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Purchase Order Flow Follow Up – Status Reporting

The third step in the purchase order flow process is the generation of purchase order (PO) status and performance reporting. PO reporting provides two critical functions. On an operations level, it enables purchasing to determine PO statuses and costs. On a strategic level, PO reporting enables purchasing to quantify its impact on overall business competitiveness and conformance to corporate budgets.

Several reports enable purchasing to perform these objectives.

PO Status Reports

These reports show the statuses of all open requisitions and POs. Examples are POs by supplier and due date or PO status by product or order number. Regardless of the sort criteria, these reports show critical information such as PO number, scheduled due date, items and quantities ordered, current receiving information, and balance open.

PO Priority Reports

Priority reports are used by purchase planners as a follow-up tool. These reports provide a window into POs not synchronized with demand quantities and due dates. These reports serve the function of a shortage list that can assist planners to ensure replenishment orders are received on time, without incurring costly expediting or possible material shortages. These reports also assist purchasing planners in maintaining the schedule of PO priorities.

Strategic Performance Reporting

There are two main areas of strategic PO reporting:

  • Monthly or bi-monthly reporting provides an account of purchasing's impact on enterprise operations controls and future planning activities. The report contents should consist of a summary of the general business climate, a list of price changes for major products, analysis of current lead times for major materials and suppliers, and a list of material shortages and purchasing's strategy to handle each shortage.
  • Another important report should provide a monthly or quarterly summary of the state of the purchasing function and efforts to increase the company's profitability and competitive advantage. This report should include a summary of quality, reliability, supplier, and cost improvements; operational statistics such as operating cost, dollar commitments against budget, and number of purchase orders issued; a brief description of departmental efforts at continuous quality improvements and elimination of wastes; and a statement of future procurement projects and administrative activities.
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