Basic Order Fulfillment Processing Guide

Part 4: Purchase Order Management

This B2B process enables a buyer to place an electronic purchase order (PO) with a supplier.  The supplier must provide the buyer with an automated confirmation to complete the purchase order process.

Business Process Management

This model illustrates a traditional PO process with a simple B2B workflow.  The many variations and complex PO process workflows are not described here. 

The basic purchase order process begins with the buyer sending a new purchase order (PO) request to the supplier.

The supplier must determine if they are able to fulfill the order.  This may be done automatically or it may require a person to confirm the order in their own business application.

The supplier sends a B2B message to the buyer to confirmation the order.  This PO confirmation may accept, reject or indicate pending for each PO line item.

The B2B process for PO management can also include the ability for a buyer to change or cancel the PO.  In each case, the supplier must send a PO confirmation.

Total Quality Management

The B2B quoting process improves these business measures:

• Reduces the amount of time spent by procurement and sales departments to manually handle fax, phone, email and website purchase/sales orders.

• Speeds the procurement process by automating the line-level confirmation decisions within the supplier’s business applications.

• Improves customer satisfaction by providing a simple and automated method for the buyer to place and confirm electronic purchase orders.

Information Technology

Automating purchase order (PO) management processes requires business applications that can determine product availability, pricing and delivery capabilities.  A comprehensive Enterprise Resource Planning (ERP) solution may contain all the information required to confirm each PO request.  Companies without a single ERP solution may require the business application to interface with a manufacturing or inventory solution (application integration) to confirm the PO.

There are many PO workflows that will likely vary across a company's customer base, requiring flexible IT and B2B solutions.

The purchase order management processes are dependent on accurate master data:

• Product Master Data for product IDs, descriptions, acceptable configurations, packages, regional variations, etc.

• Partner Master Data for company IDs, locations, credit and billing information.

B2B Standards

This table identifies standards supporting the B2B process for Purchase Order Management.