Discussion:
Inventory: KIT vs BOM
(too old to reply)
Carmie
2007-02-12 18:48:58 UTC
Permalink
Until Oct 2006 I was running great plains DOS and was able to create
Finished Goods items in inventory using other inventory items.

I was told with Dymanics, I would need the Bill of Materials module in order
to do that. But recently I was told I could create a "KIT" in the same
fashion that would grab other inventory items and create one completed item.

Is that so and how do I go about doing it.?

Carmie
Diana Van Raden