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Internal Distribution
Version 2.3S
Contents
7 Reordering................................................................................ 7-1
7.1 Internal Distribution reordering review ................................................... 7-1
7.2 Distribution networks and reordering ..................................................... 7-2
7.3 Purchase Order Run and Internal Distribution ....................................... 7-3
7.4 Purchase Order Processing in Internal Dist ........................................... 7-8
7.5 Spot Orders ............................................................................................ 7-9
11 Index........................................................................................ 11-1
Once you have selected Internal as the creditor type, the warehouse entity field (W/H)
becomes enabled. You are required to enter the supplying warehouse entity i.e. the
warehouse from which this internal supplier takes his stock.
You should select Email as the Advise method. Internal purchase orders can be
transmitted by email to the supplying warehouse.
Tax Incl Buy Prices, Tax Incl Base Price and Tax on Purchases should all be
turned off if you are selling at cost between warehouses. The setting to allow back
orders should be set the same as the internal customers setting.
You may also wish to <Restrict> the internal creditor to an entity or an entity view. If
you have a number of warehouse entities and wish this internal supplier to be
available to all your warehouse entities and you have Enforce Entity on Creditor
turned on (in the A/P System Configuration program), you should <Restrict> this
internal creditor to an entity view rather than an entity.
If you have a number of warehouse entities and wish this internal creditor to only be
available to one warehouse entity and you have Enforce Entity on Creditor turned
on, you should <Restrict> this internal creditor to the entity of the warehouse to be
supplied.
Note: If you are creating more than one internal supplier for the warehouse entity, you
should use the <Restrict> option before setting the supplier type to Internal.
Once you have selected Internal as the customer type, the warehouse entity field
(W/H) field is enabled. You are required to enter the receiving warehouse entity i.e.
the warehouse entity to which the stock is delivered.
You should select Email as the Advise method as shipment dispatch details can be
emailed to the receiving warehouse. The setting to allow back orders should be set the
same as that of the internal supplier. The internal customer and the internal supplier
should also have the same tax statusthey should either both pay tax or both not pay
tax.
You may wish to <Restrict> the internal customer to an entity or an entity view. If
you have Enforce Entity on Debtor turned on (in the A/R System Configuration
program) and you wish this internal customer to be able to buy from all your
warehouse entities, you should <Restrict> this internal customer to an entity view
rather than to an entity.
If you have Enforce Entity on Debtor turned on and you wish this internal customer
to be able to buy from a specific warehouse entity, you should <Restrict> the internal
customer to the entity of the supplying warehouse entity.
Note: If you are creating more than one internal customer for the warehouse entity,
you should use the <Restrict> option before setting the customer type to Internal.
You are shown the Type, which sales entity the customer or supplier is restricted to
(Owned By), the Account Number and its Name. Drilling down on a line takes you
to the appropriate inquiry program.
Scenario one is the situation where one internal supplier supplies multiple warehouse
entities.
Each receiving warehouse entity must have its own internal customer.
If these internal customers are to be permitted to only purchase from the one internal
supplier (in this case InternalSupplierB1), they must be restricted to the entity of the
supplying warehouse (B1 in this example).
The second scenario shows that greater control can be exercised over the Internal
Distribution process by restricting each internal customer to purchasing from their
own internal supplier at the supplying warehouse entity.
The internal customers must be restricted to the entity of the supplying warehouse.
The internal suppliers are restricted to the entity of the receiving warehouse.
This situation makes it relatively simple to reconcile accounts at the end of each
month as each internal supplier has only one customer.
The third scenario is the situation where all warehouse entities can purchase from all
other warehouse entities. This requires that each warehouse entity has both an internal
supplier and an internal customer.
The diagram above shows this situation with no entity restrictions in place. Each of
the internal customers can buy from each of the internal suppliers.
The same situation of multiple suppliers/customers can also be strictly controlled with
entity restrictions, as shown in the following diagram.
This allows you maximum control over the Internal Distribution system. Each internal
customer has only one internal supplier to purchase from, and each internal supplier
can only supply one internal customer.
If you wish to have this degree of control, you must set up one internal customer and
one internal supplier for each warehouse entity in your organisation.
Internal
1 Purchase Order
Warehouse A 5432
(Receiving warehouse) Product 1
7 Receipting Product 2
Product 3
Notification
6
TRANSMIT 2
5 Local Shipment
The Internal Distribution process starts with the receiving warehouse creating a
purchase order on an internal supplier using the Purchase Orders program
[Purchasing:Operation:Purchase Orders].
The purchase order automatically becomes an Internal purchase order when the
supplier is an internal supplier. Internal purchase orders use a different numbering
sequence from normal purchase orders to clearly identify them as being internal.
When creating an internal purchase order, you should ensure that the entity on the
purchase order is that of the receiving warehouse i.e. the warehouse entity placing the
order.
