Original Date: 07/18/1994
Revision Date: 01/18/2007
Best Practice : Office Supply Ordering System
Inventory practices were successfully improved by Mason & Hanger's (M&H’s) implementation of an Office Supply Ordering System. By centralizing and streamlining its office supply ordering system, M&H was able to alleviate accumulated inventory, release capital, eliminate the need for large amounts of valuable space, and avoid extensive monitoring and inventory control resources.
The previous office supply ordering practice required each department to requisition and issue supplies, and involved many steps, resources, and time. Requisitions were sent to the warehouse, and transportation and labor were required for distribution. A clerk would input information to the inventory system, requisitions were again initiated for inventory replenishment, and a buyer would issue purchase orders to the vendor. A material checker would then receive and stock material awaiting next issue.
Implemented in April 1994, the new Office Supply Ordering System was designed for one vendor to take the entire order. Only one purchase order is negotiated and issued each year, and each department forwards orders directly to the vendor. Orders placed by Monday noon are delivered by the vendor each Wednesday morning to eight centralized locations. The delivery invoice is checked by the requestor and a copy is forwarded to accounts payable. Accounting then debits each department for the items it orders, and vendor payments are made monthly.
The new system has reduced invoices from 140 to 12 per year 90%. Only one purchase order is negotiated per year instead of the 84 individual purchase orders issued in 1993. Stores inventory is no longer required. Material checker and clerical time, purchasing time to negotiate and issue purchase orders, and accounts payable transactions have been reduced or eliminated. Dollars tied up in office supply inventories have been virtually eliminated.
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