11 Questions
What is the primary responsibility of SCM (Supply Chain Management) in foreign procurement and EPC contracts?
Selecting appropriate Contractors on Delivered Duty Paid (DDP) basis
Under what circumstances can SCM conduct material procurement or EPC contracts using Letters of Credit (LC)?
Under exceptional circumstances with CEO/MD approval
What is a key aspect of quality control inspections of incoming materials carried out by SCM?
They are carried out in collaboration with User Departments
What action does SCM take to ensure prompt clearing and forwarding of materials?
Coordinates freighting, clearing, and forwarding of imports
What is a responsibility of SCM related to exports of equipment or materials for repairs or regeneration?
Coordinates exports with Original Equipment Manufacturers (OEMs)
What is the process for establishing a Letter of Credit (LC) according to SCM's responsibilities?
Notify the Treasury Unit with contract terms and beneficiary details
What is the objective of the Clearing and Haulage process?
Ensure smooth and timely shipment of goods.
What strategy does SCM adopt for Materials Procurement and EPC Contracts?
Door-to-Door Strategy/Delivered-Duty-Paid (DDP) incoterm
What is the purpose of making foreign consignments in the Seller’s/Contractor’s name?
To mitigate financial risks associated with foreign procurements.
What does the approved clearing agent and freight forwarder do in the Clearing and Haulage process?
Clear merchandise through customs and pay required duty or fees.
What policy does SCM adopt for Materials Procurement and EPC Contracts?
Compliance with Logistics and Warehousing Policy
Study Notes
- SCM (Supply Chain Management) is responsible for ensuring appropriate Contractors are selected for foreign procurement and EPC contracts on Delivered Duty Paid (DDP) basis, with sufficient financial and logistical capability.
- On exceptional circumstances, SCM can conduct material procurement or EPC contracts using Letters of Credit (LC), but with CEO/MD approval.
- SCM coordinates and monitors freighting, clearing, and forwarding of imports, adhering to local and international regulations.
- Quality control inspections of incoming materials are carried out in collaboration with User Departments.
- SCM provides adequate materials handling equipment through purchase or hire.
- SCM ensures prompt clearing and forwarding of materials to minimize demurrage and ensures prompt processing of Contractors, Vendors, or Suppliers' payments.
- SCM coordinates exports of equipment or materials for repairs or regeneration with Original Equipment Manufacturers (OEMs).
- To establish a Letter of Credit (LC), SCM notifies the Treasury Unit with contract terms and beneficiary details.
- After LC establishment, SCM receives copies for record keeping.
- SCM sends copies of Form M and LC to the supplier.
- Finance receives shipping documents from the supplier and forwards them to SCM after receiving a PAAR from the Authorized Dealer Bank (ADB).
- SCM appoints a clearing agent for shipment documentation and monitoring.
- SCM generates the SON-CAP activation code and sends it to the ADB for the Pre-Arrival Assessment Report (PAAR).
- ADB receives the shipping document and PAAR code from Treasury and uploads the documents to the Nigeria Customs Service (NCS) Server within 14 days of shipment.
- Treasury receives the PAAR and forwards it to SCM.
- SCM prepares the Single Goods Declaration (SGD) and obtains the Duty Assessment Slip, forwards it to Treasury for payment.
- Treasury pays the customs duty and obtains an acknowledgement receipt, forwards it to SCM.
- Clearing agent arranges for consignment loading and delivery to NNPC's Fast Track Warehouse.
- SCM/Agent requests for material examination and customs release for onward delivery to the required destination.
- Agent prepares the document for finance and forwards it for payment.
- Key performance indicators include accuracy of documents and timely processing, with targets for zero errors and one to two weeks for various processes.
Test your knowledge about the process of clearing and haulage in NNPC Limited, including the use of approved agents and freight forwarders for customs clearance and payment of fees for imported or exported goods.
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