Business Considerations

There are several business issues to take into consideration before setting up Purchase Order Management. This section does not discuss all potential issues, but presents some issues to generate thought and discussion.

Distributed Purchasing

• Allows purchasing for multiple sites, even across multiple databases

• Lets you save money through volume purchases

• Allows local plants to purchase locally when necessary or economical

Setup Implications

PO and requisition numbering schemes must be unique across all databases

• Usually accomplished through the use of prefixes

Site names must be unique across all databases and must have matching address codes

• For example, the address code for site 10-100 is also 10-100

Requisitions

• Can require approvals

Why Consider?

• To track and limit spending

• To control spending by amount, product line, site, and GL account

• For conversion of MRP planned orders

• To give visibility to outstanding requests for purchase activity

• To automatically update purchase details by MRP

Limitations

• Cannot be used for subcontract purchases or supplier schedules

• Do not specify a supplier or invoice directly

• Take more time through the approval process (if in use)

• Only one requisition is allowed per PO line

Setup Implications

• If you require all line items on POs to come from approved requisitions, the approval field must be set to Yes in Purchasing Control

Otherwise, you can use requisitions with the approval field set to No

• Creation of approval codes and levels

See Requisitions for details.