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SUPPLY-CHAIN MANAGEMENT
Manual
Table of Contents
Table of Contents
TABLE OF ABBREVIATIONS..............................................................................I
1. INTRODUCTION............................................................................................................. 5
1.1. USE OF THE SCM MANUAL ................................................................................. 5
1.2. ALKAWN ALSAUDI CORP(KSC) .......................................................................... 5
1.3. PRODUCTS HANDLED ......................................................................................... 5
1.4. GENERAL FUNCTION OF SCM DEPT ................................................................. 7
1.5. RESPONSIBLITIES OF SCM DEPT...................................................................... 8
2. WORKFLOW & PROCESSES ........................................................................................ 9
2.1 ENQUIRIES
Table of Contents
TABLE OF ABBREVIATIONS
Abbreviation
Meaning
CSC
ELC
GM
HoS
L/C
Head of Sales
Letter of Credit
LOI
Letter of Intent
MC
Manufacturing Costs
NPP
NPS
NSP
OC
OPUR
Order Confirmation
Order Purchase Requisition
SCM
HoD
AM
Head of Department
Assistant Manager
CBB
FC
FICO
GA Drwg
HQ
KPI
Head Quarters
Key Performance Indicators
MD
Managing Director
MM
Material Management
PO
PP
Purchase Order
Production Planning
OE
OI
PE
Project Engineer
PM
Plant Manager
QAP
Sales Rep
SD
Sales Representative
Sales & Distribution
SE
SM
Sales Engineer
Sales Manager
T&C
TDS
WM
Warehouse Management
WO
Work Order
I
1. Introduction
1.1. Use of the SCM Manual
The SCM Organization Manual serves as a working basis for the employees in the
Supply Chain Management (SCM) Department of AL KAWN AL SAUDI CORP.
It contains all essential information on structures, work processes, rules and guidelines needed for employees in the SCM Dept.
Moreover it is to be handed out to all employees as a hard copy at the time of
publishing of revisions and to any new employee of the department at the time of joining.
The Organization Manual is intended for internal use only and must not be made
available to any person outside the KSC
1.2. AL KAWN AL SAUDI CORP (KSC)
KSC provides a wide range of high quality products and services geared to our
customers specific needs and requirements. Al Kawn Al Saudi Corp (KSC) was
established as a trading company during 1977 to act as a representative office of some of
the best UK, European and American companies for the Kingdom of Saudi Arabia and
neighboring GCC states. The operation is basically to sell the products on behalf of
overseas companies on exclusive representation basis to the wholesalers on direct
orders to the manufactures. In order to achieve our objective we are continually reengineering, reevaluating and reinventing the way we do business in order to provide the
best value solutions to our customers. A promise given is a promise kept. We understand
customers needs and strive to fulfill and exceed customers expectations at all times.
1- VAG Group
Products manufactured by VAG group companies VAG, GA Industries, Rodney Hunt /
Fontaine & KLAMFLEX
i.
Straight Couplings
Single-phase, open drip proof and totally enclosed fan cooled induction electric motors.
ii. Three-phase AC motors, open drip proof and totally enclosed fan cooled, squirrel cage
and slip ring, low voltage induction electric motors.
iii. Three-phase AC motors, totally enclosed fan cooled, squirrel cage, low voltage induction
electric motors, explosion proof motors.
iv. Low voltage AC/AC and AC/DC drives, soft starters.
4- Pentair Pump Group USA
a) Pumps for Water and Wastewater
b) Pumps for Commercial HVAC / Plumbing
c) Pumps for Industrial Process
d) Pumps for Fire Protection
5- Liestritz Pumps - Germany
a) Twin Screw Pumps
b) Triple Screw Pumps
6- REXNORD Couplings
7- Enerfin Inc. Canada
a) Generator Coolers
b) Motor Coolers
c) Transformer Coolers
d) Bearing coolers
e) Hydrogen coolers
f)
g) Furnace Coolers
h) SCR
i)
Sales Support
Order Processing
Service
Forecasting
Internal
(Pre-Order Process)
(Post-Order Process)
(Handling of Claims)
(Turnover) (Financial, SCM,
Management, etc.)
