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# Level-1 Process

Level-2 processes

Level-3 processes Linkage with

SOCP/Procedure

9 Procurement 9.1 Purchasing

Management 9.1.1

Enquiry, negotiation &

placement of order

TSI/PUR/01, TSI/PUR/02,

TSI/PUR/05

9.2 Vendor

management 9.2.1 Vendor Development TSI/PUR/01, TSI/PUR/05

9.2.2.1

9.2.2.2

Vendor Evaluation

(Suppliers)

Vendor Evaluation (Service

Providers)

TSI/PUR/03,

TSI/PUR/05,

TSI/PUR/06

9.2.3 Vendor Satisfaction Assessment

Process

NIL

PROCUREMENT & STORES MANAGEMENT

SCM

Purchase

Stores

Ve

nd

ors In

tern

al

Cu

sto

me

rs

Govt. Bodies ( Excise, GST, Pollution Control Board, Dept Of

Explosives , District Administration )

Accounts

Inputs

Tata Code of Conduct SLAs CBSC Co Values Vendor Feedback Best Practices

Function Supply Chain Management

Process Identification No.(PIN) 9.1 Process Owner Head – Purchase

Process Name Procurement Management Revision No. &

Date 05 20/08/2018

Process Objective Procurement of materials as per indenters’ requirement (Quality,

Quantity) at right price and right time. Review frequency Yearly

Linked EPMs (Input) 8.3, 11.2 Linked EPMs (Output) 9.1.1,9.2.1

Supplier Input Process Steps Output Customer

Indenters , Stores PRs, Specifications & Drawings

Purchase/Work orders to

Vendors

Suppliers & Service Providers

Offers

Material delivery to Stores & Line(Point of use)

Stores & User Depts.

In process Measures Target Review freq End process Measures Target Review Freq Reference Documents

PR to PO cycle time 15 days Monthly

Availability of indented material

as per indentors’ requirement at

right time.

90% Monthly

(1) SAP record

(2) Supplier Data Bank

Availability of indented material

of right quality as per indentors’

requirement.

Conforming

to indentors

specification.

Quarterly

(3) Vendor rating records

Vendor

rating.

Delivery 90% Bi Annually (4) CBSC

Quality

98%

Bi-Annually (5) SLAs

(6) Meeting reviews

Receive & scrutinize PRs

Send RFQ to selected set of

Suppliers / Service Providers

Receive & scrutinize PRs

Receive & scrutinize PRs Receive and analyse offers

Receive recommendations &

approvals

Issue Purchase/Work Orders to qualified

Suppliers/Service Providers


Process Identification No.(PIN) 9.1.1 Process Owner Head – Purchase

Process Name Enquiry, negotiation & placement of order Revision No. &

Date 05 20/08/2018

Process Objective To ensure competitiveness of offer and supply of materials in time Review frequency Monthly

Linked EPMs (Input) 9.2.3, 9.3, 8.3 Linked EPMs (Output) 9.2.1, 9.2.3

Yes

Start

Receive PR ( by SAP

transaction code ME5A) Is the PR Well-

defined?

Referred to

respective dept

No

Existing

item?

No Is there any

recent order?

Yes Supplier confirming

old price & terms?

No

Select vendor from panel /

by new vendor

search/alternate superior

product

No No

Yes

Send RFQ to suppliers/

service providers

Receive & open offers on

due date in presence of

Accounts Official

Is recom-

mendation

necessary?

Receive recommendation

from concerned dept.

Yes

No

Negotiate price and

terms & conditions

Obtain approval from

sanctioning authority

Get terms & conditions vetted by

Legal for new PO / WO for high

value orders.

Prepare PO / WO /RO / Ch.Order

Issue PO/WO/Ch Order / RO

after release in System &

Signature by authorized

personnel

End

Is the offer

complete?

Yes

Reject offer and

inform the bidder

Obtain clarification

from bidder

No

Regular

consumable?

Yes

Yes

Is ARC

possible?

No Yes

Proprietary spares

Frequency of need

Price list based items

Select vendors interested for

ARC from the empanelled list. Information on Capacity &

Capability of new Vendors

Vendors at new locations

OEM alternate Vendors

User Recommendations

Suppliers Visit/Profile

Feedback from end users

Affirmative Action Vendors

Inputs considered

Information to other

participating vendors regarding

closure of order.

In process Measures Target Review freq End process Measures Target Review Freq

%age of consumables against ARC >40% Annual %age of orders within 5% variation of

Average Price per Unit 90% Monthly

Savings arising out of Procurement Function Rs 3 crore Quarterly


Process Identification No.(PIN) 9.3 Process Owner Head - Purchase

Process Name Vendor Management Revision No. &

Date 05 20/08/2018

Process Objective Vendor Evaluation and New Vendor development for meeting the

requirement of material/ service of the company. Review frequency

Bi-Annually for suppliers.

