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TOP-PURCH: Raw Material Purchasing


SCOPE: This procedure covers the purchasing of raw material (primarily steel bar stock)






1 Buyer Daily Customer order and specifications; steel info Run and check Material Outlook Spreadsheet; call up On Hand by Location Report on computer to check for having an adequate supply of material that meets the specifications of the Job Orders.
2BuyerStandard BOM and Router requires a change in the size or a change in the process after the Job Order is openedM2M Job Order number; PDF file of Customer POUpdate the Job Order BOM and Router as needed and email to Forging Engineer for approval.
3Forging EngineerUpon receipt of an email from Buyer requesting approval on the Job Order BOM and Router changesJob Order BOM and Router; email form Buyer; customer's original POUse information from Buyer to review and approve Job Order BOM and Router changes.
4 Buyer Upon identifying the need to purchase material (due to a customer order or a low stock condition) Material Outlook Spreadsheet; On Hand by Location Report: Material Availability Report Determine ordering needs per purchasing policy; e-mail, telephone or fax selected raw material suppliers with list of needs (material may only be purchased from suppliers approved per TOP-SAPVL, but unapproved suppliers may also be asked for consideration); inquiries for all purchased material and services related to product we sell must clearly describe the material/services requirement, including all applicable specifications and supplemental requirements.
5 Buyer After receiving quotations back from suppliers Supplier quotations; customer orders; specs Review supplier quotations; within 3 business days of quotation solicitation, if need a waiver on specifications or delivery from the customer, ask Customer Service Rep to perform step 4; if an unapproved supplier needs to be considered, petition QA Manager to add supplier to Approved Supplier List
6 Customer Service Representative As requested by Buyer Customer order; info from Buyer Contact customer, inform them of material availability difficulties and renegotiate specifications, delivery or price; update in computer; return to Buyer
7 Buyer Upon decision to place purchase order Supplier quotations, customer orders;specs Enter PO* information into computer (supplier, grade, size, quantity, delivery, specifications and price); if customer order is being held pending material order, complete step 1.
8 Buyer After printing Purchase order Email purchase order to supplier; file Open PO file; submit current supplemental requirements per TOP-POSUP in addition to the purchase order / work order to the vendor at the time of order
9 Buyer As supplier acknowledgment arrives Purchase order and acknowledgment Compare acknowledgment with PO in file; if discrepancy, contact supplier and resolver; attach acknowledgment to PO copy in Open PO file
10 Buyer If PO needs to be changed or canceled Customer change order, notice from supplier, etc. Negotiate change with supplier (possibly involving Customer Service Rep to negotiate with customer as well); finally change PO in computer as in steps 5-7, except "Revised PO" imprinted and sent to vendor
* Purchasing Policy:
  1. Raw material may be purchased for three purposes:
    1. To meet the requirements of specific customer purchase orders, including material overages to ensure adequate yield, within credit limits stipulated by the CFO.
    2. To support customer supply contract requirements, based on moving averages, averages of recent business levels, and contract-specific quantities. Supply contracts require the endorsement of the President.
    3. To purchase larger quantities of material to take advantage of volume pricing, purchasing opportunities for forecasting, or short term demand, but only with the specific approval of two of these three: VP-Sourcing, CFO, President.
  2. Raw material purchases that exceed $50,000 per single item or $100,000 per purchase order must be approved by two of these three: VP-Sourcing, CFO, President.

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