PURCHASING MANAGEMENT - Qmuzik Technologiesapps.qmuzik.com/Training/qm8pdf/Purchase Management.pdf1....

PURCHASING MANAGEMENT Course Assignment

REVISION 18

COPYRIGHT © 1997 BY QMUZIK

All rights reserved. The contents, nor any part thereof, nor the format, the

configuration or any other aspect thereof may be copied, transformed, reworked,

reverse engineered, stored or transmitted, irrespective of the mode or method

thereof, or in any other way be dealt with other than only with the express prior

written permission of QMuzik.

Set Purchasing

Business Rules

Create Planned

Order with MRP

Run.

Firm

Planned Order

Release

Purchase Order

Movement „Out‟

or „Into‟ Store

Firm a Planned

Purchase Order

Release a Firm

Purchase Order

External

Modification Order

Subcontracted Purchase

Order

Add Characteristics to

Purchase Line

Release Purchase Order

with Unit Of Measure and

Currency Conversion

Release a Purchase Order

Back-to-Back with Sales

Link a Shipment

Document.

Request for RFQ

Purchasing Analysis

Basic Purchase Order Process

View Detail Flows On:

Inventory%20and%20Material%20Management.doc#Exercise3a1Inventory%20and%20Material%20Management.doc#Exercise3a1Inventory%20and%20Material%20Management.doc#Exercise3a1Movements.doc#Jump2PurchManCourseMovements.doc#Jump2PurchManCourse

Add Firm

Order

Create Firm Order

and Requisition

Print Stock Replenishment

Requisition

Only on Non-Fixed Account Parts

Mail to

Responsible Person

Release Requisition by

Responsible Person

Firm a Planned Purchase Order

Firmed Order Add Header Add Line Defaults Add Detail for Order

Print Purchase Order

Edit Line

Delete Line

Release a Firm Purchase Order

Add Purchase

Order Header

Line Add

(Status = Firmed)

Add Requirements Print Stock Replenishment

for Modification Order

Print Released

Modification Purchase

Order

Release Order

Mail to Storeman Message to

Storeman

Supplier to Store

To Receive Modified Parts

External Modification Order

Movements.doc#Jump2PurchManCourseExMod

Create

Planned

Order with

MRP Run

Select

Planned

Purchase

Order

Firm

Purchase

Order

Print

Replenishments

Release

Purchase

Order

Print

Released

Purchase

Order

Issue Parts

„Stores to order

Requirements‟

Perform

„Supplier to

Stores‟

Movement

Receive Stock from Subcontractor

Subcontracted Purchase Order

Inventory%20and%20Material%20Management.doc#Exercise3a1Inventory%20and%20Material%20Management.doc#Exercise3a1Inventory%20and%20Material%20Management.doc#Exercise3a1Inventory%20and%20Material%20Management.doc#Exercise3a1

Retrieve Order Line Activate

Characteristics

Select „Linked to

Destination‟

Add Values Select Table Name Create

Characteristics

Add Characteristics to Purchase Line

Release a Firmed Purchase Order

(Change Contractual Currency)

Select New

Contractual Unit of

Measure

Select the

Conversion

Button

Change Unit Price

Apply to Activate

Settings Transaction

Apply to Exit

Conversion

Release Purchase Order with Unit of

Measure and Currency Conversion

Create a Sales

Order Header

Add a Customer

Spares Line

Create a Purchase

Order Header

Add Purchase

Order Line

Defaults

Add Purchase

Order Line Detail

View Purchase

Order

Create Shipment

Document

Release a Purchase Order

Back-to-Back with Sales.

Link a Shipment Document

Firm Purchase

order

Create Purchase

Order RFQ

View/Print

Purchase Order

RFQ

Release Purchase

Order From Quote

View Results On

RFQ

REQUEST FOR QUOTATION

Revision 18 : 14 July 2005 Page 1

Purchase Management Course Assignment

INTRODUCTION

This course addresses the management of purchase orders. Purchase orders are used to replenish parts, which are marked as purchased parts.

OBJECTIVES : You will learn about System Configuration / Division Rules / Requisition Configuration / Part Master and how to:

EXERCISE 1 : Firm a Planned Purchase Order

EXERCISE 2 : Print a Stock Replenishment Requisition

EXERCISE 3 : Release a Firm Purchase Order

EXERCISE 4 : Print a Purchase Order

EXERCISE 5 : Change a Purchase Order

EXERCISE 6 : Delete a Purchase Order Line

EXERCISE 7A : Add a Modification Purchase Order

EXERCISE 7B : Add Modification Purchase Order Requirements

EXERCISE 7C : Print a Stock Replenishment Requisition (Refer to Exercise 3)

EXERCISE 7D : Release the Modification Purchase Order (Refer to Exercise 4)

EXERCISE 7E : Print the Released Modification Purchase Order (Refer to Exercise 5)

EXERCISE 7F : Send a message to the storeman to issue the required part

EXERCISE 8 : Firm and Release a Subcontracted Purchase Order

EXERCISE 9 : Add Characteristics to a Purchase Order Line

EXERCISE 10 : Release a Purchase Order with UOM and Currency Conversions

EXERCISE 11 : Release a Purchase Order back-to-back with sales.

EXERCISE 12 : Link a Shipment Document.

EXERCISE 13 : Purchasing Analysis.

