The procurement process generates a purchase order and handles the sending and confirmation of the order. It also handles delivery surveillance and sends out reminders when needed. The process can be performed in three different ways:
This procurement process will handle the option wherein the purchase orders are generated from supplier schedules in the form of plans and/or call-offs. Plans and call-offs are entered or generated by MRP and Kanban in the supplier schedules module, where they are tolerance checked, i.e., checked against each other, and approved before the needed parts are moved to a purchase order. They then follow the regular order flow until they arrive and are placed into stock.
The Procurement process includes a supporting process, which handles supplier agreements. There are two ways in which this process can be performed:
You can use supplier agreements when you and your supplier have agreed on terms for a purchase part or for a supplier assortment. There are two different kinds of supplier agreements: blanket purchase orders and purchase agreements. The difference between them is in the way in which they are used. A blanket purchase order is only used for supplier agreement releases. A purchase agreement serves in the background as a basis for the price on all applicable purchase order lines, i.e., all manually and automatically generated purchase orders. The only exceptions for the purchase agreement are Supplier agreement releases (which use blanket purchase orders) and purchase orders created from an order quotation (the terms agreed in the order quotation will be used for the purchase order line).
You can use the quotation functionality to convert the accepted quotation into a supplier agreement. The quotation to be converted into a supplier agreement can begin either as an externally generated need (from IFS/Project or IFS/Project Delivery), or can be entered manually as a request for the supplier agreement quotation.
You start by entering a header and the parts (or supplier assortments) to be included. After this, enter the suppliers to whom you want to send the requests, then print the requests. If the request was generated from IFS/Project or IFS/Project Delivery, the system will include the header and the part lines. All you will have to do in this case is to choose the suppliers and print the requests.
Once you have received the quotations from the suppliers, enter their terms and compare the data in order to find the most favorable quotation. When you have compared the quotations and decided which one to accept, you can create a new purchase agreement, or add on to an existing supplier agreement. Furthermore, you can print rejection letters to the suppliers whose quotations you have chosen to reject.
The Enter Supplier Agreement flow consists of two different activity diagrams: one for purchase agreements and one for blanket purchase orders. You can enter the supplier agreement manually in both these activity diagrams.
When you enter a supplier agreement manually, you begin by creating a supplier agreement header in which the supplier and some miscellaneous information is entered. Before saving the supplier agreement for the first time, determine whether it is a purchase agreement or a blanket purchase order. When you have entered the general information, continue adding periods, sites and parts. You can include supplier assortments in purchase agreements. You can use supplier assortments instead of parts if you receive the same discount and additional costs for several parts. You can also include no-number parts, i.e., parts that are not entered in the part record. The supplier agreement must be in a status that allows purchasing (most often status Active), before it can be used.
The plan or call-off is generated from the MRP module. It can also be entered manually; you start by entering a schedule header, wherein you state supplier, the needed part and the validity period. Then you continue to the schedule line where you indicate the wanted delivery dates and quantity. As soon as the schedule is activated, it is ready to follow the schedule flow. The first step is to check whether the ordered quantities are within the agreed tolerances. Once the schedule has passed the tolerance check, it should be approved, which leads to the final step where you convert the schedule lines into purchase order lines. You can also print the supplier schedule or send it via EDI.
Regardless of whether the purchase order is manually created or generated from a requisition or a supplier schedule, it will be released by the purchaser or someone at the purchase department. The next step depends on the company’s routines. You can print and send the order form to the supplier to await his order confirmation before the products are delivered, or you can simply await the delivery of the order after the supplier has released it. In case of a delayed order confirmation, you can send a reminder to the supplier.