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Items cost sum of vendor invoices in production on purchase orders

Here is an interesting twist that was thrown my way today. Client has several items that can undergo various machining processes. Each of these processes are provided by a different vendor. What is the cleanest way to track the item in its production process as step 1 will be provided by vendor A and then step 2 is provided by vendor B and so on. In the end they need the total cost of all the processes to be added to the initial cost of the item. They want to use purchase orders to track the services provided by each vendor. This is similar to a manufacturing production line only the work is peformed by outside vendorsoutside of their fatory.

Hi Richard,

The Outsourcing functionality in Manufacturing will do what you want. You will need to setup one of your cost buckets to collect outsourcing costs in the WIP Preference Defaults window then specify the outsourcing unit costs in either the Machine or Labor card, depending on your choice in that window. You then create an Outsourced Work Center for each vendor in the Outsourced Work Center Setup window. When you create the routing for your finished good you specify each of the steps that you described as a separate sequence. When a Manufacturing Order includes outsourced sequences, a Purchasing button is enabled that will allow you to issue the PO's to your vendors. Then as you receive the PO items, costs are automatically added to your WIP and will transfer to your FG cost as you receive the MO. The Help files in each of these windows do a good job in describing the individual setup steps you need to take.

Good luck

Wassim Rahme

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