SFC -- Create a Shop Order with Outside Services operation, adding job number to associate with Shop Order.
PO – Create Outside service PO, Item number = Shop Order
Parent item and job number same is the same as shop order’s job number, GL account =
Outside Service Expense. Receiving won’t update item quantity on hand. It is treated
as a non-stocked, non-controlled item.
AP – Process voucher for vendor invoice and indicate "Job No" for distribution screen. System will update information in Job History File (JOBHIST).
JC – Pull Outside Service cost from AP (JOBHIST) by transferring cost from Accounts Payable processing.
A purchase order is created for the outside process where the item number on the purchase order line is not the same as the BOMP Work Order parent item number. It is considered a service item.
1. We
need to tie the purchase order line and plus work order outside the process operation.
In the old method, the shop order provided the job number to the purchase
order. Strictly speaking, the shop order is not directly tied with the purchase
order. It is the job number that is tied
with the purchase order. In the existing method, Work Order Plus uses the work order
number and operation number to tie with the purchase order line. The tie is
from the Plus Work Order side to the purchase order side, but the purchase order side
has no knowledge of how it is tied with the Plus Work Order. This can cause a problem.
2. The real issue is the cost of outside processing timing.
a. In the legacy manufacturing outside processing, the tie is through the job number, so the cost of the outside processing can wait till the Accounts Payable side processes the voucher with the job number. That gives a lot of flexibility.
b. But with the Plus Work Order, we can’t wait. We must have the cost of the outside processing at the time of reporting the production operation of outside processing. With the existing implementation, we are picking up the expected cost of the PO line item, which is not flexible enough.
c. The new implementation solves this issue by doing the following:
i. It is still based on purchase order line item cost.
ii. But there’s a Global setup flag “17. Update PO Receiving Cost thru WO+ Outside Proc”. If this flag is set to “Y,” it will create a receiving transaction based on the expected cost. The purpose is to speed up the Work Order Plus and purchase order receiving.
iii. If this flag is set to “N,” the user will not be able to report the production work order outside the processing operation until the purchase order line item is received. This will give the purchase order side a chance to verify the outside processing cost before we allow the Work Order Plus to proceed. But in the past, there’s no such mechanism to prevent the Work Order Plus to proceed. The new Work Order Plus process still requires an accurate purchase order line item cost to make outside processing work, but the checks and balances (per Global Setup) can prevent Work Order Plus from proceeding before the outside processing cost is confirmed by the purchasing department.
3. The new implementation supports an outside processing expense account.
a. In the past, outside processing was expensed by using a special outside processing item number and optionally using an outside processing material cost code resulting in the use of an outside processing inventory account, which should be an outside processing expense account.
b. The Above is somewhat complicated for users to set up, and it is easy to make a mistake. The new method supports an outside processing expense account in Global Setup. Once it is set up, it is not likely to cause further issues.
c. Also, a special outside processing item is no longer needed in the new implementation. We simply use the same item number as the Work Order Plus parent item number to make it easy for users to understand.
d. We also support using the item vendor record to store the last outside processing cost with the vendor, and it is used when the purchase order line is created.
4. Accounting distributions work the same between the old and new implementation of Work Order Plus. There’s no issue there.
a. Purchase Order Receiving will debit the Outside Processing Expense Account per purchase order line item.
i. The old way is based on the item setup, material cost type (complicated)
ii. The new way is based on the Global Setup, which is simple.
b. Purchase order receiving also credits the Receiving Accrual for the Accounts Payable side to offset.
c. Work Order Plus will debit WIP and credit the Outside Processing Absorb Account per the BOMP Global Setup screen 1 (flag 13). This will be used to cancel the Outside Processing Expense Account.
In In summary, the new Outside Processing Account allows the following:
· Creates an optional check and balance to prevent WO Plus outside processing operation until the purchase order side is received. This will give the purchase order side the control of cost and hence can make the outside processing cost more accurate. The manufacturing personnel generally speaking should not get involved with outside processing cost.
· It ties the purchase order line to the Plus Work Order which simplifies the purchase order entry side because a separate outside processing item number is not required to tie with the outside processing expense account. We can utilize the same Work Order Plus parent item number and use a Global Setup outside processing expense account.
· In addition, this feature gives the user the ability to update outside processing Work Order Plus linkage information in the purchase order directly, which they have not been able to do in the past. Also, we allow the Work Order Plus side to update the purchase order and line item info on the production side, and that will update the purchase order line item info with the Work Order Plus information. The linkage goes both ways.