Using Customer Provided Material in a Job

Thanks on this, Stephen.

And thanks to everyone else for their input - your feedback has given us lots of options to consider.

Laraine



--- In vantage@yahoogroups.com, Stephen Schaefer <sschaefer323@...> wrote:
>
> We choose to use Inventory Adjustments, but we could easily use PO's, since we have different Part Numbers and use Lot Control.
> Â Sincerely,
>
>
> Stephen Schaefer
> Abrams AirborneÂ
>
> [Non-text portions of this message have been removed]
>
Hi All,

We are on 8.03.407, and we're planning to use customer provided / customer-owned material in place of an existing part already specified in the BOM. I've been looking through this forum and there are a lot of good ideas, but I have a couple of specific issues: the issue with Engineering and Production is traceability (so do we use the same part number for the customer-provided part?), and the issue is with Accounting - we're using AVERAGE costs, and they don't want the $0 cost of the customer-owned part to pollute/undervalue our inventory costs.

1. We typically haven't used "substitute" parts; if we give the customer-owned part a new part number, but call it a substitute for our part, will it address the traceability and costing issues? Or is there that much danger with using the same part number and living with the average cost consequences (and doing cost adjustments later)?

2. Because we want to track it, we want to issue it to the job (our sister company doesn't bother to do anything in Vantage with the customer-owned part, they just know it's there and that they need to use it - they enter a lot of comments and notes onto Vantage). What would be the best way to bring it in? The PO process has been mentioned, but that could be ugly. What about using an RMA, and dispositioning the RMA to the job? Or does it depend on if we're using the same or a different part number?

If anyone already has a process, I would appreciate hearing about it.

Thanks in advance!
Laraine
we use a po receipt, leaving the po# @ 0 and receive the part to stk at $0. since we use lot costing we don't have the same issues you would using avg or std costing. we also have setup a warehouse in the system called 'cst' for customer owned inventory that the inventory will reside in until job issue.


BILL R. KING
J&B Industrial Services
(806).776.4409 Office
(254).592.4397 Cell



________________________________
From: vantage@yahoogroups.com [mailto:vantage@yahoogroups.com] On Behalf Of laraines422
Sent: Wednesday, March 24, 2010 1:56 PM
To: vantage@yahoogroups.com
Subject: [Vantage] Using Customer Provided Material in a Job



Hi All,

We are on 8.03.407, and we're planning to use customer provided / customer-owned material in place of an existing part already specified in the BOM. I've been looking through this forum and there are a lot of good ideas, but I have a couple of specific issues: the issue with Engineering and Production is traceability (so do we use the same part number for the customer-provided part?), and the issue is with Accounting - we're using AVERAGE costs, and they don't want the $0 cost of the customer-owned part to pollute/undervalue our inventory costs.

1. We typically haven't used "substitute" parts; if we give the customer-owned part a new part number, but call it a substitute for our part, will it address the traceability and costing issues? Or is there that much danger with using the same part number and living with the average cost consequences (and doing cost adjustments later)?

2. Because we want to track it, we want to issue it to the job (our sister company doesn't bother to do anything in Vantage with the customer-owned part, they just know it's there and that they need to use it - they enter a lot of comments and notes onto Vantage). What would be the best way to bring it in? The PO process has been mentioned, but that could be ugly. What about using an RMA, and dispositioning the RMA to the job? Or does it depend on if we're using the same or a different part number?

If anyone already has a process, I would appreciate hearing about it.

Thanks in advance!
Laraine




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[Non-text portions of this message have been removed]
Thanks for your input, Bill. Average cost vs. lot/actual cost is the difference - otherwise it would work great.
Laraine


