We are in the implementation stage and there is some back and forth regarding the best practice for setting up our Subcontract Operation in the MOM. The dilemma is having one supplier that performs 2 or more operations concurrently before receiving it back in. A statement was made as follows… “For example lets say a part goes to a supplier and a gets both a laser operation and paint operation then comes back to East Moline for shipment to the customer. Each operation will each require a separate PO, separate shipment and separate receipt in Epicor. This is why this approach was avoided.” Ex: Part goes out for Laser cut (OP Laser) and the next operations is also subcontract Pickle and Oil (OP Oil) both provided by the same vendor. is the above statement correct? Couldn’t both operations from 1 job show as separate line items on a pack slip to the vendor? What is best practice here?
Is the requirement for 2 lines on the PO your companies requirement or the Supplier’s?
I don’t think it matters to either to be honest, I just assumed that the PO would be based on each individual operation and set as individual line items and not the by the Job. I am coming in late and previous experience was to set up the Outside processes as the operation Laser, Paint, Cut, ETC…Their current setup is to set up the operation as the Vendor. This does not make sense to me and when I asked the above response in BOLD is what I was told. We are trying to avoid multiple PO’s is what I am getting. SO what are the options? Does each Subcontract step require a separate PO even if it is on the same Job?
Each Subcontract Op will require its own PO Line. It could be all on the same PO but each line would be linked to the Job Operation and would require its own receipt to put cost onto the job.
Haveing the Sub Contract Op being the Vendor is a way to keep it simple but it doesnt really tell what is being done to that part. If thats not important, then you could take that approach to keep it simple.
This was my thought, the statement was made that a separate PO would be needed. I appreciate your help here. The motivation to use the process and not the Vendor is a.) to see what we are spending quarterly or yearly on outside laser for example and see if the cost justifies the purchase of a new machine to do it in house or b.) if a vendor goes out of business or we switch then every BOO that has that Vendor will have to be changed every time.
Can you make 1 operation that is both Laser Cut and Pickle and Oil?
I have also thought of this option. I have not suggested it to the group yet but it could be a solution however; the visibility for how much is being spent on each outside operation will be lost. We can see the total cost for the Vendor but not how much is being spent on each OP. The president said “I need to know 2 things…where my inventory is at any given time and how much I am spending on each outside process so I know if I should just invest in a new machine or equipment and preform the tasks in house.” SO that is what I am trying to get for him.
Two PO Lines will be required as you are saying.
Also, to follow what Epicor has in place for you, you should also do subcontract shipments of each operation to keep your subcontract status up to date.
As your president asked, want to know where the inventory is, the shipment is critical.
Using the shipment, you now can leverage the SubContract Status report for both outbound and inbound from each supplier.
BTW - the same shipment could be on one pack slip.
Bruce
You could make one operation and create UD fields to store the individual costs for reporting later.
M