19 Managing Suppliers

You can manage the relationships that you have with suppliers and the items that they provide. You enter initial information about each item that you purchase from a supplier and the system monitors delivery, quality, and cost performance on behalf of the supplier. You can compare performance information to determine the best suppliers from whom to make purchases.

This chapter contains the following topics:

19.1 Understanding Conversion of Supplier Limit Amounts

To convert limit amounts for multiple suppliers from one currency to another, you can run the Address Book Conversion - F0401 program (R890401E). This program converts supplier currency codes and address book amounts. In the JD Edwards EnterpriseOne Procurement system, the address book amounts are the supplier minimum and maximum order values. Access the Address Book Conversion - F0401 program from Batch Versions.

When you enter minimum and maximum order values for a supplier, you typically enter them as rounded numbers, which are stored without decimals in the F0401 table. When you convert these amounts to a different currency, you can specify a rounding factor in the processing options. For example, to round converted minimum and maximum order amounts to the nearest 50, you specify a rounding factor of 50.

19.1.1 Example: Rounding Converted Limit Amounts

Limit amounts are credit limit amounts and minimum and maximum order amounts that you assign to a customer or supplier master record. Limit amounts are usually rounded numbers and are stored without decimals.

See Also

This example describes how the Address Book Conversion - F03012 (R8903012E) and Address Book Conversion - F0401 (R890401E) programs round converted limit amounts when converting from Canadian dollars (CAD) to U.S. dollars (USD) if you enter a rounding factor in the processing options.

In this example, the exchange rate is 1 CAD = 0.63492 USD and the rounding factor is 50. The conversion programs round converted limit amounts up or down, as described in this table:

Converted Limit Amounts Description
Round Up The conversion program converts 8,000 CAD to 5,079.36 USD. It rounds 5,079.36 USD up to 5,100 based on this calculation:

Converted Amount ÷ Rounding Factor = Q with a remainder of R. If R is greater than or equal to one-half of the rounding factor, then subtract R from the rounding factor and add that amount to the converted amount.

In this example, 5,079 USD ÷ 50 = 101 with a remainder of 29, which is greater than one-half of 50. Subtract 29 from 50 (50 – 29 = 21) and add 21 to 5,079 to get a rounded value of 5,100.

Round Down The conversion program converts 12,000 CAD to 7,619.05 USD. It rounds 7,619.05 down to 7,600 based on this calculation:

Converted Amount ÷ Rounding Factor = Q with a remainder of R. If R is less than one-half of the rounding factor, then subtract R from the converted amount.

In this example, 7,619 USD ÷ 50 = 152 with a remainder of 19, which is less than one-half of 50. Subtract 19 from 7,619 to get a rounded value of 7,600.


19.2 Generating Supplier Prices in an Alternate Currency

This section provides an overview of the generation of supplier prices in an alternate currency and discusses how to:

  • Generate supplier prices in an alternate currency.

  • Set processing options for Supplier/Catalog Purchase Price Generation by Currency (R4106101).

19.2.1 Understanding the Generation of Supplier Prices in an Alternate Currency

You can create new supplier prices in a different currency for multiple records at one time by running the Supplier/Catalog Purchase Price Generation by Currency program (R4106101). This program generates new prices based on existing records.

The Supplier/Catalog Purchase Price Generation by Currency program is especially useful if you need to create multiple supplier price records in a different currency. For example, you might use this program if the company is about to conduct business with a supplier that uses a currency in which you do not have supplier price records. If you need to create a new price for an individual record, simply update the existing record on the Supplier Catalog Revisions form; you do not have to run the Supplier/Catalog Purchase Price Generation by Currency program.

When you run the Supplier/Catalog Purchase Price Generation by Currency program, you control the currency and exchange rate in which to create new supplier prices by specifying this information in the processing options:

  • Date as of when you want to create records.

    If the expiration date of a price is greater than or equal to this date, a new supplier price is created.

  • Currency of the existing records.

    This is the original currency code that you want to base the new records on.

  • Currency in which you want to create new records.

  • Exchange rate to use to calculate the amount.

  • Method (divide or multiply) to use for the exchange rate calculation.

The Supplier/Catalog Purchase Price Generation by Currency program copies the original supplier price, calculates a new price, and creates a price record with the new currency amount. Specifically, the program:

  • Creates new prices one currency at a time to avoid confusion about which currency new records are based on.

