Handle inventory in consignment warehouse


I have some consignment inventory that must be listed as inventory items but those items are not own by plants ( 2 plants: A & B ) even they will use them.

I need to have those items with zero value in inventory for inventory valuation purposes.

When plant A want to use one of those items, it should be done through a production order then purchase order process. The Purchase order for the manufacturer will be for the full value of the item.

When the purchase order is sent to the supplier , they will sent a replacement part which will be put back into inventory to replace the one just used by plant A…

How can I setup and process this scenario?

Thanks for any idea.

Hi Taty,

First, I’m curious as to the volume of inventory items you need to apply this process to?

I may have a solution called Foxtrot which will allow you to quickly write a script that can in fact automate the zeroing of the inventory items and then as POs go out it can automate the updating of the replacement part back into inventory.

There are a number of Foxtrot users that are doing a similar process, and from what you’ve described should only take a short time to setup.

Please let me know if you are interested in discussing further.

Hi larry, thank you for your suggestion but I really need a work around for this one. The volume that we have does not justify an investment of alternate solution.

Don’t have them at zero, purchase them, stock them, remove from stock monthly with a journal identifying the stock in a separate warehouse. Consume from the warehouse and process the invoice to the supplier from the supplied purchase orders based upon usage.

Good Work around. thanks.

What’s happen if I need to generate a Po for the manaufacturer will teh full value of the item.

Also how to take an account the fact that a replacement part should be put pack in inventory to replace the one already used.

Nothing happens to the PO you want it at full cost to ensure the consumption cost is absorbed into the parent. You only need to journal the cost of these items out of your inventory asset account monthly for reporting purposes and having the cost satisfies any insurance requirements.

The replacement part I would setup a minimum stock holding at the vendor warehouse and trigger replenishment through master planning.

that’s clear .I’ll try that . thanks Adam.