Consignment inventory

Yahoo Archive
1
I see e-mails with all sorts of handy hints flying backwards and forwards on
the user group, and we now have a request of our own.
Can anyone help? Our company has just started a system of having suppliers'
materials on site, not paid for until used by us. We will be invoiced for
what we have used on a monthly basis.
We can't work out how to set it up on Vantage.

The timetable is as follows:-

We place orders for materials when the minimum stock level is reached.
The goods are received against these orders and are entered into inventory
at the price on the order.
We will not be invoiced by our supplier for these orders.
The supplier checks at the end of each month how much material we have used.
The supplier invoices us for what we have used in the month.

The points arising are:-

The inventory does not belong to us, but to the supplier, so needs to be
excluded from our stock valuation.
But we still need the value on file, so the correct value is charged to each
job as materials are withdrawn and used.
Delivery notes will record goods received, but will not match up to
invoices.
How do we match invoices to anything?

Will we have to maintain records manually or on spreadsheet, off Vantage???

There must be some other Vantage user out there who has a similar situation
- please stop us re-inventing the wheel!!!!!!!!!!!!!


Thanks in anticipation


Carole Broadbent

Allsops Limited (England)


[Non-text portions of this message have been removed]
2
Carole,

We have about 30 customers that we support with consignment inventory at
their sites.

In theory it's a great program ... in reality it can be confusing.

The benefits we propose to the clients are:
* They don't pay for the inventory until they use it.
* They receive one invoice per month for inventory used.

Generally the concept is:
* They setup a new warehouse in their system to contain this inventory and
issue from it as required. Since this is a unique warehouse on their system
their CFO's can simply isolate the $-value on their G/L as zero.

* We generally stop by and do an inventory either once per week or once per
month - as required. Given those counts we will "Restock" them back to
standard levels. They receive these shipments to stock on their systems in
the separate warehouse.

* When the customer uses the inventory they issue from the warehouse at the
cost entered.

* Once per month we take the counts from two physical inventories and do
the following math. Qty-Start + Qty-Shipped-To-Them -
Qty-Received-From-Them(defective material) - Qty-End = Qty-Used-During-Month
....... I have a report on our system that shows all of the details which we
then forward with the monthly invoice. This can be reconciled with their
system by having them print off a listing of qty issued/qty returned during
the same period of time.

Once this is setup it works fairly well. One note as a supplier, life can
get interesting when the customer wants X amount of inventory on the shelf
and you find out that X is a 5 year supply. It sort of screws up the
concept of inventory turns = profits for us. Actually, it's probably more
accurate to say that during boom times consignment inventory levels need to
be high enough to cover the reorder / restock lead time. When business goes
into the tank like this year you can find that you have way to much
inventory on consignment.

Also, I'd suggest contracting a fixed price by item for a set period of
time. Trying to track variable costs on each reorder shipment will end up
being a nightmare. Fix the cost for three months across the board for all
"Usage". Then renogiate for the next 3 months - etc.

Regarding your purchase orders for resupply ... I wouldn't use them. I'd
simply print off an on-hand listing for each consignment warehouse and fax
it to the supplier - they should be able to add up what you need to bring
you back to "Contracted" level.

You should get ONLY one invoice per month from your supplier to cover the
qty issued from your "Consignment" warehouse. If you are going to have
multiple vendors supplying consignment goods I would use one warehouse for
each - CS1, CS2, CS3, etc ?

In the end, as a consignment customer, you do have available inventory with
no carrying charge and greatly simplified billing during the month. It's
the audit trail that can be a bit confusing.

Hope this helps,

Todd Anderson



-----Original Message-----
From: Carole Broadbent [mailto:c.broadbent@...]
Sent: Thursday, November 29, 2001 7:22 AM
To: 'vantage@yahoogroups.com'
Cc: Marcus Kinder
Subject: [Vantage] Consignment inventory


I see e-mails with all sorts of handy hints flying backwards and forwards on
the user group, and we now have a request of our own.
Can anyone help? Our company has just started a system of having suppliers'
materials on site, not paid for until used by us. We will be invoiced for
what we have used on a monthly basis.
We can't work out how to set it up on Vantage.

The timetable is as follows:-

We place orders for materials when the minimum stock level is reached.
The goods are received against these orders and are entered into inventory
at the price on the order.
We will not be invoiced by our supplier for these orders.
The supplier checks at the end of each month how much material we have used.
The supplier invoices us for what we have used in the month.

The points arising are:-

The inventory does not belong to us, but to the supplier, so needs to be
excluded from our stock valuation.
But we still need the value on file, so the correct value is charged to each
job as materials are withdrawn and used.
Delivery notes will record goods received, but will not match up to
invoices.
How do we match invoices to anything?

Will we have to maintain records manually or on spreadsheet, off Vantage???

There must be some other Vantage user out there who has a similar situation
- please stop us re-inventing the wheel!!!!!!!!!!!!!


Thanks in anticipation


Carole Broadbent

Allsops Limited (England)


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



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[Non-text portions of this message have been removed]
3
Hi Carole

We do just that with an engineering supplies (consumable tooling) supplier.

They loan us consignment stock which we enter as a part in Vantage in a bin
called 'consignment stock'.

Issues and receipts can be made and referenced via 'Issues to Manufacturing'

Stock reports filter 'Consignment Stock'.

A single purchase order is raised monthly for agreed usage. The
corresponding receipt ships all goods into 'Consignment Stock'.

If you need more info e-mail me offline.

Regards Chris Reed
Professional Welding Services Limited.
+44 (0) 1202 895 080



-----Original Message-----
From: Carole Broadbent [mailto:c.broadbent@...]
Sent: 29 November 2001 13:22
To: 'vantage@yahoogroups.com'
Cc: Marcus Kinder
Subject: [Vantage] Consignment inventory


I see e-mails with all sorts of handy hints flying backwards and forwards on
the user group, and we now have a request of our own.
Can anyone help? Our company has just started a system of having suppliers'
materials on site, not paid for until used by us. We will be invoiced for
what we have used on a monthly basis.
We can't work out how to set it up on Vantage.

The timetable is as follows:-

We place orders for materials when the minimum stock level is reached.
The goods are received against these orders and are entered into inventory
at the price on the order.
We will not be invoiced by our supplier for these orders.
The supplier checks at the end of each month how much material we have used.
The supplier invoices us for what we have used in the month.

The points arising are:-

The inventory does not belong to us, but to the supplier, so needs to be
excluded from our stock valuation.
But we still need the value on file, so the correct value is charged to each
job as materials are withdrawn and used.
Delivery notes will record goods received, but will not match up to
invoices.
How do we match invoices to anything?

Will we have to maintain records manually or on spreadsheet, off Vantage???

There must be some other Vantage user out there who has a similar situation
- please stop us re-inventing the wheel!!!!!!!!!!!!!


Thanks in anticipation


Carole Broadbent

Allsops Limited (England)


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



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/