The following key responsibilities fall under the above mentioned categories:
a) Sales Support
Vendor Approvals
Customer Visits
Project follow-up
b) Order Processing
Handling Orders
Order Clarification
c) Service
d) Reporting
Reporting to Controlling
Reporting to Sales
e) Forecasting
Forecasting of Turnover
f) Internal Support
working days to the client in writing. An offer can only be rejected after approval from by
HoD and generally an alternative offer shall be made if the products meets the
application requirement.
2.2. Workflow Offers
Within the SCM, quotations are worked out by the respective Project Engineer in
charge and subsequently sent to the respective sales person.
Study the specifications and list out the points which deviate from standard
specifications in a deviation list.
Clarify all technical issues with the concerned sales person or with the client
directly.
Prepare the price working sheet as per the standard format
Prepare the offer as per the standard format
Prepare the deviation sheet as per the standard format
Prepare any additional technical support documents
Sign the offer and get it checked and countersigned by a second person as
per the signature rules applicable
Send the offer along with the deviation list to the respective sales person, or if
instructed by the later, send it directly to the client
Register the offer in the Offer Registry
File all pertaining documents on the server on SCM hard drive according to the
SCM filing guidelines (see General Rules & Guidelines)
Upload the enquiry and the offer in the CRM system
The overall technical and commercial responsibility for an offer lies within the
concerned Project Engineer. This is particularly valid for the correct workout of the
cost prices of the products as well as the detailed analysis of the specifications. All
offers shall be counterchecked by a second person, and sales representative shall
generally be asked to cross check the offer before submitting.
2.2.1. Time for Preparation
The standard time for preparation of an offer should not exceed 3 working days. This is
applicable for all offer for standard products with a value of less than 60lakhs INR
(~100t). The SCM PE has to inform the sales person in case the projected time for
preparation of the offer is longer than this.
For project business which includes Design or Quality support or which exceeds a
value of 60lakhs INR (~100t) the time for preparation of offers should range from 5- 10
working days. In any case the PE shall inform back to the sales and/or client about the
expected time of submission of the offer.
2.2.2. Documents for Offers
Offers are worked out by the PE in charge and comprise the following documents:
Offer as per the standard quotation format with cover letter and all terms and conditions
(Annexure - 1)
Price calculation sheet of the standard format (Annexure - 1) This calculation sheet is
only for internal use and to be send to customers
Deviation List referring the specifications of the client
Supporting technical documents (Reference lists, flow calculations, GA Drawings, design
calculations, according to the requirements and project size)
Incoterms
2.2.6.
Calculating or estimating the delivery time requires intensive knowledge on the supply
routes and background of the suppliers. Minor deviations from standard specifications
might lead to prolonged delivery times and the PE in SCM is generally required to
check the delivery period for each and every project offer individually with the supplier.
For all other products not mentioned in the delivery matrixes, the PE relies on offers to
estimate the delivery period. The general guideline to calculate the delivery after having
obtained the EXW delivery time from the respective suppliers.
2.2.7.
Generally the communication with the customer is under the responsibility of sales. As
general guideline the sales representative shall be following up with the customer for all
sorts of clarifications on the technical and commercial issues that may arise during a
project. The SCM employee specifically shall not send offers or price information to
customers unless specifically agreed with the concerned sales representative. This is to
avoid issues of confusion with prices and commitments which might have been discussed with the sales person not known the SCM employee.
An offer is generally to be submitted through the concerned sales representative or, if
requested by the sales person, it can also be send directly to the customer, marking a
copy to the sales person.
2.2.8.
Workflow in CRM
The entire CRM workflow concerning enquiries, offer and project tracking is available in
the CRM manual; and SCM forms an important part of it. E.g. the Project Engineer in the
SCM holds the responsibility to register the enquirer, enter enquiries into the Sales
Opportunity and to upload the offer into CRM. The CRM workflow is strictly to be followed
and forms an essential part of the responsibilities of the employees in the SCM Dept.
(For details refer Annexure CRM Manual)
2.3. Order Processing
2.3.1. Definition
Orders are divided into stock orders and trading orders. These specify whether the
goods at stock or to be manufactured.
