New procurement concept

Registered by Grzegorz Grzelak (

I designed This Blueprint because of lack of some basic functionality:
1. Request of products from another warehouse/location and
2. Placement of Purchase or Production done in any warehouse/location (not Sales warehouse only).

Very common example: Company has central warehouse with its purchasing dept. and few regional warehouses with sales depts. They want to have minimal stock rules triggering purchasing in central warehouse (easy in OpenERP) and they want to have minimal stock rules in regional warehouses triggering procurement from central warehouse. AFAIK automatic supplying from another warehouse is not possible now in OpenERP, but it is very important feature.

Another example: Everything from example above and production in central site. When you place Sales order in regional warehouse you want to make request for products to central warehouse, central warehouse should make request to production and production should create request to Purchasing Dept. to buy raw materials in central site. Now in OpenERP automatic scheduling can place production in different location than Sales warehouse but it still generates moves of raw materials from Sales warehouse (!) and (even worse) when you press "Production done" it generates moves of Finished products to Sales (regional) warehouse in status Done. I know that they have to be in status done but why Production done at the same moment means that products are in another region (?).

I think concept below allows to configure perfect products flow and together with Automatic moves covers all cases we encounter in real company. Concept suppose some expanding of Orderpoint document and Production orders. Concept can even simplify system (when during discussion we agree to drop Procurement orders).

I think it could be developed very easy way using current Minimum Stock Rules functionality. Order Point object would be expanded by fields:
- Supply method (values: Buy, Produce, Internal move)
- Source warehouse or/and Source location (used when Supply method is Internal move)
- Supply lead time (for discussion)

routings can be expanded by field:
- Destination warehouse or location.

To certain point system works as now: When you create Sales order it is placed in Sales Warehouse. Sales order creates confirmed moves from Sales warehouse to Customer. Virtual stock (Future stock) in Sale warehouse decreases. MRP triggers procurement if orderpoint is reached.

Now the new concept. MRP works according to Supply method in Orderpoint:

- When Orderpoint indicates “Buy” MRP creates purchase order and its confirmed Packing lists to this warehouse as usual.

- When Orderpoint indicates “Internal move” MRP creates confirmed packing list from given Source warehouse to current warehouse.

- When Orderpoint indicates “Produce” MRP creates Production order. Production order creates confirmed moves (Finished goods to output location of calculated warehouse and Raw materials from input location of this warehouse). It would be human duty to create correct BoMs and routings. Next MRP run calculates virtual stock of Raw materials and analyse procurement according to the same rules set in Orderpoints for current warehouse. Maybe some of them will be bought to Workshop warehouse, some will be required from another warehouse, and some produced as components.

And system repeats MRP runs until all negative virtual stocks are covered by confirmed stock moves (ie. confirmed Packing lists, Production orders or Purchase orders according to Orderpoint). If it is no indication in Orderpoint MRP does nothing (maybe designer of flow has set automatic move).

Off-course it is not so easy and should be discussed. Below are my remarks:
1. Orderpoints should be created even with minimum stock 0 to know how to create Make to Order procurements (in case of internal move). So maybe we can remove option Make to Order. Orderpoint with minimum stock 0 will do the same. Or rather Make to order should work as fast routing. In such case system follow the rule for MRP but just for path of ordered product immadietaly after confirming Sales Order.

2. To simplify implementation in such concept BoMs/routings can contain production warehouse (instead of location) which would be normal warehouse where locations are treated in Production Order as follows: Input for Raw materials, Stock for Production (virtual), Output for Finished Products. It allows to maintain different Production location for different workshops (warehouses). Production location in Product could be needless.

3. Another option is to use two warehouses in BoM/routings - Source and Destination. Then Production order would use Source Input and Source Stock for Raw materials moves and Destination Stock with Destination Output for Finished products moves. This option allows to have different Inventory account (in Production location) for Raw materials and Finished goods what can be needed by accounting. If the company wants the same Production location (and Inventory account) you can set the same warehouse as Source and Destination in this option. But you have flexibility.

4. I think system don't need to care if BoM/routing settings are compatible with Orderpoint. It can be left to implementation persons. They should be responsible for proper configuration of system. But MRP report should provide more details of its run in requests.

5. I think that in such concept we can think of droping Procurement orders functionality. We can move informations from Procurements orders to Stock moves. Confirmed Stock moves could work as procurements - Internal order (as reservations they already are part of procurement order). They would contain Supply method, Properties and other needed information. Procurement exceptions could be in detail reported in Requests. And we can drop Procurement location which is rather tricky.

6. It could be more developing work to implement Properties because Production order workshop can be dependant of Property. Two BoMs of the same product can be defined to produce this product in different places according to Property. So Orderpoint should contain Property field and according to this choose proper Source warehouse. Question is if Orderpoint should contain list of properties with Supply methods or it could be few orderpoints with the same product and different property. For discussion.

7. Current Supply method in Product can be kept as default when there is no Order point in Minimum Stock Rules.

Generally this “Procurement routing” concept allows to “forward” procurements to another warehouses and place Purchasing and Production in any warehouse (even across few warehouses). Using such Orderpoints and Automatic moves (which are already powerful) we could implement any product routes and procurements that company needs.

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