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Category Archives: Materials

Undo Sales Shipment

Mandatory Steps: Shipment must has not been invoiced.

1. Go to Warehouse –> History –> Posted Documents –> Posted Sales Shipments.

2. Click on shipment number that has to be reversed, in ‘Posted Sales Shipments’ list and open it in edit mode, by clicking Edit button on Manage tab.

3. Click Functions menu in Lines area.

4. Click on Undo Shipment menu options.

5. Click on Yes button in all the confirmation dialog boxes.

6. Close all the open pages by clicking OK on them.

7. Once done, check ‘Stock Ledger Report batch wise’ to verify the changes done.

 

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Sales Invoice Generation

Sales invoice is a document that needs to be sent along with the material.  Other accompanying documents may be Outward (Non Returnable) Gate Pass, Vehicle Loading Gate Pass, Test Certificate, Material Safety Data Sheet etc. as per the requirement and case.

Before creating a Sales Invoice, Sales Shipment needs to be generated by Marketing department.  A list of all the generated shipments is available in the form of ‘Daily Dispatch Report’ report.  In this report, all the pending shipments are highlighted in Blue color.

Important points to note here are:

  • No invoices can be made (except supplementary) without Sales Order. 
  • Invoices can be printed by authorized users only.
  • Invoices CANNOT BE REPRINTED.

Click Here to download step by step process flow for creating Sales Invoice (our company specific) (Download link has been removed).

 
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Posted by on June 28, 2014 in Materials

 

Adding/Removing Comments on Vendor Card

It was required that, if any vendor has comments against it in Vendor Card, it should be highlight in some way so that the user can identify such vendors just having a look on Vendor List.

To achieve this, Vendor List have been modified in such a way that if any vendor has comments attached in Vendor Card, it will be highlighted in “Red-Italicized” in Vendor List.

To Add comments go to:

       Vendor Card > Home Tab > Vendor Group > Comments.

       In open Comment Sheet, enter whatever comments you want and click OK to close.

To Remove comments go to:

       Vendor Card > Home Tab > Vendor Group > Comments.

       Right Click on comment line and select “Delete Line”. Click OK to Close.

Do not remove the comments manually as it will not remove the line from database, blank line will still be there.

 

 
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Posted by on June 24, 2014 in ERP, Materials, Navision

 

Physical Control and Security of Inventory

Physical Control and Security of Inventory

Because inventory is tangible, items may lost, stray or stolen. It is not that people are dishonest, rather that they are forgetful. What is needed is a system that makes it difficult for people to make mistakes or be dishonest. There are several elements that help:

  • A good-part numbering system.
  • A simple, well documented transaction system. When goods are received, issued, or moved in any way, a transaction occurs. There are four steps in any transaction: item the item, verify the quantity, record the transaction, and physically execute the transaction.
    1. Identify the Item. Many errors occur because of incorrect identification. When receiving an item, the purchase order, part number, and quantity must be accurately specified. When issued, the quantity, location, and part number must be recorded.
    2. Verify Quantity. Quantity is verified by a physical count of the item by weighing or by measuring. Sometimes standard-sized containers are useful in counting.
    3. Record the Transaction. Before any transaction is physically carried out, all information about the transaction must be recorded.
    4. Physically execute the transaction. Move the goods in, about, or out of the storage area.
  • Limited Access. Inventory must be kept in a safe, secure place with limited general access. It should be locked except during normal working hours. This is less to prevent theft than to ensure do not take things without completing the transaction steps. If people can wander into the stores area at any time and take something, the transaction system fails.
  • A well-trained workforce. Not only should be stores staff be well trained in handling and storing material and in recording transactions, but other personnel who interact with stores must be trained to ensure transactions are recorded properly.

