Currently we are able to assign inventory items to divisions, but this creates a problem in case multiple divisions use the same items.
Instead, it would be nice to have Locations assigned to Divisions which would then enable splitting up inventory by Division without creating duplicate items.
Locations also doesn’t have to be “physical” per se, it can also be serve as virtual stock keeping units.
Two issues:
Divisions may not always be split by location. For example a business may have a Manufacturing division and a Retail division covering many locations.
There would also need to be some mechanism to split the supplier side of the transaction, other wise the inventory may allocate correctly but the corresponding AP will not be allocated correctly.
That’s true but not entirely. Retail sales happen in the showroom (that’s your retail location) and your wholesale takes place in the store (that’s your wholesale location).
The act of restocking your showroom from the stores corresponds to an inventory transfer in manager. You can do that, daily, monthly … whatever.
Even if there’s no physical location, you can create 1 store and as many virtual locations to store the sales and hold negative quantities until a transfer adjustment replenishes the negative quantities.
It’s not perfect but it does the job well enough (I personally haven’t seen a better setup elsewhere) and at least you don’t have to duplicate your inventory items to assign them directly to divisions.
I don’t know exactly how Manager would behave in that situation but I guess these kinds of problems will have to be sorted out as they arise.
If a manufacturing centre or a retail centre serves many locations in a business I wouldn’t assign a division to these centres. So the value of inventory items in these centres will only show in consolidated reports.
After I went through all the topic in this forum regarding the inventory division;
It seems the situation is still remain the same.
My issue now is;
I have 3 divisions and 3 inventory locations, each locations belong to each 3 divisions, I have around 157 inventory items, all these items are stored in these 3 inventory locations.
When I try to create the inventory items, I can select the inventory locations(more than one with the help of new line), but there is division selection where I can select only one.
Here a solution I found for my problem is to create 157*3=471 inventory items. Means 157 items for each division(maybe with a different name/code)
Is there any easy/correct way to overcome this issue.
(I think assign the division selection while create inventory location may solve this issue, but there is no option for it now)
@Shan, your situation is not clear. First, why do you have 3 divisions? Do you really have 3 separate organizations within your company with separate accounting needs? Or have you just created them as part of your attempt to manage inventory? Are all inventory items sold at all three locations? If the divisions are real, do all divisions sell all the inventory items?
You seem to have picked up certain concepts from this thread that are not related to your actual operations. But it really is not possible to tell without more information.
Dear @Tut Thank you for your effort to get into this matter.
Yes my situation is real. This is for one company who is running almost same kind of business in 3 separate branches. Each branches have their own stores(more than one for each branches). Even though suppliers sending the items to these branches separately, they will send the invoice to the main. All the 3 branches selling same items (branches are located in 3 different districts). The owner of the business wanted to see P&L and Balance sheet every month for the company and the same time each branches separately.
My issue arise here when I went to create the inventory items with their opening stock.
For example they have “Green apple” in all of their 3 stores bought separately under these 3 divisions.
Now the option I have it to create Green apple-1, Green apple-2, Green apple-3 and record it under Division 1,2 and 3.
Am I doing something wrong or is there any other way to achieve it. your help on this matter is highly appreciated.
I strongly believe this is all going to be resolved when @lubos implement Batch Tracking.
A serial number given to a specific batch can be tracked easily. The issue of Division ownership of homogeneous inventory items could be solved or better managed with a Batch tracking feature (assign batch numbers to divisions in productions or purchases), and furthermore, help:
Track the expiry date of items
Track defective or recalled items back to the batch.
The reason why I would go for this over the idea of assigning Locations to Divisions is that having inventory in a location assigned to a division does not necessarily mean the items are owned by that division. The location of items does not have anything to do with ownership. What counts is which division owns which batch.
@Ealfardan thoughts?
@Shan in your case, you would only need to create 3 batch numbers for the items and then give 1 batch to every division and then share the items with the batches.
Hi
I don’t see a problem with this.
Suppose you have 3 divisions:
And you have 3 physical locations:
Now that doesn’t mean that the stock of all of your divisions are all mingled up – that would be poor warehouse management.
Now let’s take the East physical location, it has a sublocation (SKU) to hold Marine, another sublocation to hold Land, and yet another to hold Aerospace.
So to solve this issue, you need 9 sublocations:
This is basically flattening out the dimensionality of the inventory structure on sublocation level.
There is still one issue, and that is the summary of physical locations and that’s why I had to bring up the concepts of sublocations – SKU, because these will solve just that.
Another thing, while @Abeiku introduced “batches”, I would argue that “SKU” are essentially the same data-structure but a bit more versatile, imo. I remember once @Abeiku brought up SKUs to solve a similar problem.
The way I see it is that we all agree on the core concept but differ in our descriptions of it.
One could consider an alternative approach. The main challenge is to ensure that each Division such as Marine, Land and Aerospace need to be able to produce a balance sheet that reflects their inventory assets. @Ealfardan describes a legit approach where items are discretely held in each warehouse for the purpose of each Division and thus depends on creating sub-locations for each.
The alternative approach could be to divide the inventory items irrespective of location to the divisions. Assume the company bought 10 bags of cement, 2 for the Aerospace Division, 4 for the Land Division and 3 to the Marine Division. The inventory item purchase entry screen should in such case allow the allocation to each Division (3 lines) which in effect you can do already. Indeed one should also be able to be flexible with the locations.
If you look at the inventory item edit screen, you can now only select one division and no locations. If this would change to one or more Divisions and Locations then when purchasing or selling inventory when selecting the item it would have a column to select the Division and one to select the Location. One can add for each Division and/or Location as new line (a Division could have the same inventory items in multiple locations).
Just thought to throw this into the idea here.