I am working on having all of our plant consumables in Epicor.
Our goal is to have our consumable products show in their designated locations and prompt on the PO suggestions when items get below the min qty. I am able to set up the parts so that they show up on the suggestions and receive to location. The road block I am currently at, is the actual consumption of the items in Epicor. We have a stores warehouse, where we keep the physical inventory and the items are physically pulled out by the area manager. We don’t want area managers to be able to adjust inventory.
is there a way to auto consume the material out of location as a issue material? or a KanBan request? material moment request? or some kinda of material out receipt
Do you need to capture the costs in a specific way (like against specific jobs), or can you expense it upon receipt? When are these supplies needed? General maintenance (like gloves, brooms, etc…), or production based (tape for masking while painting, funnels used to mix epoxies, etc…)?
When someone needs one of these, they just ask the area manager? And physically pulls it off the shelf and gives it to them? No need to know what its for?
they are non job related consumables like saw blades, gloves, PPE etc… so the area manager pulls it from the location and gives it to the production worker in need, in result would deplete our physical inventory, but not in epicor without doing a “quantity adjustment”. we are looking for a different way to consume our indirect inventory when used so when the item in location gets to the minimum on hand quantity, it populates in PO suggestions. The manager knows what each item is for so we keep all our consumables locked for physical control.
There’s the Issue Misc Material program. It’s very similar to the Qty Adjust, but limits the Qty to being positive, and you can only pull from a Bin with a QOH.
Edit
That generates a STK-UKN transaction where as Qty Adj makes a ADJ-QTY transaction
Still requires someone to launch the program select the P/N and Bin, then enter the Qty. Not sure what you are thinking can automatically cause the transactions to happen.
perfect! I think this might actually be faster than the area manager making the manual adjustment and then issuing a requisition. The requirement will be on my suggestions when the material is issued so this will limit the processes.I can generate purchase order right from the suggestions.
One more thing that might make Accounting happier (or possibly not)…
Since these items will be expensed - as opposed to becoming a cost of sales - you can make a Part Class with a GL Control to expense them upon receipt. This way their value is never part of inventory.
As a regular inventoried part, the GL Trans would be:
PO Receipt entered
Debit: Inventory GL
Misc Issue - STK-UKN part tran.
Credit: Inventory GL
Debit: GL specified by Reason code (i.e “Shop Supplies Acct”)
With the Part Class setup to use the Shop Supplies GL Acct, it would be:
PO Receipt entered -
Debit: Shop Supplies GL Acct debited
If the part with the “Shop Supply” Part Class was needed on a job, it could still be on a BOM or manually issued:
Issue to Job - STK-MTL part tran.
Credit: Shop Supplies acct
Debit: WIP acct
Same goes for if it was a line item on an order.
Customer Shipment - STK-CUS part tran.
Credit: Shop Supplies acct
Debit: COS acct
One very important thing to know …
These parts would be included in the Stock Status Report. But are not part of the Inventory (or Finished Goods) GL. So for all those accountants that think the Stock Status should reconcile with the Inventory GL (WHICH YOU SHOULDN’T NORMALLY TRY TO DO!), it may be even more confusing.
Yes… the “NonStock” flag on the Part Master tells Epicor to ignore all inventory during MRP and Generate PO Suggestions. When that flag is set, Epicor will ALWAYS generate a PO Suggestion (or a Job Suggestion for a manufactured part) when demand is entered, regardless of existing inventory quantities.
As an Accountant who DOES use the Stock Status Report to reconcile my inventory, I exclude the Part Classes that are expense-type since, obviously, they won’t tie to my Inventory Accounts. I really can’t understand why people don’t use the Stock Status Report. What is your sub-ledger backup?
Second, with regard to the best way for accounting for expense-type items and when they hit the books, most of my clients will put the expense-type parts into an expense inventory account on the Balance Sheet and then as used will expense them rather than hitting the expense all at one time in one fiscal period. This balances and normalizes the expenses so that a 6-month supply of expense items doesn’t hit all at one time in one month.
Finally, with regard to Reason Codes, if the Accounting department tracks expenses at the department level, it would be useful for there to be more than one Reason Code for Shop Supplies, i.e. Shop Supplies - Paint Dept, Shop Supplies - Assembly, Shop Supplies - Fabrication, etc., with the corresponding GL Control Code coded to that department’s shop supplies expense account, so that the expense inventory is relieved upon the Misc. Issue and the correct department’s shop supplies expense account is charged. Otherwise, if all the costs go to one general shop supplies expense account, then one Reason Code, with the appropriate GL Control Code, would suffice.
Jumping into the “Wayback Machine”… Where I used to work, we kept consumables in stock.
Part Number assigned to each consumable (this included Toilet Paper, Copy Machine Paper, Paper Towels, small tools, Pencils, paper, etc.
each consumable was assigned to a special consumable Part Class.
each consumable had a min/max setting which caused MRP to make suggestions to buy when needed.
Purchasing acquired new parts
receiving received them to “stock”… the value charged to the Expense account in the part class. The owning “department” was the stockroom… in other words, the stockroom was charged for the expense.
when the inventory was issued (via misc issues), this reduced the qty on hand. Credit the Expense account for the STOCK department… Debit the Expense account for the consuming department.
Note that making parts non-stock does NOT resolve this… neither does making it “non-qty bearing”.
During Physical inventory, we DID validate the quantities… any adjustments went against the stock room expense account.
But after we started the above procedure, we never ran out of toilet paper again.
