In the retail manufacturing industry, we see innovations cropping up everyday but very few of these are actually able to make their mark and change existing processes. Purchase Orders are one such innovation.
A Purchase Order (PO) is a written sales contract between buyer and seller detailing the exact merchandise or services to be rendered from a single vendor. It specifies payment terms, delivery dates, item identification, quantities, shipping terms and all other obligations and conditions. Purchase orders are generally pre-printed, numbered documents generated by the retailer’s financial management system which shows that purchase details have been recorded and the payment will be made.
Example: Every time a retail store places an order with its vendors, the retailer submits a purchase order. This document allows the retailer to track outstanding orders and accounts payable.
Companies use purchase orders for several reasons. Some of these are:
- Purchase orders allow buyers to clearly and explicitly communicate their intentions to sellers
- Sellers are protected in case of a buyer’s refusal to pay for goods or services
- Purchase orders help a purchasing agent to manage incoming orders and pending orders
- Purchase orders provide economies in that they streamline the purchasing process to a standard procedure
- Commercial lenders or financial institutions may provide financial assistance on the basis of purchase orders. There are various trade finance facilities that almost every financial institution allows to business people against purchase orders such as:
- Before Shipment credit facility
- Post Shipment credit facility
- Trade Finance facility
- Foreign Bill Purchase credit facility
- Bill retirement credit facility
- Order Confirmation
Currently the industry practice involves using multiple excel documents and emails to track the WIP (Work In Progress). This varies across different product categories, brands and Individuals.
Unfortunately, this method is moving towards being outdated. This is because using this method results in:-
- Following formats that are not standard across brands and business units
- Lack of real time visibility to the Buyer
- Files being shared on emails make sending large file sizes a painful task
- Difficult to detect and identify delays and bottle necks and hence not very efficient
- Lack of visibility to Production Sample approvals and Final inspection reports at any point.
As a solution, the business needs the following:-
- A digital platform to capture Product Order commitment, unit volumes and delivery dates
- A system to track which product has been assigned to which supplier
- Robust workflow and calendar management tools, within the PLM solution, that enable work-in-progress (WIP) tracking and production tracking
- A system which can hold all the final inspection reports and sample statuses and is accessible by everyone in the supply chain
A Production Order Tracking feature, integrated with a PLM system, caters to all these needs and combines with them the following advantages:
- Web-based PLM ensures that a single version of the truth is available to all participants from start to finish
- Greater and Better visibility provides a more consistent and consolidated view of the business to improve management and control, minimizing the risk of delayed Retail intros
- A shared, collaborative platform with real-time access to data, enables better data accuracy, provides early notification of problems via alerts and provides a platform for business intelligence to help improve decision making.
ITC Infotech’s PO Tracking Solution:
ITC Infotech provides Product Order commitment management and a Production Order Tracking solution which help provide a comprehensive digital platform for negotiation of product order commitments, as well as unit volume, delivery dates and transportation methods. The Streamlined Purchasing Procedure maintenance utility is a robust and easy-to-use program that helps various business organizations to automate the entire purchase order entries, and efficiently create and tackle the multi-sales and purchase order process in real time. Automated archiving and capturing of discussion threads provides seamless visibility between retailer and brand, and the supply chain. Once a commitment decision has been made, PLM tracks which products have been awarded to which supplier. The ‘commitment’ created within the PLM system can automatically be sent to an ERP system to generate a purchase order.
Advantages Of The Solution:
1.Robust workflow and calendar management tools within the PLM Solution enable work-in-progress (WIP) tracking and production tracking.
2. WIP tracking is a combination of statuses from ERP and PLM, with PLM providing a single, central repository to integrate the two workflows.
3. Reports are easily generated for viewing the status of not only an individual product, but also all orders for that product.
4. Final inspection Reports will be entered in the system under season\product\sourcing\Final inspection
5. The supplier will submit pre-production samples and TOP samples based on the calendar dates. The buyer will review the samples and release comments under comments tab under season\product \specifications\comments.
6. The supplier will test the fabric for fabric performance test and these test reports will be saved under the respective material in the library. At any point the supplier or the buyer can go into the material and view the test reports.
7. The supplier will also perform the garment performance test based on the brand requirement, once the test report is ready, this will get saved under the documents under season\product\Approvals\Product testing.
8. It helps to track entire purchase and sales transactions in a simplified way. PO (purchase order) program saves your valuable time from finding any invoice templates, PO forms, PO format sample or example, and purchase order online forms to create purchase order forms.
For any retailer to keep up with the fast evolving face of the industry, PO tracking is an invaluable tool, paving the way for the retailer to be part of the technological revolution that is changing the industry.