SDLC SOP 1004 - Procurement and Purchasing

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Contents

(SDLC SOP 1004 - Procurement and Purchasing)

Objective:

The objective of this Standard Operating Procedure (SOP) is to document the procedures to provide SDLC with an efficient and consistent way of purchasing assets needed to support the operation of the business.

Scope:

This SOP establishes the criteria for requesting, approving, ordering and receiving assets, as well as tracking orders throughout the entire purchasing cycle. This SOP is initiated by major projects and programs, as well as by operational requirements that sustain the production, QA and staging environments.

Owner:

Purchasing


Definitions

Term Definition/Description
Request for Proposal A request for goods and/or services to meet requirements established by the requestor.
Requestor A group or individual from whom a request for materials and/or equipment is received.
Requisition A request for material or equipment
Requisitioner A group of individual who processes requests for materials and/or equipment.


Process Flow Diagrams

Procurement/Purchasing Overview

File:SOP1004-01.gif


Roles and Responsibilities

Role Responsibility

Requestor

The individual who meets with the requisitioner in order to obtain required assets.For the purpose of this document, the requestor is defined as any internal SDLC department or personnel.In some instances, the requestor and the equisitioner may be the same person.The requestor is responsible for clearly defining purchasing needs by discussing requirements with the requisitioner.

This may occur during Release Planning, Capacity Management or Configuration Management. The requestor is also accountable for identifying the urgency in receiving the asset(s).

Requisitioner

The individual who is responsible for identifying whether or not assets must be purchased and which assets to purchase.The requisitioner has the responsibility of meeting with the requestor and understanding the requestor's asset needs This person is also responsible for generating the Purchase Order, obtaining all the proper approvals and tracking the status of the asset through the entire process.Lastly, the requisitioner is responsible for asset distribution and forwarding asset information to Asset Management. The requisitioner can be any individual from within Engineering.

Chief Financial Officer, SDLC

One of the two people responsible for signing all Purchase Orders generated within Engineering.

Chief Technology Officer, SDLC

One of the two people responsible for signing all Purchase Orders generated within Engineering

Secondary/Back-up

It is required that all roles held by a specific title have a back-up or secondary person to fulfil responsibilities if the primary individual is not available

Office Manager

The Office Manager is responsible for placing the order based on the approved Purchase Order.It is the responsibility of the Office Manager to inform the requisitioner and requestor of delivery information. In instances where technical knowledge is required, the role of the Office Manager will be replaced with that of the requisitioner.


Metrics

The following metrics should be captured to help estimate the length of time it takes from procurement request initiation to asset receipt. These metrics will also help measure procedure effectiveness and identify areas of concern.

  • Time required for the Request for Proposal (RFP) process, if applicable

- The time required to begin researching a product through initiating the Purchase Order.

  • Purchase Order “request” date compared to Purchase Order date.

- The time required to get appropriate approvals.

  • Purchase Order “order” date compared with the date the asset is received.

- Identifies the lead-time for specific vendors/products.


Procedure Activities

In preparation for the execution of this SOP, each of the following individuals will identify a secondary resource in the event that individual is unavailable.

  • Chief Financial Officer (CFO), SDLC
  • Chief Technology Officer (CTO), SDLC
  • Office Manager
  • Manager of Operations

The secondary is responsible for signature should the primary individual identified above be unavailable.