--- In vantage@yahoogroups.com, Bill King <bking@...> wrote:
>
> we use a po receipt, leaving the po# @ 0 and receive the part to stk at $0. since we use lot costing we don't have the same issues you would using avg or std costing. we also have setup a warehouse in the system called 'cst' for customer owned inventory that the inventory will reside in until job issue.
>
>
> BILL R. KING
> J&B Industrial Services
> (806).776.4409 Office
> (254).592.4397 Cell
>
>
>
> ________________________________
> From: vantage@yahoogroups.com [mailto:vantage@yahoogroups.com] On Behalf Of laraines422
> Sent: Wednesday, March 24, 2010 1:56 PM
> To: vantage@yahoogroups.com
> Subject: [Vantage] Using Customer Provided Material in a Job
>
>
>
> Hi All,
>
> We are on 8.03.407, and we're planning to use customer provided / customer-owned material in place of an existing part already specified in the BOM. I've been looking through this forum and there are a lot of good ideas, but I have a couple of specific issues: the issue with Engineering and Production is traceability (so do we use the same part number for the customer-provided part?), and the issue is with Accounting - we're using AVERAGE costs, and they don't want the $0 cost of the customer-owned part to pollute/undervalue our inventory costs.
>
> 1. We typically haven't used "substitute" parts; if we give the customer-owned part a new part number, but call it a substitute for our part, will it address the traceability and costing issues? Or is there that much danger with using the same part number and living with the average cost consequences (and doing cost adjustments later)?
>
> 2. Because we want to track it, we want to issue it to the job (our sister company doesn't bother to do anything in Vantage with the customer-owned part, they just know it's there and that they need to use it - they enter a lot of comments and notes onto Vantage). What would be the best way to bring it in? The PO process has been mentioned, but that could be ugly. What about using an RMA, and dispositioning the RMA to the job? Or does it depend on if we're using the same or a different part number?
>
> If anyone already has a process, I would appreciate hearing about it.
>
> Thanks in advance!
> Laraine
>
>
>
>
> ________________________________
> The information contained in this message is intended solely for the individual to whom it is specifically and originally addressed. This message and its contents may contain confidential or privileged information. If you are not the intended recipient, you are hereby notified that any disclosure or distribution, or taking any action in reliance on the contents of this information, is strictly prohibited.
> We have taken precautions to minimize the risk of transmitting software viruses, but we advise you to carry out your own virus checks on any attachment to this message. We cannot accept liability for any loss or damage caused by software viruses.
>
> This message (including any attachments) is intended only for
> the use of the individual or entity to which it is addressed and
> may contain information that is non-public, proprietary,
> privileged, confidential, and exempt from disclosure under
> applicable law or may constitute as attorney work product.
> If you are not the intended recipient, you are hereby notified
> that any use, dissemination, distribution, or copying of this
> communication is strictly prohibited. If you have received this
> communication in error, notify us immediately by telephone and
> (i) destroy this message if a facsimile or (ii) delete this message
> immediately if this is an electronic communication.
>
> Thank you.
>
>
> [Non-text portions of this message have been removed]
>
If you receive it and issue it to a job (whether zero cost or not) - it is YOUR inventory. (Is it under your arrangement?)

With average cost - your sister plant may have the better solution (somewhat manual -paper-process though that it may be.)

If it is legally your inventory, why SHOULDN'T it roll into average?


Â

________________________________
From: laraines422 <laraines422@...>
To: vantage@yahoogroups.com
Sent: Wed, March 24, 2010 2:55:34 PM
Subject: [Vantage] Using Customer Provided Material in a Job

Â
Hi All,

We are on 8.03.407, and we're planning to use customer provided / customer-owned material in place of an existing part already specified in the BOM. I've been looking through this forum and there are a lot of good ideas, but I have a couple of specific issues: the issue with Engineering and Production is traceability (so do we use the same part number for the customer-provided part?), and the issue is with Accounting - we're using AVERAGE costs, and they don't want the $0 cost of the customer-owned part to pollute/undervalue our inventory costs.

1. We typically haven't used "substitute" parts; if we give the customer-owned part a new part number, but call it a substitute for our part, will it address the traceability and costing issues? Or is there that much danger with using the same part number and living with the average cost consequences (and doing cost adjustments later)?

2. Because we want to track it, we want to issue it to the job (our sister company doesn't bother to do anything in Vantage with the customer-owned part, they just know it's there and that they need to use it - they enter a lot of comments and notes onto Vantage). What would be the best way to bring it in? The PO process has been mentioned, but that could be ugly. What about using an RMA, and dispositioning the RMA to the job? Or does it depend on if we're using the same or a different part number?

If anyone already has a process, I would appreciate hearing about it.

Thanks in advance!
Laraine







[Non-text portions of this message have been removed]
We use Customer provided parts - with ZERO cost. Different Part Number than if we should use one off the shelf that we have purchased. We use Lot Numbers so our Costs are captured per specific Lot.
You can modify the specific job to use the Customer provided Part Number without messing with the MOM or BOM.
You could issue the Customer Provided part instead of what is required on the job, but my personal preference would be to modify the specific Job to indicate the use of the Customer provided Part Number.


 Sincerely,


Stephen Schaefer
Abrams AirborneÂ

[Non-text portions of this message have been removed]
Hmmm. You actually make a valid point (but you aleady knew that).

Both our companies' policy is that customer-provided material should be "valued" at $0 (read: valued on Vantage at $0), that applies to RMAs, etc. I think that we started thinking in that same mindset, to treat this material in the same way - but as you've pointed out, maybe not.

