Blanket Orders
Introduction to Blanket Orders
A blanket order is a purchase or sales agreement that outlines the details for repetitive
purchases from a vendor or sales to a customer over an agreed time period.
A blanket order may specify a set quantity to be delivered on a specific schedule or it
may be on-demand where deliveries are to be made at the periodic request of the
customer or vendor.
A blanket order simplifies purchasing and sales because it reduces the number of
orders that are required (one to start) and serves to stabilize supply. Suppliers like
blanket orders because they tend to stabilize sales and inventories and simplify the
selling process. Customers often use blanket orders to more easily budget their planned
expenditures. They work as a cost reduction and profit improvement tool for both
suppliers and customers.
Compiere supports both blanket purchase orders and blanket sales orders.
Blanket purchase orders
Setup
Document Type
Create a document type purchase order release with the document base type of
purchase order.
Specify that this is a release document.
Create a document type blanket purchase order with the document base type of blanket
order.
Select purchase order release for document type of releases.
Next, run the Verify Document Types process. This ensures that your calendar (which
controls the posting of all documents) has the necessary records for any new document
type added.
Then, open your Calendar and ensure that the appropriate periods are open for
processing the new document type.
Business partner setup
Select the business partner that you want to create a blanket order agreement with.
Navigate to the vendor tab.
Check the “Allow Blanket PO” checkbox.
Blanket purchase order business process
Blanket purchase order creation
Invoke the Blanket purchase order window.
Select document type “Blanket purchase order.”
Select the vendor from whom you want to purchase products.
Select a future date in the “Order valid to” field to indicate how long you want this
blanket purchase order to be valid.
Select the appropriate delivery and invoicing options.
Select the appropriate release intervals (see the release intervals section below for
more details).
Navigate to the purchase order line tab.
Add purchase order lines to the purchase order with the desired product and quantity as
you would when creating a regular purchase order line. Note: The quantity entered is
the total quantity for all the PO releases.
Navigate back to the blanket purchase order header.
Complete the blanket purchase order.
Once completed, the next step is to create purchase order releases.
Purchase Order Release
There are three ways to create purchase order releases.
1. You can generate purchase order release from the blanket purchase order window.
Once you complete the blanket purchase order, you will notice that the “Generate
Release” button appears on the purchase order header.
Click this button to create the purchase order release.
This option lets you create purchase order releases on an individual blanket
purchase order basis.
The system will take into account the order validity range, frequency type, frequency
range and order quantity to calculate what quantity of product should be released on
the purchase order release.
2. You can generate purchase order release via the generate PO releases process.
Invoke the generate PO releases process, enter the appropriate parameters and run
the process.
This option allows you to run the process for multiple blanket purchase orders.
The system takes into account the order validity range, frequency type, frequency
range and order quantity to calculate what quantity of product should be released on
the purchase order release.
3. You can generate purchase order release manually.
This option lets you override the frequency calculations and generate purchase
order releases line by line with quantities of your choosing. You cannot exceed the
total quantity that is on the blanket purchase order.
Navigate to and invoke the purchase order releases window.
Enter the blanket order number for which you want to generate the purchase order
release.
Navigate to the PO line tab and create a new record.
Select the appropriate blanket order line.
The system defaults the product.
Enter the quantity to release.
Save and navigate back to the header window.
Complete the release by clicking the complete button.
Receiving and returning products
Products can be received for blanket purchase orders against the purchase order
release number.
The process involved is exactly the same as any regular material receipt.
The accounting consequences are exactly the same as any regular receipt and you can
generate invoices and make payments as you would for a regular receipt. The same
applies for matching documents as well.
The returns process is also exactly the same as any normal returns process. You would
create an RMA for the goods to be returned and then use the return to vendor window
to return the products.
Blanket sales orders
Setup
Document Type
Create a document type sales order release with the document base type of sales
order.
Specify that this is a release document.
Create a document type blanket sales order with the document base type of blanket
order.
Select sales order release for document type of releases.
Next, run the Verify Document Types process. This ensures that your calendar (which
controls the posting of all documents) has the necessary records for any new document
type added.
Then, open your Calendar and ensure that the appropriate periods are open for
processing the new document type
Business partner setup
Select the business partner that you want to create a blanket order agreement with.
Navigate to the customer tab.
Check the “Allow Blanket SO” checkbox.
