Core Procurement Management Process

Core procurement process

Including purchase requisition, purchase order, and purchase receipt.

In fact, the enterprise's procurement business involves more processes, including materials, supplier authentication and maintenance, procurement sourcing, and bidding.

Supplier information maintenance is required for procurement. Maintenance of material information is described earlier. Materials and suppliers are the basic data of procurement management. After both materials and suppliers are maintained, they can further maintain the correspondence between suppliers and materials, which is called supply source maintenance in ERP.

Supply Source maintenance includes a list of suppliers for material approval. The approval Supplier List will show materials, suppliers, supplier Shipping Organization and location and establish mappings.

A single item can have multiple qualified suppliers, so that the proportion of each supplier can be further maintained. After defining the supply source rules and the supply ratio of each supplier, you can allocate planned orders to different suppliers based on the predefined-cent ratio. This scenario is generally used when a purchase order is automatically generated for more purchase applications or MRP plan requirements. From a long period of time, the supply volume of each supplier should meet the supply proportion allocation settings.

Procurement requisition process

Purchase requisitions and orders
1. production subject: Each Business Requirement department can submit a purchase order, which can only be produced by the procurement department.
2. document content: the purchasing department only cares about the materials and delivery period. Generally, no specific supplier or price is specified. Suppliers and prices are the procurement items.
3. Correspondence: purchase orders are generally based on project requirements and may need to be purchased from multiple suppliers. One purchase order can correspond to multiple purchase orders.
4. Basic data: both purchased materials and suppliers may be new or existing. Different purchase implementation strategies are involved according to the content of the purchase request.

Requisition core object table
1. Requisition header: Po. po_requisition_headers_all
2. Requisition details: Po. po_requisition_lines_all
3. Requisition allocation: Po. po_req_distributions_all

There is not much important information in the requisition header, mainly the requisition number, the type of the requisition, including the purchaser, mainly the purchaser and the employees in the hr_employees table.

For details of the requisition, you need to provide information such as the purchased materials and versions, material descriptions, quantity, demand date, target type and organization, delivery location, and recommended suppliers. The requisition details must be associated with the material table. The distribution of requisitions is mainly divided into specific accounts, and further information is needed.

After the procurement requisition is completed, it corresponds to specific procurement implementation strategies, including public bidding, bidding invitation, and exclusive designation. In the oracleerp system, after the procurement request is completed, the corresponding price is quoted by the supplier. After the quotation, the negotiation is made to final determine the supplier and materials. Before formal procurement, you must input basic supplier and material data in a series of offline processes.

Procurement Order core table
Purchase order header: Po. po_headers_all
Purchase order details: Po. po_lines_all
Po. po_line_locations_all
Purchase order distribution line: po_distributions_all

The purchase order header mainly includes basic information such as the purchase order number, purchase type, supplier, location, buyer, and order description.

Split the purchase order line to determine a series of information about the materials, quantities, unit prices, currencies, exchange rates, and delivery dates that are purchased from the supplier.

The core purpose of the Splitting Operation of a purchase order is that the same item in a purchase order has multiple delivery locations, and the number of deliveries made at different delivery locations is different.

(Different shipping locations or the same shipping location, but two different shipping times)

The purchase order distribution line is further split into different projects, so that the actual material information and project requirements of the procurement are linked.
(Two Different Charge subjects or fees must be borne by two different departments respectively)

 

When issuing and maintaining a purchase order, you also need to maintain the follow-up invoice matching methods and rules, including two-order matching and three-order matching.

Generally, three matches are the purchase order, and the invoice payable matches the purchase receipt. If you do not need to submit a file after receiving the file, four matching orders may be involved.

Standard procurement order and package procurement agreement
The procurement management system provides the following four types of procurement orders. The common types of orders are standard procurement orders and package procurement agreements.
1. standard purchase order: when creating a purchase order, it is required that detailed information (such as price, quantity, delivery date, and accounting distribution) of specific materials or services should be specified for the order type for one-time purchase.

2. planned procurement order: a long-term agreement that specifies a tentative Delivery Plan and all the details of the goods or services to be purchased, and issue the planned procurement order as needed to actually order the goods.

3. package procurement agreement: a long-term procurement agreement that specifies detailed information about these materials or services, but does not yet specify a specific delivery plan, prior to actual material procurement, you can use a package of procurement agreement price to specify the purchase price of materials.

4. Procurement Agreement: an agreement with the supplier regarding the specific terms and conditions, but does not specify the materials and services to be purchased. This contract will be referenced in subsequent standard purchase orders.

 

A package procurement agreement is also called a Framework Agreement. The Framework Agreement focuses on determining only the unit price after the materials are negotiated and the actual delivery plan is determined later, it is possible that a package procurement agreement has been established and a list of suppliers has been established for the materials. Replenish managed materials and establish standard procurement orders in the ERP system according to replenishment notifications.

