Concepts

Tasks

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Procurement and Materials

The procurement system in APM interacts with the materials system. Procurement includes requisitions, purchase orders, blanket orders and releases, suppliers, and supplier resources, requests for quotation (RFQs), and contracts. Materials management covers resources, warehouses, and warehouse items, and consignment inventory. The two systems work together to process purchases.

This topic explains how procurement and materials management work together in APM. You will need to understand these concepts to implement and maintain the procurement system in APM. For more information about the materials management system, see Inventory.

Resource

Resource

A resource is an item that is available to be used, usually as part of completing a work order task. A resource can be a material, tool, trade, or service. Resources are listed in the resource catalog.

When a resource is not available from a warehouse, APM creates a requisition line (if necessary) and purchase order line to fulfill that demand.

Requisition lines and purchase order lines include the name of the item’s supplier and the name of the deliver-to warehouse. A link between a resource and a supplier creates a supplier resource in APM. A link between a resource and a warehouse location creates a warehouse item in APM.

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Supplier Resource

A supplier resource adds supplier information, such as price and delivery terms, and the part number or other identification that the supplier uses to identify the resource. Each resource that you purchase from a supplier must have an associated supplier resource. You can use the supplier resource whenever you create a purchase demand (requisition or purchase order) for the resource.

The resource and the supplier must exist in APM before you can create the supplier resource. You can create one supplier resource at a time or many supplier resources at once from the resource catalog.

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Warehouse Item

A warehouse item is a resource that is located in a specific warehouse. In order to receive an item, the warehouse clerk must be able to identify it and add it to the list of items stored in the warehouse.

Requisition

A requisition is used to request materials, tools, services, or contractors needed by your organization. Each item on the requisition is contained in a requisition line. If an item is available in a warehouse, that requisition line is filled using a pick list. If an item needs to be purchased from a supplier, that requisition line is filled using a purchase order line.

A requisition or each requisition line may need to be approved, depending on your organization’s approval policy.

Once the requisition or requisition line has been approved, you can select the lines to turn into purchase order lines. Only items purchased through replenishment requisitions get received into inventory. Items purchased through manual requisitions are considered to be non-stocked direct purchases.

Replenishment

You can use replenishment requisitions to maintain the inventory levels of warehouse items. Each warehouse item can be set up for either automatic or manual replenishment review.

When you run the Generate Replenishment Requisition method for a warehouse, APM reviews the warehouse items set for system replenishment and then automatically creates replenishment requisitions for warehouse items that have reached the set replenishment point.

You can also manually generate replenishment requisitions for warehouse items that use either an automatic review or a manual review. You must manually generate the requisition for items whose replenishment rules indicate a manual review.

Replenishment requisitions use the supplier or warehouse information indicated in the purchase from or transfer from section of the replenishment rules tab for the warehouse item.

If the inventory group selected in the replenishment rules is a consignment inventory group, the item is treated as a consignment resource and the requisition is a consignment requisition.

If selected on the supplier resource price (the Replenishment review not required option), purchase orders can be automatically created for warehouse items being replenished.

Purchase Receipt

If you receive only one line on a purchase order, the system creates a purchase receipt. You can receive material purchases into a warehouse or simply mark them as received. To receive more than one purchase order line at a time, you must use a receiving report. If you receive an item using a purchase receipt, you will not be able to print it on a receiving report.

Consignment Inventory

Consignment inventory is defined as material that is paid for on use, not on receipt. With consignment, you hold the material in your warehouse, but the supplier continues to own the material until it is used or issued. When the item is issued, your organization takes ownership of the material and assumes responsibility for payment.

Consignment inventory is tracked like regular inventory: in warehouses and inventory groups. Each consignment supplier has its own inventory group.

To learn more about consignment inventory, please see Consignment Inventory.

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