28269960-Purchase-Orders

Copyright © Oracle Corporation, 2002. All rights reserved.

Purchase Orders

1-2 Copyright © Oracle Corporation, 2002. All rights reserved.

Procurement: Purchase OrdersRequisitions

Supplier identification

Sourcing

Ordering

Analysis

RFQs/ Quotations

Purchase orders

Receiving

Reporting

Invoice/ Payment

Supplier performance

Supplier management


Objectives

After completing this module, you should be able to do the following:

• Create standard, blanket, contract, and plannedpurchase documents

• Create purchasing document releases

• Understand purchasing document interfaces

• Maintain purchase orders

• Identify key reports

• Understand setup options

• Identify additional implementation considerations


Agenda

• Overview of purchase orders

• Create standard purchase orders

• Create blanket purchase agreementsand releases

• Create contract purchase agreements

• Create planned purchase orders

• Maintain/adjust purchase orders

• Purchasing Document Interfaces

• Identify key standard reports




Purchasing Document Flow

Requisition

RFQ

QuoteBlanket

POContractPO

Blanket PORelease

StandardPO


Demand

Import

RequestersRequisition

Approval

Inventory WIP MRP Order Mgmt

Other Systems

Requisitionpool

Order management

Internalsales order

Purchase order

Creating Purchase Orders


Purchase Order Types

Header

Line

Shipment

Distribution

Contract Agreement

HeaderHeader

Line

Header

Line

Shipment

Distribution

Blanket Agreement

Planned Purchase

Order

Standard Purchase

Order (PO)

Shipment

Distribution

Blanket Release

Header

Line

Shipment

Distribution

Standard PO

Scheduled Release


Purchase Order Components and Record Structure

Header

Lines

Shipments

Distributions

1 32

1 11

111

2

2 1


Purchase Order Documents ERD

PO_RELEASES_ALL

PO_LINE_LOCATIONS_ALL

PO_HEADERS_ALL

PO_LINES_ALL

PO_DISTRIBUTIONS_ALL


Overview of Automatic Purchase Order Creation

PORequisition pool

In addition to manual entry, documents can be automatically created using:

• AutoCreate

• PO Create Documents workflow

• Purchasing document open interface

• Copy documents

• Oracle Sourcing


Agenda












Overview of Standard Purchase Orders

Buyer Supplier

Purchase Order

- binding agreement -


Default Value Hierarchy

Financials options

Purchasing and Receiving options

Supplier

Supplier site

Item

Purchasing Documents

1

2

1 Takes precedence over 2


Simplify the Entry of Purchase Orders: Preferences

Purchasing Documents

Default Value Hierarchy

Preferences


Standard Purchase Order Elements

Standard purchase orderscontain all four elements ofa purchasing document.

All purchase order typesrepresent some combinationof the basic elements of thestandard purchase order.

HEADER

LINE

SHIPMENT

DISTRIBUTION

Standard Purchase Order


HEADER

LINE 1

SHIPMENT 1

DISTRIBUTION 1

LINE 2

SHIPMENT 1

DISTRIBUTION 1

Structure of a Simple Standard Purchase Order


Structure of a More Complex Standard Purchase Order

DISTRIBUTION 2

LINE 1

SHIPMENT 1

DISTRIBUTION 1

LINE 2

SHIPMENT 1

DISTRIBUTION 1

SHIPMENT 2

DISTRIBUTION 1

HEADER


Line

PO Number PO Type Created Date

Supplier Name Supplier Site Supplier Contact

Ship To Bill To Currency

Buyer Status Total

Description

Purchase Orders

Currency Terms

Entering Standard Purchase Order Header Information


Standard Purchase Orders Terms and Conditions

Special Conditions

• Confirming Order

• Firm

• Acceptance Required

Notes

• Supplier

• Receiver

Terms

• Payment

• Freight

• Carrier

• FOB

• Pay On


The line portion of the standard purchase order is comprised of four tabbed regions:

• Items

• Price Reference

• Reference Documents

• More

Entering Standard Purchase Order Lines Tabbed Regions


ItemsNum, Type, Item, Revision,Category, Description,UOM, Quantity, Price,Promised, Need-By, SupplierItem, ChargeAccount, Amount

