The procurement process in the supply chain usually starts with the activity of a purchase requisition. In this post, we explore the purchase requisition process in more detail.
The purchasing process typically includes the following steps:
- identify a need
- provide and describe the requirement to satisfy the need and
- continue with a workflow approval system to obtain the necessary confirmation to make the spend
Although this process can vary according to every organisation’s requirements, a purchase requisition is needed for spending above certain limits stipulated by management. The process can be delegated for easy purchases up to a specific amount, usually by credit card.
Any purchase request needs to be accompanied by specific details, which typically includes an item description, quantity, unit of measure if available, unit price, the name of the supplier and the deadline for the order.
Also, depending on the requirement, details of the buyer may be required, which may include department, staff member, project name or customer.
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The above details are entered in a Master Resource Planning (MRP) software tool pending approval according to the type of purchase and the authority needed to validate the request, be it a department manager or a director.
Hence the time approval is usually dependent on the number of levels of authorisation required and the complexity of the requirement.
The purchase requisition process serves as an enabler for the approval process given by management. Items cannot be purchased until the approval is received for releasing the funds for the expenses (unless under a certain value if agreed beforehand).
Once a requisition has been approved, it then moves into the procurement department and is followed by a purchase order.
Dynamics 365 for Operations, previously known as AX7, is a single software system that helps run businesses more effectively. It is a digitally transformed financial and operational ERP system for medium and large organisations.
Ax Store Requisition Management (SRM) reduces buffer inventory by integrating with Dynamics AX supply chain management.
Microsoft Dynamics for Operations
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