EXERCISE 14 : Request For Quotation process.

APPENDIX A : Examples of Purchasing Procedures as used in Project Management

environments

APPENDIX B : Journals for Purchase Orders

APPENDIX C : Purchase Order Type Summary



SYSTEM CONFIGURATION

FIELDS APPLICABLE TO THE PURCHASING FUNCTION

SYSTEM CONFIGURATION The following fields need to be set on system configuration to enable the purchasing department to operate correctly within the constraints or policies of the company:

1. LEAD-TIME DAYS (PURCHASING) MAXIMUM When adding Part Master Records and the Source is Purchased, you will not be able to specify a lead-

time > the days specified in system configuration.

FIGURE 1

LEAD-TIME DAYS

2. PURCHASE DE-COUPLE TIME (DAYS) MAXIMUM When adding a Part Master Record and the Source is Purchased, you will not be able to specify de-

couple time > the days in system configuration.

3. PURCHASE ORDER FIRMING ALLOWED WITHOUT MRP ORDER If “Yes” you will be able to create Firm Purchase Orders (PO Line Status = F (firmed) for Stocked items

where no MRP Planned Purchase Order exist. This can only be done via the Stock Purchase Order Requisition function.

4. PURCHASE ORDER MANUAL RELEASE (NO SOURCE ORDER)

If setting = Allow, you will be able to create Released Purchase Orders for Stocked Items if no Planned

or Firm Purchase Orders exist. This can only be done via the Released Purchase Order Generation function.

NOTES:

The above is only applicable to Fixed Account Parts. Rework, Modification and Repair Purchase Orders must be firmed first.

5. PURCHASE ORDERS PLANNED TO RELEASED ALLOWED



If = Allow, no Firming required, then you will be able to directly release a Planned Purchase Order. If = Allow only if Buyer is also the Planner, then the system will only allow you to release a planned

order if the Buyer on the Released Purchase Order is also the Part Planner.

NOTES:

The above is only applicable to Fixed Account Parts.

Rework, Modification and Repair Purchase Orders must be firmed first.

6. PURCHASE ORDER RECEIVING DAYS EARLY

This setting will apply to the Movements Till Date when performing the Supplier to Store or Supplier to

Inspection movements. The Completion Dates Till field date defaults to a date = Today‟s Date + Days (Working Days) specified. Only outstanding Purchase Order Lines with a Completion Date < will be allowed to be received.

7. PURCHASE ORDER RECEIVING DAYS ERROR

If “No”, the Storeman will be allowed to adjust the Completion Dates Till Date to any date in the future.

8. PURCHASE ORDER RELEASE OPTION

If = Allow Deviation from Firm Order if Buyer is also the Planner, then you will be allowed to change the

Firm Purchase Order Quantity and Date if the Buyer on the Released Purchase Order is also the Part Planner.

If = Allow Deviation from Firm Order Date and Quantity, then you will be able to change the Quantity

and Date of the Firm Purchase Order when releasing the order.

9. PURCHASE ORDER RELEASE PRICE DEFAULT If = No Default then the system will not insert a price for the part during the releasing of the order. If = Last Purchase Price then the system will default the last Purchase Price to the Unit Price of the

order to be released. If = Part Financial Year Data, then the system will default the Standard Price for the current financial

year to the Unit Price of the order to be released. If = Requisition Unit Price, then the system will default the Unit Price from the Requisition to the Unit

Price of the Order to be Released. This is only applicable to Non-fixed Account Parts and Non-stock Requisitions.

If = Supplier List Price then the system will default the Buying Price and Discount Records from the

External Organisation Parts table.

10. PURCHASE ORDER RELEASE BACK-TO-BACK WITH SALES ALLOWED

If “Yes” then the System will enable the mode “Back to Back with Sales Orders” on the

function “Release Purchase Order Generation.

12. UOM FORCE PREDEFINE OF CONVERSION



If in your company you purchase in a different Unit of Measure than your Stocked Unit of Measure then this setting will, if “No”, allow the Buyer to specify a Unit of Measure Conversion when Releasing the order.

If “Yes” and a Unit of Measure Conversion are applicable when releasing the Purchase Order, then the

Unit of Measure should have been predefined in the Part Unit of Measure Conversion function.

13. DAYS SUPPLY MAXIMUM

When adding a Part Master Record this will be the maximum number of days you will be able to

specify in the field days supply.

14. NUMBER CONTROL On the second tab the option to set Auto Numbering is available. When set to “Yes” no userdefined

number can be used. The system will provide a number when a “Released” Purchase Order is generated.

DIVISION SETTINGS

15. DIVISION MAY PLACE PURCHASE ORDERS

This setting if = Yes will allow this division to place purchase orders (= Purchasing Division on

Purchase Orders).

FIGURE 15

DIVISION PURCHASE ORDERS

16. PURCHASE PRICE VARIANCES

The system will either stop or warn the user by means of a stop or warn icon if the unit price on a

purchase order lines varies with the lesser of the stop or warn percentages or amount measured against the part‟s standard value.



FIGURE 16

DIVISION PURCHASE VARIANCE

Warn = The system will warn you of the deviation but will still allow you to release the line. Mail is sent to the Division Accountant.

Stop = The system will not allow you to release the line.

