PTO - Purchase to Order products

PTO products are setup as stocked products today but are not stocked at the Warehouses since we only want to purchase them when ordered from customer. Both purchase and logistic processes are manually identifying items that needs PTO related special handling without any good system support.

PTO products are also miscommunicated in the Webshop since they are communicated as stocked products and therefor Customers will often expect one day delivery time but in reality these product should be shown as transit products with at least the lead time from the supplier.

A PTO product is not handle as a normal stocked product (even if it right now is setup as one) using MRP (forecast), instead a purchase order is only created after a sales order from a customer is created. PTO items don't have enough central warehouse stock rotation to tie net working capital into those items. Due the net working capital monitoring and reporting purposes it is crucial to be able to distinguish PTO items from stocked items which is not possible today.

Difference between a PTO product and a stocked product:

PTO items don't have enough central warehouse stock rotation to tie net working capital into those items and therefore should not be stocked.

Difference between a PTO product and a non stocked product:

Purchasers for PTO items are often collecting PTO order lines into a weekly/bi-weekly/monthly purchase order to supplier. Logistic fill up to customer consignment stocks runs automated (unlike transit items).

PTO items are applied stocked item rates and conditions from suppliers (freight charges, purchase volume conditions, EDI or volume based discounts etc)

Transit-items are typically purchased per order line by sales rep.

Benefits from supplier when buying to stock instead of transit.

How will this digital initiative improve our efficiency, our processes (main or supporting processes), and our position towards customers, suppliers, or employees?

Benefits

• Centralized to Purchase instead of purchased per order line by sales staff