Requesting Material and Services

Scope
This procedure covers purchase requests for nonproduction materials and services, unplanned production material and services, fixed assets, requests for purchases from affiliates, special purchases made directly by a department, and requests for production items to augment planned production orders generated in MRP. This procedure does not cover requests for planned production material and services which result directly from material requirements planning OR routine requests for planned production services (refer to Material Requirements Planning [../FND/@PRO1154Y]) preliminary requests for fixed asset purchases (refer to Fixed Asset Request [../FND/@PRO1099Y])

Policy
Appropriate approvals are required when requesting the purchase of nonproduction material and services. Refer to the Purchase Authorization Table [../FND/@REF0881Y]. Nonproduction material and services include those used by Engineering in creating prototype products. A supplier item is a specific item (material or service) supplied by a specific supplier. A unique item identifier is established for each production supplier item correlates the supplier item with the quality system used and with the suppliers qualified to supply the item is required for all purchases affecting product quality (excepting special nonproduction purchases made using a supplier authorized with a supplier deviation)

A supplier's quality status defines the conditions under which a supplier item affecting product quality may be purchased from a supplier consists of one of the following: authorized or unauthorized

An authorized supplier is authorized as a source for supplier items affecting product quality. An unauthorized supplier

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is not authorized as a source for supplier items affecting product quality may be used as a source for a supplier item that does not affect product quality

The quality status of an authorized supplier is one of the following classifications: approved suppliers suppliers approved for a supplier deviation

An approved supplier appears on the Approved Supplier List for specific supplier items. A supplier deviation must be approved by the Quality Manager, Manufacturing Engineer, Purchasing Manager, and Material Control Coordinator must be supported by precise identification of the supplier item is required for the purchase of any supplier item affecting product quality when the selected supplier classification is neither approved nor qualified

The Approved Supplier List is a record of authorized suppliers with an approved classification distributed to required company employees each time it is issued collected and destroyed when succeeding copies of the Approved Supplier List are distributed

All suppliers supplying material or services affecting product quality are selected on the basis of their ability to meet requirements, including quality requirements. Purchasing documents may include one or more of the following Purchase Requisition [../FND/@FOR0797Y] Purchase Order form Purchase Order Change Request [../FND/@FOR0796Y] supporting documents, including: specifications, drawings, tear sheets, Capital Appropriation Request [../FND/@FOR0378Y] forms, etc.

All purchasing documents for special nonproduction materials and services are evaluated to determine whether the purchased materials or services affect product quality. The Purchase Document Requirements Table [../FND/@REF0882Y] documents the required purchase order documents (covering prior authorization and supplier contracts) for the various categories of purchases.
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Purchase requisitions for supplier items that affect product quality and for which no authorized supplier has yet been established must include, for purposes of supplier authorization, the following: precise identification of the item ordered the title and issue number of any drawings, specifications, or other technical data relevant to the item being ordered, or reference to that information the title, number, and issue of the quality system international standard to be applied to the product, as applicable required approvals

A Purchase Requisition [../FND/@FOR0797Y] form is the request document required for the purchase of all unplanned production materials and unplanned production services, including rework services nonproduction materials and services items from affiliates for sales orders consulting and other outside services fixed assets leased equipment special purchases

Purchase requisitions are converted into purchase orders daily. A Capital Appropriation Request [../FND/@FOR0378Y] is required for the purchase of fixed assets and reflects the same approval signatures as purchase requisitions. Refer to the Purchase Authorization Table [../FND/@REF0881Y]. The Requester of a special purchase may commit company funds to that purchase with appropriate approvals. Special purchases of nonproduction material or services include items about which the purchasing department has limited experience or expertise are performed directly by the requesting department, not by the purchasing department are paid in advance by check or when invoiced

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require the same approval signatures as documented in the Purchase Authorization Table

Buyer names are assigned to each Buyer each Production Control Planner the Master Scheduler the Production Control Manager the Purchasing Manager

Responsibility
The Employee is responsible for submitting a purchase requisition for the fixed asset submitting a Capital Appropriation Request form for the fixed asset selecting a supplier when a requested purchase is for special nonproduction materials and services

The Department Manager is responsible for approving purchase requisitions made by employees in their departments for special nonproduction purchases.

