Managing Third Party Inventory
The opentaps inventory management system provides for third party storage of inventory. To manage the staging of your inventory, you can have inventory held for your at a supplier or another third party warehousing vendor who is listed as your Supplier in Purchasing > Suppliers Tab. Then, you can pull inventory into your primary pick/pack 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:
- Set up Backup Warehouses representing the vendors who will be holding inventory for you, with the vendor as owner of the facility (and the inventory in it).
- Set up Inventory Stock Levels for both your primary warehouse and your backup which is the supplier's warehouse. For example, you may have a minimum stock of 10 in your primary warehouse and 100,000 in your supplier's warehouse.
- Run Material Resources Planning (MRP) on your primary warehouse to determine if inventory needs to be transferred from your vendor to you. You can also run MRP on your (backup) vendor's warehouse periodically to determine if you need to reorder.
- Inventory transfers (requirements or requests depending up settings) will be automatically created for you by MRP from your supplier's warehouse to your primary warehouse. You can then transfer inventory by approving transfers from your supplier's warehouse to your warehouse when needed or as suggested by MRP.
- After you transfer the inventory into your warehouse, create a "vendor invoice" (using Financials > Payables Tab > [Create Vendor Invouce] button > in the New Invoice Item box, "Type" = "Inventory Xfer In") from your supplier and use the invoice item type "Inventory Xfer In". Once this invoice is set to "Ready", it will offset the accounting payable entires for inventory transferred in with accounts payable entries for your supplier.
- For your supplier's warehouse, MRP will create requirements for purchasing additional stock when it is below the targeted minimum stock there. You can then approve those requirements and create purchase orders for your supplier.
- Receive the inventory into your supplier's warehouse to track the quantities open with your vendor.
Using this method the inventory in backup storage at the vendor's warehouse belongs to you when you receive it, and is on your books at that time.