Annually for ServiceProvider.

Linked EPMs (Input) 9.2.3, 9.2.1 Linked EPMs (Output) 9.3.1, 9.3.2.1

Supplier Input Process Steps Output Customer

Internal customers (Indenting Depts)

PRs, Specifications & Drawings

Modified specifications, Modified Vendor Master

Indenters, Purchasers

User feedback Vendor rating reports

Suppliers,

Service

Providers &

Company

Manageme

nt

Stores Supply data

ITS System Support

Trade bodies & Industry

Information on new suppliers

Modified specifications, Improved Transactions

i. No. of new Vendors added

ii. No of Vendors deleted on account of poor performance

No

Yes

Yes

Yes

No

Search New Supplier & verify credentials

Not adequate

Conduct Vendor Rating

Allot Vendor Code & place trial order

Competency of

supplier?

Continue business in future.

Adequate

Intimation and engagement with vendor for improving performance by providing any

possible assistance.

Competency Adequate?

Issue caution letter to vendor-2nd time If repeating 3rd time, delete vendor in SAP

Is trial order acceptable?

Continue future transaction

Engage with the vendors for improvement scope

Update Vendor Master List

Is the order acceptable now?

Inform the vendor about its product/service not meeting desired criteria.

No

In process Measures Target Review freq End process Measures Target Review Freq Reference Documents

Vendor Rating for all

active vendors during

the FY

Delivery-90% Min

Quality-98% Min. for

Suppliers & Avg.

87%(with safety and

statutory>90%) for

Service providers.

Bi-Annually

for suppliers.

Annualy for

service

providers.

No of vendors meeting

performance criteria.

100% (i)Bi-Annually

for suppliers.

(ii)Annualy for

service

providers

(1) SAP Vendor Rating report

(2) Internet Search Engines

Feedback from clientele All Vendors As per reqmt. New Vendor Incorporation As applicable Annually (3) SAP Vendor Master


Process Identification No.(PIN) 9.3.1 Process Owner Head - Purchase

Process Name Vendor Development Revision No. & Date 05 20/08/2018

Process Objective

To empanel & keep competent vendors in Vendor Master List to

receive competitive price & good quality materials, including

facilitating long term supplies.

Review frequency Annual

Linked EPMs (Input) 9.1.1,9.2.1 Linked EPMs (Output) 9.3.1,9.3.2.1

Start

Search new

Vendor

Get Vendor credentials along with Vendor Registration Form filled up & verify. GST registration mandatory. (Priority for Vendors already enlisted in Tata Steel

Limited)

Does Vendor fulfil

required criteria ?

Yes

Allot Vendor Code & send RFQ

End

No

Keep the Vendor

intimated

Receive offer

Is offer

competitive?

Will revised offer

be permitted?

Negotiate

Yes

Yes

Place trial order

Obtain user feedback

Is trial quantity acceptable ?

Yes

Will further trials

be permitted?

Yes

No No

Continue transaction

No

No

Vendor Credentials :

1. Profile details

2. Dealership certificate

3. Last 2-3 years IT returns

4. Statutory Registrations

5. Client list with order copies

6. Registered with Tata Steel Ltd.

7. MSME / Others

8. AA / Others

9. Systems & Regluatory Norms

10. Ehtics & Safety

11. Visit Vendor premises if

required

Engage with vendor for

improving its

performance by providing

any possible assistance.


Credentials of Vendor complying reqmnt. 100% As required

No. of new Vendors developed.

As per requirement.

(Min 3 vendors per

commodity identified

except OEM)

Annually Compliance to Statutory Norms 100% As required

Feedback from Clientele 2-3 Clients As required

User Dept. feedback in case not satisfactory Initial Supply As applicable


Process Identification No.(PIN) 9.3.2.1 Process Owner Head - Purchase

Process Name Vendor Evaluation (Suppliers) Revision No. &

Date 05 20/08/2017

Process Objective To keep the vendors informed of their performances in order

for them to improve their performance Review frequency Bi-Annually

Linked EPMs (Input) 9.1.1,9.2.1 Linked EPMs (Output) 9.3.1,9.3.2.1

Start

Maintain supplier in

SAP record

Is vendor rating score less

than 80% for Delivery / less

than 90% for Quality? ?

Yes

No

Calculate score on “Quality” criterion as

average of score received by supplier on

sub criteria “GR. Inspection” & “ Rejection/

Complaint” (Out of 100 marks Each )

Calculates Score on “Delivery” criterion as

average of score received by supplier on

sub criteria “ On time delivery” & “Quality

reliability” (Out of 100 marks) Each.

