1 Reply Latest reply: Sep 27, 2011 7:56 AM by 890789 RSS

    Manufacturing with a third party, How to control cost and automate

      JDE E1 v8.12 will be upgrading to 9.0

      I am new to this so if someone has ideas or point me in the right direction. You see we Order a supply of Wrappers, Trays(Boxes) and Master Shippers(Cases). This is put into inventory . We Only ship out amount needed to our third party when orders need to be filled, (Our 3rd party completes of finished goods). Rest of the Wrappers, etc are stored in our warehouse.
      iInventory adjustments are done when sending to our 3rd party. When we buy the wrappers etc creates a large negative variance which floats on our books, It takes about 2-6 months to offset the variance. Our 3rd party makes our finished goods and we send them the packing etc, so our 3rd receives Wrappers, etc to complete finished Product
      We are charged for Labor and the finished product.

      The things we want to keep track of is

      labor(3rd party)
      Finished product(3rd party)
      incurring a (+- 5%)Spoilage of wrappers
      iWe get hit with freight cost 3 times
      (1)     1st cost freight to 3rd party
      (2)     2nd cost freight back to us
      (3)     3rd cost freight out to the DC( Distribution Centers)

      Things we would like to automate
      •     Be able to place a PO for finished goods to 3rd party
      •     The system knows and states what components are needed to complete the finished goods(So we can monitor it)
      •     The system flags when more components needs to be ordered(so our supply does not fall below our benchmark)

      Within manufacturing this product wewant to be aware of our prime cost

      Prime Cost
      1)     Direct material
      2)     Labor
      3)     Other direct cost(e.g. packaging and royalties)
      Since we send our material (packing only) to a third party to complete the finished good, within the manufacturing suite. We can we use? Do we have to have manufacturing account as well? .

      Any suggestion would be received.

        • 1. Re: Manufacturing with a third party, How to control cost and automate
          Control the process with Outside Process Work Orders. You create a Work Order and a parts list in the normal way but have a two step routing, the first step is the Outside Process done by the Third Party and the second step is receipt of the goods back from them (JDE will not allow an Outside process to be the last step on a routing)

          With the first operation you will need a OP item number, this is part number which is made up of the Item being manufactured plus the characters OP plus the operation number, this part number represents the service that the 3rd party is providing and is set up as a Stock Type X, Line Type X

          When you run R31410 to attach the parts list it will automatically raise a Purchase Order on the 3rd party

          You can then issue the parts to the Work Order in the normal fashion and since you have a P/O for the manufacturing process this will acount for the 3rd party labour

          Look on Oracle Support for document 647965.1