/04/2006
8,850
349,275
5,275
30,050
80,518
300
323,778
798,046
G.
DIFFERENCE BETWEEN (E - F)
10,875
575
137
200
11,787
123
1. VESSEL LOSSES PL06BJ0905
123
2. PORT LOSSES
3. IN-COUNTRY LOSSES
4. WAREHOUSE LOSSES
10,875
575
0.00
200
11,650
10,875
575
123
200
11,773
14
14
5. BULGUR WHEAT FOUND IN LENT

STOCK
H.
TOTAL DIFFERENCE ACCOUNTED FOR (G1

+ G2 + G3)
I.
I. TOTAL DIFFERENCE UNACCOUNTED FOR

(G - H)
MM = Maize Meal / Commodity reimbursed by WFP in place of borrowed corn meal

F/WSB : 349175 kgs are stock in Port Warehouse, Physical Inventory not done
F/Green Peas: 323600 kgs are stock in Port Warehouse, Physical Inventory not done
14 KGS OF Veg Oil to be justified with the next CSR
88
Appendix E: Sample Recipient Status Report
Month 1
Receipient
Partner 1
Stock Initial
Receipt
Distributions
Returns
Stock Final
450
380
67
450
380
67
Partner 2
Partner 3
0
0
0
0
0
Month 2
Receipient
Partner 1
Stock Initial
Receipt
Distributions
Returns
Stock Final
450
380
67
450
380
67
Partner 2
Partner 3
0
0
0
0
0
89
Appendix F: Sample Bed Net form

LLIN QUANTIFICATION FOR GLOBAL FUND ROUND 9 APPLICATION

LLIN Distributed / Planned under Round 6
Yr1
Yr2
Yr3
Yr4
Yr5
<5 yrs reached with LLIN (estimated)

Pregnant women reached with LLIN
(estimated)
Differentially abled reached with LLIN
Total Population reached with LLIN
(Round 6)
0
0
Grand Total LLIN Round 6
LLIN Planned under Round 9

Yr1
Yr2
Yr3
Yr4
Yr5
Distribution Type
Target Population (New)
Target Population (LLIN Replacement)
Total Target Population
Total LLINs for Round 9 Distribution
Grand Total LLIN Round 9
0
0
Assumptions for the following LLINs: 0

Example
1. 7
0,322 nets will be distributed in 2009/2010 plus 297,256 nets which were distributed in 2007/2008 and 2008/2009 to
pregnant women, CU5, and the differentially abled under R6. This group would not receive nets again until 2011 (120,999
and 2012 (176,257). A total of 289,905 LLINs will be distributed the general population in 2010/2011
2. 7
0,322 nets will be distributed as well as a replacement of 120,999 under R6 plus 297,256 LLINs distributed the previous
year minus the total population and providing one net to every two persons in the remaining population needing LLINs in
2010 under the R6 grant. This group would not receive nets again until 2013. Incluidng the population growth rate of
30,396 a total of 67,287 LLINs will be distributed the general population in 2010/2011 under the R9 grant.
3. 7
0,322 LLINs will be distributed to pregnant women, CU5 and the differentially abled in 2011/2012, and 70,322 to the
same population cohort in 2009/2010 under R6. Replacement of 120,999 LLINs distributed in 2010/2011 and population
growth factor of 31,160 plus net replacement of 176,257 under the R6 grant. Therefore a total of 92,185 LLINs will be
distributed to the general population in 2011/2012 under the round 9 grant.
4. 7
0,322 LLINs were distributed to pregnant women, CU5 and the differentially abled in 2011. Replacement of 360,227 LLINs
distributed in 2010/2011 and population growth factor of 31,116. Therefore a total of 261,562 LLINs will be distributed to
the general population in 2012/2013 under the R9 grant.
5. A
n LLIN replacement of 258,608 LLINs distributed in 2013/2014 and population growth factor of 32,865. Therefore a total
of 194,315 will be distributed to the general population in 2013/2014 will be distrbuted under the R9 grant.
90
Appendix G:
Sample Procurement Officer Job Description
JOB TITLE:
PROCUREMENT OFFICER
DEPARTMENT: LOGISTICS PROCUREMENT