Products are added as normal. A warning is given if the suppliers stock would fall
below the safety stock level, providing safety stock levels have been set for the
products. Any comments entered when selecting products are transferred with the
purchase order and can be viewed when drilling down on the lines.
Internal purchase orders must be transmitted using the <Transmit> option. This
automatically generates an email message informing the supplying warehouse entity
of the internal purchase order number, which then becomes the internal sales order
number.
For the order to be transmitted, the status must be Ready to Send. You are able to
edit the message before it is transmitted if required.
Once the internal purchase order has been transmitted, it is not possible to alter it. If
you wish to order additional products you must raise another internal purchase order.
The status of the purchase order is shown in the bottom right corner of the Purchase
Orders program [Purchasing:Maintain:Purchase Orders]. A purchase order with a
status of Transmitted cannot be deleted.
The option to Auto Print P/Slips in the Entity Master program [General
Ledger:Maintain:Entity Master] determines the steps to follow next.
If this setting is on, the internal sales order is processed in the Open Invoices program
[Sales:Operation:Open Invoices]. You are able to over supply the product lines for an
internal customer even when the product is not flagged to allow over supplying. This
allows you to be supply internal orders with more appropriate quantities depending on
stock packaging, space availability and so on. If more items are picked than were
initially ordered, the supplied quantity on the internal sales invoice is increased.
Completing the sale in the Open Invoices program automatically creates a local
shipment, if the warehouse entities are defined as being remote. A remote
warehouse entity is one where the physical location of the warehouse from the
dispatching warehouse requires some time for the goods to be dispatched and
received. Warehouses are remote by default. An email notification is sent to the
originating (or receiving) warehouse entity that the local shipment has been
dispatched.
If the Auto Print P/Slips setting is off, the internal sales order is processed using the
Sales Processing program [Sales:Operation:Sales Processing]. Entering the internal
customer and the internal sales order number as the Customer P/O number results in
the sales order lines being loaded into the program. The sale can then be completed as
usual. It is not possible to over supply an internal order in the Sales Processing
program.
The different process, depending on the Auto Print P/Slips setting, is shown in the
diagram below.
Note: If the internal purchase order is raised with a due date other then the current
date, when the order is transmitted, a pick slip is not automatically created. A sales
order is created with everything on backorder. The sales order then needs to be
recalled using the Sales Processing program or a customer back order run can be used
to create a pick slip for the stock.
If the Auto Print P/Slip setting in the Entity Master program [General
Ledger:Maintain:Entity Master] is off, a LOCAL SHIPMENT ENTRY window is
shown when the internal sales order is finalised in the Sales Processing program
[Sales:Operation:Sales Processing]. Otherwise it is shown when the sales order is
finalised in the Open Invoices program [Sales:Operation:Open Invoices].
Here you are able to enter freight information including the number of cartons and
pallets. If further invoices are to be added later, you can leave the shipment open. If
there is already an existing local shipment to the same receiving warehouse entity, the
new shipment is allocated to it. Otherwise a new local shipment is created. You can
finalise the local shipment at this time, or dispatch the shipment using the Local
Shipments program [Purchasing:Maintain:Local Shipments] later.
After confirming, you are given the shipment number.
When the stock arrives at the receiving warehouse, it is receipted using the Local
Shipment Receipts program [Purchasing:Operation:Local Shipment Receipts].
<Details> allows you to view the lines on the local shipment although there is no drill
down available. If products are bin tracked, <Put Away> allows you to alter the
default bin.
The local shipment is finalised using <Receipt>. After the shipment has been
receipted, the stock is released so that it can be processed and sold as normal.
A price matrix forms an association between a product price code and a customer
price code in the form of a two dimensional matrix, one side being product price code
and the other side being the customer price code.
You can use the customer price code created for your internal customers and associate
this customer price code with some or all of your product price codes to create price
matrices. You are able to set your pricing to be cost-plus in a price matrix. This means
that you are able to set a small percentage to cover transfer costs.
Refer to the Pricing Manual for further details on setting up a price matrix.
Invoice #A103
Line 1..
Line #A102
Invoice 2..
LineLine 3..
1..
LineLine 4..
2..
Invoice #A101
Line
Line 3..
1..
Line 4.. Shipment 1
Line 2..
Line 3..
Line 4..
Invoice #A104
Line 1..
Line 2..
Shipment 2
Line 3..
Line 4..
Invoice #A105
Line 1.. Shipment 3
A local shipment is created when an internal sales order for a remote warehouse is
finalised.
The local shipment can include partially filled as well as completed internal sales
orders that are consolidated into the one shipment. The shipment can be inquired on in
the Local Shipment Inquiry program [Purchasomg:Inquiry:Local Shipment Inquiry].
If further invoices are to be added later, you are able to leave the shipment open.
