Stockless processing

Stockless processing is a method of automatically replenishing inventory that significantly reduces buyer and receiver interaction. The vendor stores and delivers inventory and non-stock items immediately before use. Items are not stored on-site. This type of processing is based on a predefined, negotiated deal with a vendor to keep enough stock available to fill company needs on demand.

With stockless processing, you reduce

• stock on hand (SOH)

• manual entry of procurement documents

• materials handling by receiving personnel, and buyer administration

You accomplish stockless processing by using electronic data interchange (EDI) or evaluated receipts settlement (ERS). For a more fully automated stockless process, EDI offers quick communications with vendors.

Stockless processing streamlines the procurement process in the following ways:

• Requisitions are created based on inventory levels and order points.

• Purchase orders created from requisitions are automatically sent to vendors via fax or EDI.

• Vendors return shipping notices via EDI.

• Inventory is delivered to the point of use versus a warehouse.

• Vendors are paid upon receipt of items.

For a purchase order item to go through stockless processing, two steps are necessary:

• The requisition location is set up as Stockless using Requesting Locations (RQ01.1).

• The agreement header is set to Stockless.