Outside Processing: Process Activity

The following activity will walk you through the process of creating and processing a production order that contains an outside processing operation.

Story

Suppose that the GoodFood One Restaurant has ordered 10 juicers from the SweetLife Fruits & Jams company. Production managers have analyzed the workload of the production department and decided to outsource the assembly of these juicers to a subcontractor, Custom Assembly Services. Further suppose that all components required for the assembly of the juicer are available in SweetLife Fruits & Jams's warehouse and will be shipped to the subcontractor. Also, SweetLife Fruits & Jams will pay for the subcontractor's service of $50 for each juicer by using a purchase order.

Acting as a production manager, you will create a production order for producing 10 juicers, create a vendor shipment with the required materials for the juicer assembly, create the purchase order for the subcontractor's service, and process all transactions related to the production order.

Configuration Overview

In the U100 dataset, the following tasks have been performed for the purposes of this activity:

  • On the Warehouses (IN204000) form, the WORKHOUSE warehouse has been defined, and its locations include MGI and MTL.
  • On the Stock Items (IN202500) form, the CFJFRUIT, PULPCONT1L, JUICECUP05L, MRBASE, FNSIEVE, and GRDISC01 stock items have been defined.
  • On the Vendors (AP303000) form, the CSEMBLY vendor (which provides the subcontractor services for juicer assembly) has been defined.
  • On the Non-Stock Items (IN202000) form, the MFGSUBCON non-stock item has been created.

Process Overview

In this activity, to process the documents and transactions related to the production of the juicers, you will do the following:

  1. On the Production Order Maintenance (AM201500) form, you will create a production order for the juicer assembly.
  2. On the Vendor Shipments (AM310000) form, you will create and process the vendor shipment, which records the delivery of the materials required for the juicer assembly to the subcontractor.
  3. On the Purchase Orders (PO301000) form, you will create and process the purchase order for the subcontractor service, and on the Purchase Receipts (PO302000) form, you will create and process the related purchase receipt.
  4. On the Move (AM302000) form, you will record the receipt of the assembled juicers from the subcontractor to the dedicated warehouse location.
  5. On the same form, you will record the movement of the inspected juicers to the warehouse location.
  6. On the Production Order Maintenance form, you will review the production order's balance.
  7. On the Close Production Orders (AM506000) form, you will close the production order.

System Preparation

Do the following:

  1. As a prerequisite to the current activity, complete Outside Processing Configuration: Implementation Activity so that the system is ready for processing the production of juicers that includes an outside operation.
  2. Launch the MYOB Acumatica website, and sign in to the company in which the prerequisite activities have been performed. You should sign in as the production manager by using the peters username and the 123 password.
  3. In the info area, in the upper-right corner of the top pane of the MYOB Acumatica screen, make sure that the business date in your system is set to today’s date. For simplicity, in this activity, you will create and process all documents in the system on this business date.

Step 1: Creating the Production Order

To create the production order for 10 juicers, do the following:

  1. On the Production Order Maintenance (AM201500) form, add a new record.
  2. In the Summary area, specify the following settings:
    • Order Type: RO (selected automatically)
    • Inventory ID: CFJFRUIT
    • Warehouse: WORKHOUSE (selected automatically)
    • Location: MGI (selected automatically)
    • Order Date: Today's date (selected automatically)
    • Description: Production of 10 juicers
  3. In the Qty. to Produce box of the General tab, specify 10.
  4. On the form toolbar, click Save.
  5. On the form toolbar, click Release Order. The order status changes to Released.

Step 2: Creating a Purchase Order for the Subcontractor's Service

To create a purchase order for the subcontractor service, do the following:

  1. On the Production Order Details (AM209000) form, open the production order you created earlier in this activity.
  2. In the Operations table, click the row with the OUTPROC work center.
  3. On the table toolbar, click Create Purchase Order. The system creates the purchase order for the CSEMBLY subcontractor, which is specified on the Outside Process tab, and opens the document on the Purchase Orders (PO301000) form.
  4. Review the purchase order details (shown in the following screenshot) as follows:
    1. Notice that CSEMBLY, which is the subcontractor, is specified in the Vendor box of the Summary area.
    2. Go to the Details tab, and notice that the system has added one row of the Non-Stock for MFG type for the MFGSUBCON item with an extended cost of $500.
    Figure 1. The purchase order for the subcontractor services


  5. In the Description box of the Summary area, enter Payment for the subcontractor service.
  6. On the form toolbar, click Remove Hold. The system changes the status of the purchase order to Open.
  7. On the form toolbar, click Enter PO Receipt. The system creates a purchase receipt and opens it on the Purchase Receipts (PO302000) form.
  8. On the form toolbar, click Release. The system changes the status of the purchase receipt to Released.