Distribution
Buyer* Customer Service Representative* Department Manager* Employee* Production Control Planner* Stockroom Supervisor*

Ownership
The Purchasing Manager [list@YourCompany.com?Subject=PRO1180Y] is responsible for ensuring that this document is necessary and that it reflects actual practice.

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Activity Preface
This activity is performed when there is a requirement to purchase nonproduction material or services (including special purchases), or unplanned production material or services. This activity is also performed when it is determined that the planned production orders generated in MRP require additional purchase orders. An annotated copy of the MRP report planned purchase order - contains information about the required additional purchase orders. This activity may be performed when a production rework order requires rework production services or when a purchase is required from an affiliate to fill a sales order. Nonproduction material and services include fixed assets, graphic arts supplies and services, research and development supplies and services (including material and services to build prototypes), advertising space, and broadcast time. Unplanned production items include free stock, expensed parts, and replacement parts for discrepant material, and unplanned outside processing services. When unplanned material issues deplete inventory, it is important to determine the cause of the material shortage. Unplanned material purchases may be the result of requests for additional components on the shop floor (due to discrepant material), replacement item requests, inaccurate MRP parameters, or requests for production material from nonproduction departments within the company. In any case, the Director of Materials should determine the reason why an unplanned material purchase is necessary. Although it is possible that unplanned outside processing services may be required, it is the responsibility of the Production Control Manager and the Master Scheduler to ensure that such requests are reasonable and not a symptom of a flawed planning and production process. Refer to Publishing the Master Production Schedule [../FND/@PRO1152Y], Material Requirements Planning [../FND/@PRO1154Y], and Changing Released Discrete Jobs/Repetitive Schedules [../FND/@PRO1166Y]. This activity does not cover a Company product issued from stock for internal use as a fixed asset. Refer to Fixed Asset Request [../FND/@PRO1099Y]. The job title Requester refers to one of the following: Buyer Customer Service Representative Employee Production Control Planner Stockroom Supervisor

Prior Activity
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Changing Released Discrete Jobs/Repetitive Schedules [../FND/@PRO1166Y] Consigning Material to Rework Suppliers from MRB [../FND/@PRO1203Y] Entering and Verifying Sales Orders [../FND/@PRO1069Y] Fixed Asset Purchase [../FND/@PRO1101Y] Material Requirements Planning [../FND/@PRO1154Y] Production Activity Control [../FND/@PRO1169Y] Releasing Discrete Jobs/Repetitive Schedules [../FND/@PRO1161Y]

Requester
1. Determine whether the item demand is controlled via reorder point or MIN-MAX planning. If performing demand fulfillment via reorder point or MIN-MAX planning, goto task #14. Otherwise, goto task #2. 2. Review quotations and blanket agreements for an item. Oracle Purchasing N > Supplier Item Catalog B > Find Supplier Item Catalog Refer to Finding Supplier Items [../PO/@POXSCSIC_FIND_CATALOG]. 3. Prepare a purchase requisition for the material or service. Purchase from outside supplier Enter a "purchase requisition" type.

Oracle Purchasing N > Requisitions > Requisitions M > List of Values Requisitions Refer to Overview of Requisitions [../PO/@reqov]. Enter a "requisition template" type.
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Oracle Purchasing N > Setup > Purchasing > Requisition Templates Requisition Template Refer to Defining Requisition Templates [../PO/@POXRQTMP_TEMPLATE]. Complete a Purchase Requisition form for the material or service. Specify item identifier(s) on the Purchase Requisition form, as available. Manually attach any other purchasing documents to the Purchase Requisition form. The purchase requisition comprises the Purchase Requisition form and any attached documents. Record the corresponding work order number on the requisition form when requesting production items. Ensure that all the purchasing documents are complete. Submit requisitions to Purchasing.

