Managing Third Party Inventory

In some cases, you may have inventory held for your at a supplier or by another third party and only pull those inventory into your warehouse to fulfill orders as you need them. For example, you may have a supplier make a year's supplier of a part at bulk quantities and stock them for you at their warehouse. Then, as the stock in your warehouse is diminished, you can transfer them from the supplier to your warehouse. Periodically, as the supplier's warehouse stock is diminished, you may need to place another order with your supplier.

opentaps supports third party inventory, and you can set it up in the following way:

1. Set up Backup Warehouses for vendors who will be holding inventory for you
2. Set up Inventory Stock Levels for both your warehouse and your supplier's warehouse. For example, you may have a minimum stock of 10 in your warehouse and 100,000 in your supplier's warehouse.
3. Run Material Resources Planning (MRP) on your warehouse to determine if inventory needs to be transferred from your vendor to you. You can also run MRP on your vendor's warehouse periodically to determine if you need to reorder.
4. Transfer inventory from your supplier's warehouse to your warehouse as needed or as suggested by MRP.
5. Create a "vendor invoice" from your supplier and use the invoice item type "Inventory Xfer In". Once this is invoice is set to "Ready", it will offset the accounting payable entires for inventory transferred in with accounts payable entries for your supplier.
6. Place purchase orders and receive the inventory into your supplier's warehouse to track the quantities open with your vendor.