Mercado | What is an Import Purchase Order?

What is an Import Purchase Order?

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What is an Import Purchase Order?

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Every week, Mercado CEO Rob Garrison pens his latest learnings from the supply chain industry as part of an on-going series. Each article aims to share a little insight into what's going on that week, and to help foster discussion amongst industry professionals across levels, geographies, and companies.
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What is an Import Purchase Order?

A Purchase Order (PO) is a document created by a buyer and provided to a supplier (also known as a supplier, vendor, etc.) with a request for a specific order. Purchase Orders typically include details surrounding the type and quantity of items, stating an agreed price and payment terms. A unique Purchase Order number enables easy distinction between orders.

Upon receipt of the Purchase Order, a seller can accept, reject or modify the terms (which must then be agreed by the buyer). Upon acceptance, a legally binding contract is then formed between the two parties.

What is the benefit of having a Purchase Order?

Although Purchase Orders require additional steps in the overall purchasing process of the supply chain, they are generally considered to help provide a smooth transaction between the buyer and the seller. Purchase Orders are an opportunity for the buyer to clearly and explicitly communicate their request to the seller, which helps to reduce the risk of an incomplete or incorrect order being fulfilled.

Using purchase orders can help companies regain control of their spending, streamline the process of acquiring goods and services, and ultimately create a proactive spend culture that improves the bottom line.

An efficient Purchase Order system also provides internal teams (including procurement and finance teams) with a means to keep track of pending and future purchases before money is committed.

What happens if a Purchase Order is incorrect?

With change, comes opportunity. The reality is that a shift needs to happen, and fast, if we’re to see the international supply chain not only weather, but remain relatively unscathed from future shocks. The consequences of not doing so will be detrimental to individual businesses and the future of global trade.

As we see continued investment to advance importer’s ability to react to demand pressures, the same needs to happen on the supply side through the advent of supply response networks—helping to increase visibility and transparency across the first mile. Only then, will those companies who plan, buy, and move goods thousands of miles each year, be able to truly create the levels of resilience and interoperability that are required to not only keep the supply chain on track, but enter it into a new era of success.

What is the 'first mile'?

Find out

How to successfully manage your Purchase Order

Successfully managing a Purchase Order (PO) doesn’t have to be difficult. Cloud-based systems like Mercado enable international importers to track, manage, and optimize their orders across the product lifecycle.

By focusing on the key areas of the supply chain, Mercado helps businesses to manage their relationships with those who are involved in the first 120 days of your supply chain.

Three factors are key to the success:

  1. Communication & Collaboration
    Successful supply chains focus on connecting and bringing together the people, processes, and tools involved under one roof. Minimizing issues at hand-off, reducing reliance on manual tasks, and focusing efforts on ensuring products meet the needs of your end-consumer. Tools like Mercado’s in-built collaboration tools, video chat, and digitized purchase order can help here.

  2. Transparency & Visibility
    Tech-savvy customers, business stakeholders, and internal suppliers today demand transparent supply chains that are socially and regulatory compliant. Offering clear end-to-end visibility of where products are across the importing lifecycle and the status of an order. Mercado provides importers with a single platform that digitally connects the first, middle, and final mile. So you can track, manage, and update your Purchase Orders and keep on top of your product demand.

  3. Automation & Predictability
    Many importers continue to rely on email chains and spreadsheets to manage their Purchase Orders. Optimize your supply chain by digitizing the First Mile thanks to tools like Mercado, providing you with real-time information to ensure all aspects of your supply chain ecosystem are connected and streamlined – from source to store. Making it easy for you to manage your entire product inventory across suppliers and deliver for your customers, every time.

About Mercado

At Mercado Labs, we know your product is the lifeblood of your business. And yet managing your imports has become increasingly complex over recent years, with products taking on average 5 months to receive, suppliers located thousands of miles away, and external forces – from trade wars to global pandemics – creating extreme uncertainty. Most of the process is analog and takes far too long. So we wanted to change that.

The Mercado platform helps importers to better manage their orders from source to store. By focusing on the First Mile – the initial 120 days of an order – we help businesses optimize their global trade, eliminating pain and mitigating risk across the supply chain.
Mercado | Bring Order to your Imports
                                               
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