Re: Consignment Purchase Orders

   We don't have your volume of odd ball stuff & I do not know all details
   how we handle all our scenarios but the following might help you:
     * We have a similar problem with items sent to us as free samples.  When
       we are starting up a new part, we need low volumes, so some suppliers
       with which we do a large volume business, send us materials that are
       new to us that we need in low volume, to encourage us to incorporate
       their source in the new parts we designing.  We cannot do a proper 3
       way match on those items.   We do not neccessarily know in advance
       which will be free.
     * We have an item class just for raw materials that are on-consignment,
       where the part to be made and sold for $ to the customer, includes
       some on-consignment components supplied by the customer that show on
       our books as zero inventory.
     * We copied "A" misc. adjustment (which impacts material variance in GL)
       to an inter-company transaction (which impacts inter-company account
       in GL) to handle inventory transfers with another factory that has
       same ownership as us, but is not on BPCS.
     * We have been processing some exception transactions same way as
       regular transactions, then doing closures & deletions on such a mass
       scale, that we need a programatical way to handle it.  The nuisance to
       me, is how we handle accounting on trading partners that are both a
       customer and a vendor.
     * We recently had a change in auditors & I think some of our methods are
       such that we wasting their time, because they are constantly
       questioning items that appear odd to them, that are in fact correct
       under our systems, but they keep questioning them.

   -
   Al Macintyre
   BPCS/400 Computer Janitor ... see
   http://radio.weblogs.com/0107846/stories/2002/11/08/bpcsDocSources.html

    DANIEL WARTHOLD wrote:

     Just throwing some ideas, if the stock in consignement is not owned, I
     think
     it should not be received under a PO, and should not create accruals for
     invoices to receive, it should not create inventory assets in the
     balance
     sheet, and should not create invoices when shipped out. I think the
     quantities on hand and the in and out movements should be accounted for
     with
     another kind of transaction: lerhaps some kind of miscellanous receipt
     or
     stock adjustment. The warehouse should not be included in the GL. Also,
     the
     company is giving a service, so their revenues should be invoiced with a
     non-inventory service item, not the inventory items.

     Daniel Warthold

     >From: "Milt Habeck" <mhabeck@xxxxxxxxxx>
     >Subject: [BPCS-L] Consignment Purchase Orders
     >Date: Thu, 1 Mar 2007 09:22:23 -0600
     >
     >Hi ...
     >
     >This is intriguiging.
     >
     >So, do you process a receipt transaction and then hold the consignment
     >items
     >in BPCS inventory with a zero inventory value? Are the consignment
     >inventory
     >counts held in BPCS?
     >
     >Do shipments from Clover to the ultimate customers generate revenue for
     >Clover in the form of some sort of per-unit handling fee rather than
     the
     >typical sales less COSales = gross profit revenue cycle? Said another
     way,
     >is your A/R collected from the owner of the consignment inventory
     rather
     >than the enterprises that receive shipments of the inventory from your
     >warehouse? If these guesses are correct, then it seems as if the owner
     of
     >the inventory cuts an invoice to its customer once you tell that
     enterprise
     >that a shipment has departed from your door.
     >
     >If you do process a BPCS receipt transaction, I'm curious how you get
     the
     >inventory removed from BPCS when you ship it.
     >
     >All these questions prove that I'm in the dark about your business
     process
     >... but the point that keeps popping into my head is that you may not
     be
     >doing yourself any favors by processing the purchase orders in BPCS.
     Why
     >can't the owner of the consignment inventory cut POs that are drop
     shipped
     >to you? They would have to have some sort of PO on their system anyway
     if
     >they wanted to 3-way match before paying their supplier.
     >
     >If you can't convince the consignment inventory owner to cut his own
     POs,
     >then maybe you need a blanket PO processed outside of BPCS and manage
     >releases against the PO using a Kanban signal.
     >
     >En pocas palabras, don't let the business process owner at Clover
     convince
     >you that this is a BPCS software problem.
     >
     >Peace to you,
     >
     >Milt Habeck
     >President
     >Unbeaten Path
     >www.upisox.com
     >
     >North American  (262) 681-3525
     >International (888) 874-8008
     >
     >
     >From: frank.shaw@xxxxxxxxxxxx
     >Sent: Thursday, March 01, 2007 4:22 AM
     >Subject: [BPCS-L] Consignment Purchase Orders
     >
     >
     >We require a method whereby we can place a purchase order for stock
     items
     >for which we expect receipt of stock but that is where the chain of
     events
     >stop.
     >No creditors invoice will ever be captured against these orders as
     these
     >stock items are managed on behalf of a third party and they only get
     paid
     >once the stock is sold.
     >At month end we programmatically perform the following on both HPH and
     >HPO:
     >change the status in both HPH and HPO to '3'.
     >make the qty received and qty costed the same as qty ordered.
     >
     >The purchasing month end then purges these records.
     >
     >We would manage this workaround easier if volumes weren't so large but
     we
     >literally have thousands monthly.
     >
     >Any ideas/input/feedback would be welcomed.
     >
     >Kind regards,
     >
     >Frank Shaw
     >Clover Information Services
     >Tel: +27 11 758 5380
     >Mobile: +27 82 451 0256
     >Fax: +27 11 758 5300
     >Email: frank.shaw@xxxxxxxxxxxx

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