PO Generator by Item
Automates replenishment Purchase Order process
Last updated
Automates replenishment Purchase Order process
Last updated
The purpose of the Purchase Order Generator by Item (POGi) is to provide decision support and automation for stock replenishment, i.e. the purchase of stock to meet ‘safety stock’ requirements.
The POGi automates the bulk creation of Purchase Orders by Item, by Supplier. The POGi can be used to detect and report which Items are below their safety stock quantity (Reorder Level).
The POGi displays by Item and grouped by Supplier the aggregated and minimum quantity of Items that need to be ordered to restore safety stock levels. You can agree with or adjust the ‘Qty to Order’ result, and then generate the Purchase Orders.
The mechanism and the algorithm (calculation method) can be adapted to your specific inventory optimization requirements. We can create custom scripts to calculate and automate. Contact support@salesorder.com for guidance.
Inventory optimization is a method of balancing capital investment constraints or objectives and service-level goals over a large assortment of stock-keeping units (SKUs) while taking demand and supply volatility into account.
Implemented effectively Inventory optimization can significantly increase the availability of your working capital, and reduce the amount of redundant stock.
The Purchase Order Generation by Item workflow has three stages:
Search and select the stock item(s) to be replenished
Adjustment of ‘Qty to Order’.
Auto-generation of Purchase Orders.
Purchasing>PO Generator by Item>+
On this screen, you can focus the search, by Item, by Site (WMS), by Supplier, and at ‘Reorder Level’. Use the ‘Advanced Search’ and ‘Extra Columns’ to further refine your search.
The results of your search are displayed as follows:
| Column | Description |
|---|---|
Item Code | The SKU |
Description | SKU description |
Free Stock | Stock not allocated, not on Sales Orders |
On SO (NA) | On Sales Orders, not allocated |
Site | The selected site to which the results in this row relate. |
Qty on PO | The quantity of this Item on current Purchase Orders that have not been received. |
Supplier | The default preferred Supplier for this Item. |
Lead Time | The last recorded lead time. This is manually entered on the preferred supplier table against the respective Item. |
Shortfall | The quantity of Items on Sales Orders that cannot be allocated because of insufficient stock. |
Item MOQ | The minimum order quantity for this Item. This is manually entered on the preferred supplier table against the respective Item. |
Reorder Level | The safety stock level. This is manually entered (or imported) on the Purchasing/Costs tab on the Item. |
Cost* | The Item cost, either inherited from the Unit cost on the Item, or from the preferred Supplier table on the Item. This can be preset on the Purchase Order configuration. |
Amount1 | The sum of the ‘Qty to Order’ and the Cost (above). |
MOV | This is not directly used in the POGI’s calculations. The minimum order value. It just indicates a threshold and is for reference. This is manually set in the ‘Ordering’ section on the ‘Profile’ tab of the Supplier master. The value is in the Supplier’s trading currency. |
MOQ | This is not directly used in the POGI’s calculations. The minimum order quantity. This is NOT the Item MOQ. It just indicates a threshold and is for reference. Use it if your supplier stipulates an overall number of pieces regardless of SKU. This setting is manually set in the ‘Ordering’ section on the ‘Profile’ tab of the Supplier master. The value is in the Supplier’s trading currency. |
Qty to Order | When the Purchase Orders are generated, this value is used to stipulate the quantity of Items to order. You can edit and adjust this field. Displays the result of the POGi calculation (see below). |
*These values are in the respective Supplier’s trading currency if derived from the preferred Supplier table. If they’re derived from the Item ‘Unit cost’ they are in the General Ledger base currency.
The search action returns the ‘Qty to Order’.
The Qty to Order is derived from:
Shortfall: The quantity of Items on Sales Orders that cannot be allocated because of insufficient stock.
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Quantity of Items required to restore the Reorder Level to the preset balance.
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Quantity of Items required to meet the Item MOQ.
Notice the search result returns the list of Items grouped by Supplier with a Totals rows which display the sums of the Amount(s) and the ‘Qty to Order’. If the MOV and MOQ fields on the Supplier master contain a value, it will be displayed in this row.
Agree with or adjust (edit)the ‘Qty to Order’ per Item.
Use the checkbox in the left-hand column of each row to select the Items for which you need to generate Purchase Orders. Click the Action ‘Generate POs’. The system will return the ‘Created Purchase Orders’ List.
The ‘Site’ on the created Purchase Orders will inherit from the Site set on your search. This will be where the Purchase Orders will be available for receiving.
