Procurement Department

| 10 minutes

The purpose of this document is to describe the function of the Procurement Department inside AdvaCare Pharma organization and define the department members' roles and responsibilities within the team.

1. KPIs

  1. Price Competitiveness
  2. Procurement ROI (Procurement ROI = Annual cost savings / Annual procurement cost)
  3. Purchase order cycle time
  4. Vendor availability
  5. Supplier defect rate
  6. PO and invoice accuracy
  7. Total spend by vendor

2. Organizational Structure

3. Department Role within Company

Goals of Procurement Dept.
  • Place new orders in the most cost efficient way and follow them.
    Existing clients consistently make new orders, and purchasing has to assist Sales Dept. with providing required information and placing orders. Prices should be negotiated, specifications and packaging confirmed, production finished in time, goods shipped to the destination.
  • Provide the best options to Sales Dept. to facilitate company growth.
    Sales Dept. creates RFQs for different clients all over the world. Procurement Dept. needs to make sure that the best options and best prices are provided, to help Sales Dept. get the new client place the order.
  • Develop new manufacturers for orders and registration.
    Our product range is wide, and often Procurement Person needs to search for new manufacturers in order to fulfill the needs of clients. Possible reasons to search for new factories: prices of current manufacturers are too high; current manufacturers cannot provide documents/samples required for registration; current manufacturers have sole agents in the country of registration; current manufacturers have not passed inspection required by country of registration; we don’t have an established manufacturer that can produce the product we need; current manufacturers have long lead time; there are reported quality issues for the goods produced by current manufacturers.
  • Contribute to shared knowledge of Procurement Dept.
    Maintaining important information about Vendros in ERP, Getting Registration Checklists from factories, keeping the documents in the appropriate folders in the Server.
Interdepartmental Relationships
Procurement & Account Managers (Sales Dept.)

The main role of Account Managers is to develop existing clients. Sales Dept. identifies the needs of the clients and passes them over to Procurement Dept. to source the vendors and offer possible solutions to satisfy clients’ needs.

The main challenge of Sales Dept. is to find balance between what the company can do and what the client wants, and start the order with maximum products and maximum profit possible. While Procurement Dept. represents the vendors and their possibilities and needs, Sales Dept. represents the clients and their needs. At the same time, both departments represent the company’s needs.

Representing different sides of the International Trade can be challenging and cause some friction, or even conflicts, between departments. However, balancing the needs of client, vendor and the company is the key to company’s growth, therefore every member of both departments needs to be clear on the main goal: maximizing the profit of the company.

To keep the balance, Procurement Dept. is responsible to:

  • Reply to all tasks sent by Sales Dept., and every question asked via tasks within the least possible amount of time;
  • Provide maximum possible information and all options;
  • Confirm the order within the least possible amount of time and make sure production time is met;
  • Not just copy/paste the information, but think what option will be best for the company and share opinion or advice when possible;
  • Facilitate inter-department communication.

Account Managers are responsible to:

  • Get all the details about the products or required documents from the client and provide the information to Procurement Dept. beforehand;
  • Be clear on the specifications of products required and inform Procurement Dept.;
  • Be clear on WHEN the client intends to start the order to get the valid and fresh prices from Vendors;
  • Facilitate inter-department communication.
Procurement & Business Development Dept. (Sales Dept.)

The main role of BD Dept. is to develop new clients and handle registrations. BD Dept. identifies the needs of the clients and passes them over to Procurement Dept. to source the vendors and offer possible solutions to satisfy clients’ needs.

The main challenge of BD Dept. is to find balance between what the company can do and what the client wants, and start the order with maximum products and maximum profit possible. While Procurement Dept. represents the vendors and their possibilities and needs, Sales Dept. represents the clients and their needs. At the same time, both departments represent the company’s needs.

Representing different sides of the International Trade can be challenging and cause some friction, or even conflicts, between departments. However, balancing the needs of client, vendor and the company is the key to company’s growth, therefore every member of both departments needs to be clear on the main goal: maximizing the profit of the company.

