There’s a lot that goes into being a buyer for any kind of business – from evaluating different suppliers to negotiating contracts to understanding supply chain management. You’ve got quite a bit on your plate to manage, but EnterpriseIQ is here to provide the tools you need to make your job easier and help you execute the purchasing strategies that will make your company more profitable. The tools I’m going to highlight in this two-part series include the AKA Buying feature, Material Exceptions List tool, Budget Comparison calculation, Vendor Performance Analysis report and the Vendor RMA module.
As with nearly any kind of project, the planning stage is critical – defining the requirements of the goods to purchase and determining time frames, economical quantities and quality measurements (to name just a few). Once you’ve nailed down all this information, the next step is finding a place to record it for future reference and visibility within your organization.
Enter the EnterpriseIQ feature, “AKA Buying” (AKA stands for also known as). EnterpriseIQ is a comprehensive, extended ERP solution, meaning that every module, from inventory to accounting and shop floor to quality is connected. Because of this system capability, AKA Buying allows you to create a link between an inventory item and a specific vendor so that you can record the details specific to those purchases.
For each inventory item, you can list your default supplier as well as ranked alternative suppliers; keep track of pricing information for each vendor (including price breaks, inactive dates and future effective dates); input the supplier item number and description information and enter different lead days for each vendor. In addition, you can designate how often you wish to signal the receiving department to perform inspections on shipments from the different suppliers.
Once you’ve gotten the basics of the relationship with your supplier hashed out, then comes the juggling act – evaluating demand and determining the most economical/efficient way to generate your purchase orders for different materials. The Material Exceptions List tool is an excellent source of information for doing just that. It provides a list of all items that have a projected exception that can be filtered based on such criteria as dates, buyer codes and inventory classes. Then, for each item, the system suggests when you need to place a purchase order (PO) with your vendor in order to get the material in house in time to start production on time. The system takes into account the information for each inventory item regarding additional safety lead times, min/max order quantities, days’ worth of material to be included on a given PO release and “buying multiples of.”
Directly from the Material Exceptions screen, you can generate requisitions for either a single release or a blanket order for multiple releases. In order to manage open purchase orders, the Material Exceptions list tool provides a list of all past due POs, as well as makes suggestions regarding purchase orders that should ideally have their release dates or quantities modified to closer meet production demand for the parts. There is also a list of items that are below the minimum stocking level.
While dealing with materials used directly for manufacturing processes is the most visible type of purchasing, it is not the only type – there is also the need for acquiring expense-type items (maintenance supplies, equipment, hand tools, office supplies, etc.). Expense purchases bring in another element to consider when generating a requisition – budgets. Directly from the requisition, users can quickly and easily evaluate if a purchase will exceed its associated budget. Based on the period that the release date falls within, EnterpriseIQ will look up the period budget for the GL account associated to the item on the requisition and notify the user if the purchase will cause the account balance to go over budget. A user-defined setting designates a PO/budget percentage so that if the account balance will be within a certain percentage of the budget (but not over yet), the user will also receive a warning.
Check back for Part II of my blog series to learn more about following up with your vendors using the Vendor Performance Analysis report and the Vendor RMA (Return Material Authorization) module.
This guest blog post was written by Training Specialist, Breana Dixon.