Set equal weightage (50% ) on each of criteria

“Quality” & “Delivery”

Calculate vendor rating as total of weighted

score on criteria “Quality” & “Delivery”

Intimate vendor rating score

to the suppler

Has performance improved as per

the target in next evaluation?

Intimate the

vendor of his

performance

Delete supplier from

SAP Record

End

Issue caution letter and Engagement

with vendor for improving performance by providing any possible assistance.

Suspension of enquiries for 2 months and

further until an assuarance from the vendor

to improve future performance.

No

Yes

Has performance improved as per

the target in next evaluation?

Yes

No

Is vendor rating score more

than 90% for Delivery & more

than 98% for Qualtiy?

The performance is

Satisfactory.Enagagement with

Vendors to further improve the

performance.

No

Yes


Timely Delivery, Quality > 90 %, > 98% Bi-Annually Feedback to active Suppliers the perf.

based on vendor rating during the FY 100% Bi-Annually

% of active vendors meeting performance

criteria. 100% Bi-Annually


Process Identification No.(PIN) 9.3.2.2 Process Owner Head - Purchase

Process Name Vendor Evaluation (Service Providers) Revision No. & Date 05 20/08/2017

Process Objective To keep the vendors informed of their performances in order for them to improve

their performance Review frequency Annually.

Linked EPMs (Input) 9.1.1,9.2.1,14.1, Plant Maintenance Linked EPMs (Output) 9.3.1,9.3.2.1

YES

No

Start

Calculate score on “Quality” criterion

as average of score received by

supplier on sub criteria “Price Level” &

“Price Behavior”( Out of 100 marks

each).

Maintain supplier in SAP record Is Avg vendor rating

score >87(with safety

& statutory>90?)?

NO

Calculate score on “Timeliness”

criterion as average of score received

by Vendor on sub criteria “Timeliness”

(Out of 100 marks Each )

Calculates Score on “Safety” criterion

as average of score received by

supplier on sub criteria “ Safety ”( Out

of 100 marks) Each.

Calculate vendor rating as average of scores on criteria “Price”, " Timeliness”, “Environment” & “Statutory” and “Safety”

Intimate score to

the vendor

Yes

End

Has performance improved in safety standard and other requirements in another 2

months?

Issue caution letter & Engagement with the vendor if

any assistance is required for improvement. User

Dept. shall observe performance and update

Purchase.

Intimate the vendor of his

performance

Calculate score on “Environment”


by supplier on sub criteria

“Environment” (Out of 100 marks Each

)

Calculates Score on “Statutory”


by supplier on sub criteria “ Statutory

”(Out of 100 marks) Each.

Is rating in all the

parameters >90?

NO

Yes

Stop sending further RFQ for 2 months and provide any further assistance if required to improve the performance.

Has performance in safety improved in

the next 2 months & Is vendor rating

score more than 87(with safety &

statutory >90) in the next evaluation?

No Suspend/cancel further enquiries, delete

vendor in SAP .

Yes

Performance is

satisfactory. Engagement

with vendor for further

improvement.


Quality, Timeliness, Environment > 85 % in each Annually

Vendor Rating Report & Feedback

Improvement action plans for Vendor

Decision for deletion of Vendor

Active Service

Providers during

last Financial Year Annually

Safety, Statutory > 90 % Annually No of Vendors with overall score>87% 100%

No of vendors deleted. As applicable


Process Identification No.(PIN) 9.3.3 Process Owner Head - Purchase

Process Name Vendor Satisfaction Assessment Process Revision No. &

Date 04 17/08/2017

Process Objective To improve Suppliers Satisfaction Review frequency

Linked EPMs (Input) Linked EPMs (Output)

In process measures Target Review Freq End Process Measures Target Review Freq

SS survey questionnaire Mar

Annual Improvement in Supplier satisfaction feedback

score

> 4 on 5

point

scale

Annual Survey results April

Qn. requires modification?

No

Assess & capture key attributes

critical for Vendor satisfaction

Draft

questionnaire

Deliberate with BE to validate

the process & capture any

unarticulated needs

Feedback on

Enquiry stage queries

negotiation stage

order stage

Order execution

Payment

Assistance by Depts

Ethics

Company overall Modify the questionnaire,

as appropriate

Evaluate and

improve for the

next cycle based

on changing

needs

Conduct feedback

Yes

End

Discuss last year issues for

considerations in current

year feedback

Segregate into required

number of attributes

Share outcome with :

Prepare action plans on low

scoring points

By BE Dept

Vendors

Management

All concerned