purchasing:ordering_from_suppliers

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purchasing:ordering_from_suppliers [2024/10/25 23:32] – [Forecast future consumption] Mark Gloverpurchasing:ordering_from_suppliers [2025/05/05 00:51] (current) – [Purchase order status explained] Mark Prins
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 mSupply provides ways for you to generate a Purchase Order with manually or automatically calculated quantities. Each organisation tends to have different requirements for their ordering process, so we have tried to strike a balance between providing different methods and making the ordering module so complex that it is of little use to anyone.  mSupply has two general methods for generating a purchase order: mSupply provides ways for you to generate a Purchase Order with manually or automatically calculated quantities. Each organisation tends to have different requirements for their ordering process, so we have tried to strike a balance between providing different methods and making the ordering module so complex that it is of little use to anyone.  mSupply has two general methods for generating a purchase order:
   * [[purchasing:ordering_from_suppliers#creating_a_new_calculated_purchase_order|Creating a new calculated purchase order]].  We recommend that you use this method since it will save you time and avoid mistakes.   * [[purchasing:ordering_from_suppliers#creating_a_new_calculated_purchase_order|Creating a new calculated purchase order]].  We recommend that you use this method since it will save you time and avoid mistakes.
-  * [[purchasing:ordering_from_suppliers#creating_a_blank_purchase_order|Creating a blank Purchase Order]].  This method allows you to create a purchase order manually, based on calculations of quantities you have made yourself or using other tools.+  * [[purchasing:ordering_from_suppliers#creating_a_blank_purchase_order|Creating a blank Purchase Order]].  This method allows you to create a purchase order manually, which is useful if you think the information entered in mSupply is not complete or accurate or you want to base it on calculations of quantities you have made yourself or using other tools.
  
 Whichever way you create a purchase order, the purchase order window looks like this: Whichever way you create a purchase order, the purchase order window looks like this:
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 ==== Forecast future consumption ==== ==== Forecast future consumption ====
-See [[reports:purchasing#quantification|Quantification]] for a more detailed discussion of the various possible methods of quantification available in mSupply.  For this discussion, the default 'Don't Adjust AMC' method is used, where the historic consumption is summed up for the number of months specified months (defaulting to 12), and divided by the number of months.  The assumption here is that future consumption will continue at the same level as historic consumption.  mSupply has a number of other options for making a forecast of future consumption.  All of these methods are documented in the [[items:forecasting|Forecasting section]] .+See [[reports:purchasing#quantification|Quantification]] for a more detailed discussion of the various possible methods of quantification available in mSupply.  For this discussion, the default 'Don't Adjust AMC' method is used, where the historic consumption is summed up for the number of months specified (defaulting to 12), and divided by the number of months.  The assumption here is that future consumption will continue at the same level as historic consumption.  mSupply has a number of other options for making a forecast of future consumption match what you think will happen or for accommodating features of your consumption data. The [[items:forecasting]] page contains a general descripotion and links to further detail.
  
 ==== Calculate required stock quantity ==== ==== Calculate required stock quantity ====
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 <WRAP center round info 90%> <WRAP center round info 90%>
 mSupply does not use set 'minimum' & 'maximum' stock levels as its primary means of determining order quantities.  Conventional minimum and maximum stock levels are calculated using the methods described here, but it is problematic to try and fix these values, because: mSupply does not use set 'minimum' & 'maximum' stock levels as its primary means of determining order quantities.  Conventional minimum and maximum stock levels are calculated using the methods described here, but it is problematic to try and fix these values, because:
-  * The parameters will keep on changing,+  * The parameters will keep on changing and therefore so will the values,
   * It takes a lot of manual work to calculate,   * It takes a lot of manual work to calculate,
   * The assumptions made in calculating them are often lost.   * The assumptions made in calculating them are often lost.
 The ‘good’ reason to use ‘minimum’ & ‘maximum’ stock levels is if you don’t have a calculator like mSupply that can quickly and easily calculate the right amount of stock to order.  Be assured that the system that mSupply uses will give you much better inventory control! The ‘good’ reason to use ‘minimum’ & ‘maximum’ stock levels is if you don’t have a calculator like mSupply that can quickly and easily calculate the right amount of stock to order.  Be assured that the system that mSupply uses will give you much better inventory control!
  
-Having said that, mSupply does allow for minimum stock levels so as to allow you to ensure a minimum quantity of rarely used items. e.g. essential emergency supplies - refer [[items:item_basics:tab_stock|Other information on the stock details page]].  These minimum stock levels should **not** be used for most items.+Having said that, mSupply does allow for minimum stock levels so as to allow you to ensure a minimum quantity of rarely used items. e.g. essential emergency supplies - see the //Other information on the stock details page// section on the [[items:item_basics:tab_stock#other_information_on_the_stock_details_page|4.01.05. Items - Stock tab]] page for more information. These minimum stock levels should **not** be used for most items.
 </WRAP> </WRAP>
  
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 <WRAP center round tip 90%> <WRAP center round tip 90%>
-Some agencies recommend that <wrap em>Buffer stock (months) = 2 x Ordering cycle</wrap>.  If you have a central store with an annual order cycle, this means keeping two years worth of stock as a buffer.  Expiry dates should not generally be problem, as a central store should definitely not be ordering stock with < 3 years expiry.  However, central stores may have limited storage capacity...+Some agencies recommend that <wrap em>Buffer stock (months) = 2 x Ordering cycle</wrap>.  If you have a central store with an annual order cycle, this means keeping two years worth of stock as a buffer.  Expiry dates should not generally be problem, as a central store should definitely not be ordering stock with less than 3 years expiry.  However, central stores may have limited storage capacity...
 </WRAP> </WRAP>
  
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 Purchase order quantity = stock required - current stock level + stock on backorder to customers - stock on order from suppliers. Purchase order quantity = stock required - current stock level + stock on backorder to customers - stock on order from suppliers.
  