  • Creates only one new supplier price record for each unit of measure. It does not create one price record for each currency.

    For example, assume that the program generates new supplier prices in the Japanese yen (JPY) based on existing prices in the Canadian dollar. A record for a certain unit of measure already has a supplier price in JPY. The program does not generate another supplier price in JPY because both records for that unit of measure would have the same key. The exception to this rule is when currency codes that are associated with a supplier, item, or branch/plant have different effective through dates. Depending on the dates, the program might create more than one new price.

Run the Supplier/Catalog Purchase Price Generation by Currency program first in proof mode, and then in final mode as follows:

  • Proof.

    Review the audit report to ensure that the records generated by the program are accurate. If the audit report is not accurate, change the processing option and data selection values accordingly and rerun the program in proof mode.

  • Final.

    When you are satisfied with the audit report created in proof mode, run the program in final mode. Review the new supplier price records on the audit report. If you review a new record on the Supplier Catalog Revisions form, notice that the new record is sequenced alphabetically along with the existing records on the form and that amounts are rounded according to the decimal places that are set up in the data dictionary.

    If necessary, adjust the new price manually on the Supplier Catalog Revisions form. For example, if the program creates a new price for 50,000 JPY as 675.1155 CAD, you might adjust the new amount to 675 CAD.

19.2.1.1 Example: Generating New Supplier Prices

This example describes an item with supplier price records before and after generating a new supplier price in a different currency.

19.2.1.2 Before Generating New Supplier Prices

An existing item has these supplier price records:

Unit Price Currency Code
2,000.00 CAD
1,297.81 EUR
820.10 GBP

The processing options for the Supplier/Catalog Purchase Price Generation by Currency program (R4106101) are set as follows:

  • Mode = 1 (final)

  • Date = June 30, 2008

  • Convert to = USD

  • Convert from = GBP

  • Exchange rate = 1.65810

  • Method = 1 (multiplier)

Even though several currency amounts are associated with the item number, the program generates only one new USD amount based on the GBP amount.

19.2.1.3 After Generating New Supplier Prices

After you run the Supplier/Catalog Purchase Price Generation by Currency program, the new price record is 1,277.80 USD, based on the 820.10 GBP record. The original 820.10 GBP record remains so that you can continue to pay suppliers in that currency, as needed.

Unit Price Currency Code
2,000.00 CAD
1,297.81 EUR
820.10 GBP
1,277.80 USD

19.2.1.4 Data Selection for Supplier/Catalog Purchase Price Generation by Currency

Typically, companies will generate new supplier prices for all suppliers within a specific branch/plant. If the company has multiple branch/plants with different currencies, you can run the Supplier/Catalog Purchase Price Generation by Currency program (R4106101) multiple times. You can also generate new supplier prices by item number or any other value in the data selection.

If the company has items that are at purchase price level 1 and you want to make sure that you generate new prices for those items, designate <Blank> for branch/plant in the data selection if you are not generating new prices for all branch/plants.

19.2.2 Generating Supplier Prices in an Alternate Currency

Typically, companies will select r Procurement Advanced & Technical Ops (G43A31), Generate Purchase Price by Currency.

19.2.3 Setting Processing Options for Supplier/Catalog Purchase Price Generation by Currency (R4106101)

Processing options enable you to specify the default processing for programs and reports.

19.2.3.1 Process

These processing specify default information that the system uses when generating the report.

1. Mode

Specify whether to run the program in proof or final mode. Values are:

Blank: Proof mode.

1: Final mode.

2. Date

Specify the date that the system uses to determine which purchase price records will be generated. If the expiration date of a purchase price is greater than or equal to the date entered, the system generates a new purchase price record. To use the system date, leave this processing option blank.

19.2.3.2 Currency

These processing options specify default currency information.

1. To Currency Code (Required)

Specify the currency code that the system uses for To conversions. This processing option is mandatory.

2. From Currency Code (Required)

Specify the currency code that the system uses for From conversions. This processing option is mandatory.

3. Exchange Rate (Required)

Specify the exchange rate for the conversion. This processing option is mandatory.

4. Operation

Specify whether the system multiplies or divides the current purchase price. Values are:

Blank: Divide the current purchase price by the exchange rate.

1: Multiply the current purchase price by the exchange rate.