Step 3: Creating a Vendor Shipment

To create a vendor shipment for the materials required for the juicer assembly, do the following:

  1. On the Production Order Details (AM209000) form, open the production order you created earlier in this activity.
  2. In the Operations table, click the row with the OUTPROC work center.
  3. On the table toolbar, click Create Vendor Shipment. The system creates the vendor shipment for the CSEMBLY subcontractor, which is specified on the Outside Process tab, and opens the shipment on the Vendor Shipments (AM310000) form.
  4. Review the details of the vendor shipment (shown in the screenshot below) as follows:
    1. Notice that CSEMBLY, which is the subcontractor, is specified in the Vendor box of the Summary area.
    2. Go to the Details tab, and notice that the system has added one row of the WIP type for the CFJFRUIT item and five rows of the Material type for each of the materials required for the juicer assembly.
    Figure 2. The vendor shipment on the Vendor Shipments form


  5. On the form toolbar, click Remove Hold. The system changes the status to Open.
  6. On the form toolbar, click Confirm. The system changes the status to Completed.
  7. On the Production Order Maintenance (AM201500) form, open the production order that you created earlier in this activity.
  8. Go to the Totals tab, and notice that in the Subcontract box of the Actual section, 4,641.70 is specified (as shown in the following screenshot). This amount is the cost of the materials that have been shipped to the subcontractor.
    Figure 3. The actual subcontract amount after the confirmation of the vendor shipment


Step 4: Receiving Items from the Subcontractor

Suppose that the subcontractor has assembled the juicers and delivered them to the warehouse. To record the receipt of the juicers, you will create the move transaction for the first operation of the production order. Do the following:

  1. On the Production Order Maintenance (AM201500) form, open the production order that you created earlier in this activity.
  2. On the form toolbar, click Create Move Transaction. The system creates a move transaction for the 0010 operation and opens it on the Move (AM302000) form.
  3. In the Summary area, do the following:
    1. Make sure that today's date is specified in the Date box.
    2. In the Description box, enter Recording the receipt of 10 juicers from the subcontractor.
    3. Clear the Hold check box. The system changes the transaction's status to Balanced.
  4. On the form toolbar, click Release. The system releases the move transaction.
  5. Close the window with the Move form.
  6. Go to the Totals tab of the Production Order Maintenance form, and notice that in the Subcontract box of the Actual section, 5,141.70 is specified (as shown in the following screenshot), which is the cost of the materials that have been shipped to the subcontractor plus the cost of the services. The service amount has been backflushed. Therefore, the system has added the amount to the actual subcontract amount when you recorded the operation completion.
    Figure 4. The actual subcontract amount after the movement of the item for the outside operation


Step 5: Recording the Inspected Items

Suppose that a warehouse worker has inspected all 10 juicers and moved them to the MGI location of the WORKHOUSE warehouse. Labor is backflushed for this operation so you will record only the movement of the juicers. Do the following:

  1. On the Production Order Maintenance (AM201500) form, open the production order that you created earlier in this activity.
  2. On the form toolbar, click Create Move Transaction. The system creates a move transaction for the 0020 operation and opens it on the Move (AM302000) form.
  3. In the Summary area, do the following:
    1. Make sure that today's date is specified in the Date box.
    2. In the Description box, enter Recording the movement of 10 juicers to the warehouse.
    3. Clear the Hold check box. The system changes the transaction's status to Balanced.
  4. On the form toolbar, click Release. The system releases the move transaction.
  5. Close the window with the Move form.

Step 6: Reviewing the Production Order's Balance

Before closing the production order, you will review its balance. Do the following:

  1. On the Production Order Maintenance (AM201500) form, open the production order you created earlier in this activity.
  2. Notice that the order is assigned the Completed status.
  3. On the Totals tab, review the balance of the production order (shown in the following screenshot) as follows:
    1. Notice that in the Actual section, the value in the Labor Time box is 2 h 30 m and the value in the Labor box is 25.00. The actual values are the same as the planned values.
    2. Notice that the value of the Subcontract box is 5,141.70 and has not been changed after you created the move transaction for the 0020 operation.
    3. Notice that the WIP Total and MFG to Inventory boxes both contain 5,166.70, which is the sum of the values in the Labor and Subcontract boxes.
    4. Notice that in the Variance section, the Total Variance and tWIP Balance boxes both contain 0.
    Figure 5. The balance of the production order


All costs have been applied correctly to the production order, so you can close the order.

Step 7: Closing the Production Order

Now you will close the production order. Do the following:

  1. While you are still viewing the production order on the Production Order Maintenance (AM201500) form, on the More menu (under Processing), click Close Order. The system opens the Close Production Orders (AM506000) form with a row for the production order added.
  2. Notice that the check box in the unlabeled column of this row is selected.
  3. On the form toolbar, click Process. In the Processing dialog box, which opens, review the processing details, and when the processing is completed, click Close.
  4. Go to the Production Order Maintenance form, and notice that the status of the production order has changed to Closed.

You have created the production order that includes an outside processing operation, created a vendor shipment for materials provided to the subcontractor, created a purchase order to pay for the subcontractor services, and processed the production order to the closing.