Procurement documentation is full of acronyms. Some come from international standards, some from specific industries, and some from a company's own internal practice.
Below are the acronyms you'll encounter most often in day-to-day work, grouped by topic.
Purchasing documents
PR — Purchase Request (also Price Request)
A request to purchase, or a request for pricing.
PO — Purchase Order
The purchasing document.
OR — Order Request
A purchase request. "Purchase request" and "order request" are synonyms and are often used interchangeably.
ON — Order Number
The order's identification number. Typically, if a company records purchases in any system, every order is assigned an individual number.
LPO — Local Purchase Order
A local purchasing document.
Quantity and inventory
MOQ — Minimum Order Quantity
The minimum quantity that can be ordered.
ROQ — Reorder Quantity
The quantity to be ordered again.
IM — Inventory Management
Management of warehouse stock.
BOM — Bill of Materials
A list of materials. Used mainly in construction and machinery/equipment procurement.
Delivery terms
FOB — Free on Board
Used in transport, and indicates when responsibility for goods passes from seller to buyer — typically at the named port of shipment.
DDP — Delivery Duty Paid
When the sender delivers raw materials all the way to your door.
EXW — Ex Works
Transport starts from the sender's or manufacturer's agreed address.
OTD — On Time Delivery
Timely delivery.
Costs and evaluation
PPV — Purchase Price Variance
The difference in purchase prices.
TCO — Total Cost of Ownership
The total cost of owning something. It includes the purchase price of a given product or asset, plus operating costs over the asset's lifetime. For large machinery and equipment purchases, this is a critically important figure.
COGS — Cost of Goods Sold
The sum of all direct costs associated with producing a product. A favorite term among finance people.
KPI — Key Performance Indicator
Defined as a measurable value that shows how effectively a company or person is achieving set goals.
Documentation and contracts
COA — Certificate of Analysis
A certificate of analysis. Mainly required for the supply and production of food and hygiene materials.
SLA — Service Level Agreement
A legally binding, simplified agreement between parties setting service levels.
TDS — Technical Data Sheet
A technical description document. Covers drawings or details of how a system works, and also includes the composition of the product being purchased.
Organization and relationships
SRM — Supplier Relationship Management
A system describing your process of strategic partnership with suppliers.
MRO — Maintenance, Repair and Operations
One of the key terms in machinery and equipment procurement. Covers all activities, stock and processes related to the uninterrupted functioning of equipment and systems.
SCD — Supply Chain Department
The supply chain department.
