Purchasing Methods

Most purchasing organizations use these methods:

• Inventory

• Non-inventory

• Subcontracting

Purchasing for inventory includes items intended for resale, raw materials, and manufactured items. These items require full integration between the JD Edwards EnterpriseOne Procurement system and the JD Edwards EnterpriseOne Inventory Management system. This kind of system integration validates that the item exists in inventory. Information included about the inventory item might include cost, description, supplier, and units of measure. An example of an inventory item for a manufacturer of computer hardware would be printed circuit boards.

Purchasing for non-inventory includes goods, materials, and services that are used internally or are subsequently charged to outside parties. Typically, these items and services are recorded in general ledger accounts. Examples of non-inventory items include office supplies, maintenance, repair, and operating supplies (MRO), and building services.

Subcontract purchasing is associated with outside operations performed by suppliers, or internal projects requiring a number of suppliers to charge their services to a common job number. One example would be a plating operation performed by an outside supplier on a steel part that was produced by the organization.