To keep the balance, Procurement Dept. is responsible to:

  • Reply to all tasks sent by BD Dept., and every question asked via tasks within the least possible amount of time;
  • Provide maximum possible information and all options;
  • Confirm the order or registration within the least possible amount of time and make sure production time or other deadlines are met;
  • Not just copy/paste the information, but think what option will be best for the company and share opinion or advice when possible;
  • Facilitate inter-department communication.

BD Dept. is responsible to:

  • Get all the details about the products or required documents from the client and provide the information to Procurement Dept. beforehand;
  • Be clear on the specifications of products required;
  • Filter out the clients that will not be able to make an order to not overload the Company and Procurement Dept. with inquiries that will never transpire;
  • Filter out the clients that will not be able to complete the registration or make an order to avoid registering products that will never be ordered, which not only wastes time but also spoils the relationship with Vendors;
  • Be clear on WHEN the client intends to start the order to get the valid and fresh prices from Vendors;
  • Facilitate inter-department communication.
Procurement & Registration Dept.

The main role of Registration Dept. is to prepare and manage the documents needed for registration of certain products in certain markets. Sales Dept. instructs Registration Dept. of the documents required, and Registration Dept. works with Vendors to get the needed documentation.

Procurement Dept. will identify the Vendors for any given RFQ, and once the RFQ is confirmed and Vendors are identified Registration Dept. will take over the documentation with the selected Vendors.

Procurement Dept. is responsible to:

  • Identify the Vendors and inform Registration Dept. which Vendors are final;
  • Assist Registration Dept. with pushing the Vendors to provide the documents in time, when necessary;
  • Provide any other information that can be useful for Registration Dept.

Registration Dept. is responsible to:

  • Communicate with Procurement Dept. to know the situation of each Vendor;
  • Communicate with Vendor to get the required documents;
  • Prepare the required documents when necessary;
  • Make sure the documentation is provided on time.
Procurement & Accounting Dept.

The main role of Accounting Dept. is to arrange timely payments to Vendors and make sure to receive timely payments from Customers.

Procurement Dept. is responsible to:

  • Inform Accounting Dept. in advance of all RMB payments to make for the month;
  • Provide the tax invoices from Vendors to Accounting Dept. (fapiao);
  • Inform Accounting Dept. of any additional cost or any changes in the total amounts to Vendors before closing the order.

Accounting Dept. is responsible to:

  • Make timely payments to Vendors;
  • Keep the record of debits/credits per Vendor;
  • Record the refund amounts and make sure to deduct from next payment due;
  • Record outstanding amounts owed to the Vendors and add to the next payment due.

4. Roles and Responsibilities

Procurement Dept. Manager

General:

  • Delegate work evenly between members of the Department;
  • Monitor work of Purchasing Dept.;
  • Ensure the efficiency of Purchasing Dept.;
  • Check every contract or agreement prepared by Purchasing Dept.;
  • Read every task that goes through the company and know details of every RFQ/Order/Registration;
  • Identify potential problems of every RFQ/Order/Registration and suggest solutions to Purchasing Dept. and Sales Dept.;
  • Create new processes and make sure they are followed;
  • Train new members of Purchasing Dept.;
  • Track department KPIs;
  • Schedule activities for department improvement and make sure they are followed.

Deliverables:

  • AdvaCare SOPs
  • AdvaCare Purchasing Training Program

Documents:

  • AdvaCare SOPs
  • Odoo Technical Manual

Skills:

  • Decision-making
  • Problem-solving
  • Delegation
  • Communication
  • Accuracy
  • Attention to detail
  • English language
Procurement Dept. Supervisor (India)

General:

  • Train new members of Procurement Dept.;
  • Schedule and prepare for meetings with Vendors, trips to Vendors;
  • Track and prepare for exhibitions;
  • Initiate the updates of Vendor related information in the ERP of all Procurement Dept. members on ongoing basis;
  • Managing any projects assigned by Procurement Dept. Manager;
  • Answer questions of Procurement Dept. members;
  • Ensure every member of Procurement Dept. follows the SOPs;
  • Delegate work evenly between members of the Department;
  • Carry out weekly Department meetings;
  • Monitor work of Procurement Dept.;
  • Track Dept. attendance, productivity and KPIs;
  • Ensure the efficiency of Procurement Dept.;
  • Resolve difficult situations and provide solutions;
  • Maintain Vendor relationships;
  • Timely Vendor audit;
  • Check every contract or agreement prepared by Procurement Dept.;
  • Read every task that goes through India Office and know details of every RFQ/Order/Registration;
  • Identify potential problems of every RFQ/Order/Registration and suggest solutions to Procurement Dept. and Sales Dept.;
  • Create new processes and make sure they are followed;
  • Schedule activities for department improvement and make sure they are followed;
  • Provide weekly/monthly reports to Dept. Manager.