Invoices can be added to a local shipment when another internal sales invoice is
processed. If there is an open local shipment, you are able to choose to add this sales
order to the open shipment.
If there are multiple local shipments open, the message Multiple Open Shipments is
displayed in the lower right hand corner of the screen. This alerts you so that you are
able to select the appropriate shipment to add to.
If you elect to leave a shipment open, you are presented with a warning to this effect.
<Next> and <Prev> only cycle you through the local shipments at the nominated To
Warehouse entity.
<Invoices> allows you to view the invoices allocated to the selected local shipment.
Drill down facilities are available.
<Products> allows you to view the products that are on the selected local shipment.
No drill down is available from this option.
You are able to view the lines on the invoices in the local shipment using <Details>.
No drill down is available in this window.
If any of the products on the local shipment are bin tracked, you are able to change the
assigned bin using <Put Away>.
The local shipment is finalised using <Receipt>.
If you have the option to Print Unpacking Report turned on in the Purchasing Sys
Configuration program, you are able to print the Local Shipment Unpacking List
directly from the product confirmation screen, to verify that the local shipment is
correct. If any corrections need to be made, these can be made using the Stock
Adjustments program.
The list identifies those items that should be put away on the shelves and those items
that have been committed to backorders. This eliminates the unnecessary work of
putting all the stock away and then repicking it for backorders.
The list is produced for a specific shipment number. You are able to choose to print
details regarding commitments associated with orders. You are also able to print the
bin locations. The list can be sorted by product code or by supplier product.
When run, the list shows the products (codes and descriptions), product group,
purchase order number/s, the buying quantity and unit, the number to put away, the
number on backorders, the number committed and the stocking unit.
The report can be produced in a summary or a detailed format. The summary format
prints a one line entry for each shipment. This gives the key shipment details, such as
Carrier and ETA. The detailed format prints most details relating to the shipment.
You can produce the report for all local shipments going to the receiving warehouse
entity. Alternatively, you can narrow the scope of the report by using the report
criteria such as a nominated date range.
You are also able to run the report for a single shipment.
A remote warehouse entity is one where the physical location of the warehouse from
the main warehouse requires some time for the stock to be dispatched and received.
A local warehouse entity could be a sub-warehouse or a parts store within the same
building or complex. The movement of goods from the main warehouse to the local
warehouse can take place immediately since no distance is involved.
The Internal Distribution system uses the position of the warehouse (remote or local)
to determine whether transfers between two warehouse entities occur immediately (if
they are local) or go via a local shipment (if they are remote).
MAIN warehouse
WH-1 Minor
Warehouse
WH-5
In the diagram above, a movement of stock between WH-1 and WH-5 would not raise
a local shipment as the two entities are not remote from one another. However, a
movement of stock between WH-1 and WH-2, WH-3 or WH-4 would raise a local
shipment as these entities are remote from each other.
There may be reason to set up multiple overlapping Distribution Networks in the same
organisation. This can occur if one warehouse entity is the distributor of a particular
product range but is a sales outlet for others. In other words, the same warehouse
entity could be involved in different networks and with different allocated main
warehouse entities.
In the diagram above, there are three minor warehouse entities placing orders on the
main warehouse for a total of 19 of an item. In addition, the main warehouse has a
total of 10 external sales orders and a safety stock of 5. Assuming no quantity on
hand, the main warehouse entity needs to purchase 34 to cover the requirements of the
entire pull distribution network.
Forecast sales at the minor warehouse entities are ignored.
A push strategy is a centralised supply system for your warehouse stock. The
decisions of what, how many, when and where to ship stock are made from a central
locationthe supplying warehouse entity.
The stock is purchased at the main warehouse entity and pushed out to the receiving
warehouses. The stock requirement decisions are made by the supplying warehouse
entity on behalf of the receiving warehouse entities.
When computing a reorder quantity, the push strategy ignores orders placed by the
receiving warehouses on the supplying warehouse and instead looks at the actual
forecast external sales of each warehouse entity.
Using the same figures as before, the three minor warehouse entities have forecast
sales of 23 for an item. In addition, the main warehouse has a total of 10 external sales
and a safety stock of 5.
Assuming no quantity on hand, the main warehouse entity needs to purchase 38 to
cover the requirements of the entire push distribution network.
Internal orders at the minor warehouse entities are ignored.
If a main warehouse is set up be a distribution hub only, the main warehouse is only
used to facilitate the consolidation of branch orders and does not maintain a level to
stock to cover future branch orders. The branch requirements are determined
individually using the separate reorder configuration settings for each branch as well
as the suppliers lead times.
8. Click <Add> on the right hand side of the screen to add a warehouse to the
distribution network.
9. Select the Remote box if the warehouse is remote from the main warehouse.
10. <OK>.
11. Repeat steps 810 for each minor (receiving) warehouse in the distribution
network.
