Purchased Part vs Shop Order Outside Operation

  • 30 September 2022
  • 0 replies

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Hi everyone,

This might be a bit long but please bear with me.

Our facility (Company A) manufactures a product which is sent to a sister company (Company B) for a specific operation to be performed. The product is then returned to the original company for further processing. 

We operate using recipes and produce in batches with lot control so our first attempt to set up this scenario is as follows:

  1.  A Shop order is created to mix the original product
  2.  A Shop order with an outside operation is created for the work being done by the sister company. The material for this shop order is the original product.


Step 1 was simple. We created the original product

We are having some trouble with the details of Step 2

  • Company A - The shop order for step 2 creates a purchase requisition for the sub-contract work
  • Company A - The req is converted to a PO and sent to the supplier (we use the intercompany messaging)
  • Company B - Receives the incoming customer order and converts it into a customer order. Which creates a shop order for them to do their work.
  • Company A - Issues the original product to the shop order for step 2.
  • Company A -  completes the ‘ship wip to supplier’ 
  • Company B -  receives the original product (PO created from the demand from the customer order), completes the operation (on their own shop order created from the customer order) and sells it back to Company A
  • Company A - Receives the product from the PO created for the outside operation

This is where we have hit a snag.. The part returning from Company B has a lot number which should be tracked upon receipt. However, because outside operations are driven by purchase parts, the lot number can not be recorded (in the part master, lot control can’t be activated on non-inventory parts)


Does anyone have a similar scenario? if so, do you handle it with a purchase part (the one with a product structure)

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