17. ALLOW UP-ADJUST PURCHASE ORDER QUANTITY If “Yes” the system will allow Up-adjustments (Change) on the Purchase Order line quantity if no account or

Node exists on the order line.

18. PURCHASE ORDER UPDATED BY

This setting determines the user‟s Authorised to perform changes to Purchase Orders.

19. ALLOW CURRENT YEAR COST UPDATE VIA PART MASTER If “Yes” the system willallow the user tochange the current material/subcontract cost 20. ALLOW NEXT YEAR COST UPDATE VIA PART MASTER If “Yes” the system willallow the user tochange the material/subcontract cost for next year

PART MASTER SETTINGS

21. DECIMAL MOVEMENTS ALLOWED 22. SOURCE 23. FIXED ACCOUNT 24. SERIALISED 25. LOT CONTROLLED 26. BUYER 27. ORDER POLICY 28. LEAD TIME 29. DECOUPLE TIME 30. PREFFERED SUPPLIER 31. LAST SUPPLIER 32. ALTERNATE SUPPLIER 33. YIELD 34. CONTROLLING STORE 35. SHORT CLOSE TOLERANCE 36. OVER RECEIPT PERCENT 37. FINANCIAL YEAR DATA 38. LAST AVERAGE COST 39. LAST PURCHASE PRICE 40. LONG DESCRIPTION If a long description exists it will be used by the system 41. REVISION



42. STOCK 43. ATTRIBUTES

OTHER FUNCTIONS RELATED TO PURCHASING

44. PART UNIT OF MEASURE CONVERSION

FIGURE 44 PART UNIT OF MEASURE

CONVERSION

When purchasing in a different Unit

of Measure than your base U.O.M.

this ratio will be used when

releasing a Purchase Order line and

if this ratio is enforced the Buyer

will not be able to deviate from this

ratio.

45. FREIGHT TERM This function is used to define and maintain the freight terms used in your company.It is specified on both purchasing and sales orders thus describing the terms of delivery as related to specified unit price. Freight terms also indicate if additional cost will

possibly be applicable. 46. INSPECTION CRITERIA This function is used to define the method to be applied, for the verification of quality and conformance to specification, when receiving purchased or manufactured goods or shipping goods to your customers. This criteria is entered on purchase, production and sales orders. 47. SETTLEMENT TERM This function is used to define settlement agreements. 48. SUPPLIER CATALOQUES The function (also referred to as Catalogues) serves the purpose to: Create buying records, where a cross-reference can be established between your parts and those of Your suppliers. As an option, link list prices to such records with added detail such as freight- and settlement terms,

trade discounts and additional cost not incorporated in the list price. Create multiple list price records over time with different effective dates, thus retaining a history of past prices as well as visibility of prices becoming effective on a future date. Create catalogues for non-stock items for which you do not have a stocked part number (e.g. stationery or office equipment catalogues applied as a lookup when non-stock requisitions require such items). Rank supplier preferences for a part and allocate preference percentages which will result in automatic splitting of MRP suggested orders between suppliers as per user-defined ratios.



Specify that Purchase orders can be automatically released for selected buying records against a predefined blanket Purchase order for a user-defined release horizon.

49. PART SUBSTITUTES Part Standard Item This function is used to cross reference all parts in your inventory, where the parts are the same item but have different part numbers assigned to them, using a standard item number of your choice. This is especially useful where a lack of standardisation in the past resulted in a scenario as described above and is primarily applicable to "standard" items that are bought from suppliers "off-the-shelf". RELATED TOPIC: Part Substitutes Standard Item Master Standard Item Master Records can be created for standard items, where the description on the Part Master is not sufficient to fully describe the part. Parts are linked to a standard item master record via the Part Standard Item function. 50. EXTERNAL ORGANISATION This function is used to define and maintain data for all external organisations your company has business dealings with. These can include your customers, suppliers, banks and other. The values specified for vat, trade, settlement, inspection and freight terms, as well as contractual currency and billing/shipping address, are applied as defaults when creating either purchase or customer orders, but can be changed on such orders if not applicable for the specific contracts in question. Suppliers can be qualified by the creditors clerk if the creditor trading status is set to “active if qualified”. 51. ORDER CROSS REFERENCE This Order Cross Reference function enables cross referencing between replenishment orders and the

requirements they are bound to satisfy once they are received/completed into stock. The cross reference can be done from quote, firm, or released replenishment order lines to quote,

firm, or released requirements. The function displays available order lines of a selected replenishment order (or all replenishment order lines for a selected part) that have outstanding quantities not yet cross referenced to requirements.

Security Only the Buyer/Planner of the replenishment order can perform the cross reference. Once the link exists, the Buyer/Planner of the replenishment order can only up-adjust the already

linked quantity, whereas, only the Buyer/Planner of the requirement order can down-adjust the quantity or undo the cross reference.



EXERCISE 1

FIRM A PLANNED PURCHASE ORDER

Use the Stock Purchase Order Requisition function to firm a planned purchase order.

TIP:

If the part number does not populate in the list box, check if the part does have material cost or average cost on the part master.

The account is only necessary when working with a „Non-Fix-Account‟ part.

FIGURE 1.1

PLANNED TO FIRM

NOTES:

Do a Supply and Demand Inquiry on a Fixed Account Part to view suggested Planned Purchase Orders.

