Materials and Suppliers – Strategic Procurement Richard Byrom Oracle Applications Consultant...
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Transcript of Materials and Suppliers – Strategic Procurement Richard Byrom Oracle Applications Consultant...
Materials and Suppliers – Strategic ProcurementMaterials and Suppliers – Strategic Procurement
Richard Byrom
Oracle Applications Consultant
Enterprise Resource Planning Seminar – 24th May 2002
Richard Byrom
Oracle Applications Consultant
Enterprise Resource Planning Seminar – 24th May 2002
ObjectiveObjective
To illustrate how
ERP systems add value
to the procurement
process
To illustrate how
ERP systems add value
to the procurement
process
Procurement ProcessProcurement Process
Requisitions
Purchase Orders
Receiving
Payment
SupplierPerformance
Catalog Content
Management
Supplier Management
OrderingSourcing
Analysis
Negotiations & Awards
Without ERP Systems in ProcurementWithout ERP Systems in Procurement
• Disparate and fragmented systems do not talk to each other
• Information is not appropriately shared between applications
• Too much paper!
• Risk of error is high
• Transactions costs are inevitably increased
• Disparate and fragmented systems do not talk to each other
• Information is not appropriately shared between applications
• Too much paper!
• Risk of error is high
• Transactions costs are inevitably increased
Procurement Process FailureProcurement Process Failure
Requisitions
Purchase Orders
Receiving
Payment
Ordering
Benefits of ERP systems in ProcurementBenefits of ERP systems in Procurement
• Create, edit and view purchasing documentation on-line in one application (no re-entry of document information i.e information flow is ensured across applications)
• Review the current status and action history of all purchasing documentation
• Route purchasing documentation according to approval hierarchies
• Enables accurate and automated accounting for all transactions
• On line approvals – less paper
• Reduced total transaction costs
• Create, edit and view purchasing documentation on-line in one application (no re-entry of document information i.e information flow is ensured across applications)
• Review the current status and action history of all purchasing documentation
• Route purchasing documentation according to approval hierarchies
• Enables accurate and automated accounting for all transactions
• On line approvals – less paper
• Reduced total transaction costs
Why Purchase Requisitions?Why Purchase Requisitions?
• Purchase requisitions allow you to decentralise your purchasing department by having requesters
• Purchase requisitions allow you to source your requisition with the best suppliers and at the lowest cost
• Purchase requisitions ensure that the appropriate management approval is given before purchase orders are created.
• Purchase requisitions allow you to decentralise your purchasing department by having requesters
• Purchase requisitions allow you to source your requisition with the best suppliers and at the lowest cost
• Purchase requisitions ensure that the appropriate management approval is given before purchase orders are created.
Where Purchase Requisitions FitWhere Purchase Requisitions Fit
Inventory WIP MRP
Demand
RequisitionRequisitionRequisitionRequisition
poolpool
Order entryOrder entry
Import/rescheduleImport/reschedulerequisitionsrequisitions
Approve SupplierSupplier
InternalInternalsales ordersales order
ManuallyManuallycreatecreate
ApprovalApproval
Order Mgmt
Business Needs Associated with Purchase Requisitions
Business Needs Associated with Purchase Requisitions
• Automate the procurement process
• Monitor and control spending amounts by approval authorizations
• Simplify the interaction with suppliers
• Free buyers from daily transactions to focus on negotiation management and supplier analysis
• Reduce administrative costs and inefficiencies
• Automate the procurement process
• Monitor and control spending amounts by approval authorizations
• Simplify the interaction with suppliers
• Free buyers from daily transactions to focus on negotiation management and supplier analysis
• Reduce administrative costs and inefficiencies
Who Acts on Purchase Requisitions?Who Acts on Purchase Requisitions?
• Employee
• Buyer or buyer-planner
• Approvers
• Suppliers
• Purchasing staff
• Employee
• Buyer or buyer-planner
• Approvers
• Suppliers
• Purchasing staff
Why Create Purchase Orders?Why Create Purchase Orders?
• Supplier is selected to satisfy demand for goods or services
• Summarize all demand for a given item or category
• Supplier terms and conditions established
• Contract with a supplier: external or internal
• Business need for goods or services is formalized
• Supplier is selected to satisfy demand for goods or services
• Summarize all demand for a given item or category
• Supplier terms and conditions established
• Contract with a supplier: external or internal
• Business need for goods or services is formalized
Where Purchase Orders Come FromWhere Purchase Orders Come From
OracleWIP
Othersystems
DemandDemand
Manually Manually
createdcreated
AutomaticallyAutomaticallyimportedimported
CreateCreatepurchase orderspurchase orders
Oracle Inventory
OracleMRP
RequesterRequesterRequisitionsRequisitions
OracleWIP
Othersystems
Oracle Inventory
OracleMRP
Oracle Order Mgmt
Procurement Solution enables you to:Procurement Solution enables you to:
• Create purchase orders easilyCreate purchase orders easily
• Create purchase orders from:Create purchase orders from:
– RequisitionsRequisitions
– QuotationsQuotations
– Other purchase ordersOther purchase orders
• Create one time and repeated purchase ordersCreate one time and repeated purchase orders
• Flexible approval and security controlsFlexible approval and security controls
Manually Create Purchase Orders Using Procurement Solution
Manually Create Purchase Orders Using Procurement Solution
Entering Purchase Order Matched Invoices : Overview
Entering Purchase Order Matched Invoices : Overview
Receive invoiceReceive invoice Enter invoiceEnter invoice
Approve invoiceApprove invoice
Match invoicesto PO or receipt
File invoice File invoice Account for Account for invoice invoice
View invoiceView invoice
Pay invoice Pay invoice
Why Enter Purchase Order Matched Invoices?
Why Enter Purchase Order Matched Invoices?
• Match Payables invoices to purchase orders to ensure that you pay only for the goods that you have ordered.
• Match to purchase order receipts to ensure that you pay only for goods that you have received.
• Payables automatically creates invoice distributions based on the purchase order distributions.
• Match Payables invoices to purchase orders to ensure that you pay only for the goods that you have ordered.
• Match to purchase order receipts to ensure that you pay only for goods that you have received.
• Payables automatically creates invoice distributions based on the purchase order distributions.
You Can Set Up Controls That Require You To Do The Following:
You Can Set Up Controls That Require You To Do The Following:
• Purchase order match each invoice
• Match the invoice to either a purchase order or receipt
• Match within amount or quantity tolerances
• Purchase order match each invoice
• Match the invoice to either a purchase order or receipt
• Match within amount or quantity tolerances
Accounting Entries should be created at each stage of the process
Accounting Entries should be created at each stage of the process
• Record items into inventory or expenses
• Appropriate valuation of stock should take place
• Physical and Monetary Variances between requisition and order should be recognised
• Physical and Monetary Variances between order and invoice should be recognised
• Account for invoice and payment into creditors
• Record items into inventory or expenses
• Appropriate valuation of stock should take place
• Physical and Monetary Variances between requisition and order should be recognised
• Physical and Monetary Variances between order and invoice should be recognised
• Account for invoice and payment into creditors