Procurement glossary

Agentic AI in procurement is software that pursues a procurement outcome across multiple steps on its own — deciding what to do next, acting, and reacting to what comes back — rather than answering a buyer's question or replaying a fixed script. The distinguishing test is whether it acts without a prompt.

"Procurement agent" has two unrelated meanings. It is a job title for a person who buys goods and services for an organisation, and it is also a term for AI software that executes procurement tasks autonomously. Which one is meant depends entirely on context.

A purchasing agent is a person responsible for the transactional side of buying — raising purchase orders, confirming them with suppliers, and chasing deliveries. The term is also now used for AI software that performs the same transactional work autonomously.

A sourcing agent is a person or firm that finds and qualifies suppliers on a buyer's behalf, common in international trade and manufacturing. In AI contexts, the term also refers to software that automates parts of supplier discovery and RFQ handling.

A PO acknowledgement is a supplier's formal response to a purchase order, confirming acceptance and stating the terms it will actually meet — quantities, prices, and delivery dates. It matters because the acknowledged terms, not the ordered terms, are what the supplier has committed to.

Tail spend is the large number of low-value purchases that together account for a small share of total spend but a large share of transactions and suppliers. It is usually the least managed part of a procurement portfolio because attention follows spend value.

The purchase order lifecycle is the full sequence a PO passes through: creation, approval, transmission to the supplier, acknowledgement, date management, shipment, receipt, and invoice reconciliation. Most procurement software automates the beginning and end, leaving the middle manual.

Supplier expediting is the practice of actively chasing suppliers to confirm, prioritise, or accelerate open orders so material arrives when it is needed. It covers acknowledgement chasing, delivery date confirmation, and escalation on orders that are trending late.

A supply commit is the delivery date and quantity a supplier has actually agreed to, as distinct from the date requested on the purchase order. Planning against requested dates rather than commits is a common source of unexpected shortages.

OTIF, or On Time In Full, measures the share of orders delivered both on the agreed date and in the complete quantity. An order arriving on time but short, or complete but late, fails OTIF — which is why it is stricter than on-time delivery alone.

A pull-in is a request to move a delivery earlier; a push-out moves it later. Both are routine adjustments to open orders as demand shifts, and both require the supplier to agree — a rescheduled date is not confirmed until the supplier accepts it.

A dock date is the date material arrives at the receiving facility, as opposed to the date it ships. Confusing the two is a routine cause of shortages, because the transit interval between them can be days or weeks depending on mode and route.

Clear to build is the condition in which every component required for a planned build is available or firmly committed, so production can start without a shortage. It is a binary state per build: one missing line makes the whole kit not clear.

Line-down risk is the exposure to production stopping because a required material does not arrive in time. In lean or just-in-time operations there is little inventory buffer, so line-down risk is driven mainly by how early a delay is detected.

Direct materials are the inputs that physically become part of a finished product — components, raw materials, and sub-assemblies. They are distinguished from indirect materials, which support operations without entering the product, and they are managed for continuity rather than cost control.

MRO covers maintenance, repair, and operations spend — the parts, consumables, and services that keep facilities and equipment running without becoming part of a product. MRO is characterised by high transaction volume, low unit values, and a long tail of suppliers.

An AVL is the list of suppliers approved to supply a given part; an AML is the list of manufacturers whose parts are approved for a design. In electronics and regulated manufacturing, buying outside them requires formal engineering approval.

A certificate of conformance is a supplier's signed statement that the delivered goods meet the specified requirements — drawing revision, material specification, and applicable standards. In aerospace, defense, and medical supply chains it is normally a condition of acceptance.

AS9100 is the quality management standard for the aerospace industry, extending ISO 9001 with aerospace-specific requirements covering configuration management, risk management, product safety, counterfeit part prevention, and traceability through the supply chain.

Counterfeit parts risk is the exposure to receiving components that are misrepresented in origin, specification, or condition — relabelled, salvaged, or fraudulently marked. The risk rises sharply during shortages, when buyers are pushed toward unfamiliar sources to find stock.

Sub-tier supplier visibility is knowing the status and risk of suppliers beyond the ones you contract with directly — your suppliers' suppliers. It is difficult because there is no contractual relationship and no obligation for those parties to report anything to you.

An MRP exception message is a system-generated alert telling a planner that an order needs attention — expedite it, reschedule it, cancel it, or place it. Volume is the defining problem: a single planning run can produce more messages than any planner can act on.

In ANSI X12 EDI, an 850 is a purchase order, an 855 is the purchase order acknowledgement, and an 856 is the advance ship notice. Together they carry the core order cycle between trading partners as structured, machine-readable messages.

An advance ship notice is a message sent by a supplier when goods leave its facility, stating what shipped, in what quantity, and how. It lets the receiving site plan labour and dock capacity, and converts a promised delivery into a confirmed one in transit.

Supplier portal fatigue is the disengagement that occurs when a supplier is asked to maintain logins across many customers' systems. It produces low adoption, stale data, and suppliers reverting to email — which undermines the visibility the portal was bought to provide.