Do line splitting on your first planned purchase order line; i.e. create more than one line for the single order suggested by MRP. You will have to adjust the completion date to a future date when creating the second line.

Planned purchase orders are firmed to enable you to print a purchase requisition (stock replenishment requisition).

For line splitting (Step 3) change the quantity to less than the suggested quantity.

Follow the steps in Figure 1.1.



TIPS:

The Mode Create Manual Firm Order(s) will only be enabled if the setting on the system configuration allows it.

If the setting allows manual orders but planned orders do exist, then the mode will also be disabled.

FIGURE 1.2

FIRMED

NOTE:

The firm order and line number created will be displayed in the message field.

FIGURE 1.3

MAIL TO

RELEASE THE REQUISITION

NOTES:

Only when the part was a non-fix-account part.



FIGURE 1.4

RELEASE THE REQUISITION



EXERCISE 2

PRINT A STOCK REPLENISHMENT REQUISITION

Use the Print Documentation function. (or Stock Purchase Order Requisition function.)

FIGURE 2.1

PRINT STOCK REQUISITION

NOTES:

Print the stock replenishment requisition and hand it to your presenter.

Follow the steps in Figures 2.1 and 2.2.

FIGURE 2.2

PRINT REQUISITION



EXERCISE 3

RELEASE THE FIRM PURCHASE ORDER

Use the Release Purchase Order Generation function and release the firm purchase order you have just created.

FIGURE 3.1

PURCHASE ORDER HEADER

NOTES:

The Buyer must be equal to the buyer on the firm purchase order. If not, change the Firm Order.

Follow steps in Figures 3.1 and 3.3.

FIGURE 3.2

PURCHASE ORDER LINE

DEFAULTS

NOTE:

The released purchase order number cannot be the same as the firm purchase order number.

TIP: The released purchase order number cannot be the same as the firm purchase order number. The firmed order gets deleted and the released order created in its place. Therefore if the order number is equal for both an illogical situation arises.



FIGURE 3.3

PURCHASE ORDER LINE DETAIL

NOTES:

Scroll to the right to view the enabled (white) fields. All enabled fields‟ data can be changed if necessary (Step 3).

Repeat the steps for the 2nd

Line.

TIPS: The Firm Purchase Order Number will not populate if:

The Buyer on the Firm Purchase Order is not equal to the Buyer on the Released PurchaseOrder The Division on the Firm Purchase Order differs from the Released Purchase Order Generation

Service Requisitions will not populate if: The Supplier on the Service Requisition is not equal to the Supplier on the Released Purchase Order and if the Payment Currency on the Service Requisition is not equal to the payment currency on the purchase order.

Requisitions must have a status of released.



EXERCISE 4

PRINT A PURCHASE ORDER

Use the Purchase Order function to print a purchase order.

FIGURE 4.1

PURCHASE ORDER

NOTES:

Print the purchase order and hand it to the presenter.

Go to the Purchase Order function and perform an inquiry on the order just released.


Printing Tip:

For printing the first time it is necessary to setup the printers. It can afterwards be changed in the

„Print Library Users Defaults‟ function.



EXERCISE 5

PURCHASE ORDER CHANGES

Use the Purchase Order function to change purchase orders.

FIGURE 5.1


NOTES:

Perform an inquiry on the released purchase order you have just created on line 1.


View amendment number in step 2. Each time you do a change on the line, the amendment number will increase by 1.

Change the following: - Delivery date - Order quantity Note that both cannot be changed simultaneously.

FIGURE 5.2


NOTES:

This function is used to view the change history of purchase orders. The selected fields on the first tab determines what changes for purchase orders in the company will be logged. The default is select all.



FIGURE 5.3


NOTES:

This function is used to view the change history of purchase orders. The selected fields on the first tab determines what changes for purchase orders in the company will be logged. The default is select all.

FIGURE 5.4


NOTES:

Select a specific change as in step 1 to see the before and after values as in step 2.



EXERCISE 6

DELETE A PURCHASE ORDER LINE

Use the Purchase Orders function to delete a purchase order line.

FIGURE 6.1

LINE DELETE

NOTES:

Perform an inquiry on line one of your purchase order.




EXERCISE 7A

ADD AN (EXTERNAL) MODIFICATION PURCHASE ORDER Use the Purchase Orders function to create a modification purchase order. External Rework and Repair Orders follow the same process as a Modification Order except requirements are create automatically. You may add or change the requirements for a Repair Orders.

FIGURE 7.1

PURCHASE ORDER HEADER

NOTE:

Follow the steps in Figures 7.1 and 7.2.

FIGURE 7.2

PURCHASE ORDER LINE

NOTE:

The line status must be Firm.



EXERCISE 7B

ADD MODIFICATION PURCHASE ORDER REQUIREMENTS

Use the Purchase Orders function. Tab the Requirements tab.

FIGURE 7.3

ORDER REQUIREMENTS

NOTE:


EXERCISE 7C

PRINT A STOCK REPLENISHMENT FOR THE MODIFICATION

ORDER

(Refer to Exercise 2)

EXERCISE 7D

RELEASE THE MODIFICATION PURCHASE ORDER


EXERCISE 7E

PRINT THE RELEASED MODIFICATION PURCHASE ORDER




EXERCISE 7F SEND A MESSAGE TO THE STOREMAN TO ISSUE THE REQUIRED

PART

Use the Movement function.

