Date format using Purchase Order Management

Standard purchase order management in Business Central calculates lead time from the order date to the date your goods are ready to use. But it does not separate the time your vendor needs to handle the order from the time the goods spend in transport. Abakion’s purchase order management adds extra date fields on the purchase order line so you can split lead time into vendor handling time and transport time.

You get three new fields on the purchase order line: the transport method, the transport time, and a vendor lead time. The vendor lead time is the time your vendor needs internally to produce, purchase, or handle the item before it is ready to ship. The transport time is the time the goods spend in transit, and it comes from the transport method you set up on each vendor.

When you change the transport method, for example from sea freight to air freight, the system recalculates the dates automatically. A shorter transport time moves your expected shipment date later, which means you can order later and still receive the goods on time. This gives you better control over how much of your total lead time is tied up in transport.

The standard date fields on the purchase order line

Before looking at the new fields, it helps to understand the standard dates already on the purchase order line.

• Order date: The date you place the order.
• Planned receipt date: The date you expect the goods to land on the ramp at your warehouse, so you are ready to unpack them.
• Expected receipt date: The date the items are available in stock, meaning the date you are ready to pick and ship the items to your own customers.

The time between the order date and the planned receipt date is the lead time calculation, which is based on the vendor lead time set up on the vendor card. That is the time from when you order until the goods are ready on the ramp.

The time between the planned receipt date and the expected receipt date covers two things: the inbound warehouse handling time and the safety lead time. The inbound warehouse handling time is what you need to receive the goods and put them on stock. The safety lead time is a buffer, normally set up to one day in most systems.

The new date fields in purchase order management

Abakion’s purchase order management splits the overall lead time into its components so you can see and control each part.

Vendor lead time is the time your vendor needs internally to handle the item, whether that means producing it, purchasing it, or something else. It runs from the order date until the goods are ready to ship from the vendor. The result is shown as the expected shipment date.

Transport time is the time the goods spend in transit, based on the transport method set up on each vendor. Together, the vendor lead time and the transport time make up the overall lead time calculation, which is the standard field used elsewhere in the system. So the lead time calculation now reflects both the vendor’s internal handling time and the transport time.

An example with sea freight

Take a case where the expected receipt date, the date you can use the goods, is the 1st of December.

The planned receipt date, when the items are on the ramp, falls five or six days earlier. That gap covers the inbound warehouse handling time and the safety lead time.

In this case the lead time calculation is 21 days plus six weeks. The six weeks is the transport time by sea, and the 21 days is the vendor’s internal lead time. The expected shipment date is the planned receipt date minus the six weeks of transport time. This means the order date needs to be at least 21 days before the expected shipment date, which lands the order date on the 14th of October.

Changing the transport method to air freight

If you change the transport method on the vendor to air freight, the system recalculates the dates from the expected receipt date, the day you can sell the goods.

With air freight, the planned receipt date is only three days earlier than the expected receipt date. That is because the inbound warehouse handling time is only two days when goods arrive by air, plus the one-day safety buffer.

The lead time calculation becomes three days plus 21 days. The 21 days is still the vendor’s internal time at their factory, and the three days is the transport time by air. This means the vendor needs to have the shipment ready from their factory on the 25th of November.

Why splitting the lead time matters

By using these date fields and separating vendor handling time from transport time, you get a clearer picture of where your total lead time is spent. You can control how much time goes into transportation, and you can see how switching transport methods affects your order date and your ability to deliver to your own customers.

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