Purchasing to Inventory and Issuing to Job upon Mtl receipt

Epicor ERP 10
1

I am looking at improving the efficiency of the purchased mtls receipt process. We currently buy to inventory to help costing and inventory tracking. Our receiving department is trying to keep up issuing upon receipt which requires them to review time-phase and make a guess as to which job the material was intended for when the PO was cut. From time to time volume gets high so receiving gets buried in unprocessed receipts.

Has anyone had to deal with this situation and successfully closed this gap? I am thinking of possible ways to include Job, Assembly and possible Mtl info on the PO, or something along that line…

Thanks!

Paul

2

We use planning contracts, and make the contract numbers the same as the job numbers. The suggestions come through similar to buy direct to job, except parts are consolidated by job. It works well for us. We don’t issue until they complete the operations (backflush) but you could issue when they arrive if you so desired. You wouldn’t have assembly or material sequence to go by, as it’s coming from inventory, but you at least would get a contract so you know what job it goes to.

This thread documents pretty well my learning about using planning contracts.

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3

Brandon,

Thanks: I had wondered about this too. I tried to add a contract, but Epicor is picky with setting the warehouses. I am digging into your notes next. Thanks for publishing those!

Paul

4

The big caveat to contract, is you have to use a contract bin, which means no real physical bin. In your case where you want to issue on receipt, no big deal.

Let me know if you have more questions on it. There are some nuances that are a little confusing until you get used to it.

5

Brandon,

That would be no issue for us. At the moment the entire warehouse is a single bin.

So what do you do for lines containing parts for multiple jobs combined? Do you ask Purchasing to split the lines on the PO into one for each job?

Paul

6

so if i am reading this right, you buy to the job but you want to buy to inventory (stock) for material tracking purposes?

7

Yes, that’s what we do. The nature of our jobs makes that ok, and the benefit of knowing what it’s supposed to go to when it gets here was an important reason that we did this.

If you wanted to have 1 contract cover multiple orders and jobs, you can do that. There’s no logic forcing you to assign contracts any certain way, we just find it easier to segregate by job. In our business, we do the whole order of a conveyor on 1 job. A conveyor can be from a $20k to a $750k conveyor, so a lot of stuff on one job.

So if your business has to think about what it wants to see and why. There will be trade offs to each approach. So you could combine multiple jobs onto one contract, it just depends if you want to make your purchasers job easier, or your receiving/issuing personnel’s job easier.

We use planning contracts for a couple reasons. 1st, it gives us the ability to create demand, or allocate PO’s to jobs before the job has all of the details on it. We are engineer to order, so engineering is part of the job and we don’t have the full BOM until engineering is done. So certain long lead items need to be ordered before the BOM is ready.

2nd, when we order to inventory (planning contracts) we get some benefits of getting average pricing working correctly, as well as giving a little more leeway on receiving/issuing order of operation screw ups. You can issue from inventory and have the parts go negative. If there is an average cost, then the cost gets assigned to the job. Then if the receipt is done after the issuing, a cost is still captured. It might not be the exact purchase price, but it’s better than $0 cost if the order gets shipped before the receipt happens.

Lastly, if there is a change on the job, which happens quite frequently on custom stuff, if I have issued something to the job (or purchased directly to it), while I can return it to inventory, I can remove the material line from the job since there is a transaction against it. If the part was in inventory until we actually used it, now I can change things later with fewer roadblocks. We can also rob things from the job and replace them without having to put transactions on the job. It’s just cleaner.

So that’s why we buy to planning contract. We like it a lot.

8

are the Jobs Unfirm. does MRP / po suggestions generate demand for the contract items on an unfirm job?

9

We don’t use MRP, so I do not know the answer to that.

10

We have exactly the same business scenario. We used to buy to the job and entire PO’s could be received in in one fell swoop. A single guy was able to receive and issue at the same time. After we went to buy to inventory we have a hard time keeping up with four guys, as we process a high volume of parts for each job.
Brandon’s work around seems like a good alternative, although I would like to see a more formal solution coming from Epicor.

11

If you are buying to inventory, the inventory team can run a job pick list to see what quantity has to go to which job. from that they can issue material to the jobs as the inventory is moved to the job.

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12

Your business’s decision to issue at the time of receipt, in my opinion, is not a typical way for a business to handle inventory. As such, I don’t think Epicor is going to make a formal way to do that.

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13

Why don’t you backflush inventory?

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14

We partially do that already for the common parts, and truthfully could push that further (work in progress).

15

We make custom machinery and it is normal procedure for orders to be in assembly for 6-8 weeks. It is very common for us to receive material in and issue it to a waiting job right in Receiving. We would love to see Epicor come up with a quick way to receive and issue material “in one transaction”. It is time consuming to receive the material, check the Time Phase screen for the receipt to see if it is required on a Job, then issue it.

We buy to inventory because the orders are not completely engineered before we start assembly. Since you cannot buy to a UF job, we really cannot do it any other way. We thought Planning Contracts would work, but there would be too much manual entry to be efficient for us.

Rick Stannard

16

There is a mass issue screen. I found it confusing, and don’t need it since we back flush everything, but you could issue everything at one time if you want.

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i use the Mass issue function to issue all material once the job is complete. our jobs dont take more than a day from start to finish though. for longer jobs with multiple operations, i would back flush based on the operations being completed.

18

In what area’s are you seeing to much manual entry? If your business rules are consistent it can probably be automated.

See this for an example.
https://epiusers.help/t/button-to-make-contract-bin-and-planning-contract/47816

19

We engineer using PLM. When the engineers push parts from PLM to E10, they automatically go into the top level part. At this point, planners add lead time, make methods, code them as purchased, etc. and MRP grabs them and creates a PO or Job suggestion. How do you add parts to a Planning Contract other than manually, or pasting from an Excel document?

Rick Stannard

20

If the part is set as link to contract in the part entry screen, when it’s added to a job with a contract assigned to it, it will automatically be linked to the contract. The PO suggestion comes through as demand to buy to that contract for things that weren’t added ahead of time. We don’t use MRP, so I don’t know how that will throw a wrench it though. When you have a make to order job, and the order has the planning contract created, the job that’s created will have the same planning contract assigned. Then whenever details are brought in on that job, non-stock parts that are selected link to contract, will be linked, and the demand shows up on the contract. Anything with a PO or inventory already received to the contract bin will satisfy that demand, and there won’t be a suggestion for it.

We don’t use MRP, and we don’t use and sub-jobs (job receipt to job). So those things could make your situation more complicated.

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