12. Click <Save> when all the warehouses have been added.
Transferring stock from one warehouse entity to another warehouse entity using
Internal Distribution requires that the receiving warehouse entity (the internal
customer) pays the supplying warehouse entity (the internal supplier). This should be
done on a monthly basis.
There are three possible procedures that can be used to settle internal accounts:
Automatic offset journals
Payment by cheque
Payment by journal entry
The Supplier entered should be the internal supplier for the supplying warehouse.
You are able to limit the purchase order run to particular Product Groups if required.
You can also select to Analyse Outstanding Customer Orders Only.
You are then required to select whether to run the task in batch or save it to a batch
suite. If you add the Purchase Order Run program to a Recurring batch suite with
selections appropriate to internal reordering, you are able to fully automate the
reordering process.
If you elect to run the purchase order run task in batch, you are required to enter a
Start Time, a Date and an Email Address. The program defaults the start time and
date to the current time and date.
If you elect to save the purchase order run in a batch suite, you are required to enter
the name of the batch suite.
The final step requires that you enter your User ID and an optional PIN.
Open the internal sales order in the Open Invoices program [Sales:Operation:Open
Invoices] or the Sales Processing program [Sales:Operation:Sales Processing].
Change the back ordered quantity to zero. Complete the invoice. This generates the
local shipment and two emails are sent to the receiving warehouse: one informs the
warehouse of details of the local shipment; the other informs the warehouse of the
product/s that have been deleted and are therefore not going to be supplied. The
internal purchase order is updated accordingly when the local shipment is receipted.
8.1.2 How can I cancel an internal sales order that has gone to
picking?
Open the internal sales order in the Open Invoices program [Sales:Operation:Open
Invoices]. Change the supplied and back ordered quantities to zero. Complete the
invoice. This creates a local shipment with no products on it. The invoice and
purchase order are updated when the local shipment is receipted, even though there
are no products on it.
8.1.3 How can I delete a product from both the internal sales
and internal purchase order?
You cannot delete a product from an internal order once it has been transmitted.
However you can ensure that it is not supplied.
Open the internal sales order in the Open Invoices program [Sales:Operation:Open
Invoices]. Change both the supplied and back ordered quantities for the product to
zero. Complete the invoice. Receipt the local shipment. Both the sales order and the
purchase order are then updated.
Open the internal sales order in the Sales Processing program [Sales:Operation:Sales
Processing]. Change both the supplied and back ordered quantities for the products to
zero. An automatic email notice is generated informing the receiving warehouse that
the order is not being supplied and the products are not being placed on backorder.
The purchase order is updated and no local shipment is created.
The only way that you can get a listing of all the products on a local shipment in
transit is to inquire on the shipment using the <Invoices> option in the Local
Shipment Inquiry program [Purchasing:Inquiry:Local Shipment Inquiry]. From this
you can ascertain the invoice numbers. You are then able to print out the invoices
using the Sales Invoice Inquiry program [Sales:Inquiry:Sales Invoice Inquiry].
If you want to have more than one internal customer for a warehouse you must use the
<Restrict> option in the Customer Master program [Accounts
Receivable:Maintain:Customer Master] and restrict the internal customers to different
entities. The restriction must be in place before you make the customer internal.
Local shipments are only created when warehouses are defined as being remote.
This is defined in the Distribution Networks program
[Purchasing:Maintain:Distribution Networks] If no distribution network has been
created, warehouses are defined as being remote by default.
Refer to the General Ledger Manual for a complete listing of G/L postings.
Default
Initial value entered into a field by the system.
Distribution Network
A network that links together warehouse entities within your
organisation that can be treated as a group for purchasing and
distribution.
Entity
A reportable section of your organisation. An entity can be
designated as being a sales entity and/or a warehouse entity.
Internal Customer
A customer account set up for use within your own
organisation.
Internal Supplier
A supplier that is used when transferring goods between
warehouse entities within your organisation.
Local Shipment
A group of items being sent from one warehouse entity to a
remote warehouse.
Pick Slip
A form that shows the items to be picked to fill a customer
order. Used by your warehouse entity staff to pick the
products from stock for a customer.
Product Price Code
A code allocated to a product to represent the products
discount structure.
Pull Strategy
A decentralised supply system for your distribution network.
It requires that the minor warehouse entities determine their
own stock levels.
Purchase Order
A request to purchase goods or services from a supplier.
Push Strategy
A centralised supply system for your distribution network.
The main warehouse entity determines the stock levels for the
minor warehouse entities.
Sales Entity
An entity used for sales analysis purposes.
Warehouse Entity
An entity where stock is held.
S W
Sales Entity, 5-1 Warehouse Entity, 2-1, 5-1
Sales Invoice Inquiry program, 8-2 Warehouse Reorder Strategy, 5-5