Material at Vendor/Sub Contractor - GL & Inventory Concerns [8

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1
Glad it helped Calvin...

Lengthy questions don't bother me as I've oft been accused of some pretty lengthy answers :)

Good luck. Sounds like you're on the right track.

Rob

--- On Mon, 9/15/08, Calvin Krusen <ckrusen@...> wrote:
From: Calvin Krusen <ckrusen@...>
Subject: [Vantage] Re: Material at Vendor/Sub Contractor - GL & Inventory Concerns [8.03.403D]
To: vantage@yahoogroups.com
Date: Monday, September 15, 2008, 4:18 PM











Robert - Thanks for entertaining my lengthy question.



After some experimenting, the way that looks like it will work best

for us is to add an 'Operation' for the outside work, and mark it as

sub contract. The MOM has the cost for the sub-contract operation,

so the BOM rolls-up correctly.



Other MRP systems I've used didn't have this feature, so we made a

phantom part just to hold the cost of the outside service.



For now we'll settle with tracking material at vendor by hand. We

don't leave any at the vendor, so we only reaaly need the accurate

value for our physical inventory.



Thanks for your reply.



Calvin



--- In vantage@yahoogroups .com, "Calvin Krusen" <ckrusen@... > wrote:

>

> How do most of you handle sending stocked parts to a vendor/sub

> contractor to make them into new parts?

>

> Here's the scenario:

> 1. A rod of 'unobatnium' is stocked as part P/N 1234

> 2. A screw is made by sending P/N 1234 to an outside machine shop,

to

> make it into P/N 5678

> 3. The finished screw is recieved from the machine shop and stocked

> as P/N 5678.

> 4. Excess P/N 1234 may be returned to us, or held by supplier for

the

> next possible job.

>

> Since the rare earth metal unobtanium is hard to get, we stock the

> raw bar (to shorten lead times), and send it to suppliers as

> necessary.

>

> Q1. Do you create a job consisting of one child component, and

assign

> PO's for the outside service to the Job?

>

> Q2. How do you capture the cost of the outside service when rolling

> up a BOM cost? Do you add a non-stocked, non-qty bearing P/N (like

> 5678-MACH, 5678-WELD, etc...) to the BOM?

>

> Q3. Do you issue the raw material to a special 'Material at Vendor'

> GL acct? Or do you just track what portion of WIP is outside the

> building.

>

> Q4. What do you do if you allow the supplier/sub hold the excees

> material for the next time you order?

>

> I'm sure there's no one single way to do this, so I'd like to hear

> how each of you address it.

>

> Thanks

>

> Calvin

>
2
How do most of you handle sending stocked parts to a vendor/sub
contractor to make them into new parts?

Here's the scenario:
1. A rod of 'unobatnium' is stocked as part P/N 1234
2. A screw is made by sending P/N 1234 to an outside machine shop, to
make it into P/N 5678
3. The finished screw is recieved from the machine shop and stocked
as P/N 5678.
4. Excess P/N 1234 may be returned to us, or held by supplier for the
next possible job.

Since the rare earth metal unobtanium is hard to get, we stock the
raw bar (to shorten lead times), and send it to suppliers as
necessary.

Q1. Do you create a job consisting of one child component, and assign
PO's for the outside service to the Job?

Q2. How do you capture the cost of the outside service when rolling
up a BOM cost? Do you add a non-stocked, non-qty bearing P/N (like
5678-MACH, 5678-WELD, etc...) to the BOM?

Q3. Do you issue the raw material to a special 'Material at Vendor'
GL acct? Or do you just track what portion of WIP is outside the
building.

Q4. What do you do if you allow the supplier/sub hold the excees
material for the next time you order?

I'm sure there's no one single way to do this, so I'd like to hear
how each of you address it.

Thanks

Calvin
3
Calvin,

Q1. Do you create a job consisting of one child component, and assign

PO's for the outside service to the Job?

Yes.


Q2. How do you capture the cost of the outside service when rolling

up a BOM cost? Do you add a non-stocked, non-qty bearing P/N (like

5678-MACH, 5678-WELD, etc...) to the BOM?

You CAN have both the required SubContract OP in your method and also a (not required) additional part number (different from the 'unobtanium' raw mtl or the finished part being produced on the job) to represent the service as a purchased subcontract part in your method (linked to the subcontract OP).

On our legacy system we were required to use both (increasing non-value added part maintenance costs as we had thousands of outside serves p/n's).

On Vantage (since our services used are repetitive - like plating and anodizing, etc.,) we only use the subcontract OP and we establish vendor-subcontract OP price lists. This is working quite nicely.

To 'roll' a standard cost, you will need a default vendor for the service defined and a price list in place. If you are on Actual (or average) cost, you will have to allow all job costs (including invoice from subcontract vendor posted) to be fully in place before doing a job close. The closing appears to update the inventory cost records even after the job is received and complete - but we have just started digging into this and I'm unconvinced I fully understand all the interactions.

