Process workflow of pr po at mro procurement

Process Workflow of PR-PO at MRO Procurement

Date of creation: 09.05.2018

Prepared By: Abhishek Garg Kumar Gopal

Background Objective: To guide any Category Manager in MRO to follow step by step process in PR – PO cycle Target: New Joinee in MRO Please refer other documents like Procurement Manual, DoP, Quality Manual etc. for reference Document Review Frequency: One Year [April]

Document owner : Abhishek Garg, Category Manager MRO Document Reviewer : Head MRO & Services

Index Sr.No.

Description

1

Abbreviations

2

Process flow of PR-PO Cycle

3

PR receiving (Know Your PR)

4

PR Acceptance

5

Vendor paneling and process RFQ

6

Quotation receiving via Eproc site

7

Quotation verification

8

Technical Approval

9

Negotiation

10

Value Approval

11

Final Check & Process PO

12

PO Release

13

Annexure-A How to attached Negotiation note/Approved SR in PO

14

Annexure-B - Import approval Format

15

Annexure-C- BGG List

16

Annexure-D- Create RFQ

17

Annexure-E- Edit RFQ

18

Annexure-F- Refloat RFQ

19

Annexure-G- Create Indigenous Purchase Order / Release PO

20

Annexure-H- Tax codes

Link

`

Back to Index slide Link to slide Back to last slide

Abbreviations 1) PR – Purchase Requisition 13) L1 – Lowest quote/vendor Ex: 970134567, 920345876, 3100052309 14) H1 – Higher than L1 quote/vendor 2) BGG – Basic Generic Group (Material 15) Q1 – Single quote/vendor group) Ex: 307 (Drawing mechanical), 298 (valves), 16) SQ1 – RFQ floated to multiple eligible vendor 288 (Rolls) and quote received from only one vendor 3) UMC – Unique material code (material 17) DOP – Delegation of power code) Ex: 5467A1324 18) COMM - Chief of Mechanical Maintenance 4) RFQ – Request for Quotations 19) COMFP – Chief of Mechanical Flat Products 5) LPP – Last purchase price 20) COMLP – Chief of Mechanical Long Products 6) Document type 21) COBF – Chief of Blast Furnaces Ex: NP – Proprietary , NB – Non Proprietary, 22) CIMMM – Chief of Iron making mechanical CR – Confirmatory maintenance 23) CSMMM – Chief of Steel making mechanical 7) FTP – First time purchase maintenance 24) CEPA – Comprehensive Economic Partnership 8) FOB – Free on Board Agreement 9) FCA – Free on Carrier 25) APTA – Asia Pacific Trade Agreement 10) DDP – Duty Delivery paid 26) IAF - Import Approval Form 11) CIF – Carriage Insurance Freight 27) SR – Sanction Request 12) P1 – Proprietary quote/vendor

Process flow of PR-PO Cycle 1

13

2

12 11

3

4

9 5 10

7 6

8

Note: For detailed description click on XX

PR receiving (Know Your PR)

1

• There are 4 different types of PR received in MRO Proprietary PR starts with 97 series

Non Proprietary PR starts with 92 series

ARC(ZP) PR starts with 31 series

Confirmatory PR starts with 93 series

UMC BGG

LPP Vendor Detail

Budget

LPP

5

2

PR Acceptance •

•

• •

Check PR is raised in correct purchase group such as – 100 for Mechanical Indigenous source – 107 for Import source – 175 for TSK – 101 for Electrical Indigenous source Check PR is raised in correct material group (BGG) – All materials has been classified in various material groups called BGG (Basic Generic Group) – For example valves 298, bearings 201, drawing Return mechanical 307 etc.

