Policy

                          Policy

This policy is to regulate the purchasing system of the hotel. The purchasing process starts with the initiation of demand lists by the concerned departments and is completed with the goods are received in the hotel. The demand lists are made on monthly basis and these are not valid for the next month. The demand list should duly be signed and approved by the general manager and financial controller and should be within the allocated budget:-

 Hotel purchases can be segregated into following categories:-

1. General purchases
2. Engineering purchases
3. Food, beverage & grocery purchases
4. Operation department’s purchases
5. Capital purchases
6. Misc. purchases (purchases other than store items)
7. Fuel & maintenance of vehicles

Procedure for initiating demands

Demand for general store items will be initiated by the store supervisor. A minimum and maximum par stock of each item should be set, since items of printing and manufacturing takes time therefore, for setting the par of these items coordination with purchasing department is encouraged. In this regard assistance from purchasing department may be requested.

Demand list for store items based on the closing stock should reach the purchasing department by the 3rd of every month duly signed by financial controller (who will verify it with the allocated budget).

Purchasing department is responsible to compile the demand lists as soon as possible and get these approved by the general manager.

For items other than stores, the concerning department is responsible for initiating the demand. These demand lists should also reach the purchasing department by the 3rd of every month duly signed by FC (who will verify it with allocated budgets). To regulate this procedure cost office is responsible to compile the lists in a file and present it to the purchase department. The format for presenting the demand lists is as follows:

 Department should seek assistance from purchase department regarding the unit price to be mentioned in the demand lists. This should be done before the start of the month and lists should be presented to the purchase department duly signed by FC by the 3rd of every month. The information regarding the exact quality and specification of the items should also be passed on the purchase department.

The general store is responsible for following stores:-

General store

Beverage store

Perishable and non perishable food and grocery store

Store supervisor is responsible for keeping close watch on the store items. As the supply of certain items is received in lots, storekeeper should inform purchasing department well before reaching the minimum par level of items. Moreover he should closely coordinate with purchase department by regularly issuing reminders.

In case of emergency or for items omitted from demand lists an additional demand list or purchase request should be presented duly signed by Gm and FC.

Purchase department will not entertain any request not approved by General Manager and financial controller. Purchase department is not authorized to purchase anything without proper approval

General Purchases

General purchases include printing. Stationary, guest supplies and cleaning supplies. Store supervisor is responsible for maintaining par and determining par for new items in coordination with the concerned departments.

Engineering purchases

The demand for engineering items rests entirely with chief engineer. The engineering stored keeper is responsible for initiating the demand for the engineering items in coordination with R&M engineer. Par stock would also be advised by the chief engineer for regular items to be kept and maintained in engineering store.

Food & grocery Purchases

F&B department is responsible for initiating demand for food and grocery purchases in the recommendation of Executive Chef. Food purchases are divided as follows:-

Meat & Fish

Fruits & Vegetable

Dairy Products

Spices & Cereals

Tin packed products

Items 1 to 3 are categorized as perishable items and the Executive Chef on the daily market list Performa according to upcoming requirements orders these on the daily basis. Other items, these are categorized as grocery or non-perishable items and these are kept in general store and their par stocks must be set in coordination with executive chef and store.

Daily market list should reach at purchasing department before 3 PM

Beverage purchases

Beverage includes soft drinks and tin packed drinks. Store is responsible to initiate the demand of beverages based on future requirements.

Since the supply of soft drinks is monopolized by the manufacturer, it is recommended to regulate it, that F&B and cost office should coordinate for the extra supply of soft drinks in case of banquets or parties and inform the purchase department a day before such event. Otherwise the supplier will only fill up the available empty bottles.

Operating Department’s Purchases

Operating departments include:-

Laundry

House keeping

Stewarding

For operating the above mentioned department’s demand lists should be made based on the current requirements and par set. After having purchased the times (crockery, cutlery, lined, glassware, silverware, towels and bed sheets) through capital budget the shortfall of these items should be filled through monthly demand list, which should be within the allocated budget.

Executive housekeeper is responsible to initiate demand for housekeeping and laundry related items.

F&B manager is responsible for stewarding related items.

Misc. Purchases

Items purchases directly (other than store and operating) are categorized as Misc. purchases and include demand for following departments.

Front office

Recreation floor

Men’s saloon (Barber shop)

Accounts

Purchase

Security

Human resources

Computer maintenance

The concerning departments should initiate demand lists

Fuel & maintenance of Vehicles

Demand of fuel for vehicles is on and when required basis but should remain within the allocated quantity for each vehicle. Demand list based on the allocated budget should be made on monthly basis and approved by General Manager.

