Checking the purchasing need is to verify that the stock, date and current purchase records accurately represent the same need before converting the quantity appearing on the MRP screen directly into an order. Just because there is material in the warehouse does not mean that it is usable. Having an open order does not mean that the material will be ready for production on time.
Examine the Proposal along with the Need It Will Meet
Verify requirement record and date. Check available stock, open order balance arriving on time, and current demands. Re-evaluate the plan if the amount or date changes; then convert the approved record into a purchase order. Do not finalize the production date based solely on the fact that an order has been opened before receiving supplier confirmation.
Are MRP Proposal, Purchase Requisition and Order the Same Thing?
MRP recommendation
It is the purchase or date change proposal produced by the plan and defined parameters. It is a plan output that needs to be examined.
purchase requisition
It is the record in which the purchasing need, responsible person and approval are monitored within the business. It is not a supplier delivery confirmation on its own.
purchase order
It is a document in which the quantity, price, delivery location and date to be communicated to the supplier are defined. Confirmation and realization are also monitored.
The meaning of these names and their approval order may vary depending on the system used. The important recommendation is to maintain the link between domestic demand and supplier orders. To learn how MRP finds net material requirement MRP guide review; here we address post-calculation purchasing control.
How to Control Purchase Need in Seven Steps?
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01
Find out what need the recommendation meets
Responsible: Planner
Review the material code, variant, unit of measurement, production or customer order and requirement date together. If the recommendation comes from an old production plan, update the plan before starting the import.
Expected output: Requirement record and current plan version are clear.
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02
Verify available stock
Responsible: Warehouse and quality officer
Separate from the physical quantity the quantity that is devoted to other work, awaiting quality, or whose use is blocked. Check the transfer and availability date for material in another warehouse.
Expected output: The amount and date that can be allocated to this need are clear.
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03
Check remaining quantity and date of open order
Responsible: Purchasing officer
Review the unfulfilled balance of the order, not its initial quantity. Determine when the material will be available for use after supplier confirmation, transportation, and incoming quality time.
Expected output: On-time supply and late supply are separate.
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04
Avoid duplication with existing demand
Responsible: Planner and purchasing officer
Check if there is a previous request or order for the same material, requirement, warehouse and date. Track the request in conjunction with the order; Do not consider the demand and the resulting order as two separate supplies.
Expected output: It is clear which record the new purchase will proceed through.
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05
Consider minimum purchase and package quantity
Responsible: Purchasing officer
Compare the missing quantity to the supplier's minimum order and packing multiple. Examine subsequent need, shelf life, storage and budget impact for excess purchases.
Expected output: The difference between the required quantity and the recommended order quantity explained.
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06
Save the change and check the plan again
Responsible: Planner and authorized approver
Re-evaluate the plan when an order that is brought forward, a change in stock status or a revised need is processed into the system. Have the quantity, date and additional stock decision approved according to the authority limits of the business.
Expected output: There is an updated recommendation and reasoned approval record.
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07
Open the order and get supplier confirmation
Responsible: Purchasing officer
Create the order with confirmed quantity, unit, price conditions, delivery location and date. Record the supplier's confirmation; Share subsequent changes with the production plan.
Expected output: Demand, order, and requirement records are linked.
Example: There is an open order, but it is late for production
A manufacturer needs 1,000 kg of materials for use on October 26. The quantities below are sample records prepared to illustrate the method. There is no need for further consumption, safety stock or transfer; All quantities are assumed to be of the same material and unit. It has not yet been confirmed that the quality pending quantity will be released by this date.
Same material, quality standard and quantity required for warehouse.
150 kg reserved for other work, 150 kg awaiting quality; available quantity 300 kg.
Current delivery confirmation is 29 October. In its current state, it does not meet the need for October 26.
It was opened for the same need; A request that has not yet been converted into an order.
