Professional Documents
Culture Documents
TOYOTA Purchasing Policy
TOYOTA Purchasing Policy
0|Page
Corporate Philosophy
Society
The Company will promote corporate growth while fulfilling the following
responsibilities as a good corporate citizen:
(1) Maintain ethical values, ensuring that our corporate activities are
fair and transparent;
(2) Supply safe products that do not harm the environment; Promote
corporate activities that help protect the global environment;
(3) Create a better society as a member of our local communities.
Customers
Shareholders
Employees
Business
partners
TB Way
We practice Genchi Genbutsu by going to the source to analyze problems and find
their root causes.
Once a decision is made, we move quickly to carry out the plan, with passion and a
sense of mission.
We seek to do our best, act professionally, and take responsibility for our actions.
We respect the values of other cultures and accept differences, with an open mind
and global perspective.
We respect the individual and use teamwork to produce the best result.
1|Page
Table of Contents
Mission Statement
Guidelines
Policy
Procurement of Machineries
10
11
12
Documents Life
2|Page
Mission Statement
The mission of the Purchasing member is to procure the highest possible quality of
goods and services for the Company at the lowest possible cost. We assist
departments in identifying best source for procuring the materials within the
stipulated time.
1|Page
2|Page
Guidelines
Purchase Department has the authority to place order for direct materials, In-direct
materials, Capital Goods, Imported materials and may be made with the vendor
using a Purchase Order.
Purchase Department has to make a PO after receipt of Purchase Requisitions /
Purchase Indents duly approved by Director Purchase / Managing Director
Purchase Department are not authorized to make capital equipment purchases
unless TBAS / TBJ approvals are obtained & submitted along with Purchase
Requisitions / Purchase Indents by user department with necessary allocation of
funds in the Budget approval sheet.
Purchase Department officials should not in indulge in any wrong practices in giving
or favoring business orders to suppliers.
Purchase Department officials to establish clarity on all Purchases in terms of Cost,
Quality and Service requirements and necessary records must be stored with
Purchase Order for all future references.
3|Page
Policy
All Quotations should be received only in PDF format with necessary signature
and seal of suppliers and shall be in force with effect from 01.09.2011.
Exceptions are given for all Proprietary items or items from Original Equipment
Manufacturer.
Purchase Department to verify the quotation details and shall check the prices
with other alternate sources if any.
Complete Vendor Registration procedure for identifying the new source for
Micro, Small or Medium scale industry to be made and necessary
documentation to be obtained from the respective source.
The policy shall ensure that items are obtained directly from the OEs or OE
approved Stockiest or Distributors.
4|Page
Necessary documents for authorization shall be received from OEs and prices
with discount shall be discussed and finalized with OEs where ever applicable.
Data sheet shall be made for each category of items for confirmation of prices
with discount details viz: Stationery, Electrical, Consumable, Small tools, Safety
items.
Prices of all the above items shall be checked once in every 3 months with OEs
and also local market condition
Suitable Price correction shall be made accordingly and the period for
correction stands at 3 months once for above category of items
Each PO shall be referred with Data Master for Price and Discount terms PO
with relevant documents shall be enclosed for final approval by HOD, Director
Purchase and MD
All Purchase Orders duly approved shall be sent to suppliers and Due
acceptance for PO for all types of items procured shall be received from
suppliers for record purpose
Any Change in PO terms should be made only thru PO Amendments
No Hand written should be allowed on the PO except Signatures
5|Page
Whistle Blower Policy shall be made and informed to all suppliers and
necessary acknowledgement for having seen and noted shall be received by
purchase department
6|Page
For the Procurement range, the selection should not be based on the price alone
and it is strongly recommended to consider some of the qualitative factors such as
Quality, stock availability, accreditations, time for completion of delivery,
Warranty conditions, technology, maintenance requirements, Organization
capability and previous relevant experiences as part of the assessment of the
quote
Items Purchased thru petty cash, petty cash vouchers are to be made and duly
approved by Director or MD (amount less than INR 5,000/-)
All Records associated with purchase of materials must be recorded and retained
for a minimum of 5 years
Cross Functional Team (CFT) will decide the sourcing strategy viz. In-house or
Out source
Respective Drawings with specification shall be received by Purchase
department
Purchase will identify suitable suppliers based on the criticality of items
RFQ shall be sent to 2 or 3 suppliers
7|Page
Any change in the Design of component shall be with prior approval thru
Instruction Memorandum duly approved by Director or thru an ECI (Engineering
Change Instruction) duly approved by the Customer
Supplier sends monthly payable statement and payment shall be made thru
RTGS transfer or thru Cheque
4
All Suppliers shall enter into agreement with TBI for Memorandum Of
Understanding (MOU) and Whistle Blower Policy.
