Course 4 - Supply side: Supply planning & processing

Question 1

Balance supply-demand

Answer 1

=> from Supply to Demand

• Purchase contracts
• Purchase orders
• Customer orders
• Sales forecasts

Question 2

Procure-to-pay / operational procurement: business process

Answer 2

1. Supply planning
   - plan supply
   - request products
2. Ordering
   - bundle orders and assign source of supply
   - process purchase order
3. Goods receipt
   - prepare receipt
   - receive and store goods
4. Settlement
   - verify invoice
   - pay supplier

Question 3

Supply planning ->

Answer 3

1. Objective
2. Procurement time
3. Planning procedure
4. Reorder quantity
5. Reorder timing
6. Planning run

Question 4

From Supply planning to Ordering (document flow)

Answer 4

1. Purchase proposal
2. Purchase request
3. Purchase order

Question 5

Purchase proposal

Answer 5

=> proposal to procure goods and services

=> created as a result of a planning activity

Question 6

Purchase request

Answer 6

=> authorizes the purchasing dpmt to procure goods or services
=> is released from other areas within your company to your purchasing dpmt
=> can be triggered by different events - purchase proposals (from supply planning), direct order (from self-service shopping), projects

Question 7

Purchase order

Answer 7

=> commercial doc issued by a buyer to a seller, indicating types, quantities and agreed prices for products or services seller will provide to buyer
=> may contain stock materials, non-stock materials, services or expenses

Question 8

Operational purchasing ->

Answer 8

1. PO processing (purchase order, etc.)

2. Process design (admin.)

Question 9

From Ordering to Settlement (document flow)

Answer 9

1. Purchase order acknowledgement
2. Supplier delivery notification
3. (Supplier) invoice
4. Supplier invoice types

Question 10

Purchase order acknowledgement

Answer 10

=> confirmation from supplier to deliver specified quantities of products at specified prices within specified times

=> can be either fully acknowledged with no deviations or partially ack.

Question 11

Supplier delivery notification

Answer 11

=> records delivery or intended delivery of products that were ordered from supplier

=> used to notify the warehouse (create warehouse request)

Question 12

(Supplier) invoice

Answer 12

=> records the obligation of the recipient of goods or services to supplier

=> posts financial transaction in the recipient company’s liabilities

Question 13

Supplier invoice types

Answer 13

=> invoices (goods and services)
=> credit memos
=> customs invoices
=> subsequent credits and debits
=> cancellation invoices
=> down payment

Question 14

Quota arrangement (supplier quota)

Answer 14

=> defines quota to distribute the overall quantity to be purchased over different contracts

=> Objective: automated source determination

=> alternative option: fixed source of supply

Question 15

Source determination

Answer 15

=> finds the sources of supply automatically (“sourcing engine”)
=> Rule: fixed sources with the highest priority, then quota arrangements, and finally contracts (prices, availability, …)

Question 16

Planning run

Answer 16

=> is performed auto., interactively or on a periodic basis

=> results in the auto creation of proposals for production and purchasing at all product levels

=> Objective: create sufficient receipts (supply) to cover existing requirements (demand)

Question 17

Document-based follow-up activities (““with reference)

Answer 17

=> no manual data entry required for existing data

=> most info is auto transferred from previous business doc

=> Objective: simplification for users, error avoidance