SUPERVISOR: Director/Supply chain manager
PRIMARY FUNCTIONS: Overall procurement and asset management for emergency field operations. Collaborate and
coordinate closely with the Logistics and Procurement Departments (whenever possible). Supervise calls for bid, local purchase
operations, and international procurement. Coordinate with the various programming and administrative departments to ensure
order what they need in the appropriate quantities and quality, that they receive what they ordered in the correct quantities when
needed and at the right cost. Develop procurement management systems as needed and train staff in their use. Align field
procurement systems with country program systems as appropriate. Modify or overhaul systems that are not efficient. Create
filing systems and manage the document trail in a transparent manner to avoid compliance shortfalls and audit findings.
Supervises: Assistant Procurement Officer, Purchasing Agent(s)
Operational contacts: Director; Administrative Officer; Program Managers and Coordinators; CP Purchasing
and other staff; local Customs and various local Government Officials
GENERAL RESPONSABILITIES:
As a member of a support department, encourage and positively reinforce open and continuous coordination and
collaboration with all departments within Organization, particularly with staff, to ensure that the Procurement Office
provides goods and services of the highest quality in the most cost-effective and efficient manner.
Provide training and coaching as necessary to Procurement Office staff and other emergency staff
Design fully compliant procurement and asset management systems; review and revise existing country
program systems to meet the needs of the emergency operation. Verify that all systems and operations
comply with policies and procedures.
Fully document all procurement operations. Create procurement filing systems as required in the Policies and
Procedures Manual.
Review and approve local purchase orders and International Requisition Forms (IRFs). Review orders made by
department managers and other parties to ensure budget availability, as well as quantity, quality and delivery
requirements. Provide regular status reports on procurement to the departments.
Develop efficient office supply requisition and ordering systems.
Develop relationships and maintain contact with local vendors.
Oversee calls for bid and contracting with suppliers. Acquire prices and pro-forma invoices for all purchases.
Fully document all local purchasing activities.
Analyze Field Requisitions, IRFs and purchase orders to determine:
a) that the description of the goods and/or services is accurate in every aspect, and that they are of the
expected quality for the cost;
b)the method of pricing to be used (e.g., catalog, written or telephone inquiries, pro formas or other estimates);
91
c) that all required support documentation is attached;

