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We use work centers for both our machining that is done within a production order as well as any outsourcing/subs that we use throughout the production process. When we purchase everyday goods and bring them into inventory, they get SMH coming in. Therefore when those items are brought into production orders as material, SMH on those items is already taken care of. The problem we are running into is goods that we bring into a production order through the Sub line. We found this out when we rolled up a part recently that had an expensive camera being brought into the production order through the sub line. The production order's rolled up value per part was actually less than if we just purchased that part and put SMH on it when it was brought into inventory. We bring in the expensive camera's cost into the production order through the routing line. Since the direct cost is not put onto the workcenter itself for this part, I don't think using the Indirect Cost % in the work center will fix the problem. Anyone ran into this before and have a solution?
Brenton,
I am guessing the Subcontractor PO does not include these SMH charges. You get a separate invoice for this. What I did was not a perfect solution but a doable one... I created a Routing Line for the Carrier Charges so a PO could be generated. When the Invoice arrived it would post and be reflected as a subcontractor on the Production Order. I did not want to play with Indirect % as it fluctuated too much.
Hope this helps.
Thanks,
Steve
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