Archived - Original Discussions about Purchasing

Forecasting & Supply/Demand Planning

• 2 Month Lead time from vendors

• Want to only carry 2 months of inventory

  • Would like to be able to identify categories based on turn around time

• Would be nice to forecast what work orders are needed for the smaller pieces of wood.

• Would like to set up safety stock levels

General

• Evaluate each year what is needed

• Bulk Purchases at the end of the year

• Only one Vendor per Item

  • They don’t have multiple vendors they would order the same item from.

• They receive a big savings for purchasing in bulk

  • 150K - 200K a year

  • But the downside to this is 28-40% of their cash is tied up in inventory

  • They currently carry about 6 months of inventory - they’d like to reduce to 2 months.

• Only purchase from US and Canada

  • Very rarely overseas

• 200 SKUs that they don’t keep in stock

  • Purchase as special orders as needed.

Blanket Purchase Order

• Create based on what they think they need for that year.

“Child” Purchase Orders when Items are Shipped from Vendor

• 2 Month Lead Time

• Linked to Blanket Purchase Order

• Need to make a payment before it’s received.

  • 90% of total

• Process

  • Shipment 1 of x

    • Item(s) in transit

  • Pre Payment Invoice for this shipment

  • Receive

  • Confirm Receipt

    • Manage Short and Overages

      • Credits or Payments

  • Shipment 2 of x

    • Repeat….