In reality, whether a specific item is Buy or Make or Subcontract depends on the warehouse (plant location).

For example, item ABC123 is a make item for the 000 warehouse (the 000 plant location has the equipment and knowledge to make item ABC123), but item ABC123 is a buy item for the 123 warehouse (the 123 plant location does NOT have the equipment and knowledge to make item ABC123).

If the procurement type for the item is set to “Make” for the ABC123 item in Item Maintenance, the following occurs:

In the MRP module, assuming there is demand that exceeds supply for the ABC123 item, the MRP Generation task will explode the ABC123 subassembly (bill of material) into its component parts. That is the proper treatment for the 000 warehouse, but it is completely wrong for the 123 warehouse.

The 123 warehouse should not be told by MRP (the MRP report and MRP inquiry) to buy the component parts since the 123 plant location does not have the equipment and knowledge to make item ABC123.

by: Steve P. | over a year ago | Manufacturing