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PURCHASING MANAGEMENT Course Assignment
REVISION 18
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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.
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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
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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
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Firmed Order Add Header Add Line Defaults Add Detail for Order
Print Purchase Order
Edit Line
Delete Line
Release a Firm Purchase Order
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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
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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
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Retrieve Order Line Activate
Characteristics
Select „Linked to
Destination‟
Add Values Select Table Name Create
Characteristics
Add Characteristics to Purchase Line
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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
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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
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Firm Purchase
order
Create Purchase
Order RFQ
View/Print
Purchase Order
RFQ
Release Purchase
Order From Quote
View Results On
RFQ
REQUEST FOR QUOTATION
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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
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Purchase Management Course Assignment
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
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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
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Purchase Management Course Assignment
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.
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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
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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.
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Purchase Management Course Assignment
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.
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Purchase Management Course Assignment
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.
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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.
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FIGURE 1.4
RELEASE THE REQUISITION
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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
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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.
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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.
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Purchase Management Course Assignment
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.
Follow the steps in Figure 4.1.
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.
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Purchase Management Course Assignment
EXERCISE 5
PURCHASE ORDER CHANGES
Use the Purchase Order function to change purchase orders.
FIGURE 5.1
PURCHASE ORDER CHANGES
NOTES:
Perform an inquiry on the released purchase order you have just created on line 1.
Follow the steps in Figure 5.1.
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
PURCHASE ORDER CHANGES
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.
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FIGURE 5.3
PURCHASE ORDER CHANGES
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
PURCHASE ORDER CHANGES
NOTES:
Select a specific change as in step 1 to see the before and after values as in step 2.
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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.
Follow the steps in Figure 6.1.
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Purchase Management Course Assignment
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.
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Purchase Management Course Assignment
EXERCISE 7B
ADD MODIFICATION PURCHASE ORDER REQUIREMENTS
Use the Purchase Orders function. Tab the Requirements tab.
FIGURE 7.3
ORDER REQUIREMENTS
NOTE:
Follow the steps in Figure 7.3.
EXERCISE 7C
PRINT A STOCK REPLENISHMENT FOR THE MODIFICATION
ORDER
(Refer to Exercise 2)
EXERCISE 7D
RELEASE THE MODIFICATION PURCHASE ORDER
(Refer to Exercise 3)
EXERCISE 7E
PRINT THE RELEASED MODIFICATION PURCHASE ORDER
(Refer to Exercise 4)
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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
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FIGURE 7.4C
MESSAGE
NOTE:
The storeman will receive the following message: (See Figure 7.4C)
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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.
Follow the steps in Figure 9.3.
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:
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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
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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
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FIGURE 9.3
CHARACTERISTIC LINK
ADD VALUES
SELECT TABLE NAME
CREATE CHARACTERISTICS
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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.
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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
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FIGURE 10.6
LINE DETAIL
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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.
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Fig 11.3
Fig 11.4
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Fig 11.5
Note on receipt of goods it will be automatically allocated to the Customer Order Line.
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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.
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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.
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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.
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Revision 18 : 14 July 2005 Page 35
Purchase Management Course Assignment
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:
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Revision 18 : 14 July 2005 Page 36
Purchase Management Course Assignment
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.
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Revision 18 : 14 July 2005 Page 37
Purchase Management Course Assignment
Fig 14.3
CREATE PURCHASE ORDER RFQ
Notes:
Notice the system created the RFQ number. Follow the steps in figure 14.3.
Fig 14.4
CREATE PURCHASE ORDER RFQ
Notes:
Select all the firm order lines which are to be part of the RFQ.
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Revision 18 : 14 July 2005 Page 38
Purchase Management Course Assignment
Fig 14.5
CREATE PURCHASE ORDER RFQ
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:
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Revision 18 : 14 July 2005 Page 39
Purchase Management Course Assignment
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.
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Revision 18 : 14 July 2005 Page 40
Purchase Management Course Assignment
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.