Deliverables:

  • AdvaCare SOPs
  • Weekly/Monthly reports
  • KPI Reports

Documents:

  • AdvaCare SOPs
  • Odoo Technical Manual

Skills:

  • Decision-making
  • Problem-solving
  • Delegation
  • Communication
  • Accuracy
  • Attention to detail
  • English language
Procurement Dept. Supervisor (China)

General:

  • Train new members of Procurement Dept.;
  • Schedule and prepare for meetings with Vendors, trips to Vendors;
  • Track and prepare for exhibitions;
  • Initiate the updates of Vendor related information in the ERP of all Procurement Dept. members on ongoing basis;
  • Managing any projects assigned by Procurement Dept. Manager;
  • Answer questions of Procurement Dept. members;
  • Take over issues with ongoing RFQ/ORD/REG as per Procurement Dept. Manager assignment;
  • Delegate work evenly between members of the Department;
  • Carry out weekly Department meetings;
  • Monitor work of Procurement Dept.;
  • Track Dept. attendance, productivity and KPIs;
  • Ensure the efficiency of Procurement Dept.;
  • Resolve difficult situations and provide solutions;
  • Maintain Vendor relationships;
  • Timely Vendor audit;
  • Read every task and know details of every RFQ/Order/Registration;
  • Identify potential problems of every RFQ/Order/Registration and suggest solutions to Procurement Dept. and Sales Dept.;
  • Identify processes improvements and submit them to Procurement Dept. Manager;
  • Schedule activities for department improvement and make sure they are followed;
  • Provide weekly/monthly reports to Dept. Manager.

Deliverables:

  • Weekly/Monthly reports
  • KPI Reports

Documents:

  • AdvaCare SOPs
  • Odoo Technical Manual

Skills:

  • Decision-making
  • Problem-solving
  • Delegation
  • Communication
  • Accuracy
  • Attention to detail
  • English language
Procurement Specialist

General:

  • Process no-registration RFQs: identify possible manufacturers, contact manufacturers, provide prices, conditions and terms, any additional information from Vendors, provide detailed reply to questions of Sales Dept.
  • Process registration RFQs: identify possible manufacturers, contact manufacturers, provide prices, conditions and terms, any other additional information from Vendors + detailed information about documents required for registration.
  • Process Orders: negotiate the prices, finalize order details, prepare the necessary documentation (Purchase Contract, Bills, receive Proforma Invoices), coordinate production with Vendors and Sales Dept., pass the timely information to Sales Dept., arrange payments.
  • Process Registrations: assist Sales Dept. with finalizing the Vendors, get the registration samples (if needed), prepare the necessary documentation (Documents and Samples agreement, CPA, NDA, registration agreement, etc.), coordinate with Sales and Registration Dept. in providing any additional information.
  • Production completion: assist Sales Dept. and Logistics Dept. with providing the information from Vendors (CBM information, production completion dates, finished product pictures, QC samples, arranging to send the goods to the warehouse), arrange timely payments to Vendors.
  • Maintain Vendor information in the System (Vendor page: catalog, contact information, Chinese translations).
  • Maintain Vendor information in the Server (copies of any certificates, documents or agreements from the Vendor in the manufacturer folder).
  • Assist Sales Dept. with resolving quality complaints and/or refunds, order cancellation.
  • New Vendors search.
  • Work on any other project or assignment given by Procurement Dept. Manager.

Deliverables:

  • Quotations from Vendors
  • Purchase Contracts
  • Manufacturing Agreements
  • Vendor Catalogs
  • Vendor documentation
  • Vendor agreements

Documents:

  • AdvaCare SOPs
  • Odoo Technical Manual

Skills:

  • Negotiation
  • Accuracy
  • Attention to detail
  • English language
  • Communication skills
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