Manage vendors and purchase orders effectively


Manage vendors and purchase orders effectively

         Any manufacturing company typically works with a good number of suppliers/vendors to procure materials and equipment required for the manufacturing process. The procurement process involves placing frequent orders, called purchase orders, with suppliers. These purchase orders are commercial documents generated by the buyer as a final offer to purchase products of certain quantities at mutually agreeable prices from the seller. As some of these orders often double up for supplier contracts, they sometimes contain additional details such as expected delivery times, mode of delivery & freight insurance details.

          Generation of purchase orders have been automated to various levels by businesses. Small businesses in the western world as well as businesses in developing countries typically generate purchase orders manually based on a manual verification of parts/raw material inventory levels. Large & medium businesses as well as businesses planning aggressive scale-ups typically automate the purchase order process. Such businesses configure there ERP systems to generate purchase orders from the Bill-of-Materials (BOM) which are then usually either delivered to suppliers over email/snail mail or are available to them on vendor portals. These POs are also used later on to reconcile with invoices at the time of delivery to ensure that all goods have been delivered as expected.

         Fully-connected and automated systems such as Channelier can onboard suppliers with appropriate authentication, integrate  with existing ERP systems to pull PO data, circulate them to suppliers over multiple channels and finally reconcile them with delivery invoices to ensure a smooth procurement process. Operational data collected automatically during the procurement process such as lead times and fill rates can be analyzed with the Channelier data engine to optimize procurement as well as inventory levels. When integrated with manufacturing processes, it can be used to make an extremely responsive JIT (Just-in-time) inventory system.

Updated On Nov 27, 2020