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Revision 18 : 14 July 2005 Page 41
Purchase Management Course Assignment
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
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Revision 18 : 14 July 2005 Page 42
Purchase Management Course Assignment
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)
(Part Fin Yr Mat * Qty Received)
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
DT STORES STOCK (DIVISION)
(Part Fin Yr Mat * Qty Received)
CT INCOMING INSPECTION (DIVISION)
(Part Fin Yr Mat * Qty Received)
INSPECTION
TO STORE
ADD INVOICE LINK INVOICELINE TO
RECEIVED
PURCHASEORDER LINE
DT CREDITOR SUSPENSE (DIVISION)
(Part Fin Yr Mat * Qty Received)
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)
(Part Fin Yr Mat * Qty Received)
CT CREDITORS SUSPENSE (DIVISION)
(Part Fin Yr Mat * Qty Received)
-
SUPPLIER
STORE
DT CREDITORS SUSPENSE (DIVISION)
(Part Fin Yr Mat * Qty Returned)
CT STORES STOCK (DIVISION)
(Part Fin Yr Mat * Qty Returned)
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)
(Part Fin Yr Mat * Qty Returned)
CT INCOMING INSPECTION
(Part Fin Yr Mat * Qty Returned)
CT CREDITORS SUSPENSE (DIVISION)
((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)
((Purchase Order Unit Price) * Qty Received)
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)
CT TRADE CREDITORS (DIVISION)
((Invoice Unit Price + VAT) * 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
((Purchase Order Unit Price) * Qty Received)
CT CREDITORS PROVISIONING (DIVISION)
((Purchase Order Unit Price) * Qty Received)
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
DT CREDITOR PROVISIONING (DIVISION
((Purchase Order Unit Price) * Qty Returned)
CT ACCOUNT OR *NODE SPECIFIED FOR THE
REQUISITION
((Purchase Order Unit Price) * Qty Returned)
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
((Purchase Order Unit Price) * Qty Returned)
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
CT ACCOUNT OR *NODE SPECIFIED FOR THE
REQUISITION
DT CREDITOR PROVISIONING (DIVISION
((Purchase Order Unit Price) * Qty Returned)
CT ACCOUNT OR *NODE SPECIFIED FOR THE
REQUISITION
((Purchase Order Unit Price) * Qty Returned)
CREDITORS DEPARTMENT
(Credit)
-
SUB-CONTRACTORMATERIAL STORE
(Your Company)
DT WIP MATERIAL PURCHASES (DIVISION)
((Part Fin Yr Mat) * Qty Issued)
CT STORES STOCK (DIVISION)
((Part Fin Yr Mat) * Qty Issued)
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
DT STORES STOCK (DIVISION)
((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)
((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)
INSPECTION
SUPPLIER TO INSPECTION
(Return Sub-contracted Item)
SUPPLIER TO
STORE
(Return Sub-contracted Item)
GOODS RECEIVING STORE
(Your Company)
INSPECTION TO STORE
DT STORES STOCK (DIVISION)
((Part Fin Yr Mat + Subc) * Qty Received)
CT INCOMING INSPECTION (DIVISION)
((Part Fin Yr Subc) * Qty Received)
ADD INVOICE
LINK INVOICE
TO RECEIVED
PURCHASE
ORDER LINE
DT CREDITOR PRICE VARIANCE (DIVISION)
((Part Fin Yr Subc) * Qty Invoiced)
CT TRADE CREDITORS (DIVISION)
((Invoiced Unit Price + VAT) * Qty Invoiced)
DT VAT PURCHASES (DIVISION)
(VAT * Qty Invoiced)
OR
SubcontractPurchase Order
-
SUB-CONTRACTORMATERIAL STORE
(Your Company)
DT WIP PROJECT MANAGEMENT (or Account for Node/Resource) (F)
((Part Fin Yr Mat) * Qty Issued)
CT STORES STOCK (DIVISION)(F)
((Part Fin Yr Mat) * Qty Issued)
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)
(Purchase Unit Price * Qty Received)
INSPECTION
SUPPLIER TO INSPECTION
(Return Sub-contracted Item)
SUPPLIER TO
STORE
(Return Sub-contracted Item)
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)
CT TRADE CREDITORS (DIVISION)
((Invoice Unit Price + VAT) * Qty Invoiced)
DT VAT PURCHASES (DIVISION)
(VAT * Qty Invoiced)
OR
DT WIP PROJECT MANAGEMENT
(i.e. Account for Node/Resource)
(Purchase Unit Price * Qty Received)
CT CREDITOR PROVISIONING (DIVISION)
(Purchase Unit Price * Qty Received)
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.