Courtesy:  J.R.Tony Arnold, Stephen N. Chapman, Lloyd M. Clive

 
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Posted by on May 22, 2014 in ERP, Materials

 

Inventory Costs

Inventory Costs

The following costs are used for inventory management decisions:

  • Item Cost
  • Carrying Costs
  • Ordering Costs
  • Stockout Costs
  • Capacity-associated costs

Item Cost

        Item cost is the price paid for a purchased item, which consists of the cost of the item and any other direct costs associated in getting the item into the plant.  These could include such things as transportation, custom duties, and insurance.  The inclusive cost is often called as landed price.  For an item manufactured in-house, the cost included direct material, direct labor, and direct factory overhead.  These costs can usually be obtained from either purchasing or accounting.

Carrying Costs

        Carrying cost includes all expenses incurred by the firm because of the volume of inventory carried.  As inventory increases, so do these costs.  They can be broken down into three categories:

  1. Capital Costs.  Money invested in inventory is not available for other uses and as such represents a lost opportunity cost.  The minimum cost would be the interest lost by not investing the money at the prevailing interest rate, and it may be much higher depending on investment opportunities for the firm.
  2. Storage Costs.  Storing inventory requires space, workers, and equipment.  As inventory increases, so do these costs.
  3. Risk Costs.  The risks in carrying inventory are:
    1. Obsolescence; loss of product value resulting from a model or style change or technology development.
    2. Damage; inventory damaged while being held or moved.
    3. Pilferage; goods lost, strayed, or stolen.
    4. Deterioration; inventory that rots or dissipates in storage or whose shelf life is limited.

What does it cost to carry inventory?  Actual figures vary from industry to industry and company to company.  Capital costs may vary depending upon interest rates, the credit rating of the firm, and the opportunities of the firm may have for the investment.  Storage costs vary with location and type of storage needed.  Risk cost can be very low or can be close to 100% of the value of the item for perishable goods.  The carrying cost is usually defined as a percentage of the dollar value of inventory per unit of time (usually one year).  Textbooks tend to use a figure of 20-30% in manufacturing industries.  This is realistic in many cases but not with all products.  For example, the possibility of obsolescence with fad of fashion items is high, and the cost of carrying such items is high.

Ordering Costs

                Ordering costs are those costs associated with placing an order either with the factory or a supplier.  The cost of placing the order does not depend upon the quantity ordered.  Whether a lot of 10 or 100 ordered, the costs associated with placing the order are essentially the same.  However, the annual cost of ordering depends upon the number of orders placed in a year.

Ordering costs in a factory include the following:

  • Production Control Costs.  The annual cost and effort expanded in production control depends on the number of orders placed, not on the quantity ordered.  The fewer orders per year, the lesser the cost.  The costs incurred are those of issuing and closing orders, scheduling, loading, dispatching, and expediting.
  • Setup and Teardown Costs.  Every time an order is issued, work centers have to set up to run the order and tear down the setup at the end of the run.  These costs do not depend upon the quantity ordered but on the number of orders placed per year.
  • Lost Capacity Cost.  Every time an order is placed at a work center, the time taken to set up is lost as productive output time.  This represents a loss of capacity and is directly related to the number of orders placed.  It is particularly important and costly with bottleneck work centers.
  • Purchase Order Cost.  Every time a purchase order is placed, costs are incurred to place the order.  These costs include order preparation, follow-up, expediting, receiving, authorizing payment, and the accounting cost of receiving and paying the invoice.

The annual cost of ordering depends upon the number of orders placed in a year.  This can be reduced by ordering more at one time, resulting in the placing of fewer orders.  However, this drives up the inventory level and the annual cost of carrying inventory.

Stockout Costs

                If demand during the lead time exceeds forecast, we can expect a stockout.  A stockout can potentially be expensive because of back-order costs, lost sales, and possibly lost customers.  Stockouts can be reduced by carrying extra inventory to protect against those times when the demand during lead time is greater than forecast.

Capacity Associated Costs

                When output levels must be changed, there may be costs for overtime, hiring, training, extra shifts, and layoffs.  These capacity associated costs can be avoided be leveling production, that is, by producing items in slack periods for sale in peak periods.  However, this builds inventory in the slack periods.

 
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Posted by on May 22, 2014 in ERP, Materials

 

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