External Provision of Process Product and Service Control Specification: Comprehensive Guide for Procurement

{"title":"External Provision of Process Product and Service Control Specification","content":"\n1. Purpose\nTo control the external provision of process products and services and ensure that they comply with specified requirements.\n\n2. Scope\nThis procedure is applicable to the procurement unit of the company's management department for controlling the external provision of process products and services.\n\n3. Responsibilities\n3.1 The management department's procurement unit shall formulate this specification and be responsible for the control and management of the external provision of process products and services.\n3.2 The quality department is responsible for the verification of external provision of process and products, as well as the assessment and evaluation of supplier's quality management. It is also responsible for obtaining performance reports and material reports for the supplied products.\n3.3 Other departments shall cooperate in the control and management of the external provision of process products and services.\n\n4. Operating Procedure\nClassification of procurement materials: Materials are divided into two categories, external purchase and external collaboration. Based on the importance of the materials, they are further classified as follows:\nA Category: Procurement products that play a critical role in the final product and directly impact its quality and performance.\nB Category: Procurement products that have a significant impact on the final product's quality and performance.\nC Category: Procurement products that have no impact on the final product's quality and performance, including general parts, standard parts, and auxiliary materials.\nD Category: Equipment accessories, tools, fixtures, etc.\nE Category: Office supplies, labor protection supplies.\n\n4.1 Procurement Preparation\n4.1.1 The procurement of external raw materials and parts must be carried out within the scope of the "Qualified Supplier List" based on the "Supplier Management Specification" and the evaluated "Supplier Capability Investigation Form." In special circumstances, procurement from unaudited suppliers shall be carried out in accordance with Article 4.4.2.\n4.1.2 When specified in the contract, raw materials, parts, or services can be procured from suppliers designated by customers, but this does not exempt the company from its responsibility to ensure the quality of the supplier's parts, materials, and services. Although evaluation may be waived, incoming materials must be double-checked.\n4.1.3 All products or materials purchased for part production must comply with applicable regulations, government requirements, and safety regulations regarding the restriction of toxic and hazardous substances. They should also consider relevant environmental regulations in domestic and international production and sales. At the same time, a quality assurance agreement and relevant logistics cooperation agreement shall be signed with our company.\n\n4.2 Each department's material procurement should be initiated by filling out a requisition form, which shall be reviewed by the department head and approved by the general manager or authorized personnel before proceeding with the procurement.\n4.2.1 A and B category direct materials: The storage unit shall prepare a "Procurement Requisition Form" based on the target production volume, standard consumption, reorder point, and inventory level. Once approved by the representative of the management, it shall be forwarded to the procurement unit for placing orders. When the inventory reaches the reorder point, the supplier shall be notified for delivery. The procurement unit must inform the supplier of the order details and obtain confirmation.\nC category materials: The storage unit shall fill out a "Procurement Requisition Form" based on the safety stock and the monthly demand of orders, which will then be negotiated by the procurement unit and submitted for approval. After obtaining the approval of the decision-making authority, the cooperating vendor shall be notified for delivery.\nTransportation: Negotiations with cooperating vendors for transportation shall be carried out, and after obtaining the approval of the decision-making authority, the transaction can take place.\n\n4.2.2 For materials that need to be purchased and have previous specifications, the previous price can be used as a reference when filling out the purchase order. When the amount is significant, it is necessary to rearrange the quotation, negotiation, search for cost-effective and quality-suitable suppliers. The procurement must be approved by the department supervisor.\n4.2.3 The content of the procurement plan can include:\n- Product name, specifications, and manufacturer;\n- Quality requirements and quantity;\n- Planned and actual delivery schedule.\n\n4.2.4 Based on the confirmed delivery time with the supplier, they should be requested to deliver on time. Suppliers should be required to have 100% on-time delivery capability. The procurement unit should provide necessary planning information and procurement commitments to ensure that suppliers can meet these expectations. A management system should be established to supervise the supplier's delivery capability, and records of additional freight charges should include payment by both the company and the supplier.\n4.3 Handling of Delivery Abnormalities:\n4.3.1 In the event of delivery abnormalities, the procurement unit shall notify the production department, ensuring that production is not affected. The delivery schedule shall be reconfirmed with the supplier to ensure production needs are met. The procurement unit shall assess the supplier accordingly. Monitoring results and response methods.\n4.3.2 When the supplier cannot meet 100% on-time delivery, quick responses can be made according to the prompts in the table below. To ensure the effectiveness of response plans, multiple methods can be used simultaneously. In case one response plan fails, the remaining response plans can take effect to prevent delays caused by sequential reactions. Principle of response: minimize the impact of procurement on production and business.\n\nItem Result Response Method Time Advance Potential delay Instruct to follow the plan based on current storage capacity and subsequent material arrival plans Delay Likely delay Notify production immediately, closely monitor, and prepare response strategies Confirm delay Notify production immediately, let production decide on specific changes Quantity Insufficient Notify production and take necessary measures to supplement Excess Return or temporarily store without accounting for it Poor quality Excessive defect rate is expected to lead to insufficient production On-site rework or return sorting, supplement defective parts, and notify production department for action Batch defects Preliminary determination of the cause to decide whether to make immediate replenishment or separate procurement, while notifying production All monitoring results should be recorded in the "Procurement Plan."\n\n4.4 Verification of Procured Products:\n4.4.1 When cooperating vendors deliver goods, the requirements of the "Incoming Inspection Management Regulations" shall be followed. The warehouse shall fill out an "Inspection Report" and notify the quality department to complete the inspection of normal materials on the same day and urgent materials within 2 hours.\n4.4.2 If there is a need to change the delivery time or quantity with cooperating vendors, the procurement personnel shall indicate it on the purchase order and promptly notify the cooperating vendors. If the cooperating vendors cannot deliver on time due to their own reasons and the delivery is around two days before or after the agreed delivery date, it shall be considered as not delivered on time.\n4.4.3 Products that have passed the inspection by the quality department shall be labeled with a qualified label and follow the "Product and Service Release Control Specification." The warehouse shall follow the "Protection Control Specification" for storage.\n4.4.4 When there is a provision in the contract for customer on-site verification of the supplier's products, the procurement unit shall notify the supplier in advance. The company's quality personnel shall accompany the customer representatives to the supplier's site to verify the supplier's products. The products can only be shipped after passing the verification. Even for products verified by customers, the quality department still needs to carry out inspections in accordance with the "Product and Service Release Control Specification."\n4.4.5 Unqualified raw materials shall be labeled as non-conforming and handled in accordance with the "Non-Conforming Control Specification."\n4.4.6 For suppliers providing A category procurement products, their traceability must be ensured.\n4.4.7 Incoming materials for acceptance and storage shall be recorded in the "Inbound and Outbound Ledger." }