Quick Summary: Purchase order history is imported to calculate supplier lead time and risk for safety stock. Certain records are intentionally excluded so that bad dates and quantities do not distort lead time and risk calculations.
Why Purchase Order History Matters
Importing purchase order history into the app allows the system to:
Calculate supplier lead time based on actual elapsed time from order to receipt
Determine supplier risk, which influences the level of safety stock required
Records that would distort these calculations are excluded before the data is imported.
Typical Data Exclusions
The following records are commonly removed from the data set before import, either by you or by scripts that extract directly from the ERP.
Exclusion 1: Receipt Date is on or before the Order Date
Lead time is calculated as the time elapsed between the Order Date and the Receipt Date. If a record shows that the stock was received on or before the day it was ordered, it produces a zero or negative lead time.
Such data is excluded because it provides no analytical value and would distort supplier performance averages.
Exclusion 2: Due Date is on or before the Order Date
This exclusion generally indicates one of two situations:
Improper data capture: Often caused by users raising the purchase order on the same day that stock arrives, failing to update the expected delivery date, or modifying an existing PO incorrectly.
Same-day turnaround: In rare cases, some suppliers genuinely deliver on the same day the order is placed. These items are considered back-to-back purchases and do not require the app to calculate safety stock for them.
Exclusion 3: Order Quantity is Zero or Negative
Purchase orders with a zero or negative quantity do not represent real replenishment. These transactions usually record returns to suppliers or credit adjustments. Because they do not increase stock, they are excluded from all lead time and supplier risk calculations.
Exclusion 4: Receipt Quantity is Zero or Negative
A record showing a zero or negative receipt quantity usually indicates a return or a data correction. Since these do not represent valid deliveries, they are excluded for the same reason as negative order quantities, to maintain accurate supplier performance data.
After Exclusions
Once the non representative records have been removed, the remaining history is imported as Historical Purchase Order Data and used for lead time and supplier risk calculations.
Take Action
Navigate to System > Data Quality screen > Purchase Orders panel to view these exclusions and take corrective action in your ERP.
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