Re: Blanket P.O.'s - 405cd

There are several ways to do this in 405 CD. Each approach comes with its
advantages & disadvantages, so you need to get familiar with alternatives,
then pick which makes most sense for your situation. This impacts inventory
accuracy, costing accuracy, General Ledger integration, MRP efficiency, good
relations with the vendor, and other elements of BPCS, so many departments
of your company should be in the loop in deciding which combination makes
most sense.

I am not familiar with all the variations of each approach, since my
employer wanted least hassle approach. Other companies are more interested
in good audit trails, having inventory accuracy of what is at the vendor,
other criteria.

Currently we are using different approaches with different outside vendors.
In all of them, we have to inspect what comes back from the vendor, and have
provisions to make repairs, before that work continues to a later stage.

We have a physical inventory imminent. Our people will be visiting the
vendors to count our stuff there, then our auditors will follow them to
check on what our people have done. Access to the vendor sites is critical.

In Shop Order (SO) Operations, there is a provision for "Outside Operations"
meaning outside your facility, with vendors or sub-contractors. Where most
operations costing use time to get some quantity completed, outside ops use
a flat rate by quantity. However, some outside vendors might bill you based
on other criteria, so you need to consider how to integrate all
transactions.

We do some that way. We use a particular item class for what is going thru
this vendor
Operation 100 = prepare a package of the inventory to go to the vendor.
Operation 200 = the outside vendor operation. This is a non-reporting
operation.
Operation 999 = count what we got back from the vendor which is perfect.

In our progress reports, for that item class, there is some math ... total
up SO's on this item, get quantity returned thru op 999, subtract quantity
sent them via operation 100, the difference is what we think they have, a
particular kind of WIP, what is associated with this vendor. There needs to
be periodic cycle counting to verify what is really there (how report scrap
for example).

You can have a PO inside a SO. This assumes the item # is not going to
change, and some of the operations will be at the outside vendor. You
cannot purge the SO until after the PO cycle has completed.

You can have separate item #s for the materials before shipping to the
vendor, and after coming back from the vendor. This way you keep SO's
in-house, with separate PO's for what the vendor will need, but you still
need to account for what needs to be shipped to the vendor.

Costing can be a pain, since the BOM includes what the vendor supplied, and
what you sent to the vendor. We are accustomed to the lowest level being
raw materials, and highest level being what is shipped to customers, but
this scenario is topsy turvy.

Normally shipments out of the company require customer orders (CO's), have
invoice billing, receivables, paying those invoices, and a pile of
associated transactions not relevant to this situation. You could clone
inventory adjustment "A" transaction to something else to track shipments to
the vendor, and eliminate a lot of hassle and overhead. Similar tracking
for what comes back from them.

The "A" clone will need an opposite General Ledger account which it is going
to, each time on-hand inventory is updated. I advise using separate GL
journal entries for both the outgoing and incoming inventory vs. the outside
vendor, with DETAIL tracking for the General Ledger. This will put into GL
Journal the item # and vendor identification, assuming you set up your
effects properly.

BPCS 405cd also has DRP, where you could designate your stuff which is at
that vendor, and which is needed from that vendor, as a specialized
facility. You end up with requirements in one facility, to be fulfilled by
a different facility, where instead of SO PO CO logic you get RO or resupply
orders.

If you have not previously been using DRP, you need to check your contract
with INFOR, what applications you are authorized to be using.

-
Al Mac
-----Original Message-----
From: bpcs-l-bounces+macwheel99=wowway.com@xxxxxxxxxxxx
[mailto:bpcs-l-bounces+macwheel99=wowway.com@xxxxxxxxxxxx] On Behalf Of
GLangston@xxxxxxxx
Sent: Tuesday, December 21, 2010 12:01 PM
To: BPCS ERP System
Subject: Re: [BPCS-L] Blanket P.O.'s - 405cd

We have a situation where we want to ship product A to a vendor for them
to provide a service and ship back to us as a finished product B. .
Looking for suggestions on how I might could handle this in 4.05cd..

Thanks,
Glen Langston

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