Oracle Purchasing N > Reports > Run M > Requisition Import M > MRP Submit Request Refer to Requisition Import Process [../PO/@t_impreq]. Select Requisition Import.

Purchases from affiliates Enter an "internal requisition" type.

Oracle Purchasing N > Requisitions > Requisitions Requisitions Refer to Overview of Internal Requisitions [../PO/@ireqov].

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Run the Create Internal Sales Order Report to populate the Oracle Order Entry interface tables with approved, inventory sourced requisition lines. Record the sales order number on the requisition form. Record any hold codes applying to the sales order on the requisition form. Instruct the Buyer to include the hold information on the purchase order. This will prevent the affiliate from shipping the order before the holds have been cleared and the company has authorized the affiliate to ship the sales order.

Indicate on the form any customer requirements and specifications that need to be met, such as quality system requirements or specifications, or special instructions. Indicate on the form that the affiliate should forward a sales acknowledgment to the customer service department, preferably by FAX or express delivery (same day or overnight).

If the request is for a special purchase made by a department, goto task #4. If the request is for nonproduction materials or services or unplanned production materials, goto task #8. If the request is for unplanned outside processing services, goto task #5. 4. Determine whether product quality is affected by the purchase. All production material and services affect product quality. Nonproduction material or services can indirectly affect product quality. 5. Obtain the assistance of your department manager, as needed.

Select a supplier for the purchase. All suppliers supplying material or services affecting product quality must be authorized. Unplanned outside processing services Select an authorized supplier. Choose a supplier from the Approved Supplier List. Request supplier authorization, as needed. When the desired supplier is not authorized, you can either select another supplier or submit the supplier for authorization. Refer to Evaluating Supplier Performance [../FND/@PRO1185Y]. Special purchases made by departments
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Select a supplier for the purchase. Verify that the supplier is authorized when product quality is affected by the purchase. Obtain assistance from a Buyer or your department manager, as needed. Authorized suppliers are on the Approved Supplier List in the supplier quality pending file. Buyers have copies of the Approved Supplier List.

Request supplier authorization, as needed. When the desired supplier needs to be authorized and is not, you can either select another supplier or submit the supplier for authorization. Refer to Evaluating Supplier Performance [../FND/@PRO1185Y].

6.

Fill out the supplier information on the Purchase Requisition form. Record the supplier name on the Purchase Requisition form.

Oracle Purchasing N > Requisitions > Requisitions M > List of Values Requisitions Refer to Overview of Requisitions [../PO/@reqov]. Select Source Details Region.

View purchase or price history.

Oracle Purchasing N > Supplier Item Catalog B > Find Supplier Item Catalog Refer to Using the Supplier Item Catalog Tabbed Regions [../PO/@POXSCSIC_SELECT_PRICING]. Select Negotiated Sources.

Product quality not affected Record the supplier code on the Purchase Requisition form, when available.
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Product quality affected Record the supplier code on the Purchase Requisition form. Indicate that product quality is affected and that the supplier is authorized for each line item on the form. Fill out a Supplier Maintenance form [../FND/@FOR0691Y], as needed. A Supplier Maintenance form is needed when requesting supplier authorization. Stop and complete Evaluating Supplier Performance [../FND/@PRO1185Y], as needed. 7. Negotiate the purchase with the supplier, if required. 8. Contact the supplier to negotiate the price, payment terms, and delivery date, as needed. Record the information obtained from the supplier on the Purchase Requisition form.

Validate whether documents can be self approved. Oracle Purchasing N > Requisitions > Requisitions M > Save B > Approve > OK Requisitions Refer to Requisition Approval Workflow [../PO/@porqwf]. Select Approve button.

