It can be important to have a clear understanding how purchase orders are managed within the contract manufacturer.
While not all contract manufacturers manage purchase orders the same way, the information that follows provides you with a reasonable understanding for what might take place inside most contract manufacturers with regards to issuing; managing, canceling, and filing purchase orders.
Issuing purchase orders
Purchase orders are typically prepared from some variation of materials resources planning (MRP) information output in the form of system-generated MRP purchase requisitions or a company-mandated purchase requisition for non-MRP requests. Most importantly, only authorized purchasing personnel should place purchase orders.
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How to get lowest bill-of-material (BOM) pricing
Purchasing and supply chain services overview
Meanwhile, the role of the purchase requisition is designed to collect all of the necessary information and authorization, relevant to processing the procurement within the contract manufacturer including applicable cost, history of purchases, approved vendors lists (AVL), approved manufacturers list (AML), special marking or certification requirements, deliver and quantity.
In most instances, purchase orders are distributed with a copy of the original copy sent to the supplier or vendor and a second copy which is filed and attached to the original purchase requisition.
Purchase orders as written change orders
Purchase orders are used as written orders to suppliers and may also be in the form of a confirmation for verbal orders.
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