Gate/Activity Description

File:SOP1004-02.gif


Initial Discussion of Purchasing Requirements

The need for assets, driven by one of the following events, may require the use of the procurement procedure


  • Project scope, identified during the Release Planning Procedure (SOP 1005) can recognize a need for new assets


  • Requirements Document, created during the Requirements Definition Procedure (SOP 1040) can indicate a necessity to purchase assets


  • Detail Design Document, completed within the Detail Design Procedure (SOP 1041) can specify procurement requirements


  • Capacity and/or performance issues, discovered within either the Site Monitoring and Problem Management (SOP 1010) or Capacity Management (SOP 1002) can require the addition of hardware


  • The Configuration Management rocedure (SOP 1003) can generate hardware configuration modifications which may indicate a need for additional hardware


  • Recurring expenses such as software maintenance, licensing, hosting fees, leases, etc. which often occur daily to support all environments, can indicate a necessity to purchase assets


This possible need for purchasing can be enerated from Product Development, Development and Operations. When it becomes evident that there is a possible need for the purchasing of assets, the requestor must coordinate with the requisitioner (in the instance where the requestor and the requisitioner are not the same person) to discuss the needs, urgency and requirements of the asset(s).

Verification with Asset Management

At this time, the requisitioner confirms whether or not there are any assets within SDLC that could be used.If assets are readily available, the requisitioner should notify the requestor of this status.

Preparing the Purchase Order

If the need for procurement is imminent, the requisitioner checks the Preferred Vendor/Product List to determine if either the product or vendor is one preferred by SDLC Either a product is selected from the Preferred Vendor/Product List or there is a selection process, requiring either a formal Request for Proposal (RFP) or an informal selectio

If the Purchase Order (> $100,000)

If the cost of the required asset(s) is more than $100,000, the requisitioner must complete the Capital Equipment Justification Form.

Obtaining Approvals

Upon completion of the Purchase Order, the requisitioner forwards the form to the Chief Technology Officer (CTO) and Chief Financial Officer (CFO) of SDLC.If a Capital Equipment Form was completed, this should be attached to the Purchase Order.

Note: It is imperative that the Purchase Order is reviewed by both the CFO and CTO within two business days.


Completing the Purchase Order

Upon obtaining the appropriate approvals, the requisitioner must provide the Office Manager with the Purchase Order. The Office Manager is responsible for placing the order based on the approved Purchase Order.In certain instances, the order requires technical expertise and will require the requisitioner to place the order. The requisitioner will know if he/she must place the order if the vendor requires detailed technical information that only the requisitioner would be able to provide. When the order is complete, the Office Manager must notify the requisitioner and the requestor of the status of the order, when the order is due to arrive and any other pertinent information.I f the assets are destined to arrive at a hosting location, the requisitioner must notify the Manager of Operations.

Receiving Assets

Once the asset(s) has/have been received, the requisitioner will notify the requestor that the asset(s) has been received and will forward the asset(s) to the appropriate party for configuration. The requisitioner must then approve payment for the asset(s) by signing the packing slip and forwarding it to Finance. Lastly, the requisitioner must furnish asset information to Asses Management for asset tracking purposes.

Procurement Tracking

Throughout the course of the Procurement Procedure, purchase status must be tracked.The following is a list of when the procurement-tracking tool must be updated. In addition to these events, whenever a change occurs to the status of the purchase, the tracking tool must also be updated. The individuals responsible for updating the procurement-tracking tool are the requisitioner and the Office Manager

  • Creating the Purchase Order
  • During all stages of the approval process
  • Ordering the asset(s)
  • Receiving the asset(s)

The procurement-tracking tool, at a minimum, should track the following information:

  • Purchase Order information
  • Date the Purchase Order is given to the CFO
  • Date the Purchase Order is signed by the CFO
  • Date the Purchase Order is given to the CTO
  • Date the Purchase Order is signed by the CTO
  • Purchase Order information
  • Date the asset is received
  • Date the asset is deployed


Forms

Form Description
Purchase Order See Appendix A
Capital Equipment Justification Form See Appendix B
Preferred Vendor/Product List See Appendix C
Request for Proposal (RFP) See Appendix D


Exceptions

  • Technical expertise may require that an engineer complete the Purchase Order and order the required asset(s) instead of the Office Manager.


Tools/Software/Technology Used

  • Procurement Tracking Tool and/or Database


Attachments

  • Preferred Vendor/Product - List Contact Purchasing Department


Related Standard Operating Procedures:


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