Outsourced purchase orders (OPO) are used when you're fully outsourcing your manufacturing to a contractor while still handling the raw materials needed for it.
Before creating an OPO, make sure the products you want to buy have I buy this product checked on the item card. To track ingredients, make sure the product has both I make this product and I buy this product checked on the product card before adding it to an OPO. Both materials and products can be purchased with an OPO.
To create an OPO, click on the global "+" sign and select + Outsourced purchase order.
Outsourced purchase order fields
*Supplier - the name of the contractor for the product or material being purchased. The Supplier field needs to be filled before an item can be added to an OPO. This field can be manually edited at any time.
Expected arrival - the date when all items are expected to arrive at your warehouse. The date is calculated from the default lead time for purchase orders. Can be manually edited on each OPO.
*Created date - the creation date of the OPO. By default, the value is set to today, but can be changed manually.
*Order # - the unique identifier for the OPO. This number is auto-generated by Katana, but can also be manually edited if needed (Examples: OPO-1, OPO-2).
*Order currency - the currency the order is in. By default, it will match the supplier currency (read here about multi-currency - available in Advanced, Professional, and Enterprise plans).
Ship to - select which Location the items on the OPO will be received at. (This can only be changed if you have more than one Location with the Buy function enabled).
*Track ingredients in - select which Location the ingredients on the OPO will be processed at. (The Make function for the Location needs to be enabled).
Line item columns
At least 1 item, either a product or a material, needs to be added to a OPO. Only products which have I buy this product functionality checked on the product card can be added to an OPO.
*Item - the name of the item you want to purchase. You can select an existing item or create a new one by typing in a material name and selecting Create new: [material name]. Only materials can be created this way on an OPO. Learn more about creating a new material.
The field value is a combination of Variant code, Item name, and Variant option values (e.g. "[M-1] MyMaterial / White").
*Quantity - the amount of the item you want to purchase. The Unit of measure (UoM) for the item can be changed on the order line. Katana allows a maximum of 5 decimal places here.
*Price per unit - the per unit manufacturing fee (excluding tax and ingredients' costs) paid to the contractor. A default price can be set on the item card under Default purchase price which can be manually edited on each OPO.
Total price - Quantity x Price per Unit. The total contracting fee per row (excluding tax and ingredients' costs). If this field is manually changed, the Price per Unit will be recalculated through Quantity.
Tax % - the applicable Tax rate (e.g. VAT, GST) for the line item. Select a tax rate from the drop-down menu. From Settings > Tax rates you can create, edit, and delete default Tax rates.
Ingredients - the consolidated stock availability status for ingredients needed to make the ordered item. Calculations are done based on the location picked on the Track ingredients in field. The Ingredients availability status will show either "In stock", "Expected", "Not available", "No recipe!" or "Not applicable".
* = Required
The OPO card in Katana doesn't include the address info of your company or the shipping address of a specific Location, but address information will be displayed if the OPO is printed. Read more.
Adding missing items
In Katana, it's easy to create a single OPO for all the items required from the selected supplier.
When you add a Supplier to the OPO, Katana will check the stock status for all products and materials purchased from this supplier (based on the Default supplier value defined for the item on the item card).
If there are any items with a negative Missing/Excess value in Stock that aren't included in the OPO, Katana will display a notification at the bottom of the page.
Click Add them... to open a list of all the missing items from the supplier, and decide whether to add them to Purchase Orders individually or add them all with a single click.
New items will be added and the quantities for existing items will be updated on the OPO to reflect the missing quantities in stock.
You can add comments to the Purchase order, such as specific instructions to purchasing personnel, various purchasing details, reference numbers, references to the location of relevant files, etc.
Track ingredients tab
If you add products to an OPO that have both I make this product and I buy this product checked, then the Track ingredients tab becomes active.
The purchase item ingredients table displays all materials and subassemblies that the contractor needs to produce a product(s).
The ingredients and quantities are taken from the Product recipe / BOM (set and edited on the product card) and the cost is based on the current Average cost of those ingredients in your Stock.
Through Katana, you can account for varying amounts of ingredients in the fully outsourced manufacturing process. If a contractor needs less, more or different ingredients in production than described in Product recipe / BOM, simply adjust the product's ingredient list accordingly.
Note: Changes to the default Product recipe on a product card will not apply to any open Outsourced purchase orders for that product.
Product cost per unit is the total price in base currency plus the ingredients total cost divided by the order quantity. This is a calculated field which cannot be edited. Read more about Outsourced purchase order costs.
Ingredients availability shows whether the required materials and subassemblies for an OPO are In stock, Expected or Not available. Calculations are done based on the location picked on the Track ingredients in field. Read more about Ingredients Availability.
The date below the Expected status indicates the arrival date of a related Purchase Order for materials or subassemblies.
Clicking on the Ingredients availability status opens an Inventory Intel pop-up, which shows additional info about the inventory level of the specific material or subassembly. Here you can conveniently check the In stock, Expected and Committed quantities of the ingredient and see all the Outsourced Purchase Orders and Manufacturing Orders to which this ingredient is booked in the Tracking ingredients in location. In the pop-up window, orders are ordered by priority and the current OPO is highlighted in bold.
An important note regarding Ingredients availability:
The ingredients availability status indicates whether the ingredient is available for this particular OPO in this particular location. The status considers the Sales orders, Manufacturing orders, and expected arrival order of OPOs. So even if you have some quantity In stock for the required ingredient, the Ingredients availability for this particular OPO may still show Not available if the Manufacturing orders or another OPO with an earlier Expected arrival date has already reserved the same ingredient. Changing the Expected arrival date can also change the Ingredients availability for Outsourced purchase orders. Read more.