Control Rules for purchase orders (to be refined)
Deleting unapproved documents or adding to an unapproved line, shipping and distribution of previous approved documents has been canceled in full or partial form, terminate the existing contract with the supplier by closing the completed order, specifying that other internal activities cannot or are not allowed to be frozen or withdraw the frozen documents for the completed order, to control whether modification of temporary document mounting is allowed, to prevent printing, receiving, invoicing and approval of documents until the temporary suspension of fixed procurement orders is lifted, to prevent MRP from planning, canceling, or creating planned procurement orders in the time bar created by a fixed date, it is recommended that the procurement management system automatically close the documents for receiving and invoicing activities

 

Purchase order status

In the control of purchase orders, cancellation is involved in the process of final close, freeze, unfreeze, fixed, temporarily suspended, receiving to close, invoicing to close, close, and delete the status of various purchase orders. The details are as follows:
Delete.

For unsubmitted documents, you can directly Delete the entire ticket, document line, and shipment in the document creation window. For documents that have been submitted for approval, you can delete unapproved lines, shipments, and distributions that are subsequently added. After the application is deleted, the application associated with the order will be automatically returned to the application set. You can use the "Automatic Creation of documents" window to reassign unexecuted applications to other purchase orders or issue them. After the delete operation is executed, the document data is directly deleted from the system and cannot be renewed from the corresponding interface and data table.

Cancel.

The document creator can terminate or partially terminate the existing contract relationship with the supplier by canceling the document header, line, shipment, and distribution in full or in part. If the Procurement Order entity is canceled, the canceled materials and services cannot be received or paid, but the canceled orders can be paid. In addition, the canceled entity or its components cannot be modified. If an application row has an associated purchase order, this row cannot be canceled. Cancellation is an irrevocable operation. You can cancel a document or its components only after all required activities are completed. After the document is canceled, the corresponding data is still displayed on the document summary page, but the document is not accessible. Through system settings, the buyer can select whether to cancel the purchase application at the same time while canceling the order. Otherwise, the application will automatically return to the application set.

For example, if you have purchased materials A and B from a supplier and no longer need material B due to design changes, you can cancel the order line containing material B. If the order quantity of item A is 30, and the production requires only 0, after receiving 0 and completing subsequent transaction processing, you can cancel the order line, the remaining 0 parts will be canceled, and the received 0 parts will still be valid.

Close eventually.

You can finally close the completed documents, lines, and shipment to prevent modification or execution of the documents. After a document is closed, the document cannot be accessed in the corresponding Input Form window, or the following activities cannot be performed on the final closed object: receiving, transfer, inspection, delivery, correction of receipt quantity, invoicing, return to supplier or return to receipt. You can approve the documents that include the final closure of the entity, but you cannot approve the documents that are finally closed at the topic layer. You can print the final closed document. After the ticket is closed, the application associated with the order will not be automatically returned to the application set. The final close of the document is the internal control activity of the purchase e purchasing system and will not affect the contractual relationship with the supplier, that is, the contractual relationship with the supplier remains valid.
Final close is an irrevocable activity. It is generally not recommended to close the document or its components only when all required activities are completed.

Pending and issuing pending.

Only documents in the "processing" status can be temporarily suspended. Documents temporarily suspended can prevent printing, receiving, invoicing, and further approval while withdrawing approval documents until they are temporarily released.

For example, if a problem exists in the terms of the contract after the procurement order is submitted for approval, you can "temporarily suspend" the document during negotiation with the supplier, after the problem is solved, execute "issuance pending ".

Freeze and unfrozen.

If you want to prevent any modifications or other activities on the purchase order, you can freeze the Purchase Order. The freeze operation can only be performed at the question header and issue layer. After the purchase order is frozen, the ordered goods can still be received and paid. If you want to prevent receipt or matching of invoices with this purchase order, the purchase order should be canceled or eventually closed. The freeze operation is reversible. You can undo it by running "unfrozen" on the control document interface. Frozen orders cannot be accessed in the input form.

Close, receive close, invoice close.

Oracle purchasing can automatically disable receiving and invoicing based on the control options specified in the "purchase options" window in the system (receiving and closing, receiving, and invoicing settlement. Oracle purchasing will automatically close all shipping of a specified row. Once all rows of the specified header are closed, orace purchasing will automatically close the document. In addition to the automatic shutdown of the system, you can also manually close the receipt or invoice on the document control interface to control the receipt and invoicing of orders within a certain period of time.

For example, if the system sets the off-tolerance to 95% and 96 items have been received when a certain item is ordered, the system automatically closes the receipt of this line. If the supplier sends 94 Items in batches, the buyer deems that the remaining 6 items are no longer needed, and can manually close the receipt on the document control interface, this line cannot be received. After "close", you can "open" the document again on the document control interface.