| Policy: | Harrington Signal Inc. shall ensure the adequacy of purchasing requirements prior to their communication to external providers. |
| Purpose: | To define appropriate methods to communicate requirements to external providers for materials, supplies, and services used to produce goods and/or services. |
| Scope: | This procedure applies to the purchase of all inventory items, supplies, materials, subcontracted services, and capital equipment affecting the quality of Harrington Signal Inc.’s products and services. |
| Responsibilities: | All Employees requiring products or services for production of Harrington Signal Inc.’s products must complete purchase requisitions specifying items for purchase and obtain required approvals.
The Purchasing Manager or designate is responsible for evaluating suppliers, maintaining raw material inventories, placing orders with approved suppliers, and negotiating pricing with suppliers. The Purchasing Manager or designate is responsible for ensuring inspection requirements are included on Purchase Orders where needed. Receiving Personnel are responsible for receiving and, where necessary, inspecting materials and forwarding all paperwork to Accounts Payable for external provider/shipper payment. Accounts Payable is responsible for payment of invoices only after satisfactory completion or delivery of goods/services has been made. |
| Definitions: | Purchase – Acquire by financial transaction; “purchasing” can be taken to mean leasing and other ways of obtaining materials or services. |
Procedure:
1.0 Order Determination and Requisition
1.1 The Purchasing Manager or designate shall determine reorder quantities of standard production inventory items/components by comparing available stock on hand with the requirements to satisfy the production plan.
1.2 For non-inventory production items, including supplies, engineering components, and services, the originating individual/department shall prepare a PURCHASE REQUISITION. Requisitions should be completed and approved with the following items and any additional supporting documentation, as appropriate:
- Complete description of part, model numbers, processes, products or service to be performed;
- Product, process or service specifications;
- Quantity and costs required;
- Date required;
- Requirements for methods, processes or equipment;
- Requirements for competence or qualification of employees;
- Communication requirements for interactions;
- Requesting department and accounting code;
- Recommended external provider, if applicable;
- Customer, regulatory, Quality Management System, Harrington Signal Inc., and other requirements;
- Requirements for verification or validation activities that the organization, or its customer, intends to perform at the external providers premises.
- Special release or shipping requirements; and
- Special inspection requirements upon receipt.
- 1.3 External provider selection for inventory and non-inventory items and subcontracted services shall be conducted in accordance with QP1120 EXTERNAL PROVIDER EVALUATION.
2.0 Order Placement
2.1 The Purchasing Manager or designate shall analyze terms, external provider pricing, price/quantity breaks, etc., and order accordingly, taking care of Harrington Signal Inc.’s best interests while doing so. The Purchasing Manager or designate shall obtain – from the requestor – approval of any material variance prior to placing the order.
2.2 The Purchasing Manager or designate shall review specified purchase requirements with Manufacturing and Stockroom personnel to ensure adequacy of requirements prior to the Purchasing Manager communicating them to the external provider(s).
2.3 The Purchasing Manager or designate shall complete Purchase Order with all applicable information (see purchase requisition data above). The Purchasing Manager or designate should include arrangements and method of product release in the purchasing information.
2.4 The Purchasing Manager or designate and the requesting party (when required) shall review the purchase order for accuracy and consistency, then indicate in the form that it was reviewed.
- 2.5 The Purchasing Manager or designate may place orders by telephone, fax, mail, or online (e-mail or web form). When placing orders by telephone, the Purchasing Manager or designate shall record the external provider contact and date of order on the purchase order and follow up the call by sending a “confirming copy” of the purchase order to the external provider.
- 2.6 The Purchasing Manager or designate shall follow up on shipping, delivery, expediting, and partial shipments of ordered items, to assist Manufacturing in maintaining consistent production flow and ensure other departments’ operational requirements are also met. The Purchasing Manager or designate may telephone external providers, keeping an email record of follow-up activity with the Purchase Order when applicable.
3.0 Recordkeeping and Matching
3.1 Purchased items shall be received in accordance with QP1210 RECEIVING AND INSPECTION.
3.3 Receiving personnel shall match Receiving documentation with the open purchase order. If receiving and open PO can be reconciled, Receiving personnel shall forward the receiving documentation to Accounts Payable.
- 3.4 For partial shipments, receiving personnel shall forward receiving paperwork to Accounts Payable. The original purchase order shall be remain open until all items have been received. When all units have been received the purchase order will be auto closed.
4.0 PURCHASING REVIEW
4.1 The Purchasing Manager watches for discrepancies or problem issues in the Purchasing process and resolves them as appropriate. Management Review meetings perform supplier performance review and trending in accordance with QP1060 MANAGEMENT REVIEWS or as needed. The President and Accounting/Finance Department, in addition to Purchasing Manager, review the inventory for non-movement items and discrepancies
4.2 The Quality Manager shall periodically audit the purchasing process in accordance with QP1020 INTERNAL AUDITING to ensure its continuing suitability, adequacy, effectiveness, and conformance to various requirements.
Effectiveness Criteria:
- Raw Material Inventory (in days)
- Materials for manufacture of Harrington Signal Inc.’s goods/services is readily available
- No nonconformities traceable to purchased materials, supplies or services
Revision History:
| Revision | Date | Description of Changes | Approved By |
| 0.0 | 07/03/17 | Initial Release | Jim Theesfeld |
| 1.0 | 8/17/18 | Digitized version | Todd Gifford |
| 2.0 | 12/21/21 | Updated 4.1 to current process | Todd Gifford |