Contributed August 31, 2001 by Dana_Johnson@adlt.com

1. Are there documented policies and procedures on materials management processes (purchasing, receiving, shipping and inventory management)? 

Obtained copies of the following procedures:


2. What information system is used to make materials purchases?  What system is used to control inventory?

3. Who are your company's suppliers?   Provide an electronic file of all suppliers and total amounts paid for the most recent 12 months. (Raw system data is acceptable) 

4.  What were the company's total costs for materials in the most recent fiscal year? (Excluding material costs from other ADLT companies)

5. How does your company monitor material prices and price variances? 

6. How are suppliers screened, and what are the standards your company's suppliers must meet?

7. Are there written contracts with all major suppliers and are the contracts re-negotiated periodically? (How often?)

8. Are there specific requirements for supplier performance, and procedures to notify suppliers of performance problems?  Is there a program in place to monitor the following for each supplier?  How often is this monitoring performed?

- performance on delivery
- frequency of returned purchases
- production problems for out-of-stock materials
- ability to meet material specifications
- price
- flexibility and service 


9. Is data retained on alternate suppliers?

10. What policies and procedures prevent unauthorized purchases? 

11. Does your company pre-number material requisitions and component parts issued to, and returned from production and investigate missing or duplicate (unmatched) items?   Are these inspections done by people independent of materials handling?

12.  Is the following purchasing data maintained?

- The purchase order and requisition.

- The request for quotation, and copies of the suppliers' quotes.

- A summary and comparison of supplier quotations and selection explanation.

- Correspondence between the purchasing department and the bidders.

- Departmental and management approvals. 


13. How are optimum inventory levels for inventory components set, and how does the company monitor actual levels in comparison to targets?


14. How is the location of inventory tracked throughout the manufacturing process? (raw material warehouse, shop floor and finished goods).  Is this done manually or systematically?


15. Are inventory products classified by risk or potential impact? (number of sources, availability, lead time, cost) How are high risk inventory items managed in comparison to low risk?  


16. How is slow moving inventory tracked? 


17. What actions has the company taken to address slower moving inventory?


18. Is Sales and Marketing provided with information on slow moving (finished) inventory?  


19. How is scrap monitored?  


20. Are the reasons for scrap documented and used as a management tool?


21. If your company has inventory owned by other units, is it segregated and monitored? 


22. If other units hold your company's inventory, how is this tracked?


23. Is all material inspected, counted or weighed as it is received? 


24. How is physical access to raw material, work in process and finished goods controlled? 


25. Are finished goods warehoused separately from raw material?


26. How is inventory protected from physical damage?


27. What is your company's policy on performing physical inventories?  (annual, cycle counts) 


28. If an inventory adjustment is required based on a physical inventory, who approves this transaction?


29. Are freight costs included in inventory costs?
Materials Management Questionnaire - For Multiple Business Units