Purchasing Roles and Procedures
There are a couple of decisions you need to make when defining your PO Builder procedures.
Job specific PO versus POs that include multiple jobs
Decide what’s the best way to organize your materials tree. As explained earlier in the chapter, you have 4 ways of sequencing and organizing the materials tree. Each approach has its own advantages relative to how you want to analyze materials needs and automate purchase order generation. Definitely spend some time experimenting with different sequencing options and choose the one that works best for your company.
A key decision is whether you want to include several jobs on a single purchase order, or only buy for one job at a time. Since ShopPAK automatically keeps track of job allocations under a given PO line item, we recommend putting as much on a purchase order as you can. This reduces the number of POs you create for a given vendor, and thus, reduces your administrative purchasing costs and positions you to take advantage of vendor price breaks on freight and materials.
Purchasing Agent’s Role Versus Engineering
PO Builder provides a nice buffer between the process of creating the Bill of Materials….and the process of actually generating PO’s based on the final Bill of Materials. Since PO Builder only shows materials that are flagged as ‘ready for PO Builder’, the purchasing agent only sees materials that have been marked as ‘Ready’ for purchase. For most of our customers, the person responsible for placing a check in a material’s ‘PO Builder Flag’ is either an engineer, project manager, or ‘materials detailer’. These are the resources most familiar with what materials are required to fabricate products and are in the best position to determine when materials should be ordered in order to make project release and ship dates.
The decision you have to make is whether the person that flags materials as ready for PO Builder is only concerned with making sure materials are accurate, or if they also determine WHEN the materials should be sent to PO Builder for purchasing. If they are only concerned with making sure the material and quantity are correct, they check the material’s ‘PO Builder Flag’ immediately after verifying the material. They must supply ‘Material Due Date’ so purchasing knows when to order the material. (Purchasing uses this date to determine when they need to order the material so it arrives by its material due date). On the other hand, if engineering only sends materials to purchasing when they need to be ordered, they place a check in a material’s ‘PO Builder Flag’ when it is time to order the material. Because of the sheer volume of materials that need to be purchased, most customers keep things as simple as possible for the purchasing agent and have them purchase/reserve everything they see in the materials tree. In other words, engineering only flags a material as being ready for PO Builder when they want the material purchased.