d)that quantities are correct and expected delivery times are realistic;
e) the choice of supplier, taking into consideration available facilities, vendor dependability, quality,
reputation and geographic location;
g) the total price CIF, including all payment terms;
h) the best method of transporting the purchased item to final destination.
Ensure that all requests for quotations are clear and complete.
Review and approve IRFs. When required, request approval of senior managers or regional staff. Place rush
orders by telephone or fax, and follow up with written (or e-mail) confirmations.
Create procurement filing system as required under policies and procedures guidelines. Enter information
into, and keep updated, purchasing and vendor databases.
Create and maintain inventories for goods purchased during the emergency.
Ensure that an adequate level of office and cleaning supplies is maintained and that rational distribution
mechanisms are developed and implemented.
In coordination with the Logistics Officer, contract local transport companies for the delivery of relief supplies
and commodities in an efficient and cost-effective manner.
Continuously evaluate and report on vendor performance.
Other tasks as may be assigned by the Director.
Qualifications:
Self-starter with ability to operate efficiently and be successful under difficult conditions. Creativity and
flexibility are paramount.
Minimum 1 year experience with CRS and/or significant training and experience in Procurement, General
Management, Logistics, Financial Management, Accounting or equivalent
Excellent knowledge and understanding of generally accepted procurement and asset accounting principles
Proven planning and organizational abilities
Strong analytical and problem solving skills
Proven leadership skills
Demonstrated ability to prioritize, manage multiple tasks, delegate responsibilities and ensure follow-up
Fluent written and spoken English
Solid working knowledge of computers and the following software: Windows, Outlook, MS Excel, MS Word;
ability with MS Access desired
92
Appendix H:
Sample Assistant Procurement Officer Job
Description
JOB TITLE: ASSISTANT PROCUREMENT officer
DEPARTMENT: LOGISTICS - PROCUREMENT
SUPERVISOR: PROCUREMENT OFFICER
PRIMARY FUNCTIONS: Efficiently meet the procurement and delivery needs of office(s). Oversee the acquisition locally of
pro formas and estimates. Manage bid comparison and vendor selection process. Provide cost and quality analyses prior
to seeking Procurement Officer approval. Prepare local purchase orders and IRFs. Ensure follow up of purchase orders
and contracted services. Monitor and report on vendor performance. Utilize the procurement management systems and
train staff in their use. With the Procurement Officer, create filing systems and manage the document trail in a transparent
manner to avoid compliance shortfalls and audit findings.
SUPERVISES: N/A
Operational contacts: Administrative staff; Program Managers and Coordinators; local vendors and service
providers; local Customs and various local Government Officials
GENERAL RESPONSABILITIES:
1) Analyze each purchase requisition to determine:
a)
that the quality description is accurate in every aspect, and that it is of appropriate quality;
b)
the method of pricing to be used (e.g., catalog, written or telephone inquiries, or estimates);
c)
that quantity and delivery information are correct;
d)
the proper supplier (local or international), considering available facilities, dependability, quality, reputation
and geographic location;
e)
the right price, including all payment terms, f.o.b. or c.i.f. terms, and all tax exemptions permitted;
f)
the best method of transporting the purchase item to destination.
2) Ensure that all requests for quotations are clear and complete.
3) Prepare all local purchase orders and International Requisition Forms (IRFs) in accordance with Organization
procurement policies and procedures. Pass all POs and IRFs to the Procurement Officer for approval prior to
making orders. Place rush orders by telephone, e-mail or fax, and follow up with a written confirmation.
4) Make necessary adjustments to final prices whenever invoice and purchase order prices disagree. Negotiate
with suppliers as necessary and appropriate.
5) Handle correspondences concerning discrepancies.
6) Create and maintain continued working relationship with local supplier sales representatives.
7) Make visits to supplier stores and production facilities whenever the situation warrants.
8) Constantly investigate new sources of vendors, materials and services.
93
9) Solicit sealed bids when necessary and appropriate according to agency procurement guidelines.
10) Ensure proper filing of all documents for purchases.
11) Create individual files for vendors, as well as for commodities and services, to speed up procurement operations.
12) Perform additional duties as assigned by the Procurement Officer.
Qualifications:
Self-starter with ability to operate efficiently and be successful under difficult conditions. Creativity and
flexibility are paramount.
Local language fluency required. Written and spoken English highly preferred.
Excellent knowledge of local operating environment and communities highly desired.
Some training and experience in Procurement, General Management, Logistics, Financial Management,
Accounting or equivalent.
Knowledge and understanding of generally accepted procurement and asset accounting principles.
Planning and organizational abilities.
Good analytical and problem solving skills.
Leadership and supervisory skills.
Demonstrated ability to prioritize, manage multiple tasks, delegate responsibilities and ensure follow-up.
Working knowledge of computers and the following software: Outlook, MS Excel, MS Word.
94
Appendix I:
Sample EFR Logistics Officer Job Description
TITLE: EFR logistics officer
DEPARTMENT: LOGISTICS office
SUPERVISOR: Director
PRINCIPAL RESPONSIBILITIES: Provide strategic and tactical leadership to the Logistics Office and departments. Create,
implement and monitor the relief commodity and equipment supply chain and operations support system. Negotiate
and contract warehouse facilities, transportation resources and logistics services. Develop commodity and equipment
procurement, storage and dispatch plans. Prepare and submit various reports. Collaborate with the other departments of
ORGANIZATION, particularly Programming, from planning through implementation and close out. Represent ORGANIZATION
at logistics (e.g., Logistics Cluster; civil and military authorities, etc.) and other coordination meetings. Coordinate relief and
supply chain activities with UNJLC, WFP, OCHA, CI partners, sister aid agencies, local partner agencies, etc.
Supervises: Commodity Management Officer, Fleet Manager, Procurement Officer, Distribution Officer, Assistant
Logistics Officers and Secretary
Operational contacts: Program Managers; representatives of various donors, international NGOs and UN agencies
(including Logistics Cluster and UN Joint Logistics Centre); ORGANIZATION/Shipping and ORGANIZATION/Purchasing;
USAID OFDA/DART Officers; partner representatives and officials; and local Customs and various Govt. Officials.

