Lean manufacturing

Yahoo Archive
1
Thank you Deb. The goods should be shown as Inventory when you receive
them, they will move to WIP when you start using them, they will move to COG
when you ship to your customer. You need to have the cost of this material
reflected in all these areas or you will be under valuing you inventory and
ultimately you manufacturing (COG) costs.

The part that is affected by not paying till consumed is Accounts Payable.
Normally you would create a Debit to Inventory (or WIP if it is to the Job)
and a Credit to Received Goods when the product is received at the
warehouse.

You could let the dollars remain in Received Goods until you ship to your
customer, but this would make it difficult to reconcile the Received Goods
account at month end. You should receive it to another account in the
Liabilities portion of you chart of accounts. You might call this account
Vendor Consignment, or whatever makes sense to you. It should remain there
until you receive or create an invoice for the Vendor.

When you enter the Vendor Invoice it would be a Debit to Vendor Consignment
and a Credit to Accounts Payable. This would also let you see at any time
what is the dollar amount of consignment goods you are holding.

While it is true the Vendor technically still owns the material until
consumed you have still acquired the liability. This type of arrangement is
just a terms of payment not a deferments of expense or liability. Should
anything happen to the goods (such as fire or theft) while in your
possession you would still be liable for the product and have to compensate
the Vendor. It is still a liability and needs to be reflected as such. You
are just agreeing to pay for it at a later date.

Please feel free to give me a call or e-mail if you have any questions.


Cameron A. Janish
Misha1 cameron@...
Direct Toll Free: 866-647-4111
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-----Original Message-----
From: Wilmoth, Deb [mailto:Deb@...]
Sent: Friday, February 08, 2002 02:12 PM
To: 'vantage@yahoogroups.com'
Subject: RE: [Vantage] Lean manufacturing
Importance: High


Sounds like TROUBLE to me. It **IS** WIP, regardless of the poor
managment
practice of paying for things when actually "consumed". A chat with your
CPA is in order before progressing down this road much further - or
CAMERON
JANISH - care to step in here?

Do you tie purchasing to inventory with Vantage? If so, then products go
to
WIP and are on the job and traceable, but you don't have to enter your
invoice into A/P until you so desire. The credit resides in the A/P
clearing account until invoiced.


Deb Wilmoth
Controller
Reeder & Kline Machine Company, Inc.
Vantage 5.0


-----Original Message-----
From: Malcolm Spann [mailto:Malcolm@...]
Sent: Friday, February 08, 2002 1:57 PM
To: vantage@yahoogroups.com
Subject: [Vantage] Lean manufacturing


I have been asked to see how we can make Vantage work under the following
situation:

We are going to put our suppliers on a PAC (Payment After Consumption)
contract. For those unfamiliar with PAC, it goes like this:

1) We place a PO with a supplier
2) The supplier ships their product to us
3) Even though we have their product in our possession, it's still *owned*
by the supplier
4) We assemble their product into our finished good
5) The supplier *still* owns their product
6) When (and only when) we ship our finished good to our customer do we
'consume' their product
7) Only upon consumption do we assume ownership of the product, and only
then will pay for it

At least one of our customers have put us on this type of program quite a
while ago. We've been able to deal with it (as the supplier) by creating
another warehouse (the Customer), transferring parts into this warehouse
(shipping), and only *shipping* the parts to the actual customer (in
Vantage) when they tell us that they've consumed it. While this has
required a bit more work on our part, we've been able to keep track of
things ok. This also means that we have to trust our customer to tell us
when they consume something.

So, I guess it's now our turn to pass the burden on down the line.

We do not want the products we receive from our supplier to show as $'s
inventory, as WIP, nor as a payable. However, we obviously need to
monitor
and track these products.

Any ideas?


============================================
Malcolm Spann
MIS
Malmberg Engineering
(925) 606-6500 x19
Malcolm@...
============================================



Useful links for the Yahoo!Groups Vantage Board are: ( Note: You must
have
already linked your email address to a yahoo id to enable access. )
(1) To access the Files Section of our Yahoo!Group for Report Builder and
Crystal Reports and other 'goodies', please goto:
http://groups.yahoo.com/group/vantage/files/.
(2) To search through old msg's goto:
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(3) To view links to Vendors that provide Vantage services goto:
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[Non-text portions of this message have been removed]


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Useful links for the Yahoo!Groups Vantage Board are: ( Note: You must
have already linked your email address to a yahoo id to enable access. )
(1) To access the Files Section of our Yahoo!Group for Report Builder and
Crystal Reports and other 'goodies', please goto:
http://groups.yahoo.com/group/vantage/files/.
(2) To search through old msg's goto:
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(3) To view links to Vendors that provide Vantage services goto:
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[Non-text portions of this message have been removed]
2
I have been asked to see how we can make Vantage work under the following
situation:

