Purchasing Methods

Purchasing methods are the different ways in which an inventory item can be purchased using the StreamV Purchasing system.  The purchasing method used for to replenish or purchase a particular inventory item, or to fill a specific customer sales order line is based on:

•      The order fulfillment method chosen by the operator when each sales order line is entered into the system. 

•      Informaton in each inventory item which determines how the item can be processed during sales order entry.  Specific purchasing methods can be enabled or blocked system-wide or on an item by item basis as required.

For the purposes of this document, purchasing method refers to the way in which the inventory quantities required to fill customer orders or “replenish” warehouse quantities are purchased.  “Fulfillment” refers to the manner in which a sales order line is completed or “fulfilled”.  In many cases, the fulfillment and the purchasing method are dependent on each other.

Inventory purchases in StreamV can be broken down into four major methods.  These methods are briefly described below and are discussed in more detail in the following sections. 

The default purchasing method in StreamV is Warehouse or Inventory Replenishment.  The system will normally use this method unless operators specify a different method during order processing.

•      Warehouse Replenishment – Warehouse Replenishment is used to fill customer sales orders from the on hand quantities present in your warehouse locations.  Warehouse or Inventory replenishment is also used to ensure that you have the defined minimum stock levels (quantity) on hand for each item. 

•      Vendor Shipment - Vendor shipments (sometimes also referred to as vendor drop shipments) are used to handle items that are shipped directly to your customer by your vendor.  As Vendor Shipment sales order lines are entered, the system automatically creates PO requisitions for the order line.  These requisitions are then converted to purchase orders and the purchase order is sent to the vendor.  The vendor then ships the product to the customer, and invoices you for the items delivered to the customer.  As vendor shipment purchase orders are created, the system automatically moves information from the sales order to the purchase order (such as the ship to address) so that the vendor has the information required to ship the goods

•      Special Order – Special Order Processing is used to handle items that you do not want to stock in your warehouse locations.  Special Order Processing allows you to only order an item from the vendor, when you have a specific sales order line for a customer who wishes to purchase the item.  When a special order line is created, the system automatically creates one or more purchase order lines for each special order sales order line, and it links these purchase order lines to the sales order.  This method is similar to using warehouse replenishment and setting the reorder point for the item to 0, but in this case, the system creates a requisition for each order line automatically during sales order entry process and it links the requisition to the line.  The Link between the sales order and purchase order is also allows the system to block deletion of the sales order line for the item once a purchase order is placed for the item (the system requires the po to be cancelled before the sales order item can be cancelled).  Later, when the PO line is received, the system will also preferentially allocate the inventory from the linked purchase order line to the appropriate sales order lines.  Special order items are received into a warehouse location before being shipped to the customer.

•      Inter-Facility Transfers. – The Inter-Facility Transfer or IFT System is used to process inventory transfers between physically separated warehouse locations –  it is appropriate for situations where the items being transferred are in transit for a period of time, and you need to track the items and quantities being transferred while they are in transit.  IFT’s are used to replenish inventory in one warehouse location using the items that are available in another warehouse location.

The first three of these methods are used during customer sales order processing and during the normal purchasing process. 

The Inter-facility transfer system is used to restock a warehouse location from another warehouse location.  The IFT system is used only for stocking items, and it is used only when you wish to replenish one inventory location using the on hand quantity from another warehouse location.  Each of these replenishment methods is described in greater detail in the following sections.

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Warehouse Replenishment