Chapter 6: Purchase Order Processing

A primary responsibility of procurement is to coordinate and execute the supply chain activities driven by the firm s S&OP (sales and operations planning) game plans. Purchased material represents the dominant concern in distribution environments and in many manufacturing environments. Procurement activities can significantly impact the firm s bottom-line performance in terms of reduced material costs and inventories, improved quality and lead-time agility, and fewer disruptions stemming from stock-outs or delivery problems.

Purchase order processing represents a key business process within procurement and the organizing focus for further explanation. Related activities include the identification of vendor information, sourcing and agreement information, coordination efforts to meet game plan requirements, and receiving activities.

Vendor Information

Each vendor is defined in a vendor master file by a unique identifier. Buy-from and pay-to vendors require unique identifiers, and a vendor can optionally have one or more ship-from locations. Several data elements have particular significance to purchase order processing.

  • Shipping Information. Shipping information pertaining to purchase orders includes the preferred shipping agent and service type.

  • Pay-to Vendor. Each vendor can optionally have a designated pay-to vendor that acts as a default on purchase orders, where the pay-to vendor determines applicable pricing and discounts .

  • Attributes Related to G/L Account Number Assignment . Account number assignment reflects the vendor posting group and business posting group assigned a vendor. A vendor posting group defines accounts such as payables and service charges. A general business posting group works in combination with an item s product posting group to define accounts such as purchases and variances.

  • Vendor Hold Status . A vendor hold status (termed a blocking status) can prevent recording of all transactions or selected transactions such as receipts and payments.

  • Biztalk Partner Information . The ability to exchange documents electronically requires identification of the vendor as a Biztalk partner, the types of authorized documents, and rules for exchanging information. Outbound documents include purchase orders and request for purchase quote; inbound documents include a purchase order confirmation, purchase receipt, purchase quote, and a vendor s product catalog information.

Summarized information about a vendor can be viewed in several ways. A vendor s statistics include month-to-date (MTD) and year-to-date (YTD) values for purchases, invoices, and payments. The total value of purchases can be viewed across time, such as monthly or quarterly time increments . Entry statistics for a vendor include MTD and YTD transaction counts, such as the number of invoices, payments, and credit memos. Transaction detail can also be viewed by type of purchase document, such as outstanding quotes, purchase orders, and return orders.

Managing Your Supply Chain Using Microsoft Navision
Managing Your Supply Chain Using Microsoft Navision
ISBN: 0071435247
EAN: 2147483647
Year: 2003
Pages: 71 © 2008-2017.
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