Purchasing Services: Inventory Value Zero

I’ve stumbled recently upon a support request, where a partner asked if there was a possibility to register purchases of services in Microsoft Dynamics NAV. When it comes to selling services, such as consulting, or repairs, NAV is your true friend, because you can use Resources to register sales against them. However, purchase documents don’t offer a possibility of purchasing resources, so you are left to some workarounds.

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Output journal confusion

A few days ago, I’ve got a question from a customer, about an alleged bug in Microsoft Dynamics NAV. According to online help, when you are posting output in manufacturing module, the last line of the type Output in the journal will actually adjust the inventory level. However, what is not explained is how the figure in this field is calculated, and why exactly that way.

When you decide to post an output of a production order, you specify the released production order for which you want to post the output, then call the function Explode Routing. After this function completes its chore, users unfamiliar with how manufacturing works can get quite confused, because two of the fields the procedure fills in contain unexpected values. These two fields are Output Quantity, and Scrap Quantity.

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Scrap doesn’t just happen

In reality, if you need 1,000 of whatever product, the manufacturing process is rarely going to yield exactly 1,000 of it, even if you feed into the first operation the exact quantities of raw materials system calculated as gross requirements. The process may produce 980 or 1,020, but is hardly ever going to be exactly 1,000. If you didn’t take scrap into account, or you took incorrect scrap into account, your actual output from the process might be much more unpredictable, with huge variances. Variances are always a problem, only they don’t have to be that big a problem in all scenarios.

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Scrap the crap

Scrap happens. So does sh*t. In my last blog post about scrap I gave a crappy explanation of how forward calculation of fixed scrap works. So instead of disgracing myself by leaving the…

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Cut the (s)crap

[I had to edit this post on April 01, 2008. And no, it’s not April Fool’s Prank] 

Have you ever wondered how manufacturing scrap works? Or what it really is? It’s an interesting topic, and yet a very confusing one. It has caused so many headaches to the project team I worked on recently, because nobody really understood it. So, what is manufacturing scrap?

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