The procurement process can handle quotations, requisitions, and purchase orders, including sending and confirming the purchase orders. It also handles delivery surveillance and sends out reminders when needed. The procurement process can be performed in four different ways:
The purchase requisition and purchase order can also be externally generated by order proposal, customer order, MRP, Master Scheduling, and Next Level Demand. Moreover, a purchase order can be created through supplier scheduling, but this will be described in a separate process document.
This process description document outlines the processes of entering and handling purchase orders.
This main process also includes a supporting process, which handles supplier agreements. There are two ways in which this supporting process can be performed:
Direct purchase order entry is useful for companies who do not create many repetitive purchases. This entry type allows you to permit either departments or only the purchaser or purchase department to enter purchase orders. Whenever the order is created, it should be released in order to be valid; it is then able to run through the order flow.
If you use both or either one of the processes, Manage Purchase and Request for Quotation parts of this process is carried out automatically.
The Enter Purchase Order flow consists of two activity diagrams: basic flow and extended flow.
When entering a purchase order manually, you begin by creating a purchase order header in which you indicate the supplier and the wanted delivery date. Then, you continue by entering purchase order lines, where you specify the part(s) and the quantity to purchase. You have the option to enter one of three kinds of parts: inventory registered purchase parts, non-inventory registered purchase parts, and no-number parts (i.e., parts that are not entered in the system's part records).
The charge/no charge function is included in the extended flow, which means that you can provide the supplier with material or components that the supplier needs to either manufacture or package the parts that you purchase. This function allows you to either charge (sell the material or the components to your supplier) or not charge the supplier for the material and components that you are providing.
If you have used the Prepare Purchase or the Request for Quotation process, a purchase order in Planned status is automatically created.
The Handle Purchase Order flow consists of three activity diagrams: basic flow, extended flow, and delivery surveillance flow.
Regardless of whether the purchase order is manually created or, for instance, generated from a requisition or supplier schedule, the buyer or someone at the purchase department must release it. The next step could vary, depending on internal routines. Either print and send the purchase order to the supplier, expect an order confirmation (before the supplier delivers the order), or await the delivery after the release without any order confirmation. In case of a delayed order confirmation, you can send a reminder to the supplier.
The extended flow contains more functions than the basic flow. For example, you can print work copies in the workflow (this will not generate any new purchase order revision). You can confirm a purchase order with differences without generating a new purchase order revision. You can reserve serial numbers directly on the purchase order line. You can enter, edit, and report milestones that have been completed. If needed, you can apply stage payment. You can either link the stage payment to milestones or require manual approval. You can use automatic order processing for purchase orders and, depending on which events are included in the order processing type, have the automatic order processing batch release and print purchase orders. If several people must authorize the purchase order, you can use authorization templates. You can review component parts to parents' parts on purchase order lines when an internal purchase order has been generated from a customer order, that originates from the Configurator.
Use the delivery surveillance flow to send a delivery reminder if purchased parts have not yet been received.
Supplier agreement releases are useful in companies where people other than the buyer need to perform purchases, such as buying expensive spare parts. Entering a supplier agreement release creates a released purchase order, which can then be run through the order flow. A supplier agreement release is always connected to a blanket purchase order, and all information needed for the purchase is specified in the blanket purchase order.
When entering a supplier agreement release, start by retrieving the blanket purchase order to use, then specify the site (if the blanket purchase order is not a local agreement) and the quantity. When this is done, a released purchase order with one order line is created.
You can use supplier agreements when you and your supplier have agreed on terms for a purchase part or for a supplier assortment. There are two kinds of supplier agreements: blanket purchase orders and purchase agreements. The difference between them is in the way in which they are used. A blanket purchase order is only used for supplier agreement releases. A purchase agreement serves in the background as a basis for the price on all applicable purchase order lines, i.e., all manually and automatically generated purchase orders. The only exceptions for the purchase agreement are supplier agreement releases (which use blanket purchase orders) and purchase orders created from an order quotation (the terms agreed in the order quotation will be used for the purchase order line).
You can use the quotation functionality to convert the accepted quotation into a supplier agreement. The quotation to be converted into a supplier agreement can begin either as an externally generated need (from IFS/Project or IFS/Project Delivery), or can be entered manually as a request for supplier agreement quotation.
You start by entering a header and the parts (or supplier assortments) to be included. After this, enter the suppliers to whom you want to send the requests, then print the requests. If the request was generated from IFS/Project or IFS/Project Delivery, the system will include the header and the part lines. All you will have to do in this case is to choose the suppliers and print the requests.
Once you have received the quotations from the suppliers, enter their terms and compare the data to find the most favorable quotation. When you have compared the quotations and decided which one to accept, you can create a new purchase agreement, or add on to an existing supplier agreement. Furthermore, you can print rejection letters to the suppliers whose quotations you have chosen to reject.
The Enter Supplier Agreement flow consists of two different activity diagrams: one for purchase agreements and one for blanket purchase orders. You can enter the supplier agreement manually in both these activity diagrams.
When you enter a supplier agreement manually, begin by creating a supplier agreement header in which the supplier and some miscellaneous information is entered. Before saving the supplier agreement for the first time, determine whether it is a purchase agreement or a blanket purchase order. When you have entered the general information, continue adding periods, sites and parts. You can include supplier assortments in purchase agreements. You can use supplier assortments instead of parts if you receive the same discount and additional costs for several parts. You can also include no-number parts, i.e., parts that are not entered in the part record. The supplier agreement must be in a status that allows purchasing (most often status Active) before it can be used.
IFS Business Reporter can be used to create and analyze information based on the purchase order data available in IFS Applications. For more information refer About Information Sources in IFS Business Reporter.
IFS Business Reporter can be used to create and analyze information based on the purchase order data available in IFS Applications. For more information refer About Information Sources in IFS Business Reporter.