Price Reference

Reference Documents

More

Temporary Labor

Standard Purchase Order Line Items Tabbed Region

HEADER

LINE

SHIPMENT

DISTRIBUTION



Standard Purchase Order Line Price Reference Tabbed Region

Items

Price ReferenceNum, List Price,Market Price, Price Type

Reference Documents

More

Temporary Labor

HEADER

LINE

SHIPMENT

DISTRIBUTION



Standard Purchase Order Line Reference Documents Tabbed Region

Items

Price Reference

Reference DocumentsNum, Contract, Quotation,Line, Quotation Type,Supplier Quotation

More

Temporary Labor

HEADER

LINE

SHIPMENT

DISTRIBUTION


HEADER

LINE

SHIPMENT

DISTRIBUTION



Standard Purchase Order Line More Tabbed Region

Items

Price Reference

Reference Documents

MoreNum, Note to Supplier,UN Number, Hazard,Capital Expense

Temporary Labor

HEADER

LINE

SHIPMENT

DISTRIBUTION



Standard Purchase Order Line Temporary Labor Tabbed Region

Items

Price Reference

Reference Documents

More

Temporary LaborName, Start & End date

HEADER

LINE

SHIPMENT

DISTRIBUTION



Entering Standard Purchase Order Shipments - Tabbed Regions

• The shipment portion of the standard purchase order is actually comprised of three tabbed regions:– Shipments– More– Status

• Must be at least one shipment for each line

• Can be many shipments for each line


Num

Org/Ship-To

UOM/Quantity

Need-By

Promised Date/ Original Promise

Charge Account

Amount

Standard Purchase Order Shipment Shipments Tabbed Region

Shipments More Status


Standard Purchase Order Shipment More Tabbed Region

Num

Receipt Close Tolerance (%)

Invoice Close Tolerance (%)

Invoice Matching

Accrue on Receipt

Firm



Num

Status

Ordered

Received

Canceled

Billed

Standard Purchase Order Shipment Status Tabbed Region



Standard Purchase Order Shipment Receiving Controls Button

Receiving Controls

HEADER

LINE

SHIPMENT

DISTRIBUTION



Entering Standard Purchase Order Distributions - Tabbed Regions

• The distribution portion of the standard purchase order is comprised of three tabbed regions:– Destination– More– Project

• Details required internally to generate accounting for the shipment.

• Must be at least one distribution for each shipment, but can be many distributions for each shipment.


Standard Purchase Order Distribution Destination Tabbed Region

Num

Type

Requestor

Deliver-To/ Subinventory

Quantity

Charge Account

Accrual/Variance Accounts

Destination More Project


Standard Purchase Order Distribution More Tabbed Region

Num

Requisition Number/Line

Online



Standard Purchase Order Distribution Project Tabbed Region

Num

Project

Task

Expenditure Type

Expenditure Org



Approve Standard Purchase Order

OK

Submit for Approval

Forward

Note

Approve Document

X

PrintFaxE-MailEDIXML

Fax NumberE-Mail Address


Agenda












When to Use a Blanket Purchase Agreement

Header

Lines

Shipment

Distribution

Blanket release

Blanket purchase agreement

Dates of delivery are not known

Details of goods/servicesare known

Accounts and dollars arenot known

Long-term agreement


Blanket Releases

Releases can be created:

• Manually

• Automatically

Demand generated

outside Purchasing

Requisition Create Releases Process

Blanket Release

Manual


Blanket Purchase Agreements Additional Information Entered

Additional information isentered for blanket purchaseagreements in the header, lineand price breaks purchaseorder elements windows.

HEADER

LINE

PRICE BREAKS



Blanket Purchase Agreements Additional Information - Header

Header Lines Price Breaks

Amount Agreed

Released

Global

Terms and Conditions


Blanket Purchase Agreements Additional Information - Lines

Items

Price Reference

Reference Documents

More

Agreement



Blanket Purchase Agreements Additional Information - Price Breaks

Quantity

Effective dates

Break Price

Discount (%)



Blanket Purchase Agreement

• Amount Agreed $5,000,000

• Effective Dates Jan 1 to Dec 31

Amount Not Released Amount Released Expiration

50% in the 1st six months

$2M in the 1st three months

Three months before expiration

Notification Controls


Approve Blanket Purchase Agreement

OK

Submit for Approval

Forward

Note

Approval is the last step in creating a Purchase Order.

