Blanket PO is generally used for B, C Class items i.e. very low value items (consumables such as stationary or any other material)
Conventional Procure to Pay contains steps PR>PO>GR>LIV (RFQ Optional) and everytime we want to procure material we do a PO send to vendor and then receive through GR, whereas to fulfil business requirement in which we want to do a PO for example the whole year and do not want to know about the receivings only post invoices against them. This is where Blanket Purchase Order comes in, its for a period of time using Item Category B (Limit) and Account Assignment Category which if you don't know at the time of PO creation can use U (Unknown) and assign at the time of Invoice. So system will keep checking the quantity and date at the time of invoice. Its not 3-way match rather only 2-way.
Khurram