Written by Bev Chretien. Edited by Judi Zietsman
Importing purchase order history into the App enables us to calculate the lead time and determine supplier risk that impacts the level of safety stock required.
Below are typical exclusions made from the data set, either provided by yourselves, or extracted from your ERP system using scripts.
The Receipt Date on an order is the same or earlier than the Order date
Remembering that the purpose of importing the historical data is to calculate the lead time or time lapsed between the order date and the receipt date, importing this record would result in the lead time being zero, and therefore would serve no purpose other than to increase the size of the database.The Due Date on an order is Earlier or the same as the Order date
This is usually an indication of improper maintenance or practice. E.g. the orders are raised on the same day that the stock arrives, or efforts are made to accommodate over-supply where the original order quantity cannot be modified, or the actual expected arrival date is not captured as a result of the user just hitting ‘enter’ multiple times through the header.
It could also be that if you place an order on a supplier, they do actually deliver the same day, and the order date and the receipt date are actually the very same day.
If that is the case, then you could just purchase that item on a back-to-back basis and there is no need for the App to do a scientific calculation on how much safety stock you should be keeping on that item with that kind of turnaround time.The order quantity is 0 or less:
Usually, if a purchase order is created with a negative quantity, it is used as a return to a supplier or similar reason, which should not be used in the App calculations.The receipt quantity is 0 or less:
Same explanation as above and it therefore excluded.
Now that we have removed anything that is going to skew our data set, we import it all into our database as the Historical Purchase Order Data.
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