Carrying on in our process series where we take a look at the key steps in the purchasing process we’ll now take a look at the suppliers side – that of Purchase Order Fulfillment.
Once the purchase order has been created and issued to the supplier – the supplier’s role – that of fulfilling order by providing the product and services, begins. From the supplier’s perspective this is very much administered as a sales order, after all they are selling their products to the company buying the products. This step in the purchasing process can broadly be segmented into four steps
1/ Order receipt and acknowledgement
The purchase order is received and usually processed into the company ERP/MRP system – the order will often need to be verified against an earlier quotation that’s has been previously issued to the buying company – common checks will include whether the price and lead time are still available.
Once the order has been verified then an order acknowledgement is typically sent back to the buying organization – this confirms that the order has been received and accepted – usually the delivery date is confirmed and any specific terms and conditions stated.
2/ Production of the goods and materials
After the order has been loaded the supplier will endeavor to fulfill the request – this will usually be achieved through one (or a combination) of the following methods
– Issue the parts from stock
– Manufacture the parts
– Procure the parts from another supplier or manufacturer
3/ Dispatch the goods
Once the required goods are available then they will be packed and dispatched. Accompanying the goods will be a dispatch/shipping note, which will indicate what is being sent, coupled with information pertaining to the order for example the order number or reference.
4/ Issue the invoice
Often at the same time that the goods have been sent the supplier will send an invoice, which is the effective “bill”, or “charge” for the goods. This may either accompany the goods or be sent separately.