This chapter explains how to replace blanket POs with a forecast and supply days setting to generate demand-driven POs at regular intervals.
Eliminate blanket POs
Do not create blanket POs whereby a series of future quantities and due dates are scheduled for an item. This is a crude form of forecasting that is not compatible with the MRP design. The correct way to purchase against anticipated demand is to set the item’s order policy to Demand Driven order policy and enter a Monthly Potential Demand rate and a Supply Days target so that future POs will be generated by MRP in demand-driven intervals.
If open blanket POs exist
If open blanket POs exist, each such PO should be closed out and canceled. Indicate to your supplier that the blanket PO will be replaced by individual POs from this point forward.
How to manage contract purchasing
If you contract with a supplier for a long term volume commitment in exchange for a fixed price, it is not necessary to manage this process with blanket POs. Instead, use the Order Policy screen to enter a Monthly Potential Demand rate and Supply Days setting so that future POs will be generated by MRP in demand-driven intervals.
The supplier price table, which is accessed from the Sources tab within the Stock Items screen, enables you to establish the fixed price along with from and thru dates that define the duration of the price contract. You can use the price notes to indicate the volume commitment associated with the price.
If there is a contract reference number, we suggest you build that number into the supplier description for the item, which is the description that prints on the PO.
To monitor actual purchases against a price contract, you can use the PO Lines Summary or PO Receipts data view, which can be filtered for a given item, supplier, and date range.
