Procurement Policy

1. Purpose

This Procurement Policy outlines the procedures and guidelines that Geviton follows when procuring goods and services. It aims to ensure that procurement practices are conducted in a transparent, efficient, and cost-effective manner while maintaining flexibility with different sourcing strategies, including Single Sourcing, Competitive Sourcing, and Internal Sourcing. This policy ensures compliance with company values, supplier integrity, and financial prudence.

 

2. Procurement Principles

The following principles will guide all procurement activities at Geviton:

• Fairness and Transparency: Ensure that all suppliers are treated equitably and that procurement processes are transparent, promoting ethical business practices.

• Cost-Effectiveness: Achieve value for money by securing goods and services at the best possible price, quality, and time.

• Sustainability: Source goods and services that minimize environmental impact, especially in alignment with Geviton’s sustainability goals.

• Compliance: Adhere to all relevant local and international procurement laws and regulations.

• Risk Management: Identify, assess, and mitigate risks in the supply chain and procurement process.

 

3. Procurement Methods

3.1 Single Sourcing

Single sourcing involves procuring goods or services from one specific supplier without a competitive bidding process. This method is generally used when:

• The supplier offers a unique product or technology.

• The supplier holds intellectual property rights or patents.

• Long-term partnerships have been established with performance incentives.

• Time constraints or emergency situations require immediate procurement.

Procedure:

• Justification for single sourcing must be documented and approved by the procurement manager and department head.

• All relevant contractual terms must be negotiated to ensure that value for money is obtained.

3.2 Competitive Sourcing

Competitive sourcing involves obtaining quotes from multiple suppliers to encourage competition, leading to better pricing, quality, and delivery terms. This method is ideal for regular procurement activities where multiple suppliers can meet the requirements.

Procedure:

• Request for Quotation (RFQ): An RFQ will be issued to at least three suppliers to obtain price, delivery, and quality terms.

• Evaluation Criteria: Suppliers will be evaluated based on price, quality, delivery time, reliability, and previous performance.

• Approval: The final selection will be based on a scoring system, and the procurement manager will approve the supplier.

3.3 Internal Sourcing

Internal sourcing refers to sourcing goods or services from within the organization (e.g., another division of Geviton or a related entity). This is usually done when:

• In-house capabilities exist that can meet the needs of the requesting department.

• Strategic benefits are gained from leveraging internal resources.

Procedure:

• Internal sourcing will follow a simplified process where the requesting department submits a request for goods or services, and the supplying department provides a proposal.

• Approval for internal sourcing must be granted by the procurement manager and the heads of both the requesting and supplying departments.

 

4. Supplier Selection and Evaluation

4.1 Supplier Selection Criteria

All suppliers will be selected based on the following criteria:

• Product Quality: The supplier must consistently meet quality standards required by Geviton’s manufacturing and design processes.

• Cost: Competitive pricing is essential, but should also consider total cost of ownership, including delivery, after-sales support, and warranties.

• Lead Time and Reliability: Suppliers must demonstrate the ability to meet delivery schedules reliably.

• Sustainability: Preference will be given to suppliers who align with Geviton’s environmental and social responsibility goals.

4.2 Supplier Evaluation

Regular evaluations will be conducted to assess supplier performance in the following areas:

• On-time delivery

• Product or service quality

• Cost competitiveness

• Compliance with contracts and terms

• Ethical and sustainable business practices

Suppliers who consistently underperform may be removed from the approved supplier list.

 

5. Procurement Process

5.1 Purchase Requisition (PR)

• A department that requires goods or services must submit a Purchase Requisition form. This document includes specifications, estimated cost, and desired delivery timeline.

• The PR must be approved by the relevant department head and forwarded to the procurement team.

5.2 Supplier Identification

• Based on the sourcing strategy (Single, Competitive, or Internal), the procurement team will identify potential suppliers and initiate the procurement process.

5.3 Purchase Order (PO)

• Once a supplier is selected, the procurement team will issue a Purchase Order that details the quantity, price, delivery date, and other contractual terms.

• The PO must be signed by the procurement manager and sent to the supplier.

5.4 Delivery and Payment

• Upon receipt of goods or services, the procurement team will verify that all requirements are met. If discrepancies arise, corrective actions will be taken.

• Payment will be processed according to the agreed payment terms, once delivery and acceptance are confirmed.

6. Procurement Approval Matrix

To ensure accountability and control, Geviton follows a clear approval matrix based on the value of the procurement:

 

7. Conflict of Interest

Employees involved in the procurement process must avoid conflicts of interest. If an employee or their immediate family has a financial interest in a supplier, they must disclose this to the procurement manager and excuse themselves from the selection process.

 

8. Record Keeping and Reporting

8.1 Record Keeping

• All procurement documents, including purchase requisitions, quotes, purchase orders, delivery receipts, and invoices, must be retained for a minimum of 7 years.

8.2 Reporting

• The procurement team will prepare quarterly reports for management, detailing all procurement activities, supplier performance, cost savings, and any compliance issues.

9. Exceptions to the Policy

Any exception to this policy must be approved by the CEO and documented in writing.

 

10. Review and Amendments

This procurement policy will be reviewed annually, and any amendments will be made to ensure continued relevance and alignment with the company’s goals and regulations.

Approved by:
Procurement Department, Geviton
Effective Date: Jan 11, 2023

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This procurement policy ensures that Geviton’s sourcing strategies are transparent, efficient, and aligned with the company’s goals for sustainability, cost control, and ethical practices.

Approved by:
Board of Directors, Geviton
Date: Jan 11, 2023