The process starting from the receipt of confirmed order until its dispatch is known as
order processing and the following chart describes the steps involved from SCM
perspective:
The process of order execution for orders requires the following steps, for which the
Order Executive is responsible in SCM:
Check of PO
Issuing of Approval
Documents
Creation of Sale Order
Po to Suppliers (if required)
Issuing of the Order Acknowledgment
Follow-up for delivery schedule & process documents
Dispatch
Documentation
2.3.3.
The commission rates and amounts have no effect on the sales price but only show
the values included in the calculation. Once the document has been invoiced, a commission credit memo has to be prepared.
For further details on handling of the SAP while entering a customer order, please refer
to Annexure 3 SAP Manual.
2.3.4.
Placing PO
With respect to the quotation received from the supplier, negotiate and place the
order after confirmation and approval from the HoD.
Figure 14 PO Format
2.3.5.
Order Acknowledgment
An order confirmation stating all techno commercial terms as well as the confirmed
delivery dates is to be issued to the customer by the SCM employee within three days
after receipt of the customer order. Delivery dates which are not confirmed are not to be
given to customers as they are binding contract agreements. The customer is to be
informed in writing, if issuing of the order acknowledgment takes more than the
above mentioned three days time.
2.3.6. Follow-up
At KSC, adherence to delivery dates / on-time delivery rate is measured as a key performance indicator (delivery performance). It is measured for each order/contract and
recorded automatically in SAP.
Measuring begins as soon as the document in the SAP message control either initiates
the print preview of an order acknowledgment (order confirmation) or by sending of an
OC to the archive, to the sales rep or to the customer through SAP. The printout to the
sales rep is excluded in this case and no measuring is effected here.
Once the order acknowledgment has been processed, all subsequent adjustments (rescheduling) of delivery dates will not affect the delivery performance measurement of ontime delivery.
It is the responsibility of the OE in SCM to continuously follow up with the procurement and the production planning department, to make sure the confirmed delivery
dates are finally met. There are weekly dispatch planning meetings to discuss the cur- rent
status of the projects to monitor and steer the dispatch and turnover planning. The
customer shall be informed in writing of any delays of more than a day time.
Similarly like the internal follow up with the production planning there is a follow up with
the customer. The sales respectively the customer is to be informed about the planned
readiness of goods and to be and followed up for all required process docu- ments like
e.g.:
LOI / confirmed PO
Approval documents
Contract Amendments
Advance Payment, PBG
LC / LC swift message
Road permit
Duty exemption certificate Etc.
2.3.7.
Dispatch
Packing clearance:
The packing clearance should be given by PE/OE to Production, Logistics & Quality
departments along with Work Order from SAP System and Purchase order 1-2 days before the planned dispatch by considering the following:
Checking for availability of all valves
Clearance from Sales
Dispatch Clearance:
Dispatch clearance should be given to Production, Logistics & Quality department
considering the following checks
Final check for any changes in Delivery
Conditions Clearance from Production
Clearance from Accounts / Finance for Payment
2.3.8.
Documentation
LC Handling
Orders with value more than 1,00 0,000 SAR are generally executed based upon
the payment term Letter of Credit (LC). An LC is a payment guarantee for the supplier
to receive the respective payment against submission of the papers as per the LC
agreement and general terms and conditions. Irrespective of any changes the supplier
has the right of encashment of the LC amount against the submission of the papers to
the respective bank. This secures the payment even under events which may have a
severe impact on the project such like:
Order Cancellation
Bankruptcy of the buyer
Unforeseen delays
Conflicts between buyer and supplier
Handling of an LC involves 4 parties:
Buyer(Applicant)
Buyers bank
Seller(Beneficiary)
Sellers Bank
The following chart describes the process / interrelation between these four parties:
products or services which had been returned or were never received. It may be issued
in the case of damaged goods, errors or allowances. Usually it references the original
Invoice and sometimes states the reason for issue.
It falls under the responsibility of the SCM employee to issue a credit note in case of a
reimbursement to the customer. In any case the credit note has to be approved by the
HoD and needs to be counterchecked and signer by the Head of Finance department.
2.6. Forecasting of turnover
The HoD of SCM is responsible for the planning and forecasting of the month
Turn- over.
The dispatch plan is one of the most important tools used to monitor and plan
the turnover (shipments) from the backlog of orders.
Offers
Sales Contracts
Order Confirmations
Invoices
Credit / Commission Notes