Purchasing List of Processes and Work Instructions

Date: December 14, 2016

Process Status
1 Sourcing of New Materials New
2 Accreditation of Suppliers Update of existing
3 Purchasing Process of Local Materials Split from PM: Purchasing Process
4 Purchasing Process of Imported Materials Split from PM: Purchasing Process
5 Outsourcing of Requirements New

Work Instruction
1 Petty Cash Issuance, Liquidation and Reimbursement Update of existing
2 Monitoring Deliveries of Requirements Update of existing
3 Issuance of Notice of PO Changes Update of existing
4 Sourcing New Contractors Update of existing
5 Sourcing New Suppliers Update of existing
6 Imported Materials Payment New
a. Processing Letter of Credit (LC) New
b. Advance Payment for Imported Materials New
7 Assigning a Forwarder and Broker New
8 Processing a Purchase Return Slip New
9 Contractor's Purchase for Components New
Sourcing of New Materials
Update: December 14, 2016

Objective:
To source sustainable materials and services at the best value and quality.

Scope:
From receiving sourcing direction, evaluation of gathered information, approval of the material to evaluation of delivery and qu

Definition of Terms:
1 PMS - System used to create the Purchase Order.
2 MOQ - Minimum Ordering Qaantity
3 MCQ - Minimum Color Qaantity

Forms Used:
No standard forms

Sequence
Number Procedure Person Responsible

Purchasing Manager /
1 Receive material direction Purchaser

Purchasing Manager /
2 Canvass and identify atleast 3 possible Suppliers Purchaser

Purchasing Manager /
3 Engage with the Suppliers and conduct inquiry Purchaser

Purchasing Manager /
4 Request for initial sample Purchaser

Purchasing Manager /
5 Request quotation Purchaser
 Purchasing Manager /
6 Receive sample and conduct visual evaluation Purchaser

Purchasing Manager /
7 Receive quotation and create comparison Purchaser

Purchasing Manager /
8 Conduct negotiation as needed Purchaser

Purchasing Manager /
9 Request for a larger sample lot Purchaser

Product Developer,
10 Submit material samples for testing and evaluation Merchandiser

Purchasing Manager /
11 Finalize results and recommendation Purchaser

Purchaser, Purchasing
12 Seek approval Manager

Submit set of documents to Accounting for entry in

13 PMS Purchaser

14 Prepare initial PO Purchaser

 Purchasing Manager,
15 Evaluate quality and delivery performance Purchaser, Quality Control
valuation of delivery and quality performance.

Details Work Instruction

1. Overview of the material description.

2. Product outlook where the material will be
used.
3. Target Price
4. Suggested sourcing

1. Sourcing New
Suppliers
2. Sourcing New
Referrals, internet, existing Suppliers Contractors

Company and material introduction

1. Fabrics - hanger sample or cuttings

2. Elastic - cutting
3. Packaging - sample materials or pegs
4. Thread - one cone of any color
5. Accessories - sample pieces

Price, material specification, MOQ/MCQ, lead

time, terms of payment, delivery conditions if any,
packing requirement if any, greige stock info if
applicable
Present to Marketing, Product Developer or
Merchandiser

Created in excel, the format will depend on the

material being compared

Price, material specification, MOQ/MCQ, lead

time, terms of payment, delivery conditions if any,
packing requirement if any

1. Fabrics - atleast 3 yards

2. Elastic - atleast 10 yards
3. Packaging - actual sample
4. Thread - for T70/2 3kg/9 cones
5. Accessories - 20 pieces/set/pairs per item

Forwarded to Product Developer for Quality

Testing and Evaluation. The material should pass
the following tests:
1. Material Test
2. Wash and wear
4. Lamination, molding, printing test if applicable

Created in excel, the format will depend on the

material being compared

Signatories: Purchaser, Purchasing Manager,

President, Marketing Manager as the case maybe.
Accompanying documents are:
1. Samples of the materials
2. Comparison form
3. Official and negotiated quotation
4. Quality Test Result
5. See "Accreditation of New Supplier" if the
Supplier is new

Compile requirements for submittion to

Accounting:
1. Approved quotation
2. COR if applicable
3. Company profile

Refer to Purchasing Process

Review and evaluate delivery results considering
feedbacks from QC, Controllers, End Users and
Experts. Re-orient or de-list Supplier
Accreditation of Suppliers
Upda
Update: December 14, 2016

Objective:
To ensure the Supplier's is credibility to serve a the Company’s requirement through evaluation.

Scope:
From sourcing candidates Suppliers, evaluation of the qualifications, recommendation and approval up to reviewing performance after a trial order.

