4.4 Order Acceptance Rules: PO Validation & Promise Logic

A Purchase Order (PO) is not a suggestion; it is a binding legal contract. Once accepted, the factory commits capital, capacity, and liability. Accepting a "dirty" PO (incorrect price, ambiguous revision, impossible date) creates a blast radius of administrative rework and margin erosion. We operate on a "Clean Order" policy: If the data does not align with the system of record, the order is rejected immediately.

The "Clean Order" Validation

Automate this check. Do not rely on sales admins to "remember" the pricing. Compare the PO against the active Quotation and Master Supply Agreement (MSA).

If any of the following criteria fail → Then the PO is placed on Administrative Hold.

Validation Point	Logic Check	Action on Failure
Pricing	PO Unit Price == Quoted Price (System)	Reject. Request Amendment.
Revision	PO Rev == Current Engineering Rev (ERP)	Reject. Clarify Rev level.
MOQ / MPQ	Quantity $\geq$ MOQ; Quantity is multiple of MPQ	Round Up. Request authorization to adjust.
Incoterms	PO Terms == MSA Terms (e.g., EXW Factory)	Reject. Logistics liability risk.
Credit Status	Total AR + New PO $\leq$ Credit Limit	Hold. Finance release required.

Pro-Tip: Watch out for "Phantom Revisions." Customers often copy-paste old POs. If they order Rev A, but the active Rev is B, and you accept it, you are legally obligated to build obsolete product or face a non-conformance penalty.

Promise-Date Logic (The commit)

The Requested Date is the customer's wish. The Promise Date is the factory's commitment. These two rarely align perfectly. We calculate the Promise Date based on constraints, not optimism.

The Calculation Formula:

Promise Date = T_entry + Max ( LT_material , LT_capacity ) + T_transit

Scenario Logic:

1. Standard Lead Time:
   • If material is bonded/in-stock → Then Promise Date = Order Date + Manufacturing Lead Time (e.g., 4 weeks).
2. Shortage / Lead Time Constraints:
   • If critical component LT > Standard LT → Then Promise Date = Component Arrival + 1 Week.
   • Action: Communicate the specific "Gating Item" driving the delay.
3. Capacity Saturation:
   • If Line utilization > 95% for Requested Week → Then Promise Date slides to the first available "Open Slot."

Rule: Never override the ERP's calculated date based on sales pressure. If the system says Week 12, and you promise Week 8, you are engineering a failure.

Expedite Rules (Breaking the Queue)

An expedite request is a request to displace another customer or incur premium costs. It cannot be free.

Category A: Supply Expedite (Material)

• Trigger: Pull-in requires air freighting raw materials or paying broker premiums.
• Rule: Customer pays 100% of the PPV (Purchase Price Variance) + Freight delta.
• Approval: PO Amendment required before booking logistics.

Category B: Manufacturing Expedite (Labor)

• Trigger: Pull-in requires Overtime (OT) or Weekend shifts.
• Rule: Flat fee applied (e.g., $+15\%$ of order value or fixed OT rate).
• Constraint: You cannot expedite physics. Cure times, burn-in cycles, and thermal profiles cannot be compressed.

Decision Matrix:

• If Request violates Minimum Process Time → Then Decline. (Risk of quality failure).
• If Request implies "Line Jumping" → Then requires VP Ops approval to delay other orders.

The Order Acknowledgement (OA)

The PO is the offer; the OA is the acceptance. The contract is not formed until the OA is sent.

SLA: 48 Hours from PO Receipt.

Content Requirements:

• Confirmed Quantity: (May differ from PO if MPQ rounding applied).
• Confirmed Price: (Must match Quote).
• Promise Date: (The binding date).
• Incoterms: (Confirming transfer of liability).

Status:

• Accepted: Dates and Terms align.
• Accepted with Exceptions: Dates shifted; Price corrected. (Requires Customer confirmation).
• Rejected: Invalid Terms.

Final Checklist

Control Point	Passing Criteria	State
Price Match	Penny-perfect match to active quote ID.	Match / Mismatch
Material Check	"Clear to Build" (CTB) analysis complete; shortages identified.	Complete
Date Feasibility	Promise date accounts for longest lead-time part.	Verified
Engineering Status	No active ECOs or "Stop Ships" on this Part Number.	Clear
Expedite Fee	If expedited, fee is added as a separate line item.	Added / N/A