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Evo-ERP and DBA Classic >> Manufacturing >> Set up part for purchase and outside process
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Message started by David Waldmann on 02/13/06 at 06:19:12

Title: Set up part for purchase and outside process
Post by David Waldmann on 02/13/06 at 06:19:12

We have always bought our lumber kiln-dried. However, we will now sometimes buy it green and get it kiln dried by a different vendor. I am trying to figure out how to allow for that. The best I've come up with is to make the Green part type R, the KD part a type A, the services as type T. That way we can buy it KD, or use a WO to put them together when purchased green. I have never used outside processing before and am not familiar with just how it works. Will this work? Any other suggestions or pitfalls to watch for?

Title: Re: Set up part for purchase and outside process
Post by Lynn Pantic on 02/13/06 at 10:01:37

This will work and is the best way to go when you will be switching from one to the other. Make-From (type M) would be easier to process the parts because therewould only be the Purchase Orders and no Work Order involved but more difficult to switch back and forth.

Title: Re: Set up part for purchase and outside process
Post by David Waldmann on 02/14/06 at 12:05:44

OK - will try it out. Thanks!

Title: Re: Set up part for purchase and outside process
Post by David Waldmann on 02/14/06 at 13:19:59

I'm not sure I know how type Ts work.

I entered a PO for the T item and received it. IN-A shows 0 on hand and Last/Avg cost as 0.00. But when I click on POs it shows the receipt at the cost I entered.

Should I just make the Kiln Drying a type R? Any advantage/necessity for using T?

???

Title: Re: Set up part for purchase and outside process
Post by Lynn Pantic on 02/14/06 at 16:49:27

Type T should ALWAYS be purchased for the work order that is converting the green wood to the dried wood. It is not a tangible thing and never has an on-hand quantity. It is a process being applied to the parts in the work order and the costs will post directly to WIP..

Title: Re: Set up part for purchase and outside process
Post by Tim Keating on 02/16/06 at 10:18:25

We use Type R for Outside Processing because our previous system was set up that way.

Reading Lynn's comments I can definitely see the advantage of Type T as all cost are forced to the work order.

In our case, we have to worry about yield issues, "stranded" costs after closing a work order and maintaining inventory on an intangible item.

We also enter "dummy" routing sequences for Outside Processing with Vendor and Lead Time info but no cost so we can see the work flow in the routing.

Title: Re: Set up part for purchase and outside process
Post by David Waldmann on 02/17/06 at 06:26:24

Tim Keating wrote:

Reading Lynn's comments I can definitely see the advantage of Type T as all cost are forced to the work order.

But if you are putting the WO# on the PO, why not just do that with a type R? Or is there another advantage to the Type T?

Title: Re: Set up part for purchase and outside process
Post by Lynn Pantic on 02/17/06 at 07:26:41

It categorizes the costs in the WO as Outside Processing for Job Cost Reporting.

Title: Re: Set up part for purchase and outside process
Post by Tim Keating on 02/17/06 at 10:03:00

David Waldmann wrote:

But if you are putting the WO# on the PO, why not just do that with a type R? Or is there another advantage to the Type T?

If your vendor uses a different Unit of Measure for the job (say Board Feet vs. Lbs) or get's better or worse yield than you expected, you can end up with a balance on the Type R Part (either positive or negative) after the WO closes.

Since you can't really carry a balance for an Outside Process, you have to make adjustments to correct this for each order.

Also, if the Vendor charges a Per Lot price and your lot sizes are variable, you have to constantly change the BOM Qty to keep things accurate.

Seems like the T option forces all costs to the Work Order with no extra accounting.

Of course, you still have to account for what you sent out and what you got back.

Title: Re: Set up part for purchase and outside process
Post by David Waldmann on 02/17/06 at 11:52:48

Well, I'm going to try type R. By putting the WO on the PO for the outside process, the entire cost for what we get charged for will be applied to whatever gets entered to finished production, which is what I want.

thanks for all the help.

Title: Re: Set up part for purchase and outside process
Post by timgolds on 02/17/06 at 14:03:56

David,

We use outside processing and we have to b e very careful how we use it! We use one with an outside process on a workorder for heat treating. There is not a seperate part but a seq number for the heat treat. That works pretty good.

We also have a part that we cut here then send out for bending, riviting and painting. This one we have a problem with as we do a single WO to create three parts (a shroud with one top and two sides) It is processed outside as a single piece and most of the time, we use it as a single peice, However, sometimes we sell or use as individual pieces. That's where the problem comes in. So we will do a reverse BOM to the break out the three pieces then do a cost adjust on the single pieces so they have fairly accurate prices.

The third is a part that we sometimes make in-house and other times have it done outside. For this we have two part numbers. One for what we build as a type A and the second as a type M where we send that parts out, they are made into a kit (not the Kit in DBA) and we receive as a M. in Workorders we can substitute the A part with the M part. (The A Part was a kit, however kits aren't displayed or broken down as kits on a WO BOM so we changed to an A).

Hope it helps,

Tim

Title: Re: Set up part for purchase and outside process
Post by Laura Oliver on 09/01/15 at 08:48:13

I am confused about using part type T. Rachel is telling me that if a item number is a type T that EVO will not allow her to enter a GL account on the PO Line. (example.outservice grinding).
Since we started using EVO I have had to go in and change the part numbers that were type T to R so that we could get then on a PO.
what am i doing wrong?
Thanks
Laura

Title: Re: Set up part for purchase and outside process
Post by Lynn_Pantic on 09/02/15 at 08:07:08

Any Outside processing (other than using Make-From) should be assigned to a work order and go into WIP so there is no need for a GL Account on the PO Line. Both Service PO (Outside Process operation on a Routing) and type T parts should be assigned to a Work Order and the cost goes to WIP as part of the work order cost.

Title: Re: Set up part for purchase and outside process
Post by Laura Oliver on 09/21/15 at 06:42:00

So when you pay the vendor's invoice how does the expense get to the GL if the Purchase Order line does not have a GL account? do you have to enter a voucher?

Title: Re: Set up part for purchase and outside process
Post by Kelloggs on 09/21/15 at 06:47:54

When you purchase to a work order, the GL used is the work order's sku (part) GL account (when you do finish production)

:)

Kelloggs

Title: Re: Set up part for purchase and outside process
Post by Lynn_Pantic on 09/21/15 at 09:46:36

The cost goes to WIP when the PO is received. it is not an expense, it is an increase in the WIP Asset value. It becomes part of the Finished Good value in Inventory (again, asset account) when Enter Finished Production is performed and becomes COGS expense when the item is shipped. Purchasing of raw materials, components and outside processing should never be an expense, it is an increase in asset value.

Title: Re: Set up part for purchase and outside process
Post by daletone on 09/23/15 at 09:46:07

So with a Make-From (M) where we sent something out for outside processing we should use a Purchase Order, not a Work Order is that correct? This is what we have been using but we are not finding a good way to reflect in inventory when Part A and Part B leave our building to go to make Part C. It all happens just fine when the parts return as Part C, but in that time frame between when they left and when they return (which could be 10-12 weeks worst case) we are left guessing. It seems that the Make-From is fairly popular from what I can tell, and we really like the benefits of using it - does anyone have any advice on how to make the make-from component inventory locations more transparent and straight forward during the time something is being processed?