Best Practice Guide - Purchasing

Use automatic reordering

There is no other option if you want your business running well, you have to use automatic purchasing. This may mean you change procedures, layout your warehouse locations and do a stocktake. What ever is required you need to do it.

Start with average weekly sales as your entry into automatic purchasing, it is easier to get started than min/max

Train your staff to use messages to understand suggested reorder quantities and to use the not reordered filter to show products that can be added to make up the minimum order quantity for suppliers

Use min/max reordering for key lines

It is easy to be a bit lazy and just use average weekly sales to calculate automatic reorder quantities for all products, don't do it. Min/max reordering should be used for some products.

Consumables used by the key products you sell, such as large photocopiers, must be on hand at all times. Those products should be purchased using min/max, to ensure they are in stock even if they are not selling regularly

Start by identifying your key products by product category

Use the min/max run to automatically suggest min/max levels. Use product categories to limit the products extracted. Then apply those min/max levels

Drag min/max onto your purchase reorder line window and edit min/max levels live as you review each purchase run

Setup purchase runs sets for different suppliers, days of week and times of day

Automatic purchasing is controlled by run sets which save the settings used by each automatic purchase run. 

Save a range of purchase runs to suit your purchasing requirements for each day, time of day etc.

Then document your purchase run procedure. So any staff member can run the purchasing process for a few days using the documented procedure if your purchasing officer is away

Use drop shipments, allocated purchases and regular purchases

Use drop shipments purchase orders that support the supplier delivering the goods directly to the customer and you invoicing the customer when you receive the invoice from the supplier

Use allocated purchase orders, as allocated purchases will only allocate to the sale order or service order to which they are linked. This allows you to order specifically for a particular sale

Use regular purchases are for normal stock. When they are received, remember to put any backorders aside, don't put stock received for back orders onto the normal shelves

Review parts requested by service technicians

Service technicians can request purchase of parts you do not stock. Ensure there is a person in the service department reviewing those requests. You can often use some other part in order to prevent too many parts building up as product lines in your parts inventory

Follow best purchasing practice

Create a product for every line you purchase if it is going to be in stock for any amount of time

Avoid using miscellaneous non-stock products on purchase orders. You can't track stock for non-stock lines

Archive products that have not been purchased or shipped for a year and have been created more than a year ago