The required approvals are based on the system purchasing setup. Refer to the Purchase Authorization Table. All nonproduction material and services require approval of the Department Manager. Unplanned production material purchases require the approval of the Director of Materials. If additional approvals are required for the purchase, goto task #9. Otherwise, goto task #14. 9. Obtain the required additional approvals.

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Oracle Purchasing N > Notifications Summary B > Open Notifications Refer to To Create a Notification Activity [../fnd/@notact]. Select Reassign button.

Department Manager
10. Review the purchase requisition. Ensure that the information is complete and accurate. Correct any errors or omissions.

Oracle Purchasing N > Notifications Summary B > Open Notifications Refer to To Create a Notification Activity [../fnd/@notact]. Select Open button. Select OK button. Speak directly with the Requester to solve any problems quickly and informally. Sign and date the requisition form.

11. Determine whether additional approvals are required. If additional approvals are required, goto task #12. Otherwise, goto task #14. 12. Obtain the required additional approvals.

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Oracle Purchasing N > Notifications Summary B > Open Notifications Refer to To Create a Notification Activity [../fnd/@notact]. Select Reassign button.

13. Return the requisition to the Requester, if required. 14. Produce reorder point or MIN-MAX planning requisitions. Reorder point Oracle Inventory N > Planning > Reorder Point Planning Reorder Point Planning Refer to Reorder Point Report [../INV/@r_invirrop]. MIN-MAX planning Oracle Inventory N > Reports > Planning Min-Max Planning Refer to Min-Max Planning Report [../INV/@r_invirmmx]. Validate for accuracy.

Requester
15. Forward the purchase requisition to the purchasing department. Retain a copy of the Purchase Requisition form. Forward the remaining copies of the Purchase Requisition form to the purchasing department.

Fixed asset purchases Retain a copy of the Capital Appropriation Request form.
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Forward a copy of the Capital Appropriation Request form to the purchasing department.

Purchases from an affiliate Retain the Sales Order Worksheet [../FND/@FOR1011Y] until you receive a copy of the purchase order.

Requisition import Oracle Purchasing N > Reports > Run M > Requisition Import M > MRP Submit Request Refer to Requisition Import Process [../PO/@t_impreq] Select Requisition Import.

End of activity. Goto Issuing a Purchase Order [../FND/@PRO1182Y].

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Requesting Material and Services

PRO1166Y

Requester
PRO1203Y PRO1069Y PRO1101Y PRO1154Y PRO1169Y PRO1161Y Performing demand fulfillment via reorder point or MIN-MAX planning? Prepare a purchase requisition for material or service. (3) > Requisitions > Requisition Template > Submit Request > Requisitions

Y A

Requester
Review quotations & blanket agreements for an item. (2) > Supplier Item Catalog

Start Requester
Determine whether item demand is controlled via reorder point or MIN-MAX planning. (1)

Request is for a special purchase made by a dept?

Y B

N C

Requesting Material and Services

C

Requester
Request is for nonproduction materials or services or unplanned production materials? Fill out supplier info on Purchase Requisition form. (6) > Requisitions > Supplier Item Catalog Y PRO1185Y N B Additional approvals required for purchase?

N A

Y A

Requester
Obtain required additional approvals. (9) > Notifications

Requester
Negotiate purchase with supplier, if required. (7) A

Requester
Determine whether product quality is affected by purchase. (4)

Dept Mgr
Review purchase requisition. (10) > Notifications D

Requester Requester
Select a supplier for purchase. (5) Validate whether documents can be self approved. (8) > Requisitions

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Requesting Material and Services

D

Dept Mgr
Determine whether additional approvals required. (11)

Dept Mgr
Return requisition to Requester, if required. (13) A A

Requester
Forward purchase requisition to purchasing dept. (15) > Submit Request

Dept Mgr
Additional approvals required? N A Y Produce reorder point or MIN-MAX planning requisitions. (14) > Reorder Point Planning > Min-Max Planning

End
PRO1182Y

Dept Mgr
Obtain required additional approvals. (12) > Notifications

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