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Process Explanation
- Purchase orders need to be classified and managed, divided into categories based on whether additional items are required:
- Sample Purchase
- Safety Stock Purchase
- Material Purchase(MPS)
- Supplementary Material Purchase
- General Administrative Purchase
- Tooling and Equipment Purchase (A)
- Repair and Maintenance Purchase (B)
- After the calculation of dependent demand orders through MPS, purchase requisitions are automatically generated. These requisitions are then sent out by the production management team and undergo the procurement process through the FLOW system.
- For independent demand, purchase requisitions are created by the requesting department and follow the purchasing process through the FLOW system.
- The unit price for purchase recommendations is selected only after approval by the supervisor.
- Purchase recommendations consider factors such as available inventory, purchase batch size, minimum purchase quantity, and safety stock levels to calculate the quantity needed to meet the shortfall.
- In the procurement recommendation process, after obtaining quotations and updating the supplier's product information in the "Supplier Product Data," the selection of suppliers and final purchase prices are determined within the same process.
- Purchase orders are controlled based on supplier, and a prepayment deposit is required for verification.
- If the purchase price exceeds the maximum set by the research and development department or is higher than the maximum purchase price during procurement, the system imposes restrictions on the purchase.
- Once the purchase order has been approved, it can be sent via email and fax.
- Purchase orders cannot be printed without going through the approval process.
- After the approval of a purchase order, any modifications to the delivery date, unit price, quantity, or specifications must be made by using the purchase change process.
- Receipt and import operations are not allowed for purchase orders that have not been approved.
- Price control measures can be implemented based on hierarchical levels to prevent procurement fraud issues.
- Purchase orders can default with a predefined delivery destination based on the supplied recipient: company, warehouse, plant, supplier, or customer.
- When a procurement officer creates a new purchase order, the system requires the inclusion of the pre-set comprehensive procurement notes. This ensures that every purchase order includes the necessary information to avoid oversight and ensure the fulfillment of rights, obligations, and requirements, thereby preventing any potential losses for the company.
- The default primary supplier for product basic data can be set based on principles such as minimum cost (1), maximum cost (2), or not read (0). After the Bill of Materials (BOM) is established, the system can calculate standard costs based on the primary supplier selected.
Import Trade Schedule Diagram
Pre-scheduling the expected shipping date for imports, internal purchasing personnel must manage several key points before the purchase order's estimated delivery date:
- The schedule from the offshore date to the inspection date, arrival date, and warehouse entry date allows for comprehensive progress monitoring and tracking.
- According to the invoice documents provided by overseas import suppliers, we can know the expected items and quantities for the upcoming arrival. This allows for better control and management of the anticipated supply inventory, enabling effective inventory planning and ensuring sufficient stock levels to meet demand.
- Calculating the precise procurement supply date based on the order's demand date helps avoid situations where personnel place orders too late or too early, which can lead to imbalances in supply and demand.
Features of Import Trade System
The import procurement operations offer two types of prices: purchase price and customs declaration price. These prices are primarily used for imports and can generate two different documents based on the flexibility of customs declaration and procurement requirements.
For those who import by themselves, it is possible to integrate import customs declaration with warehouse receiving operations. This integration allows for a comprehensive understanding of the "in transit" quantities, which refers to goods that have been shipped but not yet received in the warehouse. Additionally, it enables the linkage of the average cost of imported products after allocation, along with monthly weighted calculations. This provides a complete and accurate inventory accounting amount, improving the accuracy of inventory cost calculations.
The system provides the functionality to link external purchasing commissions to customer orders. Whether it is for fixed commission percentages, fixed commission amounts, or based on the difference between the order price and purchase price, the system automatically calculates the commission amount. This feature facilitates commission amount management, preventing duplicate expenses or missing commission income/expenses that may occur due to offline management. It helps the company avoid misjudging profitability information.
The system can automatically offset the delivered quantity of the purchase order and calculate the payable amount for non-L/C payments. It can also generate accounts payable for foreign suppliers. Additionally, it controls the situation of external commissions by monitoring the delivered quantity of customer orders and the receivable commissions. This allows for a comprehensive understanding of the progress of procurement deliveries and the status of pending imports.
iTEC ERP system provides functionality for the following operations: procurement corresponding to import receipt, import customs declarations, receipt inspection, and inventory status. It allows for tracking and querying historical records, ensuring traceability and enabling feasibility analysis.
When the overseas supplier provides an invoice with an estimated arrival date for the goods from abroad, the iTEC ERP system offers import arrival operations. It can estimate the expected arrival at the local port based on the transportation duration, helping to prevent material shortages and serves as a crucial reference for scheduling operations.
After the goods arrive locally, iTEC ERP provides import customs declaration operation. This process automatically retrieves data from the import receipt record. Based on the applicable customs regulations and pre-set rates, it calculates various expenses incurred during the customs declaration process. This includes import duty, customs tariffs, value-added taxes, port construction fees, trade promotion fees, and other import-related charges. These calculations facilitate subsequent accounting processing.
iTEC ERP system allows for real-time auditing of the status of foreign procurement, from arrival at the port to warehouse entry. It provides comprehensive visibility and insights into the progress and estimated material shortages for all procurement items. This enables users to have a clear understanding of the procurement status and effectively manage potential material shortages.
After the completion of imports, the expenses incurred are allocated and transferred to the cost of raw materials.
To ensure the accuracy and reasonableness of cost settlement, the iTEC ERP system maintains and allocates import cost expenses. It automatically calculates import customs duties, including import duty, customs tariffs, value-added taxes, port construction fees, trade promotion fees, and other import-related charges. It also handles the allocation of procedures, endorsements, freight charges for sea, air, and inland transportation, and more. This allows business owners to have a clear understanding of the total cost of each imported batch and the precise cost of individual goods. With this information, they can accurately assess the profitability of the business.