Design, implement and monitor the relief commodity and equipment supply chain:
As a member of a support department, encourage and positively reinforce open and continuous
coordination and collaboration with the other departments within ORGANIZATION, particularly with the
program officers and their staffs. Ensure that the Logistics Office provides goods and services of the
highest quality, in the most cost-effective and efficient manner.
Coordinate with programming staff to determine the types and quantities of operations support, relief
supplies and equipment that will be required immediately and over the longer term to meet program
objectives.
Plan strategically and tactically the immediate and longer-term logistical requirements necessary to
store and transport relief supplies.
Assess logistical infrastructure, utilizing local knowledge, including: road, rail and water transportation
systems; warehouse facilities (central, intermediate and extended); means of transportation (land, air and
water); commodity and equipment vendors.
Identify storage facilities, transportation resources and leasing options; share storage facilities and
transport if possible with UN agencies, other NGOs or partner organizations. Make full use of common
services as available and appropriate.
Coordinate supply chain planning and implementation with other agencies.
Budget costs of personnel, goods, services and leased assets.
95
Hire and train staff.

Develop and oversee the commodity pipeline(s).
Prepare and share regular reports on commodity acquisition, movements, distributions and replenishments.
Set up a viable filing system for all Logistics Office documents.
Maintain up-to-date field office equipment and furniture inventories.
Determine local logistics service requirements, ensure procurement procedures are followed to select
service providers, negotiate prices and terms, select service providers, and prepare contracts.

Supervise Logistics Office personnel:

1. Commodity Management Officer (CMO)
Identify, contract, rehabilitate and equip warehouse facilities as necessary.
Establish and oversee the application of warehouse and commodity systems and procedures.
Hire and train warehouse staff.
Maintain up-to-date commodity pipelines and dispatch plans.
With Commodity Management Officer, prepare warehouse stack plans and dispatch plans.
Ensure the efficient reception and inventory of relief supplies and equipment, and the loading and
departure of delivery trucks according to dispatch plans.
Communicate delivery plans to programming staff, transportation contractors and/or ORGANIZATION drivers.
Ensure that the required waybills are prepared and arrive at the appropriate warehouse well in advance of
the loading of the trucks in accordance with the delivery plan.
Maintain up-to-date registers for each warehouse; oversee the preparation and submission of Weekly
Commodity Status Reports and Weekly Reports of Total Tons Transported.
Supervise the scheduling of the movement of trucks and drivers; certify that the deliveries are completed
according to the regulations (written and unwritten) of the ORGANIZATION Relief Program.
Verify invoices received from private warehouse landlord and service providers; submit verified and
approved copies to the Finance Office for payment.
2. Procurement Officer
Assess local markets to determine availability, quality and cost of required goods and services.
Arrange for duty-free importation of internationally procured commodities and equipment, and the dutyfree local procurement of goods and services. Determine importation procedures (coordinate with UNJLC,
Logistics Cluster, other NGOs and local government authorities).
Coordinate with programming to plan and prioritize procurement for the immediate, short- and longer-term.
Determine required or desired specifications of commodities, packaging, delivery schedules, etc. Inform
staff of expected lead times for goods and equipment.
Standardize purchases to the extent possible, particularly with vehicles and IT equipment.
Ensure ORGANIZATION procurement policies and procedures are in place and adhered to. Assist with set
up of effective and efficient file system.
Assess impact of local procurement on market prices, and adjust strategy accordingly.
96
Evaluate in-kind donations against need, appropriateness, management and transport costs. Pay
particular attention to packaging and expiration dates.
Set up inventory of equipment, furniture, etc. imported for the response.
Manage directly international procurement; supervise local procurement.
3. Fleet Manager
Assess local availability of vehicles and leasing options for vehicles (passenger and trucks). Discuss
possibility of borrowing vehicles from other programs, from local Catholic missions and organizations, etc.
Contract passenger and transport vehicles as necessary. Plan for excess capacity (15-20% over expected need).
Coordinate with Programming and the Procurement Office to determine the models of vehicles to procure
internationally. Standardize to the extent possible.
Ensure availability of sufficient drivers, fuel, lubricants, spare parts and tires, maintenance and repair options.
Coordinate with international community to ensure fuel stock availability. Set up fuel farm as necessary.
Hire and train drivers.
Oversee implementation of vehicle management and control system: vehicle logs, daily checks,
maintenance and repair schedules, travel planning, etc.
When necessary, work with local communities or hire temporary personnel to improve roads and
infrastructure along supply chain.
Verify invoices received from private transport companies and service providers; submit verified and
approved copies to the Finance Office for payment.
4. Beneficiary Registration and Distribution Manager
With other agencies, determine coordinated modalities for the distributions of standardized goods and
services, including ration sizes.
Determine distribution points, staffing needs, and schedules.
Prepare various documents and formats needed to register beneficiaries, manage distributions, and report
on distribution activities.
Hire and train distribution staff as necessary.
Ensure beneficiaries are informed of the distribution locations, schedules and services and goods they will
receive.