We are going to put our suppliers on a PAC (Payment After Consumption)
contract. For those unfamiliar with PAC, it goes like this:

1) We place a PO with a supplier
2) The supplier ships their product to us
3) Even though we have their product in our possession, it's still *owned*
by the supplier
4) We assemble their product into our finished good
5) The supplier *still* owns their product
6) When (and only when) we ship our finished good to our customer do we
'consume' their product
7) Only upon consumption do we assume ownership of the product, and only
then will pay for it

At least one of our customers have put us on this type of program quite a
while ago. We've been able to deal with it (as the supplier) by creating
another warehouse (the Customer), transferring parts into this warehouse
(shipping), and only *shipping* the parts to the actual customer (in
Vantage) when they tell us that they've consumed it. While this has
required a bit more work on our part, we've been able to keep track of
things ok. This also means that we have to trust our customer to tell us
when they consume something.

So, I guess it's now our turn to pass the burden on down the line.

We do not want the products we receive from our supplier to show as $'s
inventory, as WIP, nor as a payable. However, we obviously need to monitor
and track these products.

Any ideas?


============================================
Malcolm Spann
MIS
Malmberg Engineering
(925) 606-6500 x19
Malcolm@...
============================================
3
Sounds like TROUBLE to me. It **IS** WIP, regardless of the poor managment
practice of paying for things when actually "consumed". A chat with your
CPA is in order before progressing down this road much further - or CAMERON
JANISH - care to step in here?

Do you tie purchasing to inventory with Vantage? If so, then products go to
WIP and are on the job and traceable, but you don't have to enter your
invoice into A/P until you so desire. The credit resides in the A/P
clearing account until invoiced.


Deb Wilmoth
Controller
Reeder & Kline Machine Company, Inc.
Vantage 5.0


-----Original Message-----
From: Malcolm Spann [mailto:Malcolm@...]
Sent: Friday, February 08, 2002 1:57 PM
To: vantage@yahoogroups.com
Subject: [Vantage] Lean manufacturing


I have been asked to see how we can make Vantage work under the following
situation:

We are going to put our suppliers on a PAC (Payment After Consumption)
contract. For those unfamiliar with PAC, it goes like this:

1) We place a PO with a supplier
2) The supplier ships their product to us
3) Even though we have their product in our possession, it's still *owned*
by the supplier
4) We assemble their product into our finished good
5) The supplier *still* owns their product
6) When (and only when) we ship our finished good to our customer do we
'consume' their product
7) Only upon consumption do we assume ownership of the product, and only
then will pay for it

At least one of our customers have put us on this type of program quite a
while ago. We've been able to deal with it (as the supplier) by creating
another warehouse (the Customer), transferring parts into this warehouse
(shipping), and only *shipping* the parts to the actual customer (in
Vantage) when they tell us that they've consumed it. While this has
required a bit more work on our part, we've been able to keep track of
things ok. This also means that we have to trust our customer to tell us
when they consume something.

So, I guess it's now our turn to pass the burden on down the line.

We do not want the products we receive from our supplier to show as $'s
inventory, as WIP, nor as a payable. However, we obviously need to monitor
and track these products.

Any ideas?


============================================
Malcolm Spann
MIS
Malmberg Engineering
(925) 606-6500 x19
Malcolm@...
============================================



Useful links for the Yahoo!Groups Vantage Board are: ( Note: You must have
already linked your email address to a yahoo id to enable access. )
(1) To access the Files Section of our Yahoo!Group for Report Builder and
Crystal Reports and other 'goodies', please goto:
http://groups.yahoo.com/group/vantage/files/.
(2) To search through old msg's goto:
http://groups.yahoo.com/group/vantage/messages
(3) To view links to Vendors that provide Vantage services goto:
http://groups.yahoo.com/group/vantage/links

Your use of Yahoo! Groups is subject to http://docs.yahoo.com/info/terms/



[Non-text portions of this message have been removed]
4
Deb,

Going lean requires adopting a new way of thinking. Vantage can
be made to fit, GAAP can be followed, pull instead of push can
really work, and not spending your cash when you don't need to
is good management practice. However, implementation is
competitive advantage, so you may not find many talking about
their success here.

have a nice weekend,
john


> -----Original Message-----
> From: Wilmoth, Deb [mailto:Deb@...]
> Sent: Friday, February 08, 2002 12:12 PM
> To: 'vantage@yahoogroups.com'
> Subject: RE: [Vantage] Lean manufacturing
> Importance: High