Note that any cost type will still result in variances to method std cost being posted to whatever you defined as your manufacturing and purchasing variance accounts.

Q3. Do you issue the raw material to a special 'Material at Vendor'

GL acct? Or do you just track what portion of WIP is outside the

building.

No - We are not (yet) using a WIP at vendor account but I suspect we might do this in the future.

Q4. What do you do if you allow the supplier/sub hold the excees

material for the next time you order?

We are single plant, multi-warehouse and, right now, do not keep raw at vendor. Everything sent to vendors is issued to Jobs and in WIP. On our legacy system, we DID systemically keep our material at vendors (materials drop shipped from, say, an Asian vendor to a European contract manufacturer). We may go back to that in the future as it is simply a matter of setting up an additional Vendor warehouse.

If you do use a vendor warehouse, it is IMPERATIVE that your vendor provide timely accurate info on mtl qty's remaining and mtl's lost to scrap during job subcontract service processing - as YOU have to do the inventory transactions (and instruct them and your people to 'receive' scrapped subcontract PO OP qty's to scrap so the inventory & WIP is releived and actual costs reflect reality).

Rob Brown
--- On Wed, 9/10/08, Calvin Krusen <ckrusen@...> wrote:
From: Calvin Krusen <ckrusen@...>
Subject: [Vantage] Material at Vendor/Sub Contractor - GL & Inventory Concerns [8.03.403D]
To: vantage@yahoogroups.com
Date: Wednesday, September 10, 2008, 10:07 AM











How do most of you handle sending stocked parts to a vendor/sub

contractor to make them into new parts?



Here's the scenario:

1. A rod of 'unobatnium' is stocked as part P/N 1234

2. A screw is made by sending P/N 1234 to an outside machine shop, to

make it into P/N 5678

3. The finished screw is recieved from the machine shop and stocked

as P/N 5678.

4. Excess P/N 1234 may be returned to us, or held by supplier for the

next possible job.



Since the rare earth metal unobtanium is hard to get, we stock the

raw bar (to shorten lead times), and send it to suppliers as

necessary.



Q1. Do you create a job consisting of one child component, and assign

PO's for the outside service to the Job?



Q2. How do you capture the cost of the outside service when rolling

up a BOM cost? Do you add a non-stocked, non-qty bearing P/N (like

5678-MACH, 5678-WELD, etc...) to the BOM?



Q3. Do you issue the raw material to a special 'Material at Vendor'

GL acct? Or do you just track what portion of WIP is outside the

building.



Q4. What do you do if you allow the supplier/sub hold the excees

material for the next time you order?



I'm sure there's no one single way to do this, so I'd like to hear

how each of you address it.



Thanks



Calvin
4
Robert - Thanks for entertaining my lengthy question.

After some experimenting, the way that looks like it will work best
for us is to add an 'Operation' for the outside work, and mark it as
sub contract. The MOM has the cost for the sub-contract operation,
so the BOM rolls-up correctly.

Other MRP systems I've used didn't have this feature, so we made a
phantom part just to hold the cost of the outside service.

For now we'll settle with tracking material at vendor by hand. We
don't leave any at the vendor, so we only reaaly need the accurate
value for our physical inventory.

Thanks for your reply.

Calvin


--- In vantage@yahoogroups.com, "Calvin Krusen" <ckrusen@...> wrote:
>
> How do most of you handle sending stocked parts to a vendor/sub
> contractor to make them into new parts?
>
> Here's the scenario:
> 1. A rod of 'unobatnium' is stocked as part P/N 1234
> 2. A screw is made by sending P/N 1234 to an outside machine shop,
to
> make it into P/N 5678
> 3. The finished screw is recieved from the machine shop and stocked
> as P/N 5678.
> 4. Excess P/N 1234 may be returned to us, or held by supplier for
the
> next possible job.
>
> Since the rare earth metal unobtanium is hard to get, we stock the
> raw bar (to shorten lead times), and send it to suppliers as
> necessary.
>
> Q1. Do you create a job consisting of one child component, and
assign
> PO's for the outside service to the Job?
>
> Q2. How do you capture the cost of the outside service when rolling
> up a BOM cost? Do you add a non-stocked, non-qty bearing P/N (like
> 5678-MACH, 5678-WELD, etc...) to the BOM?
>
> Q3. Do you issue the raw material to a special 'Material at Vendor'
> GL acct? Or do you just track what portion of WIP is outside the
> building.
>
> Q4. What do you do if you allow the supplier/sub hold the excees
> material for the next time you order?
>
> I'm sure there's no one single way to do this, so I'd like to hear
> how each of you address it.
>
> Thanks
>
> Calvin
>