In the manufacturing and distribution sectors, efficient supply chain and inventory management are crucial to meeting customer demands. Epicor, a leading ERP solution, offers a variety of tools to streamline these processes. One such tool in the Sales Management module is "Buy to Order" (BTO) at the release level. This feature allows businesses to link purchasing activities directly to specific customer orders, ensuring that products and parts are allocated precisely when and where they are needed.
Understanding "Buy to Order" in Epicor
The "Buy to Order" (BTO) functionality in Epicor creates a direct connection between customer sales orders and purchase orders. When a sales order is created, BTO generates a corresponding purchase order suggestion for the required materials or products. This linkage ensures that items are procured specifically for fulfilling that sales order, without depleting existing inventory. This is particularly beneficial for companies that deal with non-stock items, where demand is unpredictable, making it impractical to keep these items in stock.
The BTO checkbox is selected by default if the part on your order line is a purchased non-stock part. However, it is unavailable for parts defined as 'Sales Kits' or if the 'Make Direct' checkbox is selected.
Key Features and Benefits
Optimized Inventory Management
Effective inventory management is key to optimizing supply chain operations and minimizing costs.
Reduced Inventory Holding Costs: By purchasing only what is needed to fulfill specific orders, companies can minimize inventory holding costs, especially for high-value or perishable goods.
Minimized Stockouts: The direct connection between sales orders and purchase orders reduces the risk of stockouts, as items are procured based on actual demand.
Enhanced Supply Chain Efficiency
Automation: The BTO functionality eliminates the need for manual intervention in the purchasing process. Once a sales order is confirmed, the system automatically triggers the creation of a purchase order suggestion, ensuring that procurement is initiated without delay.
Improved Supplier Coordination: By linking purchase orders directly to sales orders, companies can better coordinate with suppliers, ensuring timely deliveries and reducing lead times.
Customization and Flexibility
Handling Custom Orders: For businesses that offer customizable products, the BTO feature allows for the precise procurement of materials based on customer specifications. This flexibility ensures that customer expectations are met without overburdening the inventory system.
Adaptability to Market Demands: As market conditions fluctuate, the BTO functionality allows businesses to adapt quickly by purchasing only what is needed for confirmed orders, rather than relying on forecasts that may no longer be accurate.
Improved Cash Flow Management
Efficient inventory management has a direct impact on cash flow.
Aligning Cash Outflows with Revenue: By tying purchases directly to sales, companies can better align their cash outflows with incoming revenue, improving overall cash flow management.
Implementing "Buy to Order" in Epicor
Implementing the BTO functionality within Epicor involves setting up specific parameters within the Sales Order Management module. Here's a brief overview of the process:
Sales Order Creation: When a customer places an order for a product designated as "Buy to Order," the sales order is created in Epicor with this designation.
Automatic Purchase Order Generation: Once the sales order is confirmed, and after running the MRP, the system generates a linked purchase order suggestion for the required materials or products.
Order Fulfillment: As the purchased items arrive, they are matched to the corresponding sales order, ensuring that they are used to fulfill the specific customer order.
Conclusion
The "Buy to Order" functionality in Epicor is a powerful tool for optimizing supply chain and inventory management processes. By linking sales orders directly to purchase orders, companies can reduce inventory holding costs, enhance supply chain efficiency, and precisely meet customer demands. Whether dealing with custom orders or navigating fluctuating market conditions, the BTO feature in Epicor provides the flexibility and control needed to stay competitive in today’s fast-paced business environment.
At Mayan Technologies, we understand the importance of tailoring ERP solutions to meet your specific business needs. If you're interested in learning more about how to implement or optimize "Buy to Order" in your Epicor system, feel free to reach out to our team. We're here to help you get the most out of your ERP investment.
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