Procurement - Getting Practical

Overview

Replenishment of inventory, anywhere in the supply chain, can originate from three different sources:

1. From Stock locations, for e.g. replenishing from a central warehouse to a regional warehouse or a shop.

2. From Factories that specifically produce SKUs for a stock location.

3. And from Suppliers, as in Purchasing RM (Raw Material) or FG (Finish Goods) to a stock location.

The Procurement module handles SKUs that are purchased from suppliers.

There are two major types of procurement transactions:

• PTO - Purchase to Order - Orders from a supplier of SKUs that are not kept regularly in stock. These orders are usually meant to serve a specific production order or a client's order. They are managed according to a due date and a time buffer.
• PTS - Purchase to Stock- Orders from a supplier of SKUs that are kept in stock. These orders are intended to replenish the stock buffers of these SKUs in their stock location. The Buffer Penetration of these orders and their prioritization are calculated according to their inventory in the stock location.