19.3 Managing Supplier Performance Information

This section provides an overview of supplier performance information, lists prerequisites, and discusses how to:

  • Review supplier delivery performance.

  • Review supplier quality performance.

  • Review supplier cost performance.

19.3.1 Understanding Supplier Performance Information

You can review performance information to determine which suppliers are most likely to provide you with the best costs and services for an item. Performance information includes the quality of service that is provided by a supplier for a certain item and the costs charged by the supplier.

You can review supplier performance information that is specific to:

  • Delivery of an item.

  • Acceptability of an item.

  • Cost of an item.

You can also review a summary of performance information for all suppliers who provide a specific item. For example, you can compare the average unit cost and lead time (average number of days to deliver an item) for all suppliers who provide you with Item A.

To store performance information, you must set processing options for the Purchase Orders program (P4310), PO Receipts program (P4312), A/P Standard Voucher Entry program (P0411), and Voucher Match program (P4314) to capture supplier analysis information.

The system retrieves supplier performance information from the F43090 and F43121 tables.

19.3.1.1 Reviewing Supplier Delivery Performance

Before you order an item from a supplier, you can determine whether the supplier has made timely deliveries in the past. You can review the percentage of items that a supplier has delivered on time, early, and late in each fiscal period (usually a month) to determine whether the supplier is likely to make timely deliveries in the future.

You can review the quantity, amount, or number of receipts for an item that was on time, early, or late. For example, if you acquired 100 bicycles in June from AAA Bicycle Company, you can identify that 10 were delivered early, 80 were on time, and 10 were late. If you review amounts, you can identify that 1,000.00 was early, 8,000.00 was on time, and so on.

You can also review delivery information for each receipt in a fiscal period. For example, you might have entered five receipts of 20 bicycles to acquire 100 bicycles in June. You can review the promised and delivery dates, and the quantity that was on time, early, or late for each of the five receipts.

19.3.1.2 Reviewing Supplier Quality Performance

Before you order an item from a supplier, you might determine whether the supplier has a history of delivering the item in good condition. You can review the percentage of acceptable items from a supplier in each fiscal period (usually a month) to determine whether the supplier is likely to provide acceptable items in the future.

You can review the quantity of an item that was acceptable in each fiscal period, as well as the percentage. For example, you can review that you acquired 100 bicycles in June from AAA Bicycle Company, of which 95 were acceptable and 5 were unacceptable.

You can also review the acceptable quantity for each receipt that you entered in a fiscal period. For example, you might have entered five receipts of 20 bicycles to acquire 100 bicycles in June. You can review acceptable and unacceptable quantities for each of the five receipts.

The system can track item acceptability only for those items that are processed through a receipt route.

19.3.1.3 Reviewing Supplier Cost Performance

You might want to review the average unit cost you paid to a supplier for an item in each fiscal period (usually a month). You can compare this cost to the average cost for the item on purchase orders and the average cost at the time of receipt to determine whether the price remains consistent.

You can have the system calculate a percentage variance between the cost you paid for an item and another cost, such as the receipt cost. For example, if the supplier specified an average cost of 0.50 when you entered a receipt for an item but then billed you an average cost of 1.00, the system displays a 100-percent variance. In this case, you would probably determine why the variance exists. You use processing options to specify the cost to compare to the paid cost.

You can also review the inventory cost for an item. You specify the cost method that the system uses to determine the inventory cost, such as last-in, first-out (LIFO). Using this cost method, the inventory cost reflects the cost of the last item you received.

You can review costs for each receipt you entered in the fiscal period. For example, if an item had an average receipt cost of 10.00, you can review the cost for the item each time you entered a receipt, which might have been 9.00 at one receipt and 11.00 at another receipt.

19.3.1.4 Reviewing a Summary of Supplier Performance Information

You can compare a variety of performance information for all suppliers who provide a certain item to determine the best supplier from whom to purchase the item. For example, for each supplier who provides you with the same item, you can compare:

  • The average unit cost for the item.

  • The last cost that was paid for the item.

  • The percentage of on-time deliveries.

  • The average number of days that it takes to deliver the item (lead time).

You select the information that appears.

19.3.2 Prerequisites

Before you review a summary of supplier performance information, you must:

  • Define the performance factors (columns) that you can review on the Work With Supplier Analysis Summary form (for example, average unit cost, last cost paid, and so on).

  • Define formats that contain the columns you want to review and assign a format to the Work With Supplier Analysis Summary form using processing options.