PR to – Refer Annexure – C for BGG List user Check if proprietary PR 97 series (Specific make) is raised in non proprietary 92 series Check if ceiling rate or budget for each individual items provided by department is lesser than LPP (last purchase price) without any proper justification mentioned in the PR If any reasons mentioned above is true than return the PR to respective user department mentioned in PR along with respective manager/Sr. manager, Supply executive and Head of Department

BGG 208 Drawing Mechanical

6

3

Vendor paneling and process RFQ •

If PR is proprietary with specific make than float RFQ to as per vendor panel • If PR is non proprietary than RFQ should be floated as per CCT approved vendor panel • For first time purchase (FTP) it is mandatory to attach budgetary offer along with the PR • For confirmatory PR(93 series) . Approved invoice from Chief is required . PO to be processed only after verifying mentioned document. However procurement has full authority to negotiate with stated vendor • Link for vendor panel booklet is given below http://144.0.1.50/mro/MRO.asp

Process to create new RFQ in the link After vendor finalization, issue instruction on PR to float RFQ to respective associates 7

4

Quotation receiving via Eproc site • • • • • • •

Quotations from Indigenous supplier is only accepted via Eproc site only Quotation from Import supplier can be taken via email also If PR is proprietary and quotation is not received than follow up to be done If PR is non proprietary and minimum 2 quotations is not received than follow up to be done Also needs to check if last L1 supplier has quoted or not. If not, needs to be follow up to make sure we get best rates.

Printout of RFQ summary needs to be check and documented in folder Instruction to be given on this RFQ summary only to open the quotes

RFQ summary to be attached by associates

If quotes received as per proper justification mentioned above than quotes can opened and proceed further 8

5

• •

•

Quotation verification If Technical approval is required than send it to respective user department with a copy to manager/Sr manager, Supply executive.

Payment terms – – For Indigenous PR standard payment terms is 30 days.

(SAP code B7P1) – For Import PR standard payment terms is 30 days or 60 days.

(SAP code IF01 or IF03) – In case of import LC at sight is also common payment term. Approval needs to be taken as per DOP. (SAP code IF12) – In case of import sometimes special payment terms also processed on case to case basis. (SAP code IF10) Incoterms – Indigenous Suppliers • For Jamshedpur based supplier is EXL (3PL) is applicable (Transportation in Tata Steel scope via DHL our 3 PL partner) • For all other indigenous cases FOR/FRD delivery at TSL site is preferred.

– Import suppliers • For Import cases FOB/FCA is preferred.

• In case supplier not agree than Ex-works is also accepted, however this is not preferred.

After this analysis steps 6, 7, 8 can be • CIF incoterm is also useful for direct shipment, however not simultaneously processed on case to preferred. case basis.

• Other incoterms as per case to case basis can be decided 9 – For advance payment terms or any other terms DOP needs to be followed.

&

6

• • • •

7

Technical Approval

If Technical approval is required than send it to respective user department with a copy to manager/Sr manager, Supply executive.

Reminder 2 needs to be sent within next 7 days with a copy to respective Head of Department Reminder 3 should be sent within next 7 days with a copy to respective Head of Department and Area Chief.

PR can be reset or deleted after 21 days with a intimation to user department

After Technical approval received negotiation can be started following step 8

10

8

Negotiation • • • • • • • • • •

In case of proprietary PR negotiation needs to be done based on LPP rate, budgetary offer or any other best possible commercial levers In case of non proprietary PR negotiation needs to be done with L1 vendor using LPP rates, budgetary offer or any other best possible commercial levers If decision is based on share of business basis (SOB) than negotiation can be done with all suppliers and decision can be taken on case to case basis Payment terms should be as mentioned in step 5.

DOP needs to be followed for non standard payment terms Incoterms should be as mentioned in step 5.

For trial orders payment terms and Incoterms can be decided on case to case basis.

Delivery lead time also needs to be negotiated on case to case basis as per requirement In case of import from China, Japan, South Korea, etc. countries mentioned in screen shot CEPA/ APTA certificate to be negotiate with supplier for duty benefits.

List of countries from where duty benefit is applicable and % can be checked from below mentioned linkhttp://www.tmilltd.com/

Step-1 Enter

Step-2 Enter UMC

After negotiation completion proceed for step 9 or 11 11

&

9

•

10

Value Approval

If final quoted value is more than 30 % of PR value than value approval from respective user department is necessary.

If value approval not received than 3 reminders to be sent upto Area Chief level and PR to reset or deleted.