FIGURE 7.4A

MOVEMENTS

NOTE:

Follow the steps in Figures 7.4A and

7.4B.

FIGURE 7.4B

INSTRUCTION TO STOREMAN



FIGURE 7.4C

MESSAGE

NOTE:

The storeman will receive the following message: (See Figure 7.4C)



EXERCISE 8 Firm and Release a Subcontracted Purchase Order

Firm the Planned Subcontracted Purchase Order.

Use the Stock Purchase Order Requisition function to firm a Planned Order.

SYSTEM CONFIGURATION SETTING:

Purchase Order Firming allowed without MRP Order. Yes: The mode Create Manual Firm Order(s) will be enabled. No: The mode Create Manual Firm Order(s) will be disabled. If the setting allows manual orders but planned orders do exist, then the mode will also be disabled.

FIGURE 8.3

PLANNED TO FIRM

NOTES:

If you want to do line splitting, do the following:

FIGURE 11.� Change the quantity too less than the suggested quantity.

FIGURE 11.� Adjust the completion date to a future date when creating a second line.

Planned Purchase Orders are firmed to enable you to print a purchase requisition (Stock Replenishment requisition).

The Firm Order and Line Number will be displayed in the message field after you have clicked on the Add button. Remember to write this down.


TIP:

If the part number does not populate in the list box, check if the part does have material cost on the part master.

Print a Stock Replenishment Order (Refer to Figure 2.1 – Exercise 2)

Release the Sub Contracted Purchase Order (Refer to Figures 3.1 – 3.3 – Exercise 3)

Enter an Order Number XX007 (XX = First 2 characters of your name / surname)

TIP:

If the part number does not populate in the list box:



1. Is the Division the same as the one on the Firmed Purchase Order? 2. Is the buyer the same as the one on the Firmed Purchase Order?

Print the Released Subcontracted Purchase Order (Refer to Figure 4.1 – Exercise 4)

MOVEMENTS TO BE PERFORMED FOR SUB CONTRACTED PURCHASE ORDERS

Do a Store to Order Requirements (Refer to Figure 7.4B – Exercise 7F)

Do a Supplier to Stores Movement



EXERCISE 9

ADD CHARACTERISTICS TO A PURCHASE ORDER LINE

Use the Purchase Order function to add characteristics to a purchase order line. Characteristics are user-defined attributes. Any number of characteristics (attributes) can be defined and linked to any System business object (i.e. colour of item or special delivery instructions to a purchase order line)

FIGURE 9.1

ORDER LINE INQUIRY

NOTE:

Follow the steps in Figures 9.1 to 10.3.

FIGURE 9.2

CHARACTERISTIC LINK



FIGURE 9.3

CHARACTERISTIC LINK

ADD VALUES

SELECT TABLE NAME

CREATE CHARACTERISTICS



EXERCISE 10 RELEASE A PURCHASE ORDER WITH UNIT OF MEASURE AND

CURRENCY CONVERSIONS

Use the Release Purchase Order Generation function.

FIGURE 10.1

ADD HEADER

NOTES:

For this exercise the system configuration setting: UOM Force Predefine of Conversion = YES.

Follow the steps in Figures 10.1 to 10.5.

The scenario here is that you want to purchase in a different unit of measure than the stocked UOM and you purchase in a different currency (i.e. Import Orders).

A firm purchase order must already exist for a part that already have a unit of measure conversion specified (see Part UOM Conversion function).

FIGURE 10.2

PURCHASE ORDER LINE

DEFAULTS

NOTES:

The Currency Exchange Rate display is derived from the Currency table and is equal to the Selling Price for the Date on which the Order is released.

If no Exchange Rate exists, then the Exchange Rate will be one to one.

You will always be allowed to change the Currency Exchange Rate when releasing an Order.

If Forward Cover Applies is selected, the Exchange Rate will be fixed and not subject to change.



FIGURE 10.3

PURCHASE ORDER LINE DETAIL

NOTE:

Step number 13 is only applicable if the Supplier on the Firm Purchase Order is not equal to the Supplier specified in the Header of the Released Purchase Order.

UOM on Parts UOM Conversions can be defined in „volume‟, „weight‟ and „dimensions‟.

FIGURE 10.4

ADD PART UOM CONVERSIONS

FIGURE 10.5

ADD UNIT PRICE



FIGURE 10.6

LINE DETAIL



EXERCISE 11

RELEASE A PURCHASE ORDER BACK-TO-BACK WITH

SALES

Use the Customer Order Function to create a Sales Order.

Fig 11.1

CREATE A CUSTOMER ORDER

Notes:

Follow the steps in Fig 11.1 to create

a header for your Customer Order.

Fig 11.2

ADD A CUSTOMER SPARES LINE Notes: Use a Customer Spares Line Type for the course. Make sure the Part is a fixed account part.

Set the shipping dates in advance to

provide for the lead and decouple

time.

System Configuration setting : Purchase Order Release Back-to-Back with Sales Allow = Yes.



Fig 11.3

Fig 11.4



Fig 11.5

Note on receipt of goods it will be automatically allocated to the Customer Order Line.



EXERCISE 12

LINK A SHIPMENT DOCUMENT

A Shipment Document is optionally created when advanced notice is received about a shipment for a purchase order sent to a supplier. Use the Shipment Document Function to create and link it to a Purchase Order.

