Sourcing begins with a decision to buy a good or service. Then, buyers focus on performing several critical tasks, including determining a supply source; negotiating price, quality, and delivery; drafting contracts; identifying opportunities for collaborative product design; and developing closer partnerships with suppliers. With these preliminary steps completed, buyers then can begin the actual process of purchasing.In Purchase Order Management and Performance Measurement, we will review purchase order management, or purchase order flow. This process spans activities beginning with the identification of a replenishment requirement and ending with purchase order receiving, put-away, purchase order close-out, accounts payable, and performance measurement and continuous improvement approaches using global sourcing and technology.Review the critical questions and learning objectives.
Critical Questions
- What are the five steps in the purchase order flow?
- What is the difference between a static and a dynamic database file?
- What are the four basic MRP action orders that can occur due to changes in supply and demand?
- Why would a company use a vendor-managed inventory (VMI) strategy?
- What are the five components of a supplier relationship management (SRM) system?
Learning Objectives
Upon completion, participants will be able to:
- List the five steps in the purchase order flow.
- List the two steps in the purchasing cycle that are not included in the purchase order flow.
- Compare static to dynamic database files.
- Calculate MRP using inventory data provided.
- Define vendor-managed inventory (VMI) process.
- List one step in the purchase order flow that is not included in the procure-to-pay cycle.
- List the five components of a SRM system.
Terms
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