SPECIAL CASES

15.10.1 Non Stocking Manufacturing Reps

When the customer places an order
Enter a PO to mfg (Your cost)
Enter a sales order to customer (your cost plus commission)

When a mfg ships to the customer
Enter a false receiver from the mfg
Enter a false invoice to the customer

When mfg sends commission check
Enter gen ledger transact, debit Checking credit Business Income

When salesman is paid
Enter gen ledger transact, debit Salescommiss cred Checking

15.10.2 Outside Manufacturing, Method 1 (Convert parts to assys)

Use pc/MRP's Configuration Module to set Invoice/Receiving Modules increment and decrement onhand qtys

Construct the BOMs include both your part numbers and the outside assy labor. Enter the labor as a part number into the partmaster file but fill in the Labor/Assy/Labor field as "L".

When finished products are to be assembled by an outside mfg
Place a PO for the outside assy labor PN

When the finished products are received:
Receive the finished assys under the outside assy labor #
Use the Convert Parts to Assys Option to change the individual parts into finished assemblies.

For example, if your business consisted of purchasing raw tweezers, having them Teflon coated by an outside manufacturing operation, and then reselling them as a Teflon coated tweezers, you would enter the raw tweezer into the Partmaster as one part number, 00-000-0001 and the Teflon coating outside labor cost per tweezer as another part number, 00-000-0002. You would then enter a BOM, 00-000-0003, for the Teflon coated tweezer which would consist of part numbers 00-000-0001 and 00-000-0002. Rolling up costs in the Partmaster or Exploding BOM 00-000-0003 would total up and load the cost of the finished tweezer into the Partmaster.

Purchasing and receiving x amount of raw tweezers would result in an onhand qty of x raw tweezers, 00-000-0001.

Purchasing would then issue a PO for x amount of labor, PN 00-000-0002 and send the raw tweezers to the outside manufacturer. When the finished tweezers are returned, they would be received as PN 00-000-0002 since this part is classified as labor and not a part no change in the on hand qty would occur.

Use the "Convert Parts to Assemblies" Option in Stock Room Module to convert these parts into x amount of finished Teflon coated tweezers 00-000-0003

15.10.3 Outside Manufacturing, Method 2 (Create work orders/issue parts)

Use pc/MRP's Configuration Module to set Invoice/Receiving Modules increment and decrement onhand qtys (Inventory adjustment method = A)

Construct the BOMs include both your part numbers and the outside assy labor. Enter the labor as a part number into the partmaster file but fill in the Labor/Assy/Labor field as "L"

Enter a work order for the job if you are building to stock or an order entry sales order for the job if you are building to order.

Use the stockroom I type transaction to issue parts to manufacturing (parts will be removed from on hand and put into WIP).

Place a PO for the outside assy labor PN

When the finished products are received:
Receive the finished assys under the outside assy labor #
Use the stockroom R type issue to receive assemblies from manufacturing.

If you were to run a purchasing consolidation report, select exclude work orders if these parts are being built for existing sales orders.

15.10.4 Outside Manufacturing, Method 3 (Requires pc/MRP for Windows 6.49 AB or higher)

Use pc/MRP's Configuration Module to set Invoice/Receiving Modules increment and decrement onhand qtys (Inventory adjustment method = A)

Issue a PO for the assys to be build by an outside manufacturer. With pc/MRP for Windows version 6.49 AB or higher, receiving assys will trigger the prompt, "Item you are receiving is an assembly, Increase the onhand qty of the assy or Convert parts to assys ?". If you press, "Convert parts" the onhand qty of the assys will be increased and the related parts in stock will be decreased based on the assy's BOM. If you press, "Increase", the onhand qty of the assys will be increased. This method has the disadvantage of incorrectly lowering the average cost of the assembly. If you use this method, you must use standard costs to value your inventory.

15.10.5 Consignment Inventory

One method to handle consignment and your own inventory, would be to assign the first 4 characters of a part number to identify the company who owns the part. You would then set the product code portion of the partnumber to 4 characters. The remaining characters in the part number would identify the part number.

For example:

If the name of your company is Jurong Manufacturing

If the name of one of your customers that provides you with consignment parts, is ABC

You could use the configuration menu, option 29, to define the product code size as 4 characters.

You could use the configuration menu, to define the total length of your part number to 10 characters

You and other customers use and inventory a 5 ohm 1/4 watt resister.

You could assign your part number for the 5 ohm resister as JUR-000055 with a cost of 25 cents apiece

You would then assign ABC's part number for the same 5 ohm resistor as ABC-000055 with a cost of 0 cents apiece

The above method has the following advantages:

Inventory can be printed out for a specified customer (All inventory for a specified product code)

Customer's inventory could be tracked throughout the system by placing POs for customer inventory ($0.00 unit cost). This can then be received by receiving and issued by manufacturing to help track of inventory movements.

When you purchase inventory that you are footing the bill for, you would purchase the JUR- part which has a real cost which will not foul up your inventory valuation, as the JUR- parts would contain real unit costs and the customer parts would contain $0.00 unit costs.

If you did need to borrow parts to complete a job you would now the equivalent part numbers automatically.

15.10.6 Return Material Authorizations, RMAs

One method to handle RMAs would be to enter a part number into inventory for $0.00 as the cost and call this part RMA. This part would be used with all RMAs and the sales order entry module. You would create an order entry sales order and enter the RMA part that you use will all RMAs. You could then use the stock room's L option to issue the part(s) required to repair the unit to the specific sales order. When the repair is complete, use the stock room's R option to receive the sales order back (this will 0 out all parts issued to WIP from this sales order). The last step would be to create an invoice for the sales order for $0.00 or the amount of the repair (this will close the sales order). The sales order number is the RMA number, all parts used for the repair are deducted, and you can run a report on the cost of parts used for the sales order to help with costing. To have accounting track this you could post the Invoice through accounting using the O type transaction.
DEBIT A/R $0.00 or amount of charge.
DEBIT COGS or RMA cost of goods sold for the $ amount of the parts.

CREDIT Business Income $0.00
CREDIT Inventory for $ amount of parts

15.10.7 Issuing Tools to Manufacturing

One method to handle tools would be to use the stockroom to do an "L" type issue to issue the tool(s) to a sales or work order. However, you must remember to do a "U", return unused parts to inventory, before your do the "R" to receive the completed assembly or your tools will be consumed in the build.