  • Define paths (multiple formats) and assign a path to the Work With Supplier Analysis Summary form using processing options.

19.3.3 Forms Used to Manage Supplier Performance Information

Form Name Form ID Navigation Usage
Delivery Analysis W43230L Supplier Management (G43A16), Delivery Analysis Review supplier delivery performance.
Delivery Analysis Details W43230O Select a detail line on the Delivery Analysis form, and then select Delivery Details from the Row menu. Review supplier delivery performance.
Receipt Detail Information W43230K Select a receipt on the Delivery Analysis Details form, and then select Receipt Details from the Row menu. Review receipt detail information.
Quality Analysis W43230L Supplier Management (G43A16), Quality Analysis Review supplier quality performance.
Quality Analysis Details W43230O Select a detail line on the Quality Analysis form, and select Quality Details from the Row menu. Review supplier quality performance.
Cost Analysis W43230L Supplier Management (G43A16), Cost Analysis Review supplier cost performance.
Cost Analysis Details W43230O Select a detail line on the Cost Analysis form, and select Cost Details from the Row menu. Review supplier cost performance.
Work With Supplier Analysis Summary W43230A Supplier Management (G43A16), Summary Review a summary of supplier performance information.

19.3.4 Reviewing Supplier Delivery Performance

Access the Delivery Analysis form.

Quantity On-time

Enter the number of items that you received on time from this supplier during the fiscal period. To determine whether a receipt is on time, the system compares the receipt date to the promised date. If it finds a difference between the two, it uses the number of days allowed early or late to determine whether the receipt is on time. You set up the number of days that you consider to be an acceptable time window for delivery performance (days allowed early or late) on the Supplier/Item Relationship form.

For example, suppose that you have an order set up in the following way:

  • Promised Date - December 5.

  • Receipt Date - December 7.

  • Days Allowed Late - 3 days.

The order is late if received three days after December 5, or after December 8.

Because you received this order on December 7, the order is on time.

19.3.5 Reviewing Supplier Quality Performance

Access the Quality Analysis form.

Quantity Dispositioned

Displays the original quantity of the order line, plus or minus any changes to that quantity, less all quantities shipped, received, or vouchered to date. This field may also represent the actual quantity received.

19.3.6 Reviewing Supplier Cost Performance

Access the Cost Analysis form.

Inventory Unit Cost

Displays the amount per unit, derived by dividing the total cost by the unit quantity.

Ordered Unit Cost

Displays the unit cost of one item, as purchased from the supplier, excluding freight, taxes, discounts, and other factors that might modify the actual unit cost that you record when you receive the item.

Percent Cost Variance

Displays the percentage variance between the cost paid, and either the inventory cost, ordered cost, or the received cost.

19.4 Updating Supplier and Item Analysis Records

This section provides an overview of updates to supplier and item analysis records and discusses how to:

  • Update supplier and item analysis records.

  • Set processing options for Supplier/Item Relationships Rebuild (R43900).

19.4.1 Understanding Updates to Supplier and Item Analysis Records

After you install a new release of the JD Edwards EnterpriseOne Procurement system, you must run the Supplier/Item Relationships Rebuild program (R43900) to update supplier and item analysis records. The procedure updates new fields in the F43090 table based on the receipt data in the F43121 table.

When you use the Supplier/Item Relationships Rebuild program to update the supplier and item analysis records, you can assign a route code for new supplier/item relationships.

After you run the Supplier/Item Relationships Rebuild program, you can have the system maintain supplier analysis information interactively when you enter purchase orders, receipts, and vouchers.

Important:

You should run the Supplier/Item Relationships Rebuild program only when installing a new release of JD Edwards EnterpriseOne. If data becomes corrupted at a later date and you need to update the records, contact the JD Edwards EnterpriseOne help desk for assistance.

19.4.2 Updating Supplier and Item Analysis Records

Select Procurement Advanced & Technical Ops (G43A31), Supplier Analysis Regeneration.

19.4.3 Setting Processing Options for Supplier/Item Relationships Rebuild (R43900)

Processing options enable you to specify the default processing for programs and reports.

19.4.3.1 Route

This processing option to specifies route information for the Supplier/Item Relationships Rebuild program.

Route - Normal Route Code

Specify a code to assign when a new supplier record or item records are added. If you leave this processing option blank, the system does not assign a route code.