Definition of Terms:
1 Certificate of Registration (COR) - Issued by the Bureau of Internal Revenue (BIR) Philippines
2 Company profile - A document containing the Supplier's product offering, capabilities, customers, address and contact information
3 Master List - Directory of accredited suppliers including their contact details
4 Supplier Code - A unique 6 digits alpha numeric code to identify the Supplier, generated upon accreditation

Forms Used:
No standard forms

Sequence
Number Procedure Person Responsible Details Work Instruction

1. Sourcing New
Suppliers
Purchasing Manager / 2. Sourcing New
1 Source candidate Supplier Purchaser Referral, internet Contractors

Requiremens:
1. Company profile
2. Certificate of Registration (COR)
Require candidate Supplier to submit accreditation Purchasing Manager / 3. Supplier comprison form if any
2 requirements Purchaser 4. Quotation if any

Purchasing Manager, QC In-

3 Initiate on-site evaluation when needed charge Inform QC to conduct plant visit

1. Review qualifications and capabilities if

4 Evaluate qualification of candidate Suppliers
Purchasing Manager
suitable to material/service requirements
versus company goals and directives
2. Prepare costing analysis if required
2. Finalize recommendation
3. Create approval memo in excel or word
format for signature

Purchasing Manager / Submit approval memo for signature to the

5 Seek approval Purchaser President

6 Submit COR for creation of Supplier code Purchaser Update Master List when the code is received

7 Prepare initial PO Purchaser Refer to Purchasing Process

Review and evaluate delivery results

considering feedbacks from QC, Controllers,
Purchasing Manager, QC In- end users and experts. Re-orient or de-list
8 Assess initial delivery through QC Department charge Supplier

9 Review performance and implement improvements Purchasing Manager Refer to Performance Indicators
Purchasing of Local Materials
Update: December 14, 2016

Objective:
To ensure accurate, complete and on timely delivery of required locally purchased raw materials at best value and of required quality for customer satisfaction.

Scope:
From receiving of the requisition to monitoring and recording of delivered items.

Definition of Terms:
1 PMS - System used to create the Purchase Order.
2 MOQ - Minimum Ordering Qaantity
3 MCQ - Minimum Color Qaantity

Forms Used:
1 Purchae Order (PO)
2 Notice of PO Change (NPC)
3 Purchase Return Slip (PRS)

Sequence
Number Procedure Person Responsible Details Work Instruction

Regular PR are received from IC. Season PR are received

1 Receive Purchase Requisition (PR) Purchaser from the Merchandiser. Log date received.

PR number, required signatures, MOQ/MCQ, lot

quantity, current price, enough lead time, spec, special
2 Check PR for completeness and correctness of information Purchaser instructions if any

1. Create PO by encoding the PR details into PMS

2. Print completed PO using pre-printed form in 4
copies, 1 original and 3 duplicates
3. The PO form contains a unique control number used
3 Create and print Purchase Order (PO) Purchaser to reference the order

Regular
4 Route PO for sigh-off Purchaser Purchaser and Purchasing Manager signs

Seasonal
Purchaser, Purchasing Manager and President signs

Fax or email PO to Supplier

1 PO duplicate copy to Accounting/Receiving
1 PO duplicate copy to IC
5 Distribute PO Purchaser 1 PO duplicate copy as Purchasing's keeping file

Verify if the Supplier received the PO and if there are

concerns on any of the details mentioned, taking note
6 Confirm PO acceptance with Supplier Purchaser of any special instructions.

7 Enter PO details in Monitoring Report Purchaser Purchasing Monitoring Report (Excel internal control)

Monitoring
Deliveries of
Monitor delivery timeliness and/or respond to any change Requirements PM-
8 in requirements Purchaser Daily communications with the Supplier or customers. WI 07-02.09

Every Friday for the next week's deliveries via email to

9 Inform all department concerned on the actual delivery Purchaser IC, Warehouse, Receiving

1. Upon delivery of bulk PO.

2. The Supplier submits their Invoice together with the
10 Release original copy of PO to Supplier Purchaser delivery report.

1. Issuance of
1. Update Purchasing Monitoring Report Notice of PO
2. Issue Notice of PO Change (NPC) if any change in the Changes
date, quantity or price 2. Issuance
3. Issue Purchase Return to Supplier (PRS) if there are Purchase Return to
11 Close PO Purchaser substandard materials for return Supplier

12 Review performance and implement improvements Purchasing Manager Refer to Performance Indicators
Purchasing of Imported Materials
Update: December 14, 2016

Objective:
To ensure accurate, complete and on timely delivery of required imported raw materials at best value and of required qua

Scope:
From receiving of the requisition to monitoring and recording of delivered items.