DOP needs to be followed for value approval from user department, simplified table is mentioned below –

• •

1

Value Approval DOP from User department Vice President

2

COMM/COMFP/COMLP/COBF

3

Area Chief

4

Departmental Head

IL3

Above 2 Crore 25 lakh to 2 Crore 5 lakh to 25 lakhs Upto 5 lakhs

5

Departmental Head

IL4

Upto 2.5 lakhs

6

Supply executive/manager

Sr. No

Impact Level Basic PO value IL1 IL2 IL2/IL3

IL4/IL5

Upto 50,000

If anyone is yes, than Value approval from user is mandatory as per DOP After receiving value approval as per DOP follow step 11 12

&

11

• • • • • • • •

• •

12

Final Check & Process PO

Check final negotiated rates are with in approved PR limit Technical or value approval received as per DOP from respective user department if applicable.

Payment terms are correct and required approval is taken if applicable ( Advance or any other special term) as per DOP Incoterms are as per correct as mentioned in step 5 Delivery lead time is as per requirement All documents are attached in folder If order value is more than 50 lakhs than negotiation note to be attached in folder and in SAP. Refer Annexure – A for process.

Online SR needs to be put if required as per DOP. Link is given below for online SRhttp://corpsys.corp.tatasteel.com/osr/ If applicable approved SR number and IAF to be mentioned in PO as per screen shot In case of import if FOB value is more than 1.5 Million USD than Import approval form (IAF) is also required from office of GED (Group Executive Director), refer Annexure – B

To Create PO refer Annexure- G This step is very much important before proceeding for PO creation. If everything is OK proper instruction to be given for PO creation to respective associate

13

13

PO Release • • • • •

•

Check PO as per instruction given to associate.

In case of Import, Tata Ltd. London (TLL vendor code T49F) is marked as partner in PO. In case of import from China than PO will be directly placed on supplier and In partner function TLL not to be mentioned.

If everything OK, release PO and transfer it further release as per DOP if required.

If applicable cases (Process given in Annexure-A) – Negotiation note to be attached in PO for order value more than INR 50 lakhs – Approved SR and import approval to be attached in PO – Approved SR number and IAF number to be mentioned in PO

Import PO other than China : - TLL marked in partner function ( Compulsory )

Procurement DOP in simplified waySr. DOP Level No

Impact Level

L1

H1

P1

SQ1

1 Vice President

IL1

40 Cr

6 Cr

10 Cr

2 Cr

2 CPO

IL2

24 Cr

4 Cr

6 Cr

1 Cr

3 Chief MRO & Services

IL2

12 Cr

2 Cr

4 Cr

0.50 Cr

4 Head MRO & Services

IL3

1 Cr

0.25 Cr 0.50 Cr 0.03 Cr

IL4/IL5

0.10 Cr

0.03 Cr 0.05 Cr 0.005 Cr

5 Sr. Manager and Manager

Import PO from China : - TLL not to be marked in partner function

NO TLL

PO can be release after satisfying all mentioned requirements in this workflow/SOP

14

Annexure – A – How to attached Negotiation note/Approved SR in PO Part- A – How to create / attach document

Step-1 – Type CV01N in SAP and enter

Step-2 – Type PO number in row 1 and type PUR in row 2 and enter

Step-3 – Type name of file and enter

15 Step-4 – Type PO number and number of first line item as per PO and enter

Annexure – A – How to attached Negotiation note/Approved SR in PO Part- A – How to create / attach document Contd…

Step-5 – click on browse option to select file

Step-6 – In browse select file from laptop/desktop

Step-8 – A window will pop up, Select Content repository and save file

Step-7 – Click on save button 16

Annexure – A – How to attached Negotiation note/Approved SR in PO Part- B – Releasing of attached document

Step-1 – Type CV03N in SAP and enter

Step-3 – Click on edit first and type FR and Enter to release

Step-2 – Type PO number in row 1 and type PUR in row 2 and enter

Last Step-4 – Save the file to complete the process 17

Annexure – B – Import approval form, if FOB value is more than 1.5 Million USD

18

Annexure – C – BGG List BGG 288 307 309 310 216 243 244 258 238 240 221 255 239 295 261 282 284 298 202 257 268 290 301 201 207 209 296 299 217

