Creating an outsourced purchase order (OPO) in Katana is crucial when manufacturing is fully outsourced, but raw materials are managed by your company. This article provides a guide through setting up an OPO, selecting suppliers, and managing ingredient tracking.
Before creating an OPO, make sure the products you want to buy have I buy this product checked on the item card and to track ingredients, make sure both I make this product and I buy this product are checkmarked. 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 what is being purchased. The Supplier field needs to be filled before items can be added.
Expected arrival - the date when all items are expected to arrive at your warehouse. The date is calculated based on the default lead time for purchase orders.
*Created date - the creation date of the OPO. By default, the value is set to today.
*Order # - the unique identifier for the OPO. This number is auto-generated by Katana, but can be edited (Examples: OPO-1, OPO-2).
*Order currency - the currency the order uses. By default, it will match the supplier currency (read about multi-currency - available in Standard, Professional, and Professional Plus plans).
Ship to - the Location where 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 - the Location where the ingredients on the OPO will be processed. (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 with I buy this product functionality selected on the product card can be added.
*Item - the name of the item being purchased. You can select existing items or create new ones 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 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.
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".
Additional costs - used to add additional cost rows to an OPO.
* = Required
The OPO card in Katana doesn't include the address info of your company or the shipping address of a specific Location, but this information will display on OPO printouts. 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 an OPO, Katana checks the stock status for all products and materials purchased from that supplier (based on the Default supplier value defined for the item).
If there are any items with a negative Calculated stock value in Stock that aren't included in the OPO, Katana displays a notification at the bottom of the page.
Click Add them... to open a list of the missing items from the supplier. You can then add them to purchase orders individually or all at once 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.
Additional info
You can add comments to purchase orders, 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 I make this product and I buy this product checked, the Track ingredients tab will become 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 different amounts or ingredients in production than described in the 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 open outsourced purchase orders for that product.
Product cost per unit is the total price (or landed cost in case you added Additional costs that are distributed) in base currency plus the ingredients total cost divided by the order quantity. 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 PO 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. From here you can 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.
A 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.
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