Order step quantity & Minimum order quantity
When purchasing (or manufacturing) an item, it happens that we are conditioned, so we cannot purchase (or produce) the exact quantity we need, but we must settle with a larger quantity.
One example is printing. For economic reasons, print suppliers will always require a minimum number of copies. For example. if we buy business cards the minimum sale is 1000 pcs, if we want 1300 pcs the printer will require us to order 1500 pcs, because when printing, the machine prints out 500 pcs on the paper width.
Another example is if we have a machine that always “produces” e.g. 8 pcs. So even if we need 5 pcs the machine will produce 3 more. The excess will remain in stock, so if needed, that amount will be used up as well.
The third example is when we buy from suppliers in boxes (box = 16 pcs) and we sell individually. The vendor will not deliver 1.1875 boxes to us if we need 19 pcs, but two whole boxes.
There are a lot of examples, but for setup, we only need two parameters:
- Minimum order quantity
Indicates the minimum amount that can be purchased or ordered. For example. 1000 pcs is a minimum.
- Order step quantity
What is the “step” of procurement (or production)? For example. When purchased it can be purchased at 16 pcs each.
Setup is for each item separately in the Fulfillment section of a product.
In our example, we will open two items, and our parameters will be the same (min order qt 1000, order step qt 250) and we will create a Sales Order with 800 pcs and 2012 pcs.
The fulfillment list will display the committed quantity of products on the created Sales Order.
(For more info regarding ERPAG Fulfillment functionality check out our blog: https://www.erpag.com/news/fulfillment-backorders)
But, when we form a Purchase Order, the quantities will be corrected according to parameters we previously set up:
The first item will have 1000 pcs (minimum order quantity), while the second item will have 2250 pcs (order step quantity 250).
3. Working with the second unit of measure
Order step quantity is extremely helpful when purchasing in Second UOM.
In our example, we will set up that the Item (Copper 3/8) has a second UOM > a “roll” of 5m. We will set up this same value in the “Order step quantity” field.
If we have a committed quantity of 12 in the fulfillment list, the generated Purchase Order will be for 3 “rolls” (eg. 15m).
With this option, we will achieve that our purchase is always rounded by the second UOM.
4. Working with Bill Of Materials (BOM)
You can set up these parameters even in products that are based on Bill Of Materials (BOM).
In our example, we will set up the minimum order quantity of 10 and step quantity of 5.
Manufacturing > fulfillment option works identically like the fulfillment in the purchasing module. The committed quantity will automatically be increased when the Work Order is formed.
When a work order (based on – bill of materials) is manually created, the quantity will be automatically be corrected when you enter that data.
In our example, if we enter 12 in the “Quantity” field, ERPAG will correct that number to 15.
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