All Direct Suppliers shall also enter into General Purchase Agreement (GPA)
and Tooling Agreement where ever applicable with TBI along with above
agreements (refer Table below :)
Name
GP A
Tooling
Agreement
M O U
Whistle Blower
Policy
Direct Material
Supplier
In Direct Material
Supplier
Spares
Equipment
Supplier
Service
Providers
Contractors
Direct Material
Import
In Direct Material
Import
10 | P a g e
11 | P a g e
Flow Chart
Receipt of Material
at port of
destination
START
PR / Recieptd
PI Approved
Clearnace
procedure
Price
Verification
Incoterms
PO
Duty Payment
Payment
Remittance thru'
Bank
Release of Goods
Receipt @ TBI
Despatch from
Origin
END
Document thru'
courier mode
12 | P a g e
Flow Chart
START
Identification /
Evaluation of
Source by
PO /
Information
to supplier
Dispatch of
Documents
Information to TBI
Clearing
Price
Negotiation
Disptach from
Port of destination
PC Schedule
Receipt @ TBI
Receipt of
Quotation from
supplier
END
13 | P a g e
Procurement of Machineries
14 | P a g e
All Utility work proposals by User department must get prior approval from
TBAS / TBJ w.r.t all criteria
Joint team of Purchase member + User member + Finance member to study
supplier selection & other processes
Joint team has the right to select supplier and commercial finalization shall
be at the discretion of HOD Purchase with Final authority and approval by
MD
All Quotations should be received only in PDF format with necessary
signature and seal of suppliers and shall be in force w.e.f 01.09.2011
Purchase Department to verify the quotation details and shall check the
prices with other alternate sources if any
Complete Vendor Registration procedure for identifying the new source for
Micro, Small or Medium scale industry to be made and necessary
documentation to be obtained from the respective source
PO with relevant documents shall be enclosed for final approval by HOD,
Director Purchase and MD
All Purchase Orders duly approved shall be sent to suppliers and Due
acceptance for PO for all types of items procured shall be received from
suppliers for record purpose
Whistle Blower Policy shall be made and informed to all suppliers and
necessary acknowledgement for having seen and noted shall be received by
purchase department
The above activity to be monitored by Legal department
Purchasing to be undertaken on a competitive basis in which all potential
suppliers are treated impartially, honestly and consistently
Where a higher priced conforming offer is recommended,.
There should be clear and demonstrable benefits over and above the lowest
total priced conforming offer duly approved by MD
For the Procurement range, the selection should not be based on the price
alone and it is strongly recommended to consider some of the qualitative
factors
such as Quality, stock availability, accreditations, time for completion of
delivery, Warranty conditions, technology, maintenance requirements,
Organization capability and previous relevant experiences as part of the
assessment of the quote
All Records associated with purchase of materials must be recorded and
retained as per the Model Life
Joint team to monitor the progress of work
Any Increase/Decrease in measurement of work carried should be
authenticated by Joint team and final approval by MD is mandatory before
amending the Purchase Order
Necessary Statutory obligation viz. PF, ESI for onsite member working to be
obtained by supplier & HR
Department reserves the right to approve
16 | P a g e
All Inward & Outward movement of Goods during execution of work should
be thru correct documents duly approved by Concerned authorities
Any Discrepancy in movement of Materials shall be subjected to verification
by Joint team and final authority on action to be initiated in case of any
fraudulence shall be made by MD
17 | P a g e
Source
Identification
Existing /
New
<New>
Supplier Quessionaire
<Existing>
Supplier Assessment /
Visit
Request for
Quotation (RFQ)
Cost Feasability
Source
Finalization
<New>
Add in approved
supplier list
<Existing>
Commercial Negotiation
/ Scheduling
LOI / PO
(Tool / Mould / Part)
SPTT / HVPT
Sample Receipt
QC Inspection , Testing
& Evaluation
<NG>
Sample
Approval
<OK>
Pilot Ordering
PCR 1, 2 and 3
MASS PRODUCTION
18 | P a g e
Mission Statement
To establish supplier base to supply out sourcing parts with Quality, Quantity
and Cost in timely manner
Concept
The entire concept of SPTT shall be done in accordance with Global Purchasing
Dept. of Toyota Boshoku and made by Mr. Masayuki Sakai.
Three visits shall be made and dept. representing would Purchase, Quality, PEDD &
PC.
