What is a division, a facility and a warehouse in M3? : Kemin Industries

What is a division, a facility and a warehouse in M3?

Introduction

In M3, Company and divisions are defined as legal units. Each division is used as a legal unit with its own general ledger, sales statistics, etc. The structure below represents all levels that are connected to a division in M3.

The overall inventory structure is used for several purposes depending on the level in the structure.

Facility level is for doing structure products and doing cost calculations.
Warehouse level is for doing material planning.
Stock zones are used for grouping purposes and picking management.
Location is where different items are stored.

Standard Costing – FACILITY LEVEL

M3 Product Costing offers a flexible solution for determining the product cost as well as the cost of purchased items and distributed items. The solution makes it possible for the company to make sure it is selling its products with a satisfactory net profit.

A standard cost can be calculated for all items, regardless of their respective inventory accounting method.

Standard cost of an item is calculated by facility. The standard cost of an item in facility will be calculated based on the facility settings plus the costing model connected to the division.

When an item has different standard costing values in the same division, more the one facility can be created to hold each different standard costing value.

A new facility creation is done by the IT area under a BU request.

Demand – WAREHOUSE LEVEL

Material requirements planning is used to transform incoming demands to appropriate order proposals that relieve a shortage. These order proposals are created in a timely manner, taking into consideration the lead time for the actual item to be ready on demand.

Regardless of the planning method used per item to generate demands, material planning works in the same manner. An order proposal is put in the material plan when signals are sent indicating a shortage. Order proposals are planned in a timely manner from the source of the shortage; that is, the requirement that brought about the shortage.

The process is completed when order proposals for all demands have been generated.

The warehouse is used as a planning level for material and production. Stock zones, stock locations and items are connected to the warehouse.

The same item can have specific demand by warehouse, so different warehouses will show different demand for the same item.

The warehouse is created in 'Warehouse. Open' (MMS005) by naming it, defining the warehouse type and connecting it to the facility.

In 'Item. Connect to Warehouse' (MMS002) enter the following information for an item per warehouse, which determines how material requirements planning is done:

Acquisition code
Order type
Planning method
Multiple supply

Stock Location/Zone – INVENTORY GROUPING LEVEL

Warehouse subdivisions are stock zones and locations. Stock zones are used for grouping purposes and can be further divided into locations.

The location is used for further specification in handling different types of orders and helps determine how to handle items and lots stored at a location inside a warehouse.

Inventory is structured according to specific needs, with locations connected to certain stock zones in warehouses, which in turn are connected to specific facilities.

The Stock zones are created in 'Stock Zone. Open' (MMS040) and the Locations are created in 'Stock Location. Open'(MMS010).

Quality Control and PO processing – FACILITY LEVEL

The Quality inspection specifications are set in the facility level. The goods connected to the purchase order are received and put away at the plant/warehouse. Quality inspection can be carried out and reported. If some goods are rejected during quality inspection, a claim can be created. Appropriate documents are printed, and all reported transactions are logged in the PO line transaction file. For stocked items, the on-hand balance is updated, and the items are made available.

Internal account entries are created. Provided the PO line is finished, purchase statistics are updated with information such as delivery time variance, interest costs for early deliveries and QI results. The inventory value rises since new goods were added to the existing stock.

The balance identity of the goods can be checked in 'Balance Identity. Open Toolbox' (MWS060), and the historical stock transactions in 'Stock Transaction. Display History' (MWS070). Also, the status development of the purchase order or PO line can be monitored in 'Purchase Order. Display Lines' (PPS220).

Normally, if a claim is created, it is created automatically in 'Claim. Open' (PPS390).

The supplier invoice connected to the purchase order is matched in 'Supplier Invoice. Record' (APS100).

It is possible to reverse the reporting of goods receipt, quality inspection, and put-away in 'Purchase Order. Display Line Transactions' (PPS330).