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Purchasing with Exact for Wholesale Distribution and Manufacturing

Written by Pieter Hamans on . Posted in Exact Online

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The most obvious manner to create a purchase order is manually: open the purchase order screen, choose a supplier and enter items and quantities. This process can be handled much smarter though in Exact Online. Three methods to automate purchasing are available: opportunistic, using a reorder point and with MRP.

Opportunistic purchasing

For items that we need to fulfill a demand and that we do not want to keep in stock we purchase opportunistic: With each demand (a sales order from a customer or a manufacturing shop order) we create a linked replenishment order. For merchandise we call this a Back to back order, for a shop order material Purchasing on the shop order.

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The advantage of opportunistic purchasing is that we do not have to keep stock, which saves us working capital. The disadvantages of opportunistic purchasing are that we do not profit from supplier price breaks and that we never have stock to fulfill unexpected demand. Opportunistic purchasing is supported in all editions of Exact for Wholesale Distribution and Exact for Manufacturing.

 

Using reorder points

When we have regular demand for the same item than it may be advantageous to keep stock. Not only will we be able to fulfill immediately, but we will also enjoy the better price breaks of our suppliers or produce an optimal batch size in manufacturing. Once the projected stock sinks below the reorder point we create a purchase order or a shop order so that we are always maintain our service levels.

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The advantages of purchasing or manufacturing with reorder points is that we can quickly fulfill a demand (sales order, shop order), and that we are benefiting from an optimal purchase price. The disadvantage of purchasing with reorder points is that the projected stock is based on demand that is near and far: There may be good reasons to defer some of the replenishment orders to a later date. However, only one replenishment order is adviced. Purchasing with reorder points is supported in all editions of Exact for Wholesale Distribution and Exact for Manufacturing.

 

Working with MRP

When we have regular demand for the same item and we want to avoid unnecessary stock at the same time then Material Requirements Planning (or MRP) is the answer. That makes it possible that we can serve demand, that we profit from supplier price breaks or economic batch quantities in manufacturing, and that we are advised weekly or monthly replenishment orders.

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The advantages of replenishing with MRP are that we can serve demand in time (sales orders, shop orders), that we are profiting from optimal prices, and that we limit our inventories. Purchasing or manufacturing with MRP is only supported in the Premium editions of Exact for Wholesale Distribution and Manufacturing. Read also Exact for Manufacturing Innovation: Material Requirements Planning for Shop Orders.

 

More information with pieter.hamans@exact.com

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