· Ensure that Norms are set in respect of Input - Output of outsourcing jobs.
· Ensure that control is kept over the outsourcing jobs on a consignment to consignment basis. The consignment wise control should be exercised for Input - Output. Any shortages / deviation from the set input-output Norms on the basis of every consignment should be inquired into and suitable recovery made from the processor. Norms should also be set for process loss / Wastage/ Scrap etc.
· Quantity / Value reconciliation with the processor should also be made on a consignment to Consignment basis and a monthly stock certificate be obtained from the processor. Any shortage / Excess in input-output should be adjusted / accounted for in the books also on a consignment to consignment basis. This would ensure a proper control over the quantity of raw material sent to the job processor and the quantity of finished product received from the processor.
· The contract with the job processors should be entered for a fixed period subject to renewal. The contract should clearly lay down the terms and conditions (including the Input - Output Norms).
· The rates for carrying out the jobs work should be finalized after a proper comparison of the rates and further negotiation.
· The terms and conditions of the contract should include the period within which the processor has to carry out the job after the receipt of the material. A penal clause should be included in the contract to this effect.
· Ensure that there is a proper control on moulds sent to outsourcing parties and the same are reconciled with periodic statements received from the parties with the total quantity /no despatched by plants.
· As far as possible there should be a central Agency (such as Outsourcing Department, H.O.) who deals with all the moulders and distribute the work accordingly from the plants. Also ensure that mould directly received by party from vendors / suppliers are reported to / accounted for by the respective plants.
· Ensure that all moulds are returned by parties concerned to the respective locations / plants, once the jobs are completed.
· Check if the moulds sent to the contractors are not returned to the Company within a period of six months, whether a debit note or invoice on the excise duty paid by the company is raised on the contractor.