-If the current stock levels and / or stock on backorder from suppliers is high enough, the above equation produces a negative number.  This means that this item does not need to be procured during this ordering cycle.  So, for the purposes of this mSupply calculation, Purchase order quantity = //maximum// of //zero// and //the above expression//.  This is expressed mathematically as:+If the current stock levels and / or stock on backorder from suppliers is high enough, the above equation produces a negative number.  This means that this item does not need to be procured during this ordering cycle.  So, for the purposes of this mSupply calculation, the Purchase order quantity = //zero// or the value of //the above expression//, whichever is the greater.  This is expressed mathematically as:
  
 <wrap em>Purchase order quantity = MAX(0,stock required - current stock level + stock on backorder to customers - stock on backorder from suppliers)</wrap> <wrap em>Purchase order quantity = MAX(0,stock required - current stock level + stock on backorder to customers - stock on backorder from suppliers)</wrap>
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 <wrap em>MOASO = MAX(0,Lead time - Current stock level + stock on backorder to customers - stock on order from suppliers)</wrap> <wrap em>MOASO = MAX(0,Lead time - Current stock level + stock on backorder to customers - stock on order from suppliers)</wrap>
  
-The automatic calculation of stock to order in mSupply does not include MOASO: it is described here so that you can manually compensate for it in your choice of months of stock to order if required. +The automatic calculation of stock to order in mSupply does not include MOASO: it is only described here so that you can manually compensate for it in your choice of months of stock to order if you choose to do so. 
 </WRAP> </WRAP>
  
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 ==== Purchase order status explained ==== ==== Purchase order status explained ====
 +
 +<WRAP center round important 90%>
 +Purchase orders generated from a tender will start with the status "tn" (for "tender"). For more information on purchase orders from tenders see  the [[tender_management:creating_purchase_orders#converting_to_a_normal_purchase_order|18.07. Analysing supplier responses and creating purchase orders]] page for details
 +</WRAP>
  
  
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     * Confirmed POs can have new lines added to them but only with an adjusted quantity, not an original quantity. This is to allow for amendments made by the supplier after they have received the order.     * Confirmed POs can have new lines added to them but only with an adjusted quantity, not an original quantity. This is to allow for amendments made by the supplier after they have received the order.
     * Details of existing confirmed PO lines can be amended. Their adjusted quantity can be amended (to reflect changes made by the supplier) original quantity cannot be amended.     * Details of existing confirmed PO lines can be amended. Their adjusted quantity can be amended (to reflect changes made by the supplier) original quantity cannot be amended.
-    * Lines can be deleted form a confirmed purchase order as long as nothing has been received against them on a goods received note. If any part of a line has been received on a goods received note then mSupply will show an alert and will not allow you to delete the line.+    * Lines can be deleted from a confirmed purchase order as long as nothing has been received against them on a goods received note. If any part of a line has been received on a goods received note then mSupply will show an alert and will not allow you to delete the line.
   * Once no more stock is to be received against a PO, it can be finalised.  An order becomes finalised by clicking on the //Finalise order// tick-box at the bottom left of the PO window.   * Once no more stock is to be received against a PO, it can be finalised.  An order becomes finalised by clicking on the //Finalise order// tick-box at the bottom left of the PO window.
     * POs that have been finalised have status "fn" (for "finalised") and an appropriate log entry is created.     * POs that have been finalised have status "fn" (for "finalised") and an appropriate log entry is created.
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 === Contract signed date, Advance paid and Received at port fields === === Contract signed date, Advance paid and Received at port fields ===
 Enter dates in these fields as appropriate. They are all optional unless any of them are made compulsory by turning on the appropriate preferences on the //Purchase orders 2// tab of the **File > Preferences...** menu item. See [[preferences:purchase_orders#purchase_order_2_tab|Purchase order preferences]] for more details. Enter dates in these fields as appropriate. They are all optional unless any of them are made compulsory by turning on the appropriate preferences on the //Purchase orders 2// tab of the **File > Preferences...** menu item. See [[preferences:purchase_orders#purchase_order_2_tab|Purchase order preferences]] for more details.
 +
 +===Minimum expiry date field===
 +This field is only turned on if the //Items received from a purchase order must be within a minimum expiry date// store preference is turned on (see the [[other_stuff:virtual_stores#preferences_tab|26.07. Virtual stores]] page for details on how to turn it on).
 +
 +If a valid date is entered in this field, stock received on a goods received note must have an expiry date that is later than this date. Otherwise, you will not be able to finalise the goods received note. Please note, this setting does not affect supplier invoices.
  
 === Heading message === === Heading message ===
  • Last modified: 2024/10/25 23:32
  • by Mark Glover