Definition
What is purchase order management?
purchase order management noun
The coordination of a purchase order from placement with a supplier to delivery at the required destination. It involves managing each order line and quantity, monitoring progress against agreed requirements, and coordinating suppliers, logistics partners and the buyer's teams. Its purpose is to get the right goods delivered in the right quantities at the required time, while managing changes and exceptions along the way.
Also called PO management.
What it involves
From supplier confirmation to receipt
Between placing an international purchase order and receiving the goods, a lot has to happen, and most of it is not in the ERP.
- Supplier confirmationQuantities, prices, dates, changes
- Production and readinessCargo ready dates that move
- Shipping ordersOne order split, or several combined
- DocumentsInvoices, packing lists, certificates
- Booking and transportAir or sea, LCL or FCL
- ReceiptWhat arrived, against what was ordered
What it is not
Often confused with
More than shipment tracking
Tracking shows where a container is. Purchase order management also covers what is in it: which order lines and quantities, and what has to happen before and after it moves.
More than consolidation
Combining goods from several suppliers into one container is one possible benefit. The discipline itself is coordinating every order to delivery, consolidated or not.
Not the purchasing decision
What to buy, from whom and when is decided in purchasing and planning, usually in the ERP. Purchase order management makes that plan happen.
Flowtor's approach
Software for this coordination
Flowtor is software for coordinating purchase orders, for importers with recurring overseas purchases. Each purchase order becomes one record with its shipping orders, shipments, milestones and documents, and a person on your team approves what changes. The ERP keeps the purchase order; Flowtor coordinates the operational work around it.