Approve Document

X

PrintFaxE-MailEDIXML

Fax NumberE-Mail Address


Blanket Purchase Agreement and Blanket Releases

Blanket Purchase Agreement

Release #/$sCumulative Release $s

#101 $ 5,000 $ 5,000

#120 $12,000 $17,000

#208 $ 9,000 $26,000


Blanket Releases Structure - Header

Shipment 1

Release Header

Distribution 1 Distribution 2

Blanket # Release # Supplier/Site Buyer Status Total Acceptance Req’d


Blanket Releases Structure Shipments and Distributions

Tabbed Regions Destination

More Project

Tabbed RegionsShipments More

Status Item

Shipment 1

Release Header

Distribution 1 Distribution 2


Center-Led Procurement

Vision Services R+D(Requesting Org)

SourceRequest Buy Pay

Vision Operations(GA Owning Org)

Singapore Distribution Center(Purchasing Org)


Creating Global Blanket Agreements

Global agreements are an extension of blanket purchase agreements that allow pricing to extendoutside of the operating unit.

• Begin by creating a blanket purchase agreement

• Select the global checkbox

• Enter items, pricing, and terms

• Save the agreement

• Enable the agreement in all organizations that will use this supplier, supplier site, and item(s)


Agenda












When to Use a Contract Purchase Agreement

Contract Purchase Agreement:

• Terms and conditions are known

• Details of goods or services are not known

• Reference contract purchase agreements directly on standard purchase order lines

Contract purchaseagreement

Delivery 1Standard PO 1

Delivery 2Standard PO 2


Contract Purchase Agreements Additional Information Entered

Additional information is enteredfor contract purchase agreementsin the header element window.

Once the contract is approved,you issue standard purchaseorders referencing the contractthrough the Line windows/ReferenceDocuments tabbed region.

Contract Purchase Agreement

Header

Header

Line

Shipment

Distribution

Standard PO


Standard Purchase Order Line Reference Documents Tabbed Region

Items

Price Reference

Reference DocumentsNum, Contract, Quotation,Line, Quotation Type,Supplier Quotation

More

HEADER

LINE

SHIPMENT

DISTRIBUTION



Creating Global Contract Agreements

Global agreements are an extension of contract purchase agreements that allow pricing to extendoutside of the operating unit.

• Begin by creating a contract purchase agreement

• Select the global checkbox

• Enter terms

• Save the agreement

• Enable the agreement in all organizations that will use this supplier, supplier site, and item(s)


Agenda












When to Use a Planned Purchase Order

• Dates of delivery are tentatively scheduled.

• Goods to be purchased must be specified.

• Actual purchases occur when a scheduled release is issued.

Delivery 1Release 1

Delivery 2Release 2

Tentative: June 1

Tentative: July 1Planned purchase

order


Components of a Planned Purchase Order

Header

Lines

Shipment

Distribution

Scheduled release

Planned purchase order

Scheduled dates of delivery

Details of goods/servicesare known

Long-term agreement


Planned Purchase Order Information Entered

Additional information isentered for planned purchase orders in the shipment window.

HEADER

LINE

SHIPMENTS

Planned purchase order


Agenda











• Use the Purchase Order Summary window– Optionally create a custom user layout of form

• Use the Tools menu to view associated– Requisitions– Receipts– Invoices– Action History

• Use the Purchase Order window– Find functionality– Query functionality

Purchase Order Inquiry


Modifying Purchase Orders

You can access and modify your purchase orders

• Reapproval Rules

• Revision numbering of purchase orders– PO #1245– PO #1245-1 1st revision– PO #1245-2 2nd revision


Printing Purchase Orders

• Only approved purchase orders can be printed

• From the Submit for Approval window:– Default communication method checked according

to supplier definition

• Select the Printed Purchase Order report from the Reports menu

Printed purchase order


Creating Purchase Order Revisions

Two Archiving options

At the time of approval

At the time of printing


Archiving Purchase Orders

Step 1: Create/save PO

Step 2: Approve PO

Step 3: Change quantity

Step 4: Reapprove PO

Step 5: Print PO

Step 6: Add an item

Step 7: Reapprove PO

Step 8: Print PO

None

0

0

1

1

1

2

2

0

0

1

1

1

2

2

2

ActionArchiveRevision

CurrentRevision

ArchiveRevision

CurrentRevision

Approval Printing

None

0

0

0

0

0

1

1

0

0

0

0

0

1

1

1


Purchase Order Statuses - Typical Cycle

No

Submit for Approval

In Process

Approve?

