Question

Make or Buy Setup

  • 4 March 2022
  • 4 replies
  • 121 views
B
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Userlevel 6
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Hi

I am looking for documents about the setup of the Make or Buy process.

Scenario:

A Customer order gets created. According to the inventory part setup the part can be partially produced and partially purchases.

 

My concern now ist the following. Since the inventory part doesnt have separated cost details it will always uses the same cost either it is produced or purchased. 

 

I mean when you purchase the part it mostly cost you more than your own production. 

 

Is there a setup guide on Supply chain site and financial site?

 

Best Regards

Sophal

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4 replies

A
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Userlevel 7
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Hello,

I think  it all depends on your inventory valuation principles, if you use fixed cost per part, then yes, cost of the part will always be same (and you will have inventory variations booked on supplier invoice and shop order). Fixed price per lot batch or serial number and actual costing will give you different results.

 

Regards, Adam
B
Rank
Userlevel 6
Badge +10

Hello,

I think  it all depends on your inventory valuation principles, if you use fixed cost per part, then yes, cost of the part will always be same (and you will have inventory variations booked on supplier invoice and shop order). Fixed price per lot batch or serial number and actual costing will give you different results.

 

Hi Adam

Do you have any experince how other customer solved that issue from the financial perspective? Right now i only see to create two different inventory parts. I dont know if the supply chain and manufacturing can handle this in the process. Thats why i need a best practice concept how to build this correctly in IFS. Serial or Lot is not an option. 

 

BEst Regards

Sophal

A
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Userlevel 7
Badge +16

I am not sure, perhaps you should ask this question in Manufacturing or procurement group. 
 

Last time I was part of implementation with inventory, cost per lot batch have been used. 

Regards, Adam
R
Rank
Userlevel 4
Badge +9

Hi,

Check with a Manufacturing Specialist whether a Cost Source set up will help you in identifying the Cost Break Down for Purchasing and Manufacturing Good Cost Comparison

 

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