Re: Out Side Services on BPCS CD -- BPCS-L

You might also check the BPCS_L archives on "Outside" since there have been other past discussions of the nuances of this kind of thing. Here are some great examples: http://archive.midrange.com/bpcs-l/200208/msg00053.html http://archive.midrange.com/bpcs-l/199902/msg00015.html

We are also on 405 CD

We have a number of items in which at a particular point in the processing they go to some outfit outside our company to get some of the work done, then they come back to us before shipped to customer.

The players and objectives * We want our inventory and engineering to be accurate so that MRP works correctly. * We want to get correct product to customer as fast and inexpensively as practical. * We want to keep things simple and straightforward for our clerical staff ... avoid exceptions to exceptions and hassles fixing mistakes. * We want to accurately track our stuff and expenses with a minimum of hassle. * It is Ok to occasionally have some stuff outside of BPCS. Scenarios: * The Outside Vendor is in a business similar to ours and it is not economical for our volumes for us to get that equipment, but they also use that equipment for other work, so it is economical for them to have it. * The Outside Vendor is using personnel, who for various legal reasons I do not want to get into, are able to pay people much less than we have to pay our work force. * We have some semi-retired somewhat disabled experienced workers who are able to do labor intensive work in their home, and I suspect from the volume that gets done, that some members of their family are actually doing some of the work, but the payroll only reflects the semi-retired worker. So a batch of work to be done "walks off" our premises, gets done at the worker home, then "walks back" to our facility in a completed state. We have gone though a number of different ways to handle these scenarios that satisfy all the players. I can forward you more info on other stuff we have tried but were not happy with.

For example, at one time we defined the Outside Vendor as both a Vendor and as a Customer. The work that we sent them was defined as if we were sending something to a Customer deliberately at zero price. This meant that we had all the paperwork associated with shipping, and we just tore up the invoices, or did not print them. We use customer # below 1000 to represent inter-facility and outside vendors, so we can do a billing run for 0-9999 and that gets a lot of stuff right, but those invoices not go anyplace.

When we got customer orders for items that went through the Outside Vendor, we would enter the orders twice ... once for the real customer, and once with a buffed due date for the Outside Vendor, but what was going to the OV was really the kit of components to make what would go to the real customer.

A method recently instituted that many people seem to be very happy with is as follows.

We make the sub-components for what will go to the Outside Vendor like normal.

Operation 100 has no routing labor or machine time requirements, all it does it list the BOM of all the components (kit) that is to go to the outside vendor. As kits leave our premises, operation 100 is reported, so now our inventory is correct in-house.

At the moment we are not reporting labor on what the Outside Vendor does. There is some talk about connecting the Outside Vendor to our VPN so that they can access selected BPCS applications. If we do that, we may have operations between 100 and 999 so they can do progress reports on where they are on intermediate steps of the work they do for us.

Operation 999 says the end product is completed. We report against operation 999 when the stuff comes back from the outside vendor, and passes our inspection. Now our inventory is correct in house for what the outside vendor did.

No inventory transactions whatsoever are keyed in. It is all done through JIT600 labor reporting. No paperwork to the Outside Vendor other than what is part and parcel of our factory paperwork, that is obtainable on any work to be done by anyone. I have no idea how we handle reconciliation between what the Outside Vendor did, and the invoices from them, to make sure both match up correctly. I have made some suggestions about revising the forms we now use, so it is clearer what stuff is between Outside Vendor and which of our facilities.

This means that there is no extra work for Customer Service personnel - they key in their stuff exactly the same for parts that go through Outside Vendors as parts that do not there is no extra work for Factory Management personnel - they process everything through dispatch reports and labor reporting same as whether Outside Vendor or not the only place there is an extra hassle is in matching up the outside vendor bills with which facility the work was done for, and auditing that we are not overcharged

Now I have some reports on WIP at the Outside Vendor, in which the logic is to identify all the shop orders for the items in question, total up what was reported at operation 100 (quantities of work sent them) total up what was reported at operation 999 (quantities of work that came back), subtract to get the difference (WIP currently there). This info was added to existing BPCS modification reports, so people can see at a glance which items involved with OV and for those items what the WIP is there. No one has to run anything special different just because some items involve OV.

Other questions for you to consider: Do you need an operation just for inspection to make sure what came back meets your criteria? Is it valid APICS SOx to be defining an outside company in BPCS as if it is part of one of your facilities? How do we do engineering files differently to handle this, such as work center, how stuff gets costed ... does TBC-C apply? Which of our BPCS manuals do best job of putting this all in perspective?

Here is two separate questions / issues in doing outside services.   Maybe
someone can share some advice.

We are doing more outside services.    How do you create paper work to
ship items out?   Today we hand write misc. Packslips and Bill of Ladings?
Today we have an operation on a shop order for out side shipping.    The
dispatch list for that work center creates a list of items to be shipped
out.   We then have an  operation / workcenter to receive back in on. This
helps us track where the parts are.

Then we create a PO for an item representing the Outside charges.    This
item is then received in and issued to the Shop order.   This applies the
cost to the shop order.     I have been testing the way a PO can be tied
to a shop order and operation.    I noticed the "OO" - outside receipt
transaction.    What does this transaction do differently than the "U" PO
receipt.

Thanks

Roger Henady
Thorco Industries
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