In the items section of the purchase order entry screen the individual order items are added.
Each item is categorised by a Category which may be your major purchase areas e.g. stationery, computers.
Within each category you can define the items, which in the stationery example could be paper, ink cartridges, envelopes etc,.
The advantage of using these categories is the ease with which you can search to find all the suppliers who may have supplied you with, say, envelopes and compare prices.
Categories and items are very flexible and some users have found they can describe all their purchase with them without ever having to enter a product description and others have used them to categorise with nominal codes.
You can use whatever best fits with your business.