1. INTRODUCTION: Fauji Fertilizer Company Ltd is a renowned name in UREA production.

Monthly ________ amount of packing material is required and is procured through various vendors. FFC success story is also related to quality of packing material used by the Company. While giving preference to cosmetic aspect of Bags for marketing purposes, FFC also strives for finding pollution free solutions for its packing material. 2. Scope: It is applicable to all types procurement related to packing material. 3. Procedure While establishing health working relations with existing vendor, Proc HO endures expansion of vendor base for healthy competition. Best working relations with all registered vendors would be established. The performance of existing registered vendors would be evaluated quarterly. Vendors having poor performance and high state of rejection would be de-listed. New vendors requesting for registration would undergo the following procedure: 3.1 Vendor Registration Procedure: Vendors request Proc Deptt for registration by providing introduction letter and profile of their company. Vendor profile is carefully studied and, if found suitable, their premises are visited by a board of Officers from Packing Committee to check type of equipment used, production capacity, financial health, skill level, safety arrangements etc. After all necessary checking and if vendor is dealing with required material by FFC, vendors are put up to SM-P for final approval. After SM-P approval, vendor is then forwarded to SAP MM Team (along with approved documents) for addition in SAP system.

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3.1.3 3.1.4

3.2

Performance Evaluation: Performance of previous quarter would be evaluated. Evaluation to include: a. Quality b. Timely delivery c. Conditional acceptance/rejections d. Use of raw material

Financial position f. c. b. e.3 Issue of RFQ: RFQs will be issued to the registered vendors only except in extreme compassionate cases having urgent (MD/SM-P) approval. Any other violation of FFC standard procedures 3.6 Quota Allocation: Quota to be strictly allocated to the vendors as per following considerations: a. 3. Bid Opening Procedure: For bid opening of WPP bags/liners. Lab facility h. Bids without earnest money would not be accepted. Internal Audit and Admin. d. Only sealed bids addressed to SM-P will be accepted. all vendors are asked to match the lowest price received.4 3. Alternate source of power e. Technical skills available with vendor d. Bids to open on given date and place in presence of all vendors/reps.5 3. Past performance (particularly during crises period) b. Equipment held by the vendor c. Vendors with poor performance in last quarter will not be issued RFQ as penalty.e. Sealed bids are to be dropped in tender box. Safety arrangements .5. following procedure will be followed: a. Use of raw material i.1 3. Bids to be opened by BOC committee comprising of members from Proc. Price Matching: After bid opening and evaluation of quotations. Printing standard g.

d. Number of bags/liners to be delivered is clearly mentioned month wise.9. Measure of weight. length. 3. a penalty @ 1% per week up to 5% (max) will be imposed. e.9 Consignment Inspection Procedure: 3.10 Acceptance/Rejection of Supplies: . width and seam stitching bottom.8 LD Procedure: In case vendor fails to deliver the material within the delivery period. Quality test check of 2% of whole consignment will also be made. 3. It should be 1000=+/-2 %. All must pass the test.000-60. f. To measure denier of 05 bags out of 20 bags whose weight appears to be lesser than the specified.000 bags must pass test as per following testing procedure: a. the supplier will be requested to change all bags getting damaged during inserting.1 25 Bags randomly selected from each consignment of about 50. filling and stitching operations. No delay in given schedule be accepted unless otherwise beyond the control of the vendor. c.3. No deviation from specification will be allowed and bags weighing less than 106 grams +/-2% will be rejected outright. All must pass the test. Margin of minimum 20 bags randomly selected. b. In case of acceptance of consignment not fully within the specification limits (acceptance under reserve). g.7 Schedule/ Deliveries: Schedule for deliveries is issued to vendors along with PO. All must pass the test. 3. To determine ends picks(weave) of first 05 bags out of 20 bags at six places on each bag ends and picks(weave) should be minimum 10 x 10 per square inch. The consignment should be rejected if any one of the above tests is not according to specification limits.

if any.1 If the supplier fails to deliver the bags as per schedule and as per requirement. may be removed by the supplier and sorted outside the plant’s boundary limit at his own cost. The consignment not conforming to the specification contained and rejected as a result of inspection. FFCL can resort to risk purchase and recover the amount of damages. 3.10.12.10.2 3. 3.2 3. if any. The supplier or his nominee shall be allowed to be present during inspection.4 3.3.10. vendor will lift out material at his own risk and cost. FFC will arrange various tests and inspection of material.11 Recycling of Rejected Material: Recycling of rejected consignment shall be strictly prohibited. FFCL may accept the re-offered bags/liners. In case bags from a rejected consignment are found in a new consignment. In this situation.12. security deposit. General Manager (Plant) or his nominee shall decide within seven working days after receipt of each consignment if it is accepted or rejected. encashment of Bank Guarantee or withhold payments against pending bills If the loss sustained by FFCL is more than any of the above. the supplier shall be immediately notified. an acceptance certificate shall be issued to the supplier.3 3.12 Risk Purchase: 3.5 On receipt of bags/liners at plant site.10.1 3.13 Supplier to Remove Rejected Supplies: . For each acceptance of consignment. the later shall be rejected outright without any further tests. from the supplier. SM-P may allow inspection for 3rd time otherwise the consignment will be permanently rejected. FFCL shall have the right to forfeit earnest money.12. The sorted out consignment may be offered again for inspection. if he so desires. In the case of rejected consignment.10.if they conform to the specifications. In case a consignment is twice rejected. FFCL shall treat such failure breach of agreement made with the vendor. the supplier shall pay the balance amount within 30 days of demand. Repeated rejected recycling by the vendor will render the agreement liable for termination.3 3. 3.

4.4 In the event of any supplies being rejected the supplier shall.3. the supplier will be liable to pay storage charges at the rate or 0. and the supplier shall not be entitled to claim any payment thereof. shall be treated as if these have not been supplied. If the supplier fails to remove the rejected items within 2 weeks of the notification. remove forthwith the rejected items at his own cost. .3 3.2 3. the items so rejected. Vendor Training and Education: FFCL is committed to minimizing environmental pollution and new technologies and methods are forwarded to vendors for their education and use in their Bags production e.5 paisas per bag/liner per day to FFCL. Counterfeit: To avoid fake/counterfeit products.13. 5.13. shall be final and the binding on the supplier. The decision of General Manager (Plant) or his nominee as to whether supply is in accordance with the agreement specifications or not. upon notification of such rejection. barcode and security measures be introduced on Bags.13. Marketing group to also review and change cosmetic aspects of bags every year to counter this problem. FFCL shall arrange insurance of such consignment at supplier’s cost for the period if the consignment is not lifted from FFCL premises by the supplier.1 3. Oxi biodegradable technology for bags.13.g.

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