While this is a Distribution blog, I encountered an interesting accounting sitiation this week.  A client has 4 maquila sites in Mexico, all production plants, that ship their finished product to a warehouse in Texas.  All sales orders are then shipped out of the warehouse.

The Operations VP's want to get a sense for inventory turns at the plants, though.  We need to trace the finished good inventory in the warehouse, in conjunction with the standard cost of shipped product (COGS), back to the originating plant.

By using the Network Code in the ptp_det record of the warehouse, we can find the plant that the part likely came from, as every part is built in one and only one plant.  By finding the origination of the parts that were shipped and invoiced in a similar manner, we can deduce not only plant inventory turns, but begin to arrive at a plant Income Statement.  Very powerful visibility for these Ops VP's.

Item Planning Data as Dynamic Data

There is a tremendous amount of benefit that can be realized by an organization by continually revisiting their settings in 1.4.7, Item Planning Data Maintenance. We are finding that clients that are seasoned MFG/PRO users are drifting back into habits of calculating their production or purchasing requirements by exporting and manipulating data in Excel. We promote the constant evaluation of the planning parameters to achieve the inventory levels that will best serve the business….letting MRP do the work for the client requires an understanding of the settings upon which MRP logic is predicated.

Organizations will benefit by understanding why the buyers and planners are overriding the policies being established in the item master. These decisions may be acting as a security blanket that, in the best case, leads to excess inventoy and, in the worst case, hides management from a significant supply chain issue that might be better addressed by changing pricing or ordering...