On paper, they have to have a value anyway (insurance reasons, replacement costs, whatever) - so could we go ahead and bring them into inventory with a cost, and then make a job cost adjustment for the customer material at the end of the job to reflect our true "cost" of the job - since we really didn't purchase the material? The biggest downside that I can see is an over-inflation of inventory or WIP - and remembering to make the cost adjustment at the end of the job.

Thanks for the input, Robert. It's definitely an option.
Laraine


--- In vantage@yahoogroups.com, Robert Brown <robertb_versa@...> wrote:
>
> If you receive it and issue it to a job (whether zero cost or not) - it is YOUR inventory. (Is it under your arrangement?)
>
> With average cost - your sister plant may have the better solution (somewhat manual -paper-process though that it may be.)
>
> If it is legally your inventory, why SHOULDN'T it roll into average?
>
>
> ÂÂ
>
> ________________________________
> From: laraines422 <laraines422@...>
> To: vantage@yahoogroups.com
> Sent: Wed, March 24, 2010 2:55:34 PM
> Subject: [Vantage] Using Customer Provided Material in a Job
>
> ÂÂ
> Hi All,
>
> We are on 8.03.407, and we're planning to use customer provided / customer-owned material in place of an existing part already specified in the BOM. I've been looking through this forum and there are a lot of good ideas, but I have a couple of specific issues: the issue with Engineering and Production is traceability (so do we use the same part number for the customer-provided part?), and the issue is with Accounting - we're using AVERAGE costs, and they don't want the $0 cost of the customer-owned part to pollute/undervalue our inventory costs.
>
> 1. We typically haven't used "substitute" parts; if we give the customer-owned part a new part number, but call it a substitute for our part, will it address the traceability and costing issues? Or is there that much danger with using the same part number and living with the average cost consequences (and doing cost adjustments later)?
>
> 2. Because we want to track it, we want to issue it to the job (our sister company doesn't bother to do anything in Vantage with the customer-owned part, they just know it's there and that they need to use it - they enter a lot of comments and notes onto Vantage). What would be the best way to bring it in? The PO process has been mentioned, but that could be ugly. What about using an RMA, and dispositioning the RMA to the job? Or does it depend on if we're using the same or a different part number?
>
> If anyone already has a process, I would appreciate hearing about it.
>
> Thanks in advance!
> Laraine
>
>
>
>
>
>
>
> [Non-text portions of this message have been removed]
>
Thanks on this, Stephen. It's one of the options that we're considering.

Just out of curiousity, how do you bring the customer-provided parts into your facility, so that they're available to issue to the job? PO? Inventory adjustment?

Laraine



--- In vantage@yahoogroups.com, Stephen Schaefer <sschaefer323@...> wrote:
>
> We use Customer provided parts - with ZERO cost. Different Part Number than if we should use one off the shelf that we have purchased. We use Lot Numbers so our Costs are captured per specific Lot.
> You can modify the specific job to use the Customer provided Part Number without messing with the MOM or BOM.
> You could issue the Customer Provided part instead of what is required on the job, but my personal preference would be to modify the specific Job to indicate the use of the Customer provided Part Number.
>
>
> Â Sincerely,
>
>
> Stephen Schaefer
> Abrams AirborneÂ
>
> [Non-text portions of this message have been removed]
>
This subject is a good one to read about since 70% of the material I receive is Customer supplied.
Now my customers have decided that they would like us to purchase some of these materials.
What I have done is this, I have 2 parts set up in part maintenance ex. 12345 & 12345.(period)
12345 is set up to be a purchased part and 12345.(period) is setup as a manufactured part and has a class of customer supplied material
Both parts are non-stock items since they are purchased directly to the job.
When I order 12345 the receipt process uses a PO and is received to the job
When I receive 12345.(period) the po number stays at 0 and I have a supplier code just for customer supplied material, the packing slip is my customers paperwork number.
you receive it to the job and material sequence. that all works fine and you have history on material transactions in job tracker. the only problem that I have found with receiving customer supplied material like this is if you ever have to send that material back to you customer it can't be done because you didn't receive the material with a PO number. you just can generate a Misc Packing slip but it will not relieve the quantities in the job. you have to do an adjustment to the job. Problem is that you didn't use a Po to receive the material. Epicor's workaround is to generate po's for everything you bring into your business.

Gary Wojtowicz
AJR Industries, Inc.




[Non-text portions of this message have been removed]
We choose to use Inventory Adjustments, but we could easily use PO's, since we have different Part Numbers and use Lot Control.
 Sincerely,


Stephen Schaefer
Abrams AirborneÂ

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