Project-related Inventory Management

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Posted on by Community Member Microsoft Employee

I would like to inquire regarding an integration on Project-related inventory management.

Let's say, we are purchasing inventories for Project A. These items are stock items and will be stored in warehouse. In addition, these items are issued as needed in project/s. My concern is that whenever we do product receipt for these Project-Purchase Orders, these items are fully consumed and warehouse location is emptied of the qty ordered. What we wanted is to completely monitor the inventory being maintained in the warehouse as well as those that are issued on projects. (e.g. We have made a purchase order for Project A of 5,000 bags of cement to be stocked and monitored. These will be stored in Warehouse 1 and will only be decreased once Project A requested that an item (let's say 1,000 bags of cement) be issued (deducted) from it's stored location.

Hope you can help me out.

Best regards,

Edmond

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Community Member Microsoft Employee on at

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RE: Project-related Inventory Management

Hi magic1949,

This makes sense, tell me how can we achieve this.

Best regards,

Edmond
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guk1964 10,877 on at

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RE: Project-related Inventory Management

Its either in inventory and is available for any use or is segregated or reserved for the project, or it is consumed (to project) in which case it is no longer inventory but may still be in project wip.

In principle you want to stock control, your installed quantity prior to issue to project which you can do by creating a project specific warehouse. You can then physically control it and decide whether the value the inventory in that warehouse should be included as inventory (which it should be for stockcheck and audit and insurance reasons) and whether to financially accrue for it as a project commitment, etc.

you can then issue when needed to specific wbs lines (which generally makes more sense for cost control analyis than consuming at project level) , or you can make it a general project consumption for items like oil and rags, and gloves..
Community Member Microsoft Employee on at

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RE: Project-related Inventory Management

Hi everyone,

I really am learning through your inputs, there are a lot of considerations we need to make and I cannot just grab the ideas I am getting but everyone of you have helped a lot. Will get back to you guys after I have discussed what I have learnt here so far to our client.

Best regards,

Monch
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ZvikaR 89 on at

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RE: Project-related Inventory Management

reading your original question, I think you are going about it the wrong way.

you want project dedicated inventory that will be consumed at a later time by the project.

this is a fairly common scenario in several industries, including construction.

There is no direct out of the box functionality to achieve that.

your attempt to have project PO without consumption, even if you can get it to work will not give you what you need - which is managed inventory before consumption (one that can be moved around, counted, etc.)

The direction should probably be a work around (some parts of the solution were already suggested here)

Create a new warehouse for every new project

Name the warehouse the same ID as the project to make it easy to link in reporting.

create regular PO receiving into that warehouse.

consume into project as necessary by project stage and progress
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Ludwig Reinhard Microsoft Employee on at

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RE: Project-related Inventory Management

Hello Monch,

Can't you first create a PO that is not related to your project and put the items first on stock as for any other PO?

Probably put it to a special site, warehouse or other inventory dimension so that people know that the products purchased are for a project and should not be used otherwise.

Once the items arrived you can then post the item consumption e.g. through a project item journal.

Would that be an acceptable workaround?

Best regards,

Ludwig
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RE: Project-related Inventory Management

Hi everyone,

I got your point. Let me elaborate further the business process.

1. Upon Purchase requisition, we choose the Requisition purpose: Consumption and select a Project ID.

2. Have it approved and the PO confirmed.

3. Then post Item Arrival.

4. Then post the Product Receipt.

Regarding setup, in Project management and accounting parameters: Create item requirement and Item consumption are unchecked.

Now with this kind of setup and business process, how can we be able to monitor Project-related inventories? Using the scenario, when inventory Issue status is Deducted, how can we be able to issue this inventory knowing that only inventory with Available physical status can be issued?

Please help us identify a solution.

Best regards,
Monch
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guk1964 10,877 on at

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RE: Project-related Inventory Management

It just a normal warehouse but is used only to stores items for the specific project so you choose that warehouse e.g. on the PO, then you can issue to wbs line rather than at header level.

Whatever is not issued is still in inventory but can be valued as held against the project. Inventory can be valued for the specific warehouse, it can be counted, etc.
Community Member Microsoft Employee on at

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RE: Project-related Inventory Management

Hi,

Can you please tell me more about Project Warehouse? Haven't heard that before. Is it compatible with our AX 2012 R2?

Best regards,

Edmond
Community Member Microsoft Employee on at

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RE: Project-related Inventory Management

Hi Magic1949,

Can you please tell me more about Project Warehouse? Haven't heard that before. Is it compatible with our AX 2012 R2?

Best regards,

Edmond
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RE: Project-related Inventory Management

Hi Ludwig,

Well that makes a good sense. It might be a good option to really consider. Now, regarding the Item Requirements, I have discussed it with my client but they did not want to create a customer and additional processes that it requires so I guess I will stick with the first option.

Blessings to you! You really did help us a lot.

Best regards,

Edmond