Approved

Changes Made

Rejected

Incomplete

Canceled

Closed

Requires Reapproval

Finally Closed

On Hold

Frozen

Pre-Approved

Approve?Yes

No

Yes

Open


Entering Purchase Order Acceptances

• Action

• Action Date

• Accepted By

• Accepted

• Acceptance Type


Workflow Notifications

REQ#583 Joe Holt Rejected

REQ#577 Sue Smith

Requires Reapproval

PO#325 Kevin Jones Incomplete

Electronic notification

PO#325 requires your attention. Its status is Incomplete. Kevin

Joe

Sue


REQ#577 requires your reapproval.


REQ#583 has been rejected.


FROM TOStandard purchase order Standard purchase order

Blanket purchase agreement Blanket purchase agreement (standard or global)

or RFQPlanned purchase order Planned purchase order

Bid quotation(Bid quotation class)

Standard or planned purchase order

Self-defined bid quotation (Bid quotation class)

Standard or plannedpurchase order

Catalog or standard quotation (Catalog quotation class)


Self-defined catalog orstandard quotation

(Catalog quotation class)


Global agreement Global agreement

Copying Purchase Orders


Agenda












Purchase Document Interfaces

You may need to import purchasing documents from sources outside of Oracle Purchasing:

• Purchasing Document Open Interface

You may need to update existing purchasing documents from one of your custom created programs:

• Purchasing APIs


Purchasing Documents Open Interface

Blanket purchase agreement lines

Openinterface

Workflow

Catalog quotations

StandardPO

X12 832, 843

Documents Items Sourcing rules

Load1

Process2


Purchase Document Import Validation

The import process derives some details if they are not already provided.

Options Item master Supplier

Document detail


Purchasing Open Interface Tables

Interface Data Flow Table, Table, View, or Module nameName Direction View, or

Process

Requisitions Inbound Table PO_REQUISITIONS_INTERFACE_ALL

PO_REQ_DIST_INTERFACE_ALL

Purchasing Inbound Table PO_HEADERS_INTERFACEDocuments PO_LINES_INTERFACE

Receiving Inbound Table RCV_HEADERS_INTERFACE RCV_TRANSACTIONS_INTERFACE


Purchasing APIs

Application program interface (API) is a software transaction connector for a specific function within Oracle Purchasing:

• Purchasing Order Change API

• Cancel Purchase Order API

• Custom Pricing API


Agenda












Purchase Order Reports

• Blanket and Planned PO Status Report

• Canceled Purchase Orders Report

• Contract Status Report

• Open Purchase Orders Report (by Buyer)

• Open Purchase Orders Report (by Cost Center)

• Printed Change Orders Report (Landscape)



• Printed Change Orders Report (Portrait)

• Printed Purchase Order Report (Landscape)

• Printed Purchase Order Report (Portrait)

• Purchase Agreement Audit Report

• Purchase Order Commitment by Period Report

• Purchase Order Detail Report



• Purchase Order Distribution Detail Report

• Purchase Order and Releases Detail Report

• Purchase Summary Report by Category

• Purchasing Activity Register


Agenda












Important Purchasing Options

Price Tolerance

Enforce Price Tolerance

Amount Tolerance %

Cancel Requisitions

Enforce Buyer Name

PO Output

Minimum Release Amount

Price Break Type

PO Number

- Entry

- Type

- Next Number

Control Default Numbering


Important Profile Options

PO: Archive Catalogon Approval

PO: Price Tolerance (%) for Catalog Updates

Current Price Adjusted Price % IncreaseApproved with 3% Price Tol

$ 2.00/each $ 2.05/each 2.5% Yes

$10.00/each $14.00/each 4% No

PO: Change Supplier Site

Original Changes

Blanket #901? OR Blanket #901/Rev #1?

Site A Site B


PO Communication Profile Options

• PO: Secondary E-mail Address

• PO: In File Path

• PO: Terms and Conditions File Name


Other Setups

• Buyers

Buyers

Jane

Mike

Bill

Buyer Name

Buyer List

Purchase Order

• Hazard Classes

• UN Numbers


Transaction Delivery Setup

There are several options available for delivery of Oracle Purchasing documents to the supplier.

