Warehouse Setup

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Table of Contents#System Administrator's Guide | Product Setup | Warehouse Setup | Resource Setup

Warehouse setup is the process of defining and organizing the physical locations used to store inventory and the logistic processes used to replenish that inventory.

Example of a large warehouse

Contents

Model

The model of logistics in ADempiere is based on a large company with a hierarchy of storage and replenishment warehouses where goods are received from suppliers at some of the warehouses and moved between warehouses to replenish those that do not receive goods directly.

Each warehouse has a physical location with an address. Inside the warehouse, products are stored in locations defined by Aisle, Bin and Level, a sort of XYZ coordinate system. There can be multiple locations for a product depending on how the logistics are arranged. For example, in a small manufacturer with lean manufacturing processes, there is a ready-use location at the manufacturing station which can hold perhaps two-days supply. A replacement supply of parts is maintained in a kan-ban style bin which is switched with the ready use bin when the later is empty. The empty bin (or a card from the bin) is returned to the warehouse for replenishment and this triggers an internal movement of inventory (a document) from the supply warehouse location to ready-use location. When the supply warehouse location is empty, an order is placed for more parts. With intelligent design, the parts will arrive before the second ready-use bin is empty.

For large stock picking operations, there may be a warehouse of boxes with many boxes of each product. This warehouse would supply a smaller warehouse where the stock picking occurs with the goal of only having one box of each product at the picking location. Replenishment of the picking warehouse could be automatic based on the order size received.

Where the warehouses are located far from each other, there can be a significant period of time where the inventory is in transit from one location to another. In-transit warehouse locations can be defined that keep track of this inventory that has been shipped but not received. The products are recorded in the in-transit warehouse until the receipts have been confirmed.

Replenishment Rules

Within the warehouse, replenishment rules can be established for each product-location. It is possible to define a custom rule for a warehouse and supply software to manage the rule. The custom software is called by the Replenish Report. The software that generates the report can also automatically generate the associated documents based on the replenishment rules assigned to the products in the warehouse including Distribution Orders, Inventory Moves, Purchase Orders, or Requisitions.

Accounting

Each warehouse can have its own accounts for

  • Inventory Adjustment - In actual costing systems, this account is used to post Inventory value adjustments. You could set it to the standard Inventory Asset account.
  • Warehouse Differences - The Warehouse Differences Account indicates the account used recording differences identified during inventory counts.
  • Inventory Revaluation - The Inventory Revaluation Account identifies the account used to record changes in inventory value due to currency revaluation.

The value of inventory is recorded in the Product Asset account associated with each product.

Image:Note.gif Note:

As of January 2011, the value of inventory is determined by the standard cost of each product. When material is purchased with a price different than the standard cost, the difference is posted to the Invoice Price Variance account. A contribution is in testing to improve and establish different costing methods, such as average costing, which may change the cost accounting methods. Check the SourceForge forums for the latest info and see the Costing Engine page.

Setup and Definition

To setup the warehouses, go to Material Management » Material Management Rules and open the Warehouse & Locators Window.

See Also

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