Definition of Terms:
1 PMS - System used to create the Purchase Order.
2 MOQ - Minimum Ordering Qaantity
3 MCQ - Minimum Color Qantity
4 Telegraphic Transfer (TT) - Mode of payment where transaction is done from a local bank to a foreign bank
5 Proforma Invoice (PI) - A document showing the intended materials, price, amount, original and consignee or receiver.
6 PMS - System used to create the Purchase Order.
7 Dollar Allocation - Memo format in excel summarizing the required amount in Pesos for actual payment in US Dollars.
8 Sworn Statement with TAN entry number - One of the requirements in opening an LC. This form was formatted by our L
9 Temporary Assessment Notice (TAN) and Single Administrative Documets (SAD) - Requirements for opening an LC. A tem
10 Import Entry Declaration (IED) - Documents from the Broker after lodgement.
11 Shipping Documents - Packing List, Commercial Invoice, Bill of Lading, Form D or E, Marine Insurance

Forms Used:
1 Purchae Order (PO)
2 Notice of PO Change (NPC)
3 Purchase Return Slip (PRS)
4 Letter of Credit Form (LC)

Seq# Procedure Person Responsible

Receive Purchase Requisition (PR) from Inventory Controller

1 (IC) or Merchandiser Purchaser

2 Check PR for completeness and correctness of information Purchaser

3 Create Purchase Order (PO) Purchaser

Seq# Procedure Person Responsible

4 Route PO for sigh-off Purchaser

5 Distribute PO Purchaser

6 Confirm PO acceptance with Supplier Purchaser

Purchaser, IMPEX
7 Enter PO details in Monitoring Report Officer

8 Prepare advance payment request IMPEX Officer

Monitor delivery timeliness and/or respond to any change in Purchaser, IMPEX

9 requirements Officer

10 Confirm shipping details IMPEX Officer

Coordinate the shipment booking schedule to the Forwarder

11 and Broker IMPEX Officer

12 Request shipping invoice and packing list from Supplier IMPEX Officer

13 Communicate requirement of Form D or E IMPEX Officer

IMPEX Officer,
14 Request to send original shipping docs from supplier Purchaser
Seq# Procedure Person Responsible

Once received shipping docs, furnished copy to

broker/forwarder, Receiving, IC and Purchaser for their
15 reference IMPEX Officer

Receive computation of duties and taxes from Broker, check

16 and approve IMPEX Officer

Make Final Assessment available and compile set of

17 documents to be submitted to Account Payable (AP) IMPEX Officer

Submit Final Assessment of duties and taxes and amount due

to the Supplier to Accounts Payable (AP) for arranging
18 payment/Payment Instructions IMPEX Officer

19 Inform all department concerned on the actual delivery IMPEX Officer

Purchaser, IMPEX
20 Close PO and update Monitoring Reports Officer

Check Forwarder and Broker's billing charges and forward to

22 Finance for payment IMPEX Officer

23 Review performance and implement improvements Purchasing Manager

erials at best value and of required quality for customer satisfaction.

cal bank to a foreign bank

nt, original and consignee or receiver.

sos for actual payment in US Dollars.

n LC. This form was formatted by our Legal Attorney.
Requirements for opening an LC. A temporary calculation of the duties and taxes as lodged by the Broker.

Work
Details Instruction

Regular PR are received from IC. Season PR are

received from the Merchandiser. Log date received.

PR#, required signatures, MOQ/MCQ, lot quantity,

current price, enough lead time, spec, special
instructions if any, approved Proforma Invoice (PI) if
any

1. Create PO by encoding the PR details into PMS in

PHP price and amount
2. Create 1 Excel equivalent in US$ price and amount
 Work
Details Instruction
Regular
Purchaser and Purchasing Manager signs

Seasonal
Purchaser, Purchasing Manager and President signs

Excel PO to Supplier by email

1 PO duplicate copy to Accounting/Receiving
1 PO duplicate copy to IC
1 PO duplicate copy as Purchasing's keeping file
Original PO and PI to IMPEX Officer

Verify if the Supplier received the PO and if there are

concerns on any of the details mentioned, taking note
of any special instructions.

Purchasing Monitoring Report and Import Monitoring

Report (Excel internal control)

1. LC Process
1. Request dollar allocation 2. Advance
2. Flll-up LC form if required Payment
3. Prepare payment instruction if needed Process

Monitoring
Deliveries of
Requirements
PM-WI 07-
Daily communications with the Supplier or customers 02.09

1 to 2 months prior to Date Wanted

Advise appointed Forwarders and Brokers regarding Assigning a

the up coming shipment by sending them the Forwarder and
importation details Broker

Check wether the amount/items of shipping is the

same as the PO

For customs purposes

Coordinate with Supplier by email and request the PI

and PL
 Work
Details Instruction

Send the the shipping documents by email.

Once approve, broker will input to BOC's system that

will create the Final assessment Notice and SAD

1. Final Assessment of duties and taxes approved by

Finance and President
3. Copy invoice
4. Copy PL
5. Original PO

Mode of payment:
1. Bureau of Customs by bank debit
2. If by TT to Supplier is 30 days from B/L date Payment
3.If by LC, opening depending on bank conditions Process

1. Coordinate actual time of delivery to Receiving,

Warehouse and Purchaser by email
2. Coordinate with Admin if there is a need for
additional manpower

Update Purchasing and IMPEX Monitoring Report

Upon receiving the Billing Charges:

1. Forwarder: Check against the accompanying official
receipts for any discrepancies (ie Port charges,
shipping line charges, storage, warehousing if any)
versus the Forwarder's billing charges
2. Actual Brokerage fee and Releasing charges

Refer to Performance Indicators