Create Blanket Purchase Order – A Summary of the activity.

This activity allows you to create a Blanket Purchase Order (BPO). A BPO is a Long term Contract or an agreement between the buyer and Supplier for the Procurement of the material.. This long-term contract enables the buyer to get a consistent supply of materials, avoids delays, and enables the supplier to plan for his resources.  This long-term contract can be made for any type of items for any time frame decided between buyer and supplier, which will benefit the both.

There are three types of contracts used in the Blanket Purchase Order document. They are “Rate”, “Quantity”, and “Value”. “Rate” contract, as the name indicates, is an agreement on the rate at which the item will be purchased. “Quantity” contract is an agreement on the total quantity that will be ordered. “Value” contract is an agreement on the total business value that is guaranteed to the supplier on the items covered under the agreement. .

The four types of Blanket PO’s are General, Capital, Dropship and Consignment.  In General type of Blanket PO excepting the Capital items, all other items can be defined. In Capital Blanket PO, Capital and Capitalizable items can be defined. In Dropship type of Blanket PO excepting the capital items, all other items can be defined. In Consignment type of Blanket PO, Items, which can be supplied on Consignment basis, can be defined. All the four types of Blanket PO will be defined for Rate, Quantity, and Value type of Contracts.

The Blanket PO can be created for the base currency or any other foreign Currencies defined in the Organization Setup Component.

Rate Control for the Blanket PO can be decided while creating the same.

LOI – Letter of Indent of the Blanket PO can be decided while creating the same.

Blanket PO can be created for the Adhoc Item Class also during this activity.

The Item should have Quantity , Cost and Per for Quantity & Value type of Contracts while Creating BPO, whereas in Rate type of Contract only Cost and Per is enough for Creation.

The system generates the line number for each item sequentially while creating the BPO.

Terms & Conditions for the Blanket Purchase Order Document can be defaulted from the Supplier master for the Supplier Code defined while creation or can be defined for this document specifically such as Payment terms, Insurance terms, Delivery terms etc.,

Invoice matching is the comparison of the quantity and the value of goods available at different points in the procurement process. The quantity ordered, the quantity received or the quantity accepted is matched with the quantity invoiced to ensure that payment is made for the proper quantity and value of items. This activity also allows you to specify the matching type for the blanket purchase order. The various matching types that are available are “Two way”, “3 way at BPO”, “3 way at GR”, “4 way at BPO” and “4 way at GR”.

Inspection type can be also defined for every line item such as None, Self & Third Party.  In case of Consignment type of BPO, Consignment Rule should be defined either as Consumption basis or Break Lot in Terms & conditions.

Against individual line items or for the document the Taxes, charges and Discounts as well as the Other Taxes and Charges can be defined. Also the same can be defaulted from the Supplier Master if the Item defined in BPO has supplier item mapping.

VAT details will be specified for the individual line items which falls as Vatable.

Quality Attributes for individual line items can be defaulted either from the Item administration, Supplier Item Combination in Supplier Master etc., and can be modified in the Blanket PO within the range specified.

Similarly, Notes details are also defaulted from the Item administration, Supplier Master or can be modified in Blanket PO itself.

The Blanket Purchase Order documents gets created in Various status in this activity based on various parameters.

1)       Draft Status – If the Blanket PO Created without specifying all mandatory fields.

2)       Fresh Status – If the Blanket PO Created by specifying all mandatory fields.

3)       Open Status – By defaulting the Supplier Master details for the Item defined in the Blanket PO and by Executing Create and Approve Blanket PO push button.

With this the Blanket PO document is Created and Sent to Next user either for editing or for Approving. If the document is created in approved status, the same can be sent to Supplier Directly.

Getting familiar with the pages inside