Fig 12.1

VIEW THE PURCHASE ORDER

Notes:

View the steps in figure 12.1 to be

able to understand the next steps.

1. Freight Terms (Purchase Order Additional Cost Applicable) = Yes 2. Inspection Criteria (Receipt of Items Via Inspection) = „Optional‟ or „Always Force‟.

Fig 12.2

CREATE SHIPMENT DOCUMENT.

Notes:

Shipment Document number is user defined – should be the same as the number on the shipment document received from the supplier.

Recall the acquired Purchase order and add the additional costs.

Follow the steps in fig 12.2 to link a

Shipment Document.



Fig 12.3

VIEW RESULTS.

Notes:

When fully linked it will disappear from the available line grit.

Selecting linked lines will display the additional cost added when linked.

Only „partial Receipt‟ if permitted by External Organisation function.



EXERCISE 13

PURCHASING ANALYSIS

The Purchasing Analysis function is used to analise purchase orders.

Fig 13.1

SELECT SELECTION CRITERIA

Notes:

We have selected to see all released purchase orders lines for a specific buyer.

Read the online help on the option “Planned Orders With A MRP Action Date Till”

Fig 13.2

SELECT DISPLAY COLUMNS

Notes:

Step 1:

Select additional columns to be displayed.



Fig 13.3

VIEW RESULTS.

Notes:

You may select a purchase order and jump via the buttons at bottom of screen to other analysis functions.

Fig 13.4

REPORTS

Notes:

Fig 13.5

REPORTS

Notes:



EXERCISE 14

REQUEST FOR QUOTE PROCESS (RFQ)

Fig 14.1

FIRM PURCHASE ORDERS

Notes:

Step 1: MRP created orders need to be firmed before quotes can be requested.

The Purchase Order RFQ function is used to request quotations.

Fig 14.2

CREATE PURCHASE ORDER RFQ

Notes:

Follow the steps in figure 14.2 to create a request for quotation.



Fig 14.3


Notes:

Notice the system created the RFQ number. Follow the steps in figure 14.3.

Fig 14.4


Notes:

Select all the firm order lines which are to be part of the RFQ.



Fig 14.5


Notes:

Step 1:

Go to the first tab and firm the RFQ before adding the possible suppliers who are to act on the RFQ.

Fig 14.6

VIEW PURCHASE ORDER RFQ

Notes:



Fig 14.7

Notes:

We have accepted a quote and now create a released purchase order.

Fig 14.8

Notes:

Note the outomatic reference to the RFQ number.



Fig 14.9

VIEW RESULTS.

Notes:

This tab on the Purchase Order RFQ function shows all the possible suppliers expected to make a quote.

Fig 14.10

VIEW RESULTS.

Notes:

The last tab on the Purchase Order RFQ function shows the purchase order this Request for Quotation resulted in.



LESSON SUMMARY

On completion of the purchase management course, students will be able to manage purchase orders through its entire life cycle.

TO DO THIS

Firm a Planned Purchase Order. Use the STOCK PURCHASE ORDER requisition.

Print a Stock Replenishment Requisition. Use the PRINT REPORTS function. Use the STOCK REQ tab.

Release a Firmed Purchase Order. Use the RELEASE PURCHASE ORDER GENERATION function.

Print Purchase Order. Use the PURCHASE ORDER function.

Change a Released Purchase Order. Use the PURCHASE ORDER function. Use the PO LINE STATUS HISTORY function

Delete a Purchase Order. Use the PURCHASE ORDER function.

Add a Modification Purchase Order. Use the PURCHASE ORDER function.

Firm and Release a Subcontracted Purchase Order Line

Use the STOCK PURCHASE ORDER REQUISITION function.

Add Specifications to a Purchase Order Line. Use the PURCHASE ORDER function.

Add Characteristics to Purchase Order Line Use the PURCHASE ORDER and CHARACTERISTICS function.

Release a Purchase order with UOM and Currency Conversions.

Use the RELEASE PURCHASE ORDER GENERATION and UNIT OF MEASURE CONVERSION function.

Release a Purchase Order Back-to-Back with Sales Use the RELEASE PURCHASE ORDER GENERATION function.

Add a Shipment Document Use the SHIPMENT DOCUMENT function.

Perform Purchasing Analysis Use the PURCHASING ANALYSIS function.

Request For Proposal Use the PURCHASE ORDER RFQ function



APPENDIX A : Examples of Purchasing Procedures as used in Project

Management Environments

Example 1 - Buying Non Stock Items Add a Non Stocked purchase Order Requisition Create Purchase Order through Released Purchase Order Generation

function (From Non Stock Requisition Option)

Perform Supplier to Store movement (do not have to specify store)

Example 2 - Buying a Stocked Non Fixed Account MRP planned part Add a Stocked Purchase Order Requisition through the Stock Purchase

Order Requisition function Release Stocked Purchase Order Requisition Create Purchase Order through Released Purchase Order Generation

function (From Firmed Order) Perform Supplier to Store movement

Example 3 - Buying a Stocked Fixed Account MRP planned part Create Purchase Order through Released Purchase Order Generation

function (Manual Option) Perform Supplier to Store movement Add a Stores Issue Requisition (no price) Perform Stores to Requisition movement

