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We have a client who purchases tractors and sell them to buyers. Before selling they do a pre-delivery inspection. In the pre-delivery inspection process, they will consume material such as oil and use labor hours. We suggested them to use production orders for this purpose as material consumption can be done through production BOM and labor hours usage can be managed through work centers.
However, when we use production orders, client has to create two item codes in the item list for one tractor. This is because same item cannot be a component of its own BOM. Client does not like to have two items codes for one tractor saying integrations with other systems may be affected. Is there a standard functionality to handle a similar scenario where an item is purchased, slight improvements are done and sold to customer (and maintain only one item code per tractor).
As a workaround, we thought of deactivating the Dynamic Low Level code button in manufacturing set up. This allows us to have the same item in its own production BOM. What will be the impact of deactivating Dynamic Low Level code (e.g. planning)?
Greetings Hasith Wanniarachchi,
The scenario is definitely interesting.
It does seem that Manufacturing may not be the right fit here. Microsoft Business Central Manufacturing is more designed for discrete manufacturing where we consume components and labor to make a final produced product in a consistent fashion.
The requirement seems to be more in line with Service Management and Service Orders or possibly aligned with the use of the Jobs functionality in Microsoft Dynamics Business Central/Microsoft Dynamics NAV.
With Service, you would buy the Tractor as an Item inventory, record the Sales Order to the Customer, and create a Service Item for the Tractor linked to the Customer. The Service Item tied to the Tractor would allow you to then to create a Service Order, select the Service Item linked to the Item for the Customer, and then at the Line > Service Item Worksheet Lines, you can add a Resource for the labor and add the supplies and any spare Item parts, such as oil, to the Service Order to complete the necessary service on the tractor as part of the sales process.
You will find more information related to Service Management at the following link: https://review.docs.microsoft.com/en-us/dynamics365/business-central/service-service?branch=master
The second alternative is Jobs. I am aware of scenarios where partners helped companies use the Jobs functionality to manage such a process. A job is created for each large Tractor Item. There was some customization to standard Jobs functionality involved to complete the link of the Job back to the Inventory Item. The Job allows for setting up Job Planning Lines with Resources and Inventory Items, along with G/L Expenses, to be consumed as usage in the Job Journal to track the cost applied against the Job for each Item to ready it for sale. The Job structure allows the company to consume component inventory and record Resource time and G/L Expenses as part of a Job schedule to complete the work necessary to ready the Item for sales completion. The key challenge would then be whether the accumulated job expense for the Items, Resource Time, and G/L Expense needs to be added to the Tractor Item Cost or is just used to report how much cost was incurred to ready the Item and could be used in off-financial statement analysis of teh profitability of the sale. Assuming the Tractor Item is Purchased on a Purchase Order and posted as Received on a PO, you could possibly use a special Item Charge called TRACTORPREP to add the cost accumulated on the Job to the Tractor cost in Inventory. A negative G/L Account line could be added to the Purchase Invoice lines to offset this Item Charge Expense because it would not be a cost billed by a "dummy" Vendor on the PO. It just allows for the adding of cost to the Tractor Purchase thorugh an Item charge, but then the offset on the Purchse Invoice lines would be to the Job Cost Recgonized Account to clear the expense and add it to the Item purchase cost as capitalized cost.
These are at least some options to consider as an alternative to Manufacturing. Unfortunately, there is no way to have an Item be a component of itself in Manufacturing or Assembly Management because that can lead to costing loops in the Adjust Cost Item Entries process, where consumption cost needs to be rolled up to the final Output Cost. Such consumption of an Item to produce itself can lead to looping of Adjust Cost Item Entries becuase an update to Output Cost leads to an adjustment to Consumption Cost, which then leads to further adjustment to Output, where the circle then continues.
I hope this helps give you some options not yet considered.
Best Regards
Tom
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