Purchasing
🛒 Procuring materials from suppliers
Also known as	Procurement, Buying
Key input	Planned purchase orders from MRP
Key output	Purchase orders, receipts to inventory
Parallel to	SFC (make vs. buy)
Part of	MRP II

Purchasing

Purchasing (or Procurement) is the MRP II module responsible for converting planned purchase orders generated by MRP into actual orders placed with suppliers. While Shop Floor Control executes "make" items, Purchasing executes "buy" items — the raw materials, components, and services sourced externally.

Contents

Role in MRP II
The purchasing cycle
Vendor management
MRP action messages
Performance metrics
Relationship to other modules
See also

Role in MRP II

In the BOM, every item is classified as either "make" (manufactured internally) or "buy" (purchased from a supplier). MRP generates planned orders for both types. For buy items, those planned orders become the input to Purchasing. The buyer's job is to convert them into purchase orders, ensure on-time delivery at the right quality and cost, and receive goods into inventory.

The purchasing cycle

graph LR
    MRP["MRP
planned PO"] --> REQ["Purchase
Requisition"]
    REQ --> RFQ["RFQ /
Vendor Selection"]
    RFQ --> PO["Purchase
Order"]
    PO --> FOLLOW["Follow-up
& Expediting"]
    FOLLOW --> RECEIVE["Receiving
& Inspection"]
    RECEIVE --> INV["Inventory
Receipt"]

    style MRP fill:#d5e8f5,stroke:#333
    style PO fill:#cedff2,stroke:#333
    style INV fill:#d5f5d5,stroke:#333

Purchase requisition — MRP's planned order is converted (manually or automatically) into a purchase requisition.
Vendor selection — The buyer selects a supplier based on price, quality, lead time, and past performance. For contracted items, this may be automatic.
Purchase order — A formal order is issued to the supplier with quantity, delivery date, price, and terms.
Follow-up & expediting — Monitoring supplier progress. If MRP generates an expedite action message, the buyer contacts the supplier to pull the delivery forward.
Receiving & inspection — Goods arrive, are inspected for quality and quantity, and are received into inventory.

Vendor management

Purchasing maintains vendor master records that track:

Lead times — Used by MRP for lead-time offsetting
Delivery performance — On-time delivery rate
Quality performance — Reject/return rate
Price history — Used for cost planning and S&OP financial projections

Accurate vendor lead times are critical — if MRP uses a 4-week lead time but the supplier actually takes 6 weeks, material will arrive late and the shop floor will starve.

MRP action messages

MRP continuously evaluates open purchase orders against current requirements and generates action messages for buyers:

Release — Convert a planned order into a PO now
Expedite — Need date moved earlier; contact supplier to accelerate
De-expedite — Need date moved later; may be able to delay shipment
Cancel — Requirement has disappeared; cancel or reduce the PO
Change quantity — Required quantity has changed

Performance metrics

Metric	Target (Class A)	Why it matters
Supplier on-time delivery	≥95%	Late deliveries cause shop floor delays
PO-to-receipt lead time accuracy	±1 day	Ensures MRP offsets are reliable
Quality acceptance rate	≥98%	Rejects create unexpected shortages

Relationship to other modules

graph TB
    MRP["MRP"] -->|"planned POs & action messages"| PUR["Purchasing"]
    PUR -->|"receipts"| INV["Inventory"]
    PUR -->|"lead time data"| MRP
    INV -->|"material available"| SFC["SFC"]
    BOM["BOM"] -->|"buy items"| MRP

    style PUR fill:#cedff2,stroke:#333