Promotional and Advertising

Sales and marketing manager is responsible to initiate the demand for promotional and advertising. Any designing or developing of a new promotional material will be conducted by the sales manager with the coordination of purchasing department demand list based on the allocated budget should be made on monthly basis and approved by General Manager.

Capital Purchases

Capital purchases includes replacement and procurement of furniture and fixtures, machinery, equipment, machine parts and some new projects for improvement of facilities and items and projects not considered as part of hotel’s normal operations.

Capital purchases will be regulated by corporate office. The concerned department heads are responsible for initiating capital demands.

Annual budgets will be prepared by corporate office based on the capital item lists provided by the departments. For pricing the capital purchases lists assistance should be sort from purchase department. Detailed information as of quality and specifications of particular item should be provided by the concerned department to purchasing department.

a) Chief engineer is responsible to initiate demand for any civil work and replacement of any machinery & equipment or machine part.

b) F&B manager is responsible to initiate the demand for Crockery, cutlery, china ware, glassware, silverware and any kind of kitchen equipment and banquet related items.

c)                  Executive housekeeper is responsible to initiate demand for linen, bed sheets, towels, uniforms and items concerning room decor.

The concerning department head should discuss the capital items with general manager and executive director. The concerning department head is responsible for the follow up of ordered capital items with the help of purchase department.

Action by purchasing department

On receipt of demand lists from departments, the purchasing department would segregate these into the following categories:-

1. General store demand list
2. Grocery store demand list
3. Engineering store demand list
4. Beverage store demand list
5. Housekeeping demand list
6. Laundry demand list
7. Stewarding demand list
8. Sales & Marketing demand list
9. Fuel & Maintenance demand list
10. Miscellaneous demand list

Purchase department is now responsible for calling at least three quotations each item or verifies rates from at least three parties. Except of those items like regular printing and items whose agreements are made. A comparison would be made for each item and the party giving the lowest would be considered for further negotiations. Past records of purchases should also be kept in mind.

Before taking quotations the parties should be informed of any specifications and exact quality required of items and also of the terms of credit. Cash purchases should be maintained at lowest level. After the formalities of quotations and negotiation a demand lists should be made on the following format. (Specimen No. 02 attached)

This format should be present to General Manager for approval. After getting it approved and signed by the GM, Purchase department can now issue purchase orders.

Purchase department is supposed to make frequent market surveys especially the survey of Fruit & vegetable should be conducted on the monthly basis before the start of each month.

Agreements/contracts for the supply of fruits & vegetable, chicken, mutton, beef and dairy products may be made on monthly or yearly basis which ever is favorable for hotel.

Agreements done for food items should confirm the laws governing the “PURE FOOD ACT”. Any loss suffered to hotel due to lack of standard of food items should be bear by the supplier. It should also be cleared to the supplier that in case items are short supplied or not supplied according to purchase order or agreement for any reason, the hotel has the right to purchase the same from the market and the difference would be charged to the supplier.

Purchase department should keep on looking for new suppliers and better products. At least one alternate supplier should be kept for items specially used for guest services.

Guarantees, warranties and assurances whenever are necessary should be taken by the purchasing department from the suppliers.

Receiving of Goods.

All the items purchased are required to be delivered at hotel’s receiving area. The receiving supervisor acting as an agent of the hotel will receive the Goods and do the documentation.

Receiving supervisor must ensure that:-

1.     Goods are accompanied by the supplier’s invoice.

2.     The quality and quantity of goods are according to the purchase order.

3.     For food items chef should approve the quality.

4.     For printing and items concerning to a particular department a representative from that department not less than a supervisor should check the quality.

5.     Engineering items will be accepted on chief engineer’s recommendation.

6.     If items are found with any discrepancy at the time of receiving it should be returned to the supplier and the matter should be solved on the spot.

7.     Purchase department should be informed of the reason as of why are the goods rejected. So, that they can make arrangements for the better one.

8.     In case of any disputes or confusion purchasing department’s help should be sought to clear the matter.

Payment to vendors

Vendors are to be paid on the basis of their monthly supply by the 15^th of every month. Vendors should be informed at the time of payments of any deductions made for any reason.

Administrative responsibilities of purchase manager

Purchase manage is responsible for overall activities of purchasing department.

PM should:-

1. Ensure that procedure of calling of quotations and making of comparisons is applied.
2. Make & conduct frequent market surverys, to check the rates of different items.
3. Ensure the maintenance and upkeep of purchase vehicle should keep a check that purchase vehicle is inspected for oil and water daily by the purchase driver. PM should also regularly inspect the log book maintain of the purchase vehicle and ensure that every trip of the vehicle is noted for the reason of journey and total distance in KM.
4. Ensure that the proper filing system is adopted and the document like purchase orders, agreements and demand lists should be filed in such a manner that they are handy for reference at anytime.