Evaluated receipts settlement (ERS) is also typically employed along with a
VMI (vendor managed inventory) process. In a process of this type both the
vendor and the buyer sync up their item master files with current/correct
product data, including pricing. The buyer then provides the vendor with
regular (daily or sometimes even more frequently) inventory status of
point-of-sale data which the vendor uses to calculate replenishment. The
details of replenishment levels are all pre-determined and agreed-to. Thus,
the issue/concern expressed below about pricing discrepancies goes away
since the buyer pays for it was received (in good condition) based on
pre-determined and agreed-to pricing. Periodically, typically monthly, an
audit and reconciliation is performed and appropriate adjustment made as
needed.
Of course, this process works effectively only when the buyer and the vendor
truly work together as trusted business partners. If the relationship
remains one of arm's length and adversarial in nature, then all bets are
off.
Rachel
I have received a couple responses from people indicating that this concept
can work, here are my thoughts to address the questions you raised, I'm
interested to hear what other potential issues there may be: (see edited
original message below)
-----Original Message-----
From: [EMAIL PROTECTED]
[mailto:[EMAIL PROTECTED]]
Sent: Friday, September 01, 2000 1:48 PM
To: [EMAIL PROTECTED]
Cc: [EMAIL PROTECTED]
Subject: vendor initiated purchase order
I have never heard of that and if you want my opinion that sounds like it
would
not work. if they (your tp's) send you an acknowledgment to a purchase
order
they have yet to receive
what do they do if the purchase order they receive and have already
acknowledged is wrong?
>they (the vendor) would not receive a purchase order, the info from the 855
would simply be used to enter the necessary info into our MRP.
How does the tp know the purchase order number they are to acknowledge
without having the purchase order?
>I don't think the tp needs to know the purchase order since the order was
entered through their web site. I haven't fully thought this through so if
it is determined that a PO number is needed to be known prior to creating
the 855, one solution may be to have the vendor generate a PO number within
agreed upon guidelines.
What would happen if there are price changes?
>presumably this price is accurate since it was ordered on-line, but if the
price does change, then this would be handled just as any other change
request, the only caveate would be that the purchasing organization would
need to have the 850 info (from the 855) in the system prior to the 860
being issued.
There is a lot of information from the 850
that the 855 uses, I would be curious to know how this process would work.
I
personally would not suggest any one trading in this manor.
just my $.2
Anthony Whitehead
technology Enablement
Andersen Consulting
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<TITLE>RE: vendor initiated purchase order</TITLE>
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<P><FONT SIZE=3D2>I have received a couple responses from people =
indicating that this concept can work, here are my thoughts to address =
the questions you raised, I'm interested to hear what other potential =
issues there may be: (see edited original message below)</FONT></P>
<P><FONT SIZE=3D2>-----Original Message-----</FONT>
<BR><FONT SIZE=3D2>From: [EMAIL PROTECTED]</FONT>
<BR><FONT SIZE=3D2>[<A =
HREF=3D"mailto:[EMAIL PROTECTED]">mailto:Anthony.Wh=
[EMAIL PROTECTED]</A>]</FONT>
<BR><FONT SIZE=3D2>Sent: Friday, September 01, 2000 1:48 PM</FONT>
<BR><FONT SIZE=3D2>To: [EMAIL PROTECTED]</FONT>
<BR><FONT SIZE=3D2>Cc: [EMAIL PROTECTED]</FONT>
<BR><FONT SIZE=3D2>Subject: vendor initiated purchase order</FONT>
</P>
<P><FONT SIZE=3D2>I have never heard of that and if you want my opinion =
that sounds like it would</FONT>
<BR><FONT SIZE=3D2>not work. if they (your tp's) send you an =
acknowledgment to a purchase order</FONT>
<BR><FONT SIZE=3D2>they have yet to receive </FONT>
</P>
<P><FONT SIZE=3D2>what do they do if the purchase order they receive =
and have already acknowledged is wrong? </FONT>
<BR><FONT SIZE=3D2>>they (the vendor) would not receive a purchase =
order, the info from the 855 would simply be used to enter the =
necessary info into our MRP.</FONT></P>
<BR>
<P><FONT SIZE=3D2>How does the tp know the purchase order number they =
are to acknowledge without having the purchase order?</FONT>
<BR><FONT SIZE=3D2>>I don't think the tp needs to know the purchase =
order since the order was entered through their web site. I =
haven't fully thought this through so if it is determined that a PO =
number is needed to be known prior to creating the 855, one solution =
may be to have the vendor generate a PO number within agreed upon =
guidelines.</FONT></P>
<BR>
<P><FONT SIZE=3D2>What would happen if there are price changes? </FONT>
<BR><FONT SIZE=3D2>>presumably this price is accurate since it was =
ordered on-line, but if the price does change, then this would be =
handled just as any other change request, the only caveate would be =
that the purchasing organization would need to have the 850 info (from =
the 855) in the system prior to the 860 being issued.</FONT></P>
<BR>
<P><FONT SIZE=3D2>There is a lot of information from the 850</FONT>
<BR><FONT SIZE=3D2>that the 855 uses, I would be curious to know =
how this process would work. I</FONT>
<BR><FONT SIZE=3D2>personally would not suggest any one trading in this =
manor.</FONT>
</P>
<P><FONT SIZE=3D2>just my $.2</FONT>
</P>
<P><FONT SIZE=3D2>Anthony Whitehead</FONT>
<BR><FONT SIZE=3D2>technology Enablement</FONT>
<BR><FONT SIZE=3D2>Andersen Consulting </FONT>
</P>
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