Typical Purchasing Cycle

When the PO Recommendations and the Requisition Management programs are used to create purchase orders, the following steps are performed on a regular basis as part of the purchasing cycle.

      The purchasing department uses the Requisition Management program to delete any open PO requisitions for warehouse fulfillment items/order lines.  The Delete Requisitions option in the Requisition Management program allows you to delete any existing warehouse fulfillment PO requisitions so that the most current data in the system can be used to refresh the Requisition Management program.  Any special order or vendor shipment requisition lines are not processed by the deletion program.

      The purchasing department runs a PO Recommendations report.  The PO Recommendations report analyzes the current status of each stocking item in the system and it comes up with a recommended quantity to purchase for each item.  The recommended quantity to purchase is based on the reorder point and reorder quantity defined for the item as well as the open sales orders, shop orders and purchase orders which exist for the item.  The logic in the PO Recommendations report ensures that the recommended quantity is based only on items to be fulfilled from the warehouse, special order and vendor ship lines are not included.

      The purchasing department reviews the recommended quantity, price and vendor suggested by the system for each item.  The PO Recommendations report also prints sales history for the item to allow the operator to view trends or sales history for the item over multiple user-defined periods.  This activity can be based on sales or demand to deal with situations where inventory is being shipped out of multiple warehouse locations, or situations where the item is both sold and used as a component in the Shop Floor System.  The information from the PO Recommendations report can be used to manually create purchase orders and or requisitions for the items to be ordered.  Alternatively, the operator can have the report automatically create requisitions for the items and quantities that are needed as the report is executed.  Normally, the automatic option is used to create the requisition lines for the items you need to purchase.

      Once the PO requisitions for items to be fulfilled from the warehouse have been created, the operator can then use the Requisition Management program to make any required changes to the prices, quantities and or vendors used on the requisition lines and quickly convert the requisitions into purchase orders.  As each requisition line is converted to a purchase order, the system updates the on order (open PO qty) for the item to indicate that it is ordered.

      The purchasing department processes the special order or vendor ship PO requisitions.  As each special order or vendor shipment sales order line is processed, the system automatically creates a requisition for the sales order line or it adjusts any existing requisitions for the line.  These requisitions must be processed before the sales orders can be completed.  The Requisition Management program allows you to quickly make any required changes to the vendor, price or other information on each vendor ship or special order line and to convert the requisition to a purchase order.

      Once the special order and vendor ship lines have been processed in the Requisition Management program, the cycle can be repeated as required (i.e. hourly, daily, weekly depending on your requirements).


Purchasing Operations Programs