Purchase Order and Receiving

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The procurement function is critical to ensure the necessary materials, supplies, and services are available when required. Maintaining strong vendor relationships, negotiating for favorable pricing and analyzing vendor performance can make the procurement function a profit center in your business. By implementing Macola ES’s Purchase Order & Receiving module (P/O), you get an efficient, time-saving tool for automating your procurement functions.

Important advantages of Purchase Order & Receiving are:

• Approved vendor control
• Inspecting incoming material for quality
• Comprehensive Landed Costs System
• Vendor performance analysis
• Assign Serial/Lot numbers for incoming material
• Total integration with Macola Bar Code
• Buyer approval-driven requisition system
• Dynamic and flexible purchasing unit of measures
• Blanket order processing for efficient recurring purchasing

P/O enables you to analyze the quality, accuracy and timely delivery of all purchased materials. P/O’s capabilities make it a must within both the manufacturing and distribution environments. It monitors vendor performance and allows you to keep inventory levels low while alerting you to material shortages. And when you combine P/O with Macola ES’s Accounts Payable (A/P), Inventory Management (I/M) packages, Material Requirements Planning (MRP) and Shop Floor Control (SFC) packages you have a comprehensive system that optimizes timely purchases with the dynamics of inventory control.

P/O immediately updates the quantity on hand and quantity on order amounts in the Inventory Management module for each receipt entered. The receipt date and quantity are entered, along with any rejected quantity and a reason for rejection. Job numbers may also be entered, if applicable, along with serial/lot and bin numbers for the purchased item.

Approved vendor control
Today, purchasing can be one of your company’s most important operations. You need control at a detailed level. Macola ES’s Item Vendor management gives you ultimate control by allowing you to maintain many key parameters by item. Information in each Item Vendor record includes:

• Manufacturing - which manufacturer the part should or should not be purchased from and the specific manufacturer part number
• Contract - contract pricing with effectivity dating and quantity breaks
• Performance Tracking - cost variance percentage, the number of line items that had a cost variance, reject percentage, the average number of line items on invoices that arrived late for the vendor item number, the average number of days required to receive a shipment from the vendor and the average number of days that a shipment arrived late
• Receiving Tolerances - to ensure that each vendor complies with delivery requirements you have specified

Inspecting for quality
When material arrives at your dock, not all of it may be in acceptable condition. This may not be immediately apparent and the possibility exists that you won’t know this until you perform an inspection of the newly received goods.

Macola ES has processes to handle these situations. The Receiving Inspection application allows you to enter receipts as you normally would, thus recording the receipt date necessary for updating receipt and vendor delivery performance data. The goods are then quarantined until they pass through a multi-step inspection and disposition process.

Landed costs system
This function supports companies dealing with international vendors and others who require comprehensive inventory costing along with all landed costs. The Landed Cost capability enables you to calculate all costs normally associated with purchasing and receiving and any additional costs of the product, such as freight, import duties, customs, and brokerage fees to be included in an item’s valuation (cost).

Analyzing vendor performance
The Vendor Performance Analysis Report in Macola ES's P/O module provides a very clear idea of the vendor’s ability to deliver quality products on time and within budget.

Vendor performance statistics include purchase items that were late this year and last year, the percentage of cost variance between expected and billed prices and percentage of delivered items rejected. Finally, the report presents the average lead time and the average days late for each vendor.

Purchasing outside services for manufacturing
Increasingly, manufacturers are outsourcing aspects of their operations to gain economies of scale. For manufacturers, an example involves the ability to send material to an outside service vendor (etching a circuit, heat treatment, painting, etc), which adds value to the material. The vendor then completes the service and the processed/completed material is received into manufacturing. Macola ES Purchasing allows you to initiate this process by linking to a shop floor manufacturing order and then receiving the processed/completed material into a work-in-process, at the same time accounting for the value-added service costs.

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