Only 300 kg of the 600 kg in the warehouse can be used for this job. The 400 kg that will arrive on October 29 is three days late. In these conditions, MRP for October 26 700 kg additional supply may suggest. However, before turning this suggestion into a new 700 kg order, the purchasing team asks whether the existing 400 kg order can be brought forward.
Intake recommendation for 700 kg
Late order does not cover the gap on 26 October. Looking only at total inventory and order quantity may give the impression that the need is met
The remaining need is 300 kg
Supplier confirms 22 October delivery for 400 kg; The quality team states that they can complete the control on October 23. The plan is updated with these new dates.
300 kg of free stock and 400 kg of open order covers 700 kg of the requirement, provided that the back order is available on time. There is already a demand for the remaining 300 kg. The purchasing team matches this request with the same need; Also, it does not create a second 300 kg request. If delivery or quality acceptance does not occur, the plan must be re-evaluated.
What to do if the minimum order is 500 kg?
Let the remaining need be 300 kg and the minimum purchase of the selected supplier is 500 kg. The 200 kg in between is not automatically considered as required stock. Purchasing may consider an alternative supplier with a lower minimum quantity or a suitable transfer. If 500 kg is to be purchased, the subsequent use of the excess amount and its budget impact must be approved.
Approved decision in the example
The planner confirms the need for an additional 200 kg for the following week. The authorized person evaluates this need and purchasing conditions and approves the 500 kg order. The current 300 kg demand is revised to 500 kg with justification and new need connection; The target of 22 October delivery and 23 October availability is written into the order.
300 kg existing available stock + 400 kg back order + 500 kg new order = 1,200 kg. Of this, 1,000 kg is allocated to 26 October production and 200 kg to the next confirmed need. A total of 300 kg reserved and awaiting quality are not included in this calculation.
If the need for the next 200 kg cannot be verified, do not copy the 500 kg decision in this scenario. Re-evaluate supply and production options rather than accepting minimum quantity. To see how reliable the delivery actually is supplier performance guide you can use
Final Check Before Converting to Order
Need connection
Is it clear for which production or customer order the purchase was made?
Quantity and unit
Are the code, quality, variant and kg/piece/package conversion correct?
stock status
Have the reserved and quality pending quantities been separated from the available stock?
Open orders
Are the remaining quantity, confirmed delivery and availability date up to date?
duplicate registration
Has a connection been established with a request or order opened for the same need?
Authorized approval
Has the justification for excess quantity, date change and budget variance been approved?
Purchase control does not end when the order is opened. Re-track requirement date, partial deliveries and quality acceptance when supplier confirmation changes. In order not to make the purchasing decision based on price alone in the purchasing management guide Also examine the topics of delivery, quality and supplier evaluation.
Frequently Asked Questions
Can the MRP proposal be converted directly into an order?
The system can provide automatic conversion; However, stock, date, supplier and authorization conditions must be established correctly. Suggestions that require review should not be converted into a definitive order before control and approval are completed.
Is material awaiting quality inspection considered available inventory?
If its availability and release time have not yet been verified, it will not be considered available. When the acceptance decision is entered into the system, it should be checked how the plan evaluates the relevant amount.
Why is a new purchase recommended when there is an open order?
Remaining quantity is insufficient, delivery date is late, warehouse or variant may be different. First compare the need on which the proposal depends and the conditions of the current order.
Is the current purchase requisition deducted from the missing quantity?
Demand alone is not delivery. If the system used can cover the request in the plan, check the connection and its status; Do not count the same requisition and resulting order as supply twice.
Control Between Plan Output and Final Order
Microsoft's planned order management, demand and supply links and stock status The documents explain the distinction between plans, orders and available stock. This article presents a control flow to adapt to the business; Screen names and automatic processes may vary depending on the ERP installation used.
To compare the planning step before purchasing control in the MRP guide You can also review the bill of materials, stock and requirement date link.
Track requirement, approval and supplier order together
Scope of order, approval, shipment and invoice records On page KG Tedarik examine; Compare it to your business's control points.