Preparation and submission of weekly and quarterly reports:

Prepare the following (among other) reports for internal use: situation reports (for Logistics Office);
commodity status reports; weekly and monthly warehouse and commodity status reports; distribution
reports; recipient status reports; loss reports (ocean and internal); quarterly activity reports; results
reports.
Prepare the following (among other) reports for local government authorities: types and quantities of relief
goods imported and delivered for the relief program.
Other reports as necessary or requested by the Team Leader or programming.
Other:
Conduct monthly physical inventories of all warehouses. Prepare and submit inventory reports.
97
Administer the final disposal of spoiled foodstuffs.

Assist Logistics staff with the preparation and submission of Trip Reports, Daily Worker Payroll Vouchers,
Travel Authorizations and other documents - financial and administrative required by the Director.
Serve as a resource person for other ORGANIZATION Offices requiring information about the functioning
of the relief program in general and the LO in particular.
Provide assistance and oversight to counterpart organizations as required or requested.
Other tasks as may be assigned by the Team Leader.
Qualifications:
University degree in international development, general management, finance, business, or other relevant
field, or significant training in supply chain management
Minimum three (3) years experience with an international NGO or UN agency in a similar capacity
Proven ability to work under pressure and to meet deadlines
Excellent understanding of and experience in logistics and supply chain management
Creative problem solver; flexible nature; excellent sense of judgment
Ability to work simultaneously on multiple tasks
Willingness and ability to work effectively with a wide variety of people in challenging conditions
Ability to work as part of a team and coordinate closely with project personnel
Experience training and supervising staff
Fluent English
Computer literate (good knowledge of MS Word, MS Excel, MS Outlook and MS PowerPoint; working
knowledge of MS Access a plus)
98
99
Catholic Relief Services (CRS)

228 W. Lexington Street
Baltimore, MD 21201, USA
Tel: (410) 625-2220
www.crsprogramquality.org
100

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Chapter 7:

Appendix A: Sample Inventory Report Form....................................................... 85

PROCUREMENT Process Map

Can you forecast how much

Do you have a system in

How do you manage the flow

Do you have a reporting

Purpose of This Guide

What Function Does

Summary of This Guide

The pillars of Scm

Warehouse & Inventory

Validate Demand Forecast

Validate Supply Forecast

Balance Demand & Supply

Secure Inbound Transportation

Port Receipt and Clearing

Transport to Primary Wrhs.

Process Vendor Invoices

Plan Logistics Network

Track & Trace

The third pillar focuses on fulfillment processes, with sections on warehousing,

The person who

prepares a purchase requisition

approve that purchase requisition.

sends out a quote request and

receive the purchase quote.

prepares a purchase order

approve that purchase order.

issues a purchase order

receive the goods.

d. Internal Control Matrix

Purchases are transparent.

A Conflict of Interest clause is implemented. Purchasers and bid

Items that are being purchased

Appropriate segregation of duties between the initiator, preparer,

Payments are made on

There is a proper audit trail.

Each payment voucher relates to the procurement register and

Records are stored and

There is an official filing procedure and files are retained according

3. Key Principles: Detailed Ethical Standards and Codes of Conduct

In personal contacts with external parties, each employee represents the

or relationships that are potentially detrimental to the best interest of the

Process 7.1 Planning

1. Internal data (operational plans, program

1. Forecasts of required goods, materials, and

1. Budget and/or program managers lead the

1. Finance Unit: budget allocation and funds

Each of the organizations program and functional

A demand planning process may be initiated in response to

New donor/grant information

1. Logistics managers lead the process

1. Program: Liaise with supply team for information

Organizations need to have an approved supply plan in

The plan provides for simple and straightforward reporting containing a

Balancing Supply and Demand

1. Procurement supply and consumption pipeline

1. Procurement officer prepares the schedule of

1. Finance officer: Aligns financial planning to the

Inventory management: Procedures and instructions for product reception,