19 | P a g e
Purchase / QCD
Purchase
MD
Purchase
Sample Submission to
TBI QCD
SVP / Implementation
Benefits of Localization
Actual Localization benefit to be taken for 1 full year (12months) from the date of
Implementation. This shall be taken for Cost Reduction annually.
20 | P a g e
21 | P a g e
GREEN PROCUREMENT
22 | P a g e
We shall encourage and prefer eco-friendly products, which are more power
efficient.
We shall prefer to purchase from a source that is less polluting or uses clean
technology
We shall encourage and prefer vendors who use recycled packaging
material. The possibilities of further reuse and/or recycling shall be explored
with the user based on needs and other conditions
Mandatory Requirement
All parts made for Toyota should be free from SOC Substance Of Concern.
SOC items are Lead, Cadmium, Mercury and Hexavalent Chrome (as per
Toyota Standards)
Suppliers are providing certificates for SOC free supply and record to be
maintained at Design Department
Suppliers should supply parts free from V O C
All parts made for Toyota should be free from Toyota Banned Chemical
items.
All Suppliers have been requested to obtain ISO 14001 certification and road
map to achieve is made
23 | P a g e
START
Director
Sr. Director
PO Creation
SAP
Purchase Member
1st PO
Approval
SAP
Purchase HOD
Final
Approval
SAP
Managing Director
Purchase Order
print out
END
24 | P a g e
START
Management target
on material cost
Official request to
all suppliers ( Direct
Supplier feedback
Negotiation
Management
Information
PO amendment
END
25 | P a g e
10
The Purchasing Department will be responsible for the disposal of TBI Purchased,
owned, surplus and obsolete material, goods, equipment, Motor Vehicles,
Production scrap, trail material, free samples, E Scrap by the method which obtains
Best Value for money including:
Auction thru notice at TBI
Transfer to other department
Return to the supplier for refund or credit
Trade in on the purchase of replacement equipment
Donation to Charitable purpose
Before sending the scrap material, they have to be first declared unserviceable or
scrap by the competent authority. For most of the materials Respective
Department Heads / Director of the Departments are competent to classify the
materials as unserviceable or Scrap.
Utmost care shall be taken by the supplier / TBI to ensure that the purchased scrap
material will be disposed in a proper way and will not have any effect on
Environmental Pollution.
26 | P a g e
Sell to Local
Transfer to
Trade In with
Auction @
Return to
Market as
other
Dealer /
Charity
TBI
Supplier
Scrap
Department
Agent
Sl#
Item
Obsolete Material
(Asbestos sheet
& others)
Non-useable goods
(Furniture, general items)
Used Equipment
Coconut
10
1
1
27 | P a g e
To dispose any other item except other than agreement item Purchase to
make feasibility study after obtaining the scrap note from user department
and will report to management. MD approval is a must before selecting
supplier and commercials
28 | P a g e
11
Sl#
Item
MSMED
Quote in PDF
MD Approval for PR /
PI
Vendor Master
Creation (Authorised
Purchase member)
Amendment thru
Verison Management
In Direct
Material
Direct
Utilities
Material
Spares
Import
Machineries Service
No Hand writing on
Director
PO
or MD
need to
No Regularisation
approve
of
PO after receipt of
Material / Job
Minimum 3 Quotation
in PDF format
10
11
12
Joint team
monitoring for
Utility work
13
14
15
Price Increase /
Decrease proposals
(MD approval) before
PO Amendment
16
Air Freight
proposals (MD
approval)
29 | P a g e
12
Documents Life
Item
PO Direct Material
Document Mode
PO In Direct Material
5 Years
PO Spares
3 Years
PO Capital Items
5 Years
PO Utility work
3 Years
General Correspondence
3 Years
Hard copy
Tax Condition
change
Cancellation /
Deletion
Short Closure
Other Terms &
Condition change
Mode
Thru version
Management
Thru version
Management
Thru Blocking in
system
Thru version
Management
Thru version
Management
Means
Approval
Final Approval
SAP
HOD
Managing Director
SAP
HOD
Managing Director
Document
HOD
SAP
HOD
Managing Director
SAP
HOD
Managing Director
30 | P a g e
PO number begins
with
Followed by
Blanket
XX
55
00000
Regular
XX
45
00000
Service
XX
63
00000
Sub Contract
XX
66
00000
Imports
XX
48
00000
Internal Requisitions
Item
By
Final approval
Document Receipt
at Purchase by
Proposal Introduction
User Department
MD
H OD
Purchase Requisition
User Department
MD
H OD
Purchase
MD
Purchase
HOD
H OD
TOYOTA BOSHOKU
32 | P a g e