• Print and deliver

• Fax (Facsimile)

• E-Mail (Electronic Mail)

• EDI (Electronic Data Interchange)

• XML (eXtensible Markup Language)


Printed Purchase Orders

Standard text based or fully formatted PDF files:

• Standard text can be customized to print on pre-printed forms using Oracle Reports

• PDF output:– Configure format templates by organization or

document type– Include watermarks or logos– Approval preview– Communicate using email or mail– View revisions in PDF


Purchasing Document Fax Setup Overview

Oracle ERP applications

server

Fax server Supplier

FCL Fax


Purchasing Document E-Mail Setup Overview

Supplier receives purchase

order

Internet

PO Create Documents

and Workflow

mailer


Purchase Order EDI Transactions

Outbound:

• Purchase Order (850/ORDERS)

• Purchase Order Change (860/ORDCHG)

Inbound:

• Price/Sales Catalogue (832/PRICAT)

• Response to Request for Quotation (843/QUOTES)


Oracle e-Commerce Gateway Overview

Supplier’s EDI translator

Value Added Network (VAN)

Buyer’s EDI translator

Oracle Applications

Buyer Supplier’s application

server

Supplier


Purchase Order XML Transactions

Purchase orders can be sent to a supplier using thefollowing XML transactions:

• Purchase Order (PROCESS_PO_007)

• Release against Blanket PO (PROCESS_PO_007)

• Purchase Order Change (CHANGE_PO_006)


Oracle XML Gateway Overview

Supplier receives purchase

order

Buyer sends

purchase order

Oracle XML

Gateway

Oracle Transport

Agent

XML Parser

Transport Layer

XML document sent through Internet hub (like Oracle Exchange) or direct through secure Internet connection


Retroactive Price Changes

How to setup:

• Profile Option PO: Allow Retroactive Pricing of POs

• Set Archive on Approve for document

How to use:

• Update pricing information on agreement

• Choose Retroactive Pricing options before submitting the document for approval

• Optionally run Retroactive Price Update of Purchasing Documents process


Agenda












Responsibility for Purchase Order Entry and Maintenance

• Assign responsibility for purchase order entryand maintenance

• Number of staff required when operational

• Consider good internal control and segregationof duties

4 BuyersCreate PO’s

Update status

2 Jr. Buyers Supplier Inquiry

Research past due shipments

1 Clerk Updates

POcontacts


Purchase Order Integration Issues

• Who is affected by purchase orders?

• Document decisions with sign-off byAuthorized Approver

Purchasing Inventory Mfg Planning Receiving

Payables Assets Accounting


Creating Purchase Orders and Releases

REQ#963

REQ#981

REQ #978

8 doz pens 1 chair

3 doz pens 2 bxs clips 1 waste can

1 copier - trade-in

Purchase Order #1219

Release #1201

11 doz pens 1 chair 2 bxs clips 1 waste can

1 copier - trade-in


Purchase Order Numbering Options

• Two choices– Automatic (numbers only)– Manual (alphanumeric or numeric)

• Switch from manual to automatic– Ensure that Next Automatic Number is larger than

the largest number assigned

Automatic 2114 2115

2116

2117

Manual A-103 B4326

A-103-2

99


Purchase Order Conversion Methodology

• Purchasing Documents Open Interface

• Which purchase orders to convert

• Method to convert

• Data cleanup required prior to conversion

• Conversion reconciliation method andreports needed

AutomatedClosed Open

Open

Manual Entry

IBM

Tile Co

Interface


Electronic Transaction Delivery

Considerations for electronic delivery of Oracle Purchasing documents to the supplier.

• Fax (Facsimile)

• E-Mail (Electronic Mail)

• EDI (Electronic Data Interchange)

• XML (eXtensible Markup Language)


Integrated Oracle Products

Consider the possible implications of using other Oracle self service products to enhance the purchase order business process:

• Oracle iProcurement– Automate common purchases– Self service ordering and receiving

• Oracle iSupplier Portal– Supplier self service acknowledgements– Supplier self service quotations

• Oracle Sourcing– Supplier driven auctions


Summary

You should now be able to do the following:

• Create standard, blanket and contractpurchase documents

• Create blanket purchase agreement releases

• Maintain purchase orders



• Understand additional implementation considerations