Create Blanket Purchase Order – A summary of the activity

This activity allows you to create a Blanket Purchase Order (BPO). A BPO is created for procurement of parts, for which long-term contracts or agreement are made with the supplier, for supply of material having low value and high level of requirement. Some examples of such parts are raw material, tool, spare part, kit etc. The long-term contract enables the company to get a consistent supply of materials, avoids delays and enables the supplier to plan the material resources well in advance.  

There are three types of blanket purchase order contracts namely, “Rate”, “Quantity” and “Value”. “Rate” contract, as the name suggests, is an agreement on the rate at which the part will be purchased. “Quantity” contract is a long-term agreement on the total quantity that will be ordered. “Value” contract is an agreement on the total business value that is guaranteed to the supplier on the parts covered under the agreement.

The part must be ordered along with the cost and quantity at the time of raising a BPO. The additional part details such as whether alternate part number must be allowed or not and the type of inspection to be carried out for the parts, are also captured in this page.

The system generates the line number for each part sequentially at the time of raising the BPO.

Invoice matching is the comparison of the quantity and the value of goods available at different points in the procurement process. The quantity ordered, the quantity received or the quantity accepted is matched with the quantity invoiced to ensure that payment is made for the proper quantity and value of items. This activity also allows you to specify the matching type for the blanket purchase order. The various matching types that are available are 3 way at BPO, 3 way at GR, 4 way at BPO and 4 way at GR.

The “Create Blanket Purchase Order” page allows you to create a BPO. The “Terms & Condition” page allows you to enter the payment terms, insurance terms and delivery terms for the parts to be purchased. The “Allotment Details” page allows you to allocate parts to the various locations. The “Part TCD Details” page allows you to add the tax, charges and discount details for each of the line parts. The “Document TCD Details” page allows you add the tax, charges and discount details for the entire BPO. The “Inspection Details” page allows you to enter the inspection details for the part at the time of delivery.

Getting familiar with the pages inside

What you can do in this activity

Enter blanket purchase order details

Specify terms and conditions for the blanket purchase order

Enter tax, charge and discount details of the part and document level

Enter inspection details for the blanket purchase order

Enter blanket purchase order details

You can copy details from an existing blanket purchase order, or manually enter all the details pertaining to a blanket purchase order.

• Use the “Create Blanket Purchase Order” page, to enter BPO details and part details for the blanket purchase order.

Specify terms and conditions for the blanket purchase order

You can enter the payment terms and conditions, insurance details and delivery terms and conditions for the parts to be purchased.

• Use the “Edit Terms & Conditions” page, to specify the terms and conditions for the blanket purchase order.

Enter tax, charge and discount details of the part and document level

You can enter the TCD details such as the duty, sales tax, discount and freight charges for the various parts in the blanket purchase order. You can also enter the TCD details for the blanket purchase order as a whole. The TCD values affect the BPO either positively or negatively.

• Use the “Edit Part TCD Details” page, to specify the tax, charge and discount details for the various parts in the blanket purhcase order.

• Use the “Edit Document TCD Details” page, to specify the tax, charge and discount details for the blanket purchase order as a whole.

Enter inspection details for the blanket purchase order

You can enter the mode of inspection required for the parts purchased and accept the parts only when they possess the certification on the quality and its attribute. The inspection of the part can be carried out by the buyer or by any other external resource.

• Use the “Edit Inspection Details” page, to specify the mode of inspection for the parts.