PURCHASE DEPARTMENT IN HAL
The purchase procedure outlined in this manual aims to fulfill the following objectives:
To buy competitively and wisely authorised supplies to desired specifications from approved / reliable sources at the available reasonable prices within the time schedule to support production plans and other requirements.
To ensure that fair and open purchase practices are followed and a healthy and good relationship develops with suppliers to foster the commercial interest of HAL in the local, national and international market.
To ensure timely formulation and commitment of purchase budget, including foreign exchange requirements.
To serve as information centre on materials knowledge-prices, sources of supply, specifications etc. to all other departments.
To ensure that investment made on inventory is at an optimum level.
Training of purchase personnel in the latest techniques of Materials Management.
To keep management appraised of the likely shortfalls in purchase performance by introducing appropriate reporting systems with a view to seek management’s intervention in time.
Purchase functions:
Purchase Department is responsible for the following functions:
Creation of a comprehensive and continuously updated register of selected reliable vendors.
Maintenance of vendor evaluation and rating records.
Market / survey with a view to establishing / developing new reliable and better sources of supply by providing information on latest products / developments.
Analysing bids / offers for decision making by the Competent Authority.
Arranging negotiations with the parties when necessary.
Issue of Purchase Orders in time.
Timely release of FE, obtaining Technical Clearance and Import Licence when required.
Follow-up of purchase orders till the arrival of materials at destination and to ensure after sales service during warranty and post-warranty periods.
To finalise the required rate contracts for regular stock items.
To work out periodically procurement lead time for various categories of items from international and local markets and advise the same to use departments so that they take timely action in initiating purchase requests.
Maintaining a library of product catalogues and manufacturers / distributor’s price lists etc.
Maintaining update information regarding sales tax, excise and custom duty rates etc.
Submit MIS reports on performance of purchasing organization.
Entering into service contracts for Transportation, Customs clearance and other miscellaneous services like repairs to capital equipment / plant, advertising, printing, packing, tailoring, maintenance service contracts, materials handling services etc.
Entering into Transit Insurance agreement for goods in transit.
Entering into contracts for sub-contracting prototype development, trial orders etc.
Finalization and operation of licence agreements.
To ensure that objectives of purchase are realised and exceptional cases are brought to the notice of Divisional heads / management.
To be alert about the responsive to the changes in production programme and change in requirements of material.
Purchase Organization:
The purchase Department shall be organized, depending on the work load at the Division, under a Chief / Senior Commercial Manager. The Head of the Commercial Department shall be responsible for organising the Purchase Department with various sub-sections to efficiently discharge the functions set out. A suggested organization for various sub-sections is given below:
Methods of Purchasing:
The different methods of purchasing may be enumerated as follows:
Purchasing by requirement.
Purchasing for a specific future period.
Marketing purchasing.
Speculative purchasing.
Contract purchasing.
Group purchasing of small items.
Purchasing Strictly by Requirement: Purchases are made only when needed. The main duty of the purchasing department is to know the resources of reliable firm.
Purchasing of specific future period: Sometimes standardized items are procured for future periods. The period concerned by such purchasing is not fixed
Market Purchasing: It requires a comprehensive study of the general market trends and procurement of materials that are required in the light of reasonable market expectations. Raw materials are procured on this basis.
Speculative Purchasing: Buying in excess of requirements when the market is low with the idea in mind of selling surplus when market price rises. Some firms buy in excess of current needs when the price is low thereby saving the company’s funds. The object may not be to sell materials in the market but to use it at a later date. Some very large textile mills usually resort to this practice. But sometimes large inventories may result in great loss through obsolescence and deterioration.
Contract Purchasing: It is the practice of purchasing under contract and arranging to receive the deliveries spread over a period of time. Price may or may not be fixed. It may be subject to negotiations periodically. In this method price concessions are available without the need of holding large amount of inventories and blocking the capital. The method is generally followed by large concerns.
Group Purchasing: The system ensures saving and economy buy placing one order for a number of small items rather than placing small orders frequently. It also spares the supplier from a great deal of clerical detects and delivery costs.
Department Structure
Management Services Department:
Senior Manager (Grade-V)
Manager (Grade-V)
Officer (Grade-I)
Employees (Scale-V)
Management service department consists of 1 Senior Manager, 2 Manager, 2 Officers and 4 employees. This department mainly deals with settling the Bills of the various activities undertaken by the other departments.
Research and Development of the HAL:
In the year 1951, when H-T-2 the first indigenously designed primary training made its first flight it heralded the era of research and development at HAL. This aircraft served as the back bone of IAF’s training fleet for more than three decades.
Subsequently HAL’s Research and Development capabilities have grown from strength to strength and have been harnessed to achieve grater heights of self reliance. Today HAL’s advanced light helicopter – All+ is the final phase of flight testing and the state of art light combat aircraft – LCA is one the threshold of flight testing phase.
In addition, HAL has successfully completed many systems updates and integration tasks. HAL has 9 Research and Development of combat aircraft, helicopters, aeroengines, gas turbines, engine test beds, aircraft communication and navigation systems and mechanical system accessories. Employed with the latest facilities the company is backed by high profile, highly skilled manpower with an impressive track record of more than five decades of rich experience in all disciplines of aeronautics.
