ERP software system processes, ERP processes in PURCHASING (POP / Purchase Order Processing) module.

ERP Business Processes Contained in the PURCHASING (POP / Purchase Order Processing) ERP Software Module
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To view the business processes supported under a different ERP software system module view the ERP Software Modules page and click the link to the appropriate module. The ERP business processes listed on this page pertain to PURCHASING (POP / Purchase Order Processing).

ERP software systems comprise a variety of software modules, each of these ERP modules houses a set of business processes that the particular ERP software package supports. A useful starting point for compiling an ERP software system spec / RFQ / RFI / ITT is listing the required system functionality, or business processes, that an ERP software system would need to support in order to be considered as viable for ERP system selection and implementation. The list of ERP business process listed below relates to the PURCHASING (POP / Purchase Order Processing) module of ERP software packages. View the high level ERP Software Modules page to see a list of other ERP system modules that encompass the various business processes required of a modern integrated ERP software package.

The standard ERP system business processes for PURCHASING (POP / Purchase Order Processing) are tabulated later on this page - the ERP business processes are descibed in more detail than on the ERP System Processes page. Next to each description of the ERP processes for PURCHASING (POP / Purchase Order Processing) here are the explanations as to why each particular business prcess may be important / relevant.

Central to any ERP software package is the PURCHASING (POP / Purchase Order Processing) software module - it is the cornerstone of an effective and integrated ERP software package. The below list of business processes can be used as first pass list of ERP software system functional requirements for your business in the area of PURCHASING (POP / Purchase Order Processing) that can be utilised to arrive at a broad brush ERP system spec of required functionality to assist your ERP selection process and subsequent implementation.

PURCHASING (POP / Purchase Order Processing) ERP Business Processes
ERP Business Process
ERP Process Explanation
Arrange sub-contract activities such as lease of machines, maintenance, etc.   
Assess supplier capabilities and capacities.   
Authorise the payment of purchasing invoices from suppliers.   
Receive acknowledgements and confirm delivery dates with suppliers.  Carried out in order to record and monitor communication and agreements made with suppliers. 
Co-ordinate logistics of incoming materials (i.e. deliveries etc.).   
Monitor details of orders awaiting delivery.  Carried out to keep track of orders and to highlight ones which may need chasing or expediting (these may be listed on exception reports). 
Subject incoming goods to an inspection approval process.  Carried out to register arrival of goods of the required quality. Information collected can be used as a measure of supplier performance. 
Investigate alternative sources of supply of raw materials and components.   
Participate in make versus buy and engineering design decisions.   
Manage materials / parts requisitions and create purchase orders.  Carried out to process internal requisitions, integrate with the purchasing system, authorise and convert to purchase orders. 
Monitor performance of the Purchasing function.  This may be done by measuring on-time deliveries, supply quality, parts availability, value of the BOM, prices reduced, cost targets reached etc. This helps to improve the effectiveness of the function and makes it accountable. 
Monitor scrap caused by poor supply quality.  Carried out to record details on supplier performance and inform planning if rescheduling is likely to be required. 
Negotiate and agree prices, product specifications and supply conditions (including lead times) with suppliers.   
Perform Vendor Rating by assessing suppliers with respect to key performance criteria.  Undertaken to ensure that suppliers remain competitive, deliver goods on time and to the correct quality specification etc. 
Generate purchase orders for suppliers; detailing prices, product specifications and delivery conditions.  Carried out as an essential purchasing activity to send out an order to a chosen supplier. 
Register material returns to suppliers.  Carried out to instigate action (e.g. source parts from an alternative supplier, expedite replacements, undertake re-scheduling if necessary etc.), The recorded details can be used to monitor supplier performance. 
Report early and / or late deliveries from suppliers (and expedite if necessary).  Undertaken so that the appropriate action can be instigated (e.g. expedite parts from suppliers) and so that planning can be informed and can adjust the schedules accordingly. The recorded details can also be used for supplier performance monitoring. 
Generate requests for quotations from suppliers.  Carried out in situations where it is necessary to send details of the order in a form which invites suppliers to reply with a price and a delivery date. 
Maintain details on suppliers, orders and purchase history.  Carried out to provide a historical record to assist planning (e.g. providing forecasting lead times) and decision making (e.g. make-versus-buy, vendor rating etc.) 

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The 4engineer to order manufacturer manufacturing production planning project management ERP system EDM PDMETO web site is being used to fulfil three purposes, firstly, it is a vehicle to recruit engineer to order manufacturers to take part in the research project concerned with improving how ETO manufacturing companies plan production and manage their jobs / projects. Secondly, the 4engineer to order manufacturer manufacturing production planning project management ERP system EDM PDMETO web site is being used a means of disseminating the results of the research project as well as good practices employed by successful engineer-to-order manufacturers. Thirdly, the 4engineer to order manufacturer manufacturing production planning project management ERP system EDM PDMETO site will be developed into a portal site for ETO manufacturers.

 

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Last Updated: 27-Mar-2008