Outsourced Purchase Orders in Microsoft Dynamics GP
Posted on: January 27, 2014 | By: Jim Bertler | Microsoft Dynamics Manufacturing
Many of the manufacturing clients we work with have outsourced operations and want to ensure that they properly track and cost these operations. Microsoft Dynamics GP provides the ability to manage this process directly through the Manufacturing Order Processing functionality and allows for a Purchase Order to be cut to the vendor. In order to use this functionality, there is some setup that must be performed prior to the processing. The Work Center must be created in Dynamics GP and must be identified as an “Outsourced” Work Center. This also involves the creation of a new Inventory Site ID for the vendor performing the service. Once the Site and the Work Center are properly created, simply create a step in the routing for the item that is performed in the new outsourced Work Center.
Once you have completed all of the setup work described above, when a Manufacturing Order is entered and released Dynamics GP will build the Picklist for the components, and it will also suggest/create the Purchase Orders necessary for the outsourced operations defined in the routing for the item. The suggested Purchase Orders can then be viewed, printed, released by the user while creating and releasing the Manufacturing Order. When the product is ready to be shipped to the vendor, there is a process in Dynamics GP to “ship” the product which moves the item to Work In Process (WIP) at the outside vendor. Upon receipt of the product back from the vendor, the Receivings Transaction Entry will complete the outsourced step in the routing, and move the WIP to the next operation in the process. This process provides visibility within the system to WIP inventory, even when it is offsite at the outsourced vendor. The system will also then include the cost of the outsourcing in the total cost of the manufacturing item when it is received.
I welcome your feedback on your use of Dynamics GP to manage your outsourcing needs. If you have questions on Outsourcing in Dynamics GP or any other Dynamics GP Manufacturing topics, please contact Logan Consulting, a Chicago based Microsoft Dynamics Manufacturing Partner and Reseller.