Unnecessary Warehouses
In most cases, warehouses should be created based on accounting function instead of physical proximity. Your plant may have many different buildings that store inventory, but that doesn’t mean you need a separate warehouse for the machine shop, the tool shed, the Conex box, etc. To distinguish between physical areas, use a prefix in the bin number. For example “TL-“ for tool shed, “CX-“ for Conex box, or “MN-“ for the main warehouse.
As a rule of thumb, always use as few warehouses as possible. Additional warehouses will generally make things less convenient.
Moving inventory between warehouses is more cumbersome than simply moving it between bins.
The likelihood of errors rises dramatically. Things like receiving POs to the wrong warehouse or winding up with duplicate bin locations.
You will have to remember to select the correct warehouses on all warehouse-related reports. Users will also have to select the correct warehouse when checking out parts, etc.
Each new user will require specific security rights to each warehouse.
Here are a few examples of valid reasons for dividing warehouses. Even in these cases, it might still be better to keep things together, but at least these reasons are worth having a conversation about.
Capitalized Status
Taxability
Ownership
Obsolete vs. In-use Items
Items that should not be visible to all users.
It is quite common to encounter plants with several warehouses that are not in use at all, or else they have only a few items (usually due to the mistakes mentioned earlier). Consolidating warehouses is usually a fairly simple bit of data surgery with a high return on investment. If you have unnecessary warehouses, it would be worth discussing with your CMMS administrator.
The ‘-‘ Item Number
Do you find MP2 automatically changing some values on PR and PO lines? This problem might explain what you’re seeing.
The issue starts when you wind up with an item in inventory whose item number is “-“. When writing a PR or PO, MP2 will allow you to leave the item number blank, but then automatically fill it in with “-“. The field is required, so MP2 thinks it’s doing you a favor by adding a placeholder. But then MP2 looks in inventory and matches the line with the “-“ item, automatically populating several of the PR/PO line fields. It’s even worse for services, where the item number is always “-“.
If that’s a bit confusing, here’s an example. You write a PO for a new laptop computer that costs $1,200. Since you don’t want to add the laptop to inventory, you do not provide an item number, and MP2 automatically fills it in with “-“. Then MP2 finds an “inventory item” that matches the “item number” and fills in the unit cost, account code, receive to fields, and more on the PR/PO line, possibly overwriting the values you’ve already entered.
The two important questions then are how to prevent it (in other words, how did it happen in the first place), and how to fix it.
To prevent the problem, you need to understand how it occurs. The issue appears because you get in the habit of leaving the item number blank (usually because there is no item number and you’re not sure what to put there) or deliberately using “-“ as an item number. This is all fine as long as you receive to cost centers, which is probably your intent. But eventually, someone will mistakenly receive one of these lines to stock (cue scary music). Then MP2 creates an item number for it, and possibly a stock location. Note that the same problem can occur for any item, but its effects are much worse if you use repeated values, especially sequential numbers (“1, 2, 3…”).
It follows then that the way to prevent this is to always provide an item number. For non-inventory items, this could be a model or catalog number. If nothing else, just putting something like “DELL-LAPTOP” will suffice.
Once the issue exists, however, it’s hard to get rid of. It can be done, but it will require some coordination and a bit of data surgery on the part of your MP2 administrator.
Incorrectly-performed Cost Changes
This section was taken from a previous blog that includes some helpful illustrations (see: The Right Way to Change Inventory Costs to Preserve Traceability).
This is another problem that I really wish that MP2 would stop you from doing this, but... I wasn’t the programmer. Although MP2 will allow you to change the cost of an inventory item by simply overwriting the 'Unit Cost' field, you need to be careful in order to avoid losing important transaction history. Unlike other stuff that you do with inventory (issues, receipts, transfers, etc.) that always creates transaction records, changing an inventory cost does what I call a "magic wand" transaction. That is, MP2 simply changes the cost without any record of it being changed. This does not provide adequate traceability. If you were to later look at the item's transaction history, you'd find a gap.
The key to avoiding this is to ensure that the actual change happens while the quantity is zero. That's because a cost change for zero quantity doesn't result in any change in inventory value. Doing the following steps in order, you'll accomplish the cost change and create a proper audit trail. MP2 will show that you checked out all the items at one cost, then checked them back in at the new cost - no "Magic Wand".
Open the item in the 'Inventory' application. If you need to, make a note of the quantity on hand so you don't forget it.
On the 'Stock' tab, change the quantity on hand to zero. Click the 'Refresh' button.
Move to the 'Costs' tab, and make the desired change to the unit cost and the adjusted unit cost. Click the 'Refresh' button.
Move back to the 'Stock' tab and change the quantity back to what it was before.
Not Allowing Negative Balances
There is an option in the warehouse setup to allow negative inventory balances. It might sound counter-intuitive, but it is usually advisable enable this. In our imperfect world, you will eventually need to check out a part that MP2 thinks you don’t have. Perhaps it was returned to the shelf without proper accounting, or it was miscounted during the most recent cycle count. Your frustrated technician, unable to issue the item, will probably just take it and use it without any record.
If you allow him to issue it (taking the balance into the negative), the issue will eventually be resolved via a physical inventory, at which time the available quantity will be brought back to the correct (positive) level.
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