The purchase procedure outlined in this manual aims to fulfill the following objectives:
To buy competitively and wisely authorised supplies to desired specifications from approved / reliable sources at the available reasonable prices within the time schedule to support production plans and other requirements.
To ensure that fair and open purchase practices are followed and a healthy and good relationship develops with suppliers to foster the commercial interest of HAL in the local, national and international market.
To ensure timely formulation and commitment of purchase budget, including foreign exchange requirements.
To serve as information centre on materials knowledge-prices, sources of supply, specifications etc. to all other departments.
To ensure that investment made on inventory is at an optimum level.
Training of purchase personnel in the latest techniques of Materials Management.
To keep management appraised of the likely shortfalls in purchase performance by introducing appropriate reporting systems with a view to seek management’s intervention in time.
Purchase functions:
Purchase Department is responsible for the following functions:
Creation of a comprehensive and continuously updated register of selected reliable vendors.
Maintenance of vendor evaluation and rating records.
Market / survey with a view to establishing / developing new reliable and better sources of supply by providing information on latest products / developments.
Analysing bids / offers for decision making by the Competent Authority.
Arranging negotiations with the parties when necessary.
Issue of Purchase Orders in time.
Timely release of FE, obtaining Technical Clearance and Import Licence when required.
Follow-up of purchase orders till the arrival of materials at destination and to ensure after sales service during warranty and post-warranty periods.
To finalise the required rate contracts for regular stock items.
To work out periodically procurement lead time for various categories of items from international and local markets and advise the same to use departments so that they take timely action in initiating purchase requests.
Maintaining a library of product catalogues and manufacturers / distributor’s price lists etc.
Maintaining update information regarding sales tax, excise and custom duty rates etc.
Submit MIS reports on performance of purchasing organization.
Entering into service contracts for Transportation, Customs clearance and other miscellaneous services like repairs to capital equipment / plant, advertising, printing, packing, tailoring, maintenance service contracts, materials handling services etc.
Entering into Transit Insurance agreement for goods in transit.
Entering into contracts for sub-contracting prototype development, trial orders etc.
Finalization and operation of licence agreements.
To ensure that objectives of purchase are realised and exceptional cases are brought to the notice of Divisional heads / management.
To be alert about the responsive to the changes in production programme and change in requirements of material.
Purchase Organization:
The purchase Department shall be organized, depending on the work load at the Division, under a Chief / Senior Commercial Manager. The Head of the Commercial Department shall be responsible for organising the Purchase Department with various sub-sections to efficiently discharge the functions set out. A suggested organization for various sub-sections is given below:
Methods of Purchasing:
The different methods of purchasing may be enumerated as follows:
Purchasing by requirement.
Purchasing for a specific future period.
Marketing purchasing.
Speculative purchasing.
Contract purchasing.
Group purchasing of small items.
Purchasing Strictly by Requirement: Purchases are made only when needed. The main duty of the purchasing department is to know the resources of reliable firm.
Purchasing of specific future period: Sometimes standardized items are procured for future periods. The period concerned by such purchasing is not fixed
Market Purchasing: It requires a comprehensive study of the general market trends and procurement of materials that are required in the light of reasonable market expectations. Raw materials are procured on this basis.
Speculative Purchasing: Buying in excess of requirements when the market is low with the idea in mind of selling surplus when market price rises. Some firms buy in excess of current needs when the price is low thereby saving the company’s funds. The object may not be to sell materials in the market but to use it at a later date. Some very large textile mills usually resort to this practice. But sometimes large inventories may result in great loss through obsolescence and deterioration.
Contract Purchasing: It is the practice of purchasing under contract and arranging to receive the deliveries spread over a period of time. Price may or may not be fixed. It may be subject to negotiations periodically. In this method price concessions are available without the need of holding large amount of inventories and blocking the capital. The method is generally followed by large concerns.
Group Purchasing: The system ensures saving and economy buy placing one order for a number of small items rather than placing small orders frequently. It also spares the supplier from a great deal of clerical detects and delivery costs.
Department Structure
Management Services Department:
Senior Manager (Grade-V)
Manager (Grade-V)
Officer (Grade-I)
Employees (Scale-V)
Management service department consists of 1 Senior Manager, 2 Manager, 2 Officers and 4 employees. This department mainly deals with settling the Bills of the various activities undertaken by the other departments.
Research and Development of the HAL:
In the year 1951, when H-T-2 the first indigenously designed primary training made its first flight it heralded the era of research and development at HAL. This aircraft served as the back bone of IAF’s training fleet for more than three decades.
Subsequently HAL’s Research and Development capabilities have grown from strength to strength and have been harnessed to achieve grater heights of self reliance. Today HAL’s advanced light helicopter – All+ is the final phase of flight testing and the state of art light combat aircraft – LCA is one the threshold of flight testing phase.
In addition, HAL has successfully completed many systems updates and integration tasks. HAL has 9 Research and Development of combat aircraft, helicopters, aeroengines, gas turbines, engine test beds, aircraft communication and navigation systems and mechanical system accessories. Employed with the latest facilities the company is backed by high profile, highly skilled manpower with an impressive track record of more than five decades of rich experience in all disciplines of aeronautics.
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