Types of Requisition

The material purchase requisitions could be generated through any of the following means:

• Standard purchase requisition form from internal users
  
  
• Auto-generated requests from Material Requirement Planning (MRP)
  
  
• Forecasts and customer orders of supply chain management and demand planning systems
  
  
• Re-order systems of inventory management
  
  
• Inventory planning systems
  
  
• Material requirements based on new product initiatives

Types of Requisition

Let us now discuss the major types of requisitions that are raised in any manufacturing organization.

• Standard Requisitions
  
• Traveling Purchase Requisition
  
• Bill of Materials (BOMS)

Standard Requisitions

Purchase requisitions can be raised by the user department for the respective material as specified in the purchasing manual. Once purchase requisitions are received, the procurement department should verify the same for budgetary allocation, completeness, eligibility and for other purchasing policy guidelines.

In most of large organizations, purchase management software is used to manage the purchase demands of various internal users. All the validations and verifications may be built into the software during implementation as per the purchase procedure manuals and business processes.

In organizations, where ERP software is implemented or where supply chain management applications are installed, purchase requisitions/orders are automatically generated into the purchasing module for standard and routine items. For blanket purchase orders, release orders may directly be sent to vendors with whom the procurement team has a long-term contract. In the case of service contracts, it is termed as the ‘Statement of Work (SoW)’ which will provide the nature of work to be performed by the vendor along with various milestones and related payment mechanisms.

Traveling Purchase Requisition

Though, not frequently used, traveling purchase requisition is a purchase requisition mechanism designed for repetitive use. Traveling purchase requisitions are used in small companies where the P2P cycle is not automated.

These are meant for repetitive purchases of standard items ordered by stores. To avoid issuing a detailed purchase requisition every time (when stores need to be replenished), a standard card containing details of the request, either in the form of codes or bar codes, is used. This card contains details like a description of the item, vendor code, price, etc.

Once the card is received by the purchasing department and a PO is created, the card is sent back to the store for later reuse. As the name suggests, in traveling purchase requisition, the card travels between originating and purchasing departments. In the case of barcode-based traveling requisitions, electronic scanning by the store’s personnel can create a standard purchase requisition in the PO module to be processed further by the procurement department.

Bill of Materials (BOMS)

BOM is a hierarchical listing of sub-assemblies, intermediates, parts, and raw materials required to produce one unit of the final product. It is used to determine the items for which purchase requisitions and production orders should be made.

The BOM can be of various types and used for different purposes. For example, an engineering BOM includes details related to the materials required for product design, whereas a sales order BOM specifies the materials required by customers. Therefore, the BOM is classified based on its usage and the business needs of the organization.

The BOM not only lists all the required parts but also outlines the sequence of steps required to produce the end product. The BOM has a series of levels, and each level represents a stage in the manufacturing of the end product. The first level may represent sub-assemblies that are combined to make the final assembly. The next lower level that comes below to this one might represent the parts needed to make sub-assemblies, and the bottom-most level might represent the raw materials from which the parts are made.