BGG Description AUXILIARY ROLLS FOR MILLS DRAWING MECHANICAL DEPARTMENTAL SPARES MECHANICAL CUTTING TOOL&ACCESS. FASTENERS FIRE FIGHT EQPT&SPAR LIFTING TOOLS&TACKLE ELECTRONIC ACCESSORI ELECTRONIC EQUIPMENT ELEC.BATT. & ACCESS. HYDRAULIC SYSTEM ELECTRONIC COMPONENT TOOLS & TACKLES LUBRICATING SYSTEM PNEUMATIC SYSTEMS PUMP VALVE ADHESIVE & SEALANT LABORATORY APPARATUS MECH-MSRG&TSTG EQPT. SAFETY APPLIANCE WELD&GAS CUTING EQPT ANTIFRICTION BEARING BOILER SPARE & ACC CHAIN & SPROCKET TURBINES & ACCESSO WATER SYSTEMS DIESEL ENGINE

Category Mechanical Mechanical Mechanical Mechanical Mechanical Mechanical Mechanical Mechanical Electrical Electrical Electrical Mechanical Electrical Mechanical Mechanical Mechanical Mechanical Mechanical Mechanical Mechanical Mechanical Mechanical Mechanical Mechanical Mechanical Mechanical Mechanical Mechanical Mechanical

BGG 256 275 285 205 211 278 289 312 215 251 254 224 225 229 230 231 237 241 306 308 203 262 281 283 315 222 232 234 235 236

BGG Description INSTRUMENTATION MOBILE EQUIP&ACCESS RAILWAY ACCESSORIES BELT & ACCESSORIES COMBUSTION SYSTEM PACKAGING MATERIAL RUBBER&POLYMER PROD MATL HANDLING EQUIP COUPLING & SPARES GEAR BOX HOSES & ACCESSORIES ELEC.CONTROL EQUIPM ELEC.FUSING ELEMENT ELEC.LAMP&LIGHT FTGS ELEC.MACHINE&ACCESS. ELEC.PR. DISTR.ACCE. BRAKE & ACCESSORIES EOT CRANES DRAWING ELECTRICAL WEIGHING CRANES ABRASIVE MATERIAL MCHINE TOOLS&ACCESS. PIPE & PIPE FITTINGS POLLUTION CTRL EQUIP STEEL WRE ROP&ACCESS ELEC.CABLE & ACCESS. ELEC.RELAY&ACCESS. ELEC.SWITCH&CKT BRKR ELEC.TSTG&MSRNG EQPT ELEC.TRNFRMER&ACCESS

Category Electrical Mechanical Mechanical Mechanical Mechanical Mechanical Mechanical Mechanical Mechanical Mechanical Mechanical Electrical Electrical Electrical Electrical Electrical Electrical Electrical Electrical Electrical Mechanical Mechanical Mechanical Mechanical Mechanical Electrical Electrical Electrical Electrical Electrical

19

Annexure – D – Create RFQ 3

2 2 1

Step-1 – Type YI51N and enter

Step-3 – Select PR number check box and click on print PR 1

Step-2 – Select type of PR, enter PR number and execute 20

Annexure – D – Create RFQ Contd…

Step-4 – Click on update source list and create RFQ

21

Annexure – D – Create RFQ Contd…

1 2 2

Step-5 – Enter quotation due date, enter personal number in our reference / your reference 22

Annexure – D – Create RFQ Contd…

1

Source List

2

3

Step-6 – Select type of RFQ AF – Import material AN – Indigenous material AV – ARC PR

Step-7 – Enter vendor code, update source list and click on create RFQ 23

Annexure – E – Edit RFQ

Step-1 – Type me42 and enter

Step-3 – To extend due date, enter the required date in selected field

Step-2 – A new window will pop up, type RFQ number and enter Step-4 – To incorporate any new material enter the UMC number in 24 selected field and extend the due date if required as per step-3

Annexure – E – Edit RFQ Contd…

Last Step-5 – Select save button and exit the RFQ after step 3 or 4 as per requirement.

25

Annexure – F – Refloat RFQ 3

2

2 1

Step-1 – Type YI51R and enter Step-3 – Select PR number check box and click on print PR

1

Step-2 – Select type of PR, enter PR number and execute 26

Annexure – F – Refloat RFQ Contd..

