RE: POs considered harmful for dependent demands

[Bob Haugen <linkage@interaccess.com>]

Andrew Macpherson wrote:
>I'm not sure if there is a real difference. Whether it is a PO or a
>dependent demand, one is satisfying a need with a service or a good.  No
>matter what you call it it is a request for item, quantity and price
>(information) coupled with a linked payment stream. 

The significant difference is that a dependent demand (as the name
suggests) is dependent for quantity, timing and even existence on
its relative independent demand.

For example, if you order a computer from Dell with a particular monitor,
the monitor is a dependent demand.  Since Dell tries to hold very
little inventory, it will probably need to be delivered from a supplier.

If you later change your order to two computers, or delay it for
a month, or cancel the order, the dependent demands had 
better change too.  

If the dependent demands are buried in aggregate line items
in purchase orders, these changes are much more difficult
to ripple down the chain.  In most business software packages,
they would require human intervention.

There are several other ways that purchase orders are too
heavyweight for dependent demands: structurally, 
administratively, organizationally.  But the problems with
changes alone make them unusable in many situations.

Make sense?
-Bob Haugen