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The Key Requirements of a Manufacturing Purchase Order

 

The Key Requirements of a Manufacturing Purchase Order

Purchase orders are the lifeblood of any supply chain. Not only are they a contract for materials and services, but they are the tool used to communicate the requirements of those contracts. A properly executed purchase order helps everyone know what is going on, when it’s going to happen, and how the financial transaction will be executed.

Even so, many purchase orders leave a lot to be desired. You’d think that after all these years of using them the business world would have learned how to write out a purchase order which provides all the necessary information to ensure that the vendor knows what the customer wants. But, you know something? That rarely happens. Most purchase orders are technically correct to a T, but that doesn’t mean that they convey all the necessary information. In fact, computerized purchasing systems can get so carried away abbreviating things that nobody knows what the purchase order really says.

So, what does it take to make this common business document, which is often misunderstood, into a true communication tool? In other words, how can we make a purchase order be more than just a formality we all have to have to keep the auditors happy?

More than anything, making a purchase into a real working document requires putting yourself into the vendor’s shoes, and asking the question, “What do I need to know about this?” That doesn’t just mean the financial and legal aspects of the purchase order, but the technical information about what needs to be done to make the part in a way that will best meet the need. Let’s look at a few things.

Completeness

Okay, this one is obvious. If a purchase order isn’t complete, it’s not going to do much good. Leaving key information out of the purchase order only guarantees a phone call from the vendor asking for clarification.

Accuracy

Another obvious requirement; Have you ever ordered something, only to have another part arrive? Not only can that be embarrassing, but it can mess up productivity, especially in a just-in-time manufacturing environment. A one digit mistake on a part can make all the difference in the world.

One major issue in accuracy is part revision. Just because engineering makes a change, doesn’t mean the whole world knows about it. That change has to get to the vendor, so that they can make sure they’re building the right thing. What happens if engineering specifies a materials change, but the vendor doesn’t get the new specification?

Blueprints and CAD Files

Unless the purchase order is for a repeat order, blueprints have to be included. This may not be important for off-the-shelf products, but what about special parts? Without blueprints, the vendor has no idea what to do. Oh, and by the way, give them a few copies while you’re at it.

Contact Information

Most purchase orders have contact information on them, but who is the contact? It’s either someone from purchasing or someone from accounting. The only problem is, they don’t know anything about the material that’s being ordered. Yes, those are the contacts for the legal execution of the purchase order, but that’s it.

Hardly anybody ever bothers telling the vendor who to contact, in case there’s a technical problem with making the part. What if it turns out that the materials specified aren’t available; or it could be there’s a tolerance problem. A technical contact can clear up these questions, without having to wait for the problem to be routed through proper channels.

Substitutions

Speaking of materials availability, what about substitutions? Are they acceptable? If so, under what circumstances can they be made? What types of substitutions can be made, without causing downstream problems. It might just be possible that a substitution will make

Quality Requirements & Correlating Inspection Practices with Your Customer

If something is critical about the part, whether it’s a dimension, a finish or a material, the vendor needs to be informed, so that they can check it. It makes a whole lot more sense to catch that problem at the vendor’s facility, than it does at incoming inspection; or even worse, on the final-assembly line.

Key Takeaways:

  • Put yourself in the vendor’s shoes; what would you want to know in order to be able to make that part?
  • Make sure that you give them all the information that you can. Nobody ever made a mistake because they knew too much.
  • Create a contact for the vendor to use for technical questions and problems, not just financial ones. That can help to expedite the procurement process. 

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