Step-4 – Click on update source list and create RFQ

27

Annexure – F – Refloat RFQ Contd..

1 2 2

Step-5 – Enter quotation due date, enter personal number in our reference / your reference 28

Annexure – F – Refloat RFQ Contd..

2

1

Step-6 – Select line item first, than click on copy line. A new line will be created.

29

Annexure – F – Refloat RFQ Contd..

2 1

3

Source List

Step-7 – Select type of RFQ New line item created, update source list , enter vendor code

Step-8 – click on refloat RFQ

30

Annexure – G – Create Purchase Order

Step-1 – Type me21n and enter

Step-2 – A new window will popup, click on drop down menu to select PO type

Step-3 – Select type of PO as per applicable category

31

Annexure – G – Create Purchase Order Contd…

Step-4 – Type vendor code/vendor name, purchase organization 1000 and respective purchase group (100, 101, 175, 107 etc.) and press enter

Step-5 – Type Po validity start date/end date, Supplier quotation reference number, quotation date & PR number in collective number box and press enter

32

Annexure – G – Create Purchase Order Contd…

Auto Generate from SAP

Step-6 – Enter your Personal number in your reference and our reference box. Supplier detail will auto generate from SAP master data.

Step-7 – Select Payment terms from check box and enter. Frequent used payment terms is B7P1 for 30 days credit period. Based on negotiation with supplier you can select payment terms with reference to DOP

33

Annexure – G – Create Purchase Order Contd…

Important step

PO Number Step-8 – Click on Hold PO, to save it in draft mode.

This is very important step to save your data in draft mode. At the bottom of page PO number will be generated to edit further in SAP. This step you can do earlier also as per your convenience.

34

Annexure – G – Create Purchase Order Contd…

Step-9 – Type me23n and enter respective PO number to edit further

Step-10 – Type any special comments or requirement in header text. There is a long list and you can select respective filed as per your requirement. All these details will be displayed in PO copy and supplier will be able to see the same. If anything you want to mention for internal information within Tata Steel than select asset field from selected column.

35

Annexure – G – Create Purchase Order Contd…

Step-11 – Enter PR Number

Step-12 – Enter tax code, Refer annexure-H

36

Annexure – G – Create Purchase Order Contd…

Step-13 – Select reason for ordering

37

Annexure – G – Create Purchase Order Contd…

Step-14 – Enter delivery schedule

Step-15 – Enter conditions, such as freight, packing and forwarding, LD clause etc.

38

Annexure – G – Create Purchase Order Contd…

Step-16 – Enter incoterms FRD/EPL 39

Annexure – G – Release Purchase Order Contd…

2

1

2

1

Step-1 – Type me28 and press enter

Step-2 – Type CR and PO number and execute

Step-3 – Click on release button and save as per DOP

40

Annexure – H –Tax codes Sl no

1

2

3

4

Sl No

Tax Code

CGST-SGST/IGST - Cenvatable

1 2 3 4

R1 R2 R3 R4

All CGST-SGST/IGST Creditable @ 5% All CGST-SGST/IGST Creditable @ 12% All CGST-SGST/IGST Creditable @ 18% All CGST-SGST/IGST Creditable @ 28%

CGST-SGST/IGST - Non Cenvatable

5 6 7 8

R5 R6 R7 R8

All CGST-SGST/IGST Non Creditable @ 5% All CGST-SGST/IGST Non Creditable @ 12% All CGST-SGST/IGST Non Creditable @ 18% All CGST-SGST/IGST Non Creditable @ 28%

IGST(Import) - Cenvatable

17 18 19 20

M4 M7 M8 M9

All IGST All IGST All IGST All IGST -

Import Import Import Import

Creditable @ 5% Creditable @ 12% Creditable @ 18% Creditable @ 28%

IGST(Import) - Non Cenvatable

21 22 23 24

N4 N7 N8 N9

All IGST All IGST All IGST All IGST -

Import Import Import Import

Non Creditable @ 5% Non Creditable @ 12% Non Creditable @ 18% Non Creditable @ 28%

Category

Description

Frequently used

Frequently used

41