APPENDIX B : Journals for Purchase Orders

SUPPLIER GOODS RECEIVING

STORE

DT STORES STOCK (DIVISION)

(Part Fin Yr Mat * Qty Received)

CT CREDITORS SUSPENSE (DIVISION)


1.1 RECEIVE “FIXED ACCOUNT” PURCHASED ITEMS AND INVOICE (Movement to and from Suppliers)

C.J. PRINSLOO

REV : 01

11/11/97

LEGEND:

Fin - Financial

Mat - Material Cost

Yr - Year



CT INCOMING INSPECTION (DIVISION)


INSPECTION

TO STORE

ADD INVOICE LINK INVOICELINE TO

RECEIVED

PURCHASEORDER LINE

DT CREDITOR SUSPENSE (DIVISION)


CT TRADE CREDITORS (DIVISION)

((Invoice Unit Price + VAT) * Qty Invoiced)

DT VAT PURCHASES (DIVISION)

(VAT * Qty Unvoiced)

VARIANCES:

a. If Invoice Unit Price > Part Fin Yr Mat Cost

DT CREDITOR PRICE VARIANCE (DIVISION)

((Invoice Unit Price * Qty Invoiced)

- (Part Fin Yr Mat Cost * Qty Invoiced)

b. If Invoice Unit Price < Part Fin Yr Mat Cost

CT CREDITORS PRICE VARIANCE (DIVISION)

((Invoice Unit Price * Qty Invoiced)

- (Part Fin Yr Mat Cost * Qty Invoiced)INSPECTION

OR

SUPPLIER TO STORE

SUPPLIER

TO

INSPECTION

DT INCOMING INSPECTION (DIVISION)




SUPPLIER

STORE

DT CREDITORS SUSPENSE (DIVISION)

(Part Fin Yr Mat * Qty Returned)

CT STORES STOCK (DIVISION)


1.2 RETURN “FIXED ACCOUNT” PURCHASED ITEMS TO SUPPLIER (Movements to and from Suppliers)

STORE TO SUPPLIER

(Return item to Supplier)

C.J. PRINSLOO

REV : 02

18/11/97

LEGEND:

Fin - Financial

Mat - Material Cost

Yr - Year

DT CREDITORS SUSPENSE (DIVISION)


CT INCOMING INSPECTION



((Part Fin Yr Mat) * Qty Returned)

DT TRADE CREDITORS

((Invoice Unit Price + VAT) * Qty Returned)

CT VAT PURCHASES

(VAT * Qty Returned)

VARIANCES:

a. If Invoice Unit Price > Part Fin Yr Mat Cost

CT CREDITOR PRICE VARIANCE

((Invoice Unit Price * Qty Returned)

- (Part Fin Yr Mat Cost * Qty Returned)

b. If Invoice Unit Price < Part Fin Yr Mat Cost

DT CREDITORS PRICE VARIANCE

((Invoice Unit Price * Qty Returned)

- (Part Fin Yr Mat Cost * Qty Returned)

INSPECTION

INSPECTION TO SUPPLIER

(Return item to Supplier)

APPLY CREDIT INVOICE LINE

CREDITORS DEPARTMENT

SUPPLIER STORE

DT ACCOUNT OR NODE SPECIFIED FOR REQUISITION

((Purchase Order Unit Price) * Qty Received)

CT CREDITORS PROVISIONING (DIVISION)


1.3 RECEIVE “NON-STOCK” OR “NON-FIXED ACCOUNT STOCK” PURCHASED ITEMS AND INVOICE (Movements to and from Suppliers)

C.J. PRINSLOO

REV : 02

18/11/97

ADDINVOICE

DT CREDITOR PROVISIONING (DIVISION

((Purchase Order Unit Price) * Qty Invoiced)



DT VAT PURCHASES

(VAT * Qty Invoiced)

VARIANCES:

If Invoice Unit Price < Purchase Order Unit Price

DT ACCOUNT OR *NODE SPECIFIED FOR THE

REQUISITIONINSPECTION

SUPPLIER TO STORE

OR

DT ACCOUNT OR NODE SPECIFIED FOR REQUISITION


CT CREDITORS PROVISIONING (DIVISION)


SUPPLIER TOINSPECTION

LINKINVOICE

TO

RECEIVEDPURCHASE

ORDERLINE

NOTE:

The node is indirectly linked to a GL account (usually the WIP project through management account),

the material resource used for the material budget

NODE

AA000

MATERIAL BUDGET

MAT RESOURCE (E.G. PROCUREMENT LOCAL)

MAT RESOURCE (E.G. PROCUREMENT OVERSEAS)

ACCOUNT

ALX1

AST9

REQ NO

AAACY

AABCY

INSPECTION TO STORE

(Non-stock or Non-fixed Account Stock Items)

SUPPLIER

STORE

1.4 RETURN “NON-STOCK” OR “NON-FIXED ACCOUNT STOCK” PURCHASED ITEMS

STORE TO SUPPLIER

(Return Item to Supplier)

C.J. PRINSLOO

REV : 02

21/11/97

INSPECTION

RETURN TO SUPPLIER

(Return Item to Supplier)

APPLY CREDIT INVOICE LINE


((Purchase Order Unit Price) * Qty Returned)

CT ACCOUNT OR *NODE SPECIFIED FOR THE

REQUISITION


NOTE:

