Organisations today face
twin challenges of globalization and shortened product life cycle. The one thing that
organisations can count on is rapid change - and the new opportunities and challenges that
change is sure to bring. New competition is pushing business to achieve higher levels of
service, while evolving technology is compressing product - life cycles and forcing
companies to adopt new technologies or risk losing market share.
What ITM Materials shall
strive to achieve
- Reduction in Inventory level.
- Reduction in through put time.
- Institutionalizing information and knowledge.
- Increase operational efficiency
- Minimizing cost and Maximizing service
- Create a more efficient purchasing cycle
provides you with a tool for your daily procurement activities. It helps you to eliminate
routine work and concentrate on more productive and profitable activities such as price
negotiations with suppliers, quality improvements, lead- time reductions thereby
empowering users to quickly obtain the goods and service they need.
ITM is developed to deal with the unique procedure and methods followed by the
company covering the following three areas of operations.
Procurement of Material
Buyers contribute to
profitability by effectively selecting and managing vendors, handling exceptions and
supervising the orderly purchase of parts and materials. ITM provides the tools like
Base Work Flow which help in accomplishing those tasks without generating or
managing piles of paper or making and receiving endless phone calls. The on-line purchase
order status information and tight integration with planning, inventory, production and
accounts payable allow the buyer to focus on value-adding activities while constantly
staying in touch with the other areas of the business that support, and rely on, this
Vendor quote management, electronic requisitions, automatic MRP release (under your
control) and comprehensive vendor performance analysis add to the buyer's tool-kit for
effective purchasing control.
Ownership of Items
The user dept is made
responsible and accountable for "master information" for a particular item. This
reduces ambiguity on description and understanding of specification. This procedure also
aims at reducing the number of Item codes created for the same material.
As a part of this concept, the engineering and maintenance department would have to
incorporate "Bill of Materials" of plant and machines to the item master so as
to ensure that conforming spare parts and process to control and analyse the consumption
of raw material. e.g. If a colour chemical required for dyeing of 100 meters of gray
fabric of sort no 10987 is 10 kg of colour "Red" and if the actual consumption
is more or less, it will reflect in variance information. Data mining would help in
understanding the possible reasons of variance.
Indents & Purchase Requisitions
User department can check
availability of stock online and either have the product issued from stores or indent for
fresh procurement. If the on- hand balance does not cover the requirement, the system
creates a purchase requisition and forwards it to the purchase department for further
action. The requistioner has access to the information on pending for approval, pending
orders, pending indents along with current stock to avoid replication of indent for same
Where the recipient location of a material in the indent is different from the originating
location of the indent requisitioned, it notifies the intended recipient of the indent
details. A single purchase request can contain one or more items; if the item requires an
authorisation from different departments, it automatically splits the indent and forwards
it to concerned department through Base Work Flow. The user can provide for
additional item details like purity, tolerance preferred packing size. The system will
provide for modification or deletion on checking the status and progress (placement of
order) of the request.
The catalog consists of
anything that has been bought such as production resources, spare parts, office stationery
and non stocked goods. The catalog provides all end- users regardless of their needs, with
one-sTop shopping. Users identify their need by making one or more selections from the
online catalog. The need is automatically satisfied based on pre-defined business rules.
Users do not need to be concerned about whether their need will be satisfied through
inventory or procurement.
The business rules take care of fulfilling the need in one of the following ways
- By tagging it in inventory for issue
- By creating a release against a blanket order
- By creating a purchase order
- By creating a requisition
Request for Quotes
For items where a suppliers
exits and are on the approved list of the company, the enquiry is forwarded to all
approved suppliers of the item. The user chooses his mode of communication and the system
creates an purchase enquiry and forwards by Email, Fax or Post.
The accepted quotations form vendors are updated in the system and tabulated for
comparison on Quantity, Price, Tax, Payment terms and other conditions quoted. The
quotation from the suppliers can be accepted in EDI, email pre-defined formats.
Effective Cost calculations for the item can be carried out by considering recoverable
cost like modvat benefits, resale value of packing materials, payment terms, and Tax
The enquiry will be closed when the referenced indent is closed or cancelled. It can also
be closed or cancelled manually.
Vendor & Vendor Development
For a given material
the minimum and maximum number of approved suppliers are defined. The vendors are
evaluated based on factors depending on the type of material, the quality restrictions,
payment terms and conditions Suppliers background, location of supply source, delivery
locations, customer list
and other criteria defined by the organization.
An approved supplier will be monitored and appraised on the following parameters
- Ordered V/s delivery quantity.
- Variance of price with purchase order rate and other suppliers.
- Rejection analysis.
- Timely delivery.
- Variance analysis in supply of material tolerance strength etc.
- Process improvements or technology advancements.
- Document submission.
An approved supplier may be "Black listed", triggering a
process to cancel its approval, pending orders, initiate sTop-pay instructions for bills
payment. The procedure would require appropriate authorizations and would make the black
listing effective from a defined date.
Suppliers are classified by the role it plays in your organisation.
- Supplier of goods or services
- Agent for a supplier of goods or service
- Payee ( not a supplier)
- Forwarding agent / Insurance company
The system records information like, terms of delivery, Payment,
Transporters, Sales tax Details Specific requirement., Default discount, freight rates.
Purchase Order (PO) is the
reference document for the receipt of material at the receiving location. The receiving
location can take single or multiple receipt against a PO for quantity specified in the
PO. In a PO there can be items from multiple indents with multiple delivery schedules. The
PO is automatically closed when all the goods are received against the PO, which is
re-open in case of rejection or returns.
On confirmation, the order copy is automatically transmitted through EDI to the location
where goods are supposed to be received. Also the copy for supplier can be sent through
The order, if required can be amended by issuing an order amendment document to the
supplier. Like order, amendment document is also sent to the supplier and receiving
Purchase orders can be classified for procurement of
- Stocked Items : Raw materials, dyes and chemicals, consumable, packing materials
- Capital Goods :Plant and machinery, Office equipment
- Service and maintenance :Installation, repair, other service contracts
- Job Work :Custom made materials
- Sub- contracting : Manufacturing or processing of finished and semi- finished
A job work order can be
issued to the supplier for conversion of material and supply a finished product or
intermediate. The material to be converted can be issued from the stores to supplier. When
received the finished goods system will account for the material issued and returnable by
the supplier. The calculation of job work changes will be done by the system and posted to
The system will automate the procedure for excise and modvat involved in job work.
Procurement from overseas
sources, will be handled in the system with complete details. The orders can be raised in
any currency; providing a conversion factor to value the order in base currency for
analysis. The loss and gain due to currency fluctuations will be monitored by the system.
Opening of LC is directly linked to purchase order and automatic entries will be created
in accounting system for margin money, TDR/FDR, bank charges. Complete information and
detailed status about LC is maintained. On receipt of goods the LC will be closed as per
the terms. All the accounting entries needed on closing of LC will be carried out like
reversal of margin, TDR/FDR, payment at prevailing exchange rates.
On "clearing" of goods, duty and export benefits are calculated by the system
with an option to link to the export sales module.
The system will capture and automate the bill passing of the clearing agents.