When warehouse replenishment is being used for an inventory item, purchase orders are placed for the total quantity of each item that is needed to fulfill the open customer orders and shop order lines for the item, and any additional quantity that is required in order to meet the minimum stocking levels defined for the item, or the minimum order quantity that is defined for the item or vendor/item combination.
Requisitions and Purchase orders for Warehouse Replenishment are normally created by
• Deleting any existing requisition records for warehouse replenishment using the Delete Requisitions option in the Requisition Management program. This step clears out any prior requisitions or purchasing suggestions that were created by the system so that the most current information can be used for the current purchasing session. The delete requisitions option will NOT delete requisitions for vendor shipment or special order sales order lines.
• Running the Purchase Order Recommendations by Buyer report. The report is run using the “Create Requisitions for Needed Quantity” selection. This step creates new purchase order requisitions for all of the items that need to be purchased based on the most current information (quantity on hand, reserved, on order, reorder point, reorder quantity) for each item.
• Reviewing or modifying the the requisitions created by the system. The Requisition Management program is used to view and edit the PO Requisitoins in the system prior to converting the requisitions into Purchase Orders. Options in the Requisition Management program allow you to update the vendor, price and quantity for each requisition line as required. Additional options also allow you to view demand (sales and shop order lines) for the item, sales history, purchasing history, and other information about each item shown in the program.
• Converting the Requisitions into Purchase Orders. Once the requisitions have been reviewed and or modified as required, the Create PO option in the Requisition Management program is used to convert the requisitions into a purchase orders in a highly efficient manner.
The Purchasing Recommendations report and the Requisition Management program are used to streamline or automate the creation of purchase orders for warehouse replenishment. These tools should be used whenever possible, but it is important to note that Purchase Orders for warehouse replenishment can also be manually created in the Purchase Order Entry program.
It is also important to note that if the quantity, vendor or price, suggested by the system for each item (as printed on the report or in the requisition lines created by the report) is incorrect, this information can be changed at the requisition level in the Requisition Management program. Alternatively, the information used by the report can be changed by updating the appropriate inventory, QVL or other database record so that the correct information is used the next time that the report is run. To get the most benefit from the purchasing system, you should enter the most accurate information that you can for each item (so that the system suggests that you purchase the same quantity at the same price that you would if making the decision manually). If you do not have accurate reorder points, reorder quantities and prices in the system for each item, the system cannot make accurate recommendations on which items and quantities to purchase or which price should be paid for each item.
For more detailed information about the Purchase Order Recommendations report, please see the section on the PO Recommendations Report Logic in the overview section of this document and the Purchasing Recommendations report description in the PO Programs section of this document. These sections describe in detail the logic that is used by the program when creating requisitions and the selections that are available in the program.
Requisitions vs. Manual PO Entry
Purchase Orders for warehouse replenishment can be created automatically by using the PO Recommendations report and the Requisition Management Program as described in the prior section. This is the recommended method to process these types of purchase orders.
Purchase Orders for warehouse replenishment can also be created manually by entering purchase orders into the system using the Purchase Order Entry program.
When an item is being shipped from one of your warehouses, the quantity to order is normally determined based on the current inventory quantities for each item and the reorder information that has been specified for the item. This information is automatically used by the Purchasing Recommendations report when suggesting the recommended quantity to order and when creating requisitions for each item. Therefore, it makes sense to use the report to create requisitions vs. printing the report and manually entering purchase orders based on the report output.
If the quantity, vendor or price, suggested by the system for each item (as printed on the report or in the requisition lines created by the report) is incorrect, this information can be changed at the requisition level in the Requisition Management program. Alternatively, the information used by the report can be changed by updating the appropriate inventory, QVL or other database record so that the correct information is used the next time that the report is run.