Blanket sales order business process
Blanket sales order creation
Invoke the Blanket sales order window.
Select document type “Blanket sales order.”
Select the customer to whom you want to ship products.
Select a future date in the “Order valid to” field to indicate how long you want this sales
order to be valid.
Select the appropriate delivery and invoicing options.
Select the appropriate release intervals (see the release intervals section below for
more details).
Navigate to the sales order line tab.
Add sales order lines to the sales order with the desired product and quantity as you
would when creating a regular sales order line.
Navigate back to the blanket sales order header.
Complete the blanket sales order.
Once completed, the next step is to create sales order releases.
Sales Order Release
There are three ways to create sales order releases.
1. You can generate sales order release from the blanket sales order window.
Once you complete the blanket sales order, you will notice that the “Generate
Release” button appears on the sales order header.
Click this button to create the sales order release.
This option lets you create sales order releases on an individual blanket sales order
basis.
The system will take into account the order validity range, frequency type, frequency
range and order quantity to calculate what quantity of product should be released on
the sales order release.
2. You can generate sales order release via the Generate SO releases process.
Invoke the Generate SO releases process, enter the appropriate parameters and run
the process.
This option allows you to run the process for multiple blanket sales orders.
The system takes into account the order validity range, frequency type, frequency
range and order quantity to calculate what quantity of product should be released on
the sales order release.
3. You can generate sales order release manually.
This option lets you override the frequency calculations and generate sales order
releases line by line with quantities of your choosing. You cannot exceed the total
quantity that is on the blanket sales order.
Navigate to and invoke the sales order releases window.
Enter the blanket order number for which you want to generate the sales order
release.
Navigate to the SO line tab and create a new record.
Select the appropriate blanket order line.
The system defaults the product.
Enter the quantity to release.
Save and navigate back to the header window.
Complete the release by clicking the complete button.
Shipping and processing returns
Products can be shipped for blanket sales orders against the sales order release
number.
The process involved is exactly the same as any regular shipment.
The accounting consequences are exactly the same as any regular shipment and you
can generate invoices and receive payments as you would for a regular shipment. The
same applies for matching documents as well.
The returns process is also exactly the same as any normal returns process.
Release Intervals
Release intervals for the generation of releases using the automated process are
governed by the “Frequency Type” and “Frequency” defined in the Blanket Order.
E.g. If the “Frequency Type” is Week and the “Frequency” is 1, it means that for this
blanket order a maximum of 1 release per week will be generated by the automated
process.
In the above example if the first Release was created on 1-April-2011, then, by using
the automated process, the next release will be created on or after 8th-April-2011.
In case the “Frequency” was 2, then the next release will be created on or after 4thApril-2011 i.e. after 3 days. This is because the calculation is done by rounding down
whenever a decimal result is encountered as in this case (interval of 7/2 days i.e 3.5
days gets rounded down to 3 days).
Similar calculations hold true for other frequency types as well. The following Frequency
days are used for each Frequency type:
Frequency Type
Frequency Days
Day
1
Week
7
Month
30
Quarter
90
Year
365
Calculation of Quantity in the Release
Release quantity is calculated based on Frequency and Blanket Order Range. Blanket
Order Range is the Number of days for which the blanket order is valid. This is decided
by the “Blanket order Start Date” and “Blanket order End Date”.
To get the line quantity we first calculate the number of releases that are estimated to
be generated. The formula used to get the number of releases is as follows:
No. of releases = (Blanket Order Range/Frequency Days) X Frequency
Example:
Blanket order Start Date - 1st April-2011
Blanket order End Date – 31-May-2011
Frequency Type – Month
Frequency – 2
Blanket Order Range is 61 Days (1st April to 31st May).
Frequency Days = 30 (From the table above)
No. of Releases = (61/30)*2 = 5 (Note: Round up for decimal results)
This means that with the given setup if you use the Generate Release process, then 5
releases will be generated for the blanket order.
Next, it is assumed that the Line quantity in the blanket order will be equally distributed
among all the releases. So the quantity for each release is calculated as follows:
Release Line Qty = (Blanket Line Qty – Line Qty already released)/(No. of Releases to
be created – No. of Releases already created). (Note: Round up for decimal results)
Blanket order detail report
A new blanket order detail report is available out of the box.
It can be run separately for blanket purchase orders and blanket sales orders by
checking or unchecking the sales transaction parameter.