The node is indirectly linked to a GL account (usually the WIP project through management account),

the material resource used for the material budget

NODE

AA000

MATERIAL BUDGET

MAT RESOURCE (E.G. PROCUREMENT LOCAL)

MAT RESOURCE (E.G. PROCUREMENT OVERSEAS)

ACCOUNT

ALX1

AST9

REQ NO

AAACY

AABCY

CT CREDITOR PROVISIONING (DIVISION


DT TRADE CREDITORS (DIVISION)

((Invoice Unit Price + VAT) * Qty Returned)

CT VAT PURCHASES (DIVISION)

(VAT * Qty Returned)

VARIANCES:

If Invoice Unit Price < Purchase Order Unit Price


REQUISITION




REQUISITION


CREDITORS DEPARTMENT

(Credit)

SUB-CONTRACTORMATERIAL STORE

(Your Company)

DT WIP MATERIAL PURCHASES (DIVISION)

((Part Fin Yr Mat) * Qty Issued)

CT STORES STOCK (DIVISION)


1.5 SUB-CONTRACT “FIXED ACCOUNT” PURCHASED ITEM AND INVOICE

(Movements to and from Suppliers)

STORE TO ORDER REQUIREMENTS

(Issue Material / Items)

C.J. PRINSLOO

REV : 02

21/11/97

LEGEND:

Fin - Financial

Yr - Year

Mat - Material Cost

Subc - Sub-contract Cost


((Part Fin Yr Mat + Subc) * Qty Received)

CT CREDITOR PRICE VARIANCE (DIVISION)

((Part Fin Yr Subc) * Qty Received)

CT WIP MATERIAL PURCHASES (DIVISION)

((Part Fin Yr Mat) * Qty Received)

VARIANCES:

If Part Fin Yr Mat > Mat Cost Issued

CT MATERIAL BUDGET VARIANCE (DIVISION) WITH DIFF.

If Part Fin Yr Mat < Mat Cost Issued

DT MATERIAL BUDGET VARIANCE (DIVISION)

DT INCOMING INSPECTION (DIVISION)


CT CREDITOR PRICE VARIANCE (DIVISION)


CT WIP MATERIAL PURCHASES (DIVISION)

((Part Fin Yr Mat) * Qty Received)

VARIANCES:

If Part Fin Yr Mat > Mat Cost Issued

CT MATERIAL BUDGET VARIANCE (DIVISION) WITH DIFF.

If Part Fin Yr Mat < Mat Cost Issued

DT MATERIAL BUDGET VARIANCE (DIVISION)

INSPECTION

SUPPLIER TO INSPECTION

(Return Sub-contracted Item)

SUPPLIER TO

STORE


GOODS RECEIVING STORE

(Your Company)

INSPECTION TO STORE



CT INCOMING INSPECTION (DIVISION)


ADD INVOICE

LINK INVOICE

TO RECEIVED

PURCHASE

ORDER LINE

DT CREDITOR PRICE VARIANCE (DIVISION)

((Part Fin Yr Subc) * Qty Invoiced)


((Invoiced Unit Price + VAT) * Qty Invoiced)



OR

SubcontractPurchase Order

SUB-CONTRACTORMATERIAL STORE

(Your Company)

DT WIP PROJECT MANAGEMENT (or Account for Node/Resource) (F)


CT STORES STOCK (DIVISION)(F)


1.6 SUB-CONTRACT “NON-FIXED ACCOUNT” PURCHASED ITEM AND INVOICE

(Movements to and from Suppliers)

STORE TO ORDER REQUIREMENTS

(Issue Material / Items)

C.J. PRINSLOO

REV : 00

02/12/97

LEGEND:

Fin - Financial

Yr - Year

Mat - Material Cost

Subc - Sub-contract Cost

(F) - Fixed Account Items

Only

DT WIP PROJECT MANAGEMENT

(i.e. Account for Node/Resource)

(Purchase Unit Price * Qty Received)

CT CREDITOR PROVISIONING (DIVISION)


INSPECTION

SUPPLIER TO INSPECTION


SUPPLIER TO

STORE


GOODS RECEIVING STORE

(Your Company)

INSPECTION TO STOREADD INVOICE

LINK INVOICE

TO RECEIVED

PURCHASE

ORDER LINE

DT CREDITOR PROVISIONING (DIVISION)

(Purchase Unit Price * Qty Invoiced)





OR

DT WIP PROJECT MANAGEMENT

(i.e. Account for Node/Resource)


CT CREDITOR PROVISIONING (DIVISION)


SubcontractPurchase Order

APPENDIX C : Purchase Order Type Summary

1. Stock Purchase Order a. Buys New inventory items b. Gives demand from – requirement of others orders

Sales forecast – safety stock policies on parts Stores issue requisitions

2. Subcontract orders

a. Has requirements from a Bom for components needed by supplier to make a part

3. Rework order a. Reworks inventory at a supplier (Use Quarantine stock)

4. Purchase repair order a. Requirements for the repairable part (Waiting Repair) b. Can have additional requirements c. Can pay supplier d. Will deliver a repaired part to stock e. Always financed against node or account

5. Non Stock Purchase Orders a. Buys non stock items, financed against node or account, needs a non stock requisition

6. Service Requisitions – link purchase order.

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