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Learn and implement – Purchase Orders in Oracle EBS Suite.

Posted on June 16th, 2007 by Sanjit Anand ||Email This Post Email This Post

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Lets take a quick look on different types of Purchase Orders , and some of the important tips before implementing within Oracle ebs-Suite of PO module.

  • Standard Purchase Orders: You generally create standard purchase orders for one-time purchase of various items. You create standard purchase orders when you know the details of the goods or services you require, estimated costs, quantities, delivery schedules, and accounting distributions.
    • Suggested Use: Choose a standard purchase order when you require vendor commitment to specific items/services, quantities and delivery schedules, but a long-term agreement is not appropriate.
  • Blanket Purchase Agreements: You create blanket purchase agreements when you know the detail of the goods or services you plan to buy from a specific supplier in a period, but you do not yet know the detail of your delivery schedules. You can use blanket purchase agreements to specify negotiated prices for your items before actually purchasing them. Blanket purchase agreements can be created for a single organization or to be shared by different business units of your organization (global agreements).
    Much organization it is sometimes called as “standing order” or an “open order”.

    • Suggested Use: Choose a blanket agreement when you’ve negotiated volume discounts and want to create releases against these negotiated volumes, or when you commit to specific items, quantities or amounts.
  • Blanket Releases: You can issue a blanket release against a blanket purchase agreement to place the actual order (as long as the release is within the blanket agreement affectivity dates).
  • Contract Purchase Agreements/Order: You create contract purchase agreements with your suppliers to agree on specific terms and conditions without indicating the goods and services that you will be purchasing. You can later issue standard purchase orders referencing your contracts.
    • Suggested Use : Negotiate pricing on your entire volume of business. Use a contract to manage terms and conditions for this type of negotiation; couple it with a catalog quotation to reference pricing on a per item basis when you create standard purchase order lines.
  • Global Agreements: You may need to negotiate based on an enterprises’ total global purchase volume to enable centralizing the buying activity across a broad and sometimes diverse set of businesses. Using global agreements (a special type of blanket purchase agreement), buyers can negotiate enterprise-wide pricing, business by business, then execute and manage those agreements in one central shared environment. Enterprise organizations can then access the agreement to create purchase orders that leverage pre-negotiated prices and terms.
  • Planned Purchase Orders: A planned purchase order is a long-term agreement committing to buy items or services from a single source. You must specify tentative delivery schedules and all details for goods or services that you want to buy, including charge account, quantities, and estimated cost.
    • Suggested Use: Choose a planned purchase order when you want to encumber the order before creating releases. Also use to provide vendor scheduling for capacity management while issuing releases to confirm order commitment.

Apart from these there are few more types may be defined as per there industry segment , but more or less they can be fit into any one of the above mentions type.

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Posted in Oracle Purchasing | 6 Comments »Email This Post Email This Post |

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6 Responses
  1. Comparing Purchase Orders Says:

    […] Here are the comparison of different purchase orders. The details of the different types can be discussed in my previous post. […]

  2. Ram Ganesh Says:

    Hi Anand

    Its very rare to see a more articulate way of explaining the concepts of a module like the way u have done for Purchasing.Kudos for the same.

    with best regards
    Ram Ganesh.B

  3. Mahesh Says:


    You are really doing great job for helping new apps professional.
    God bless you.


  4. 3ERP Says:

    This is an EXECELLENT explanation!!! Thanks for ALL you do!

  5. Sdsmt Says:

    Thanks a lot for the perfect article .

  6. mubarak Says:

    Dear friends

    I want to start my carrer in oracle apps i was a electrical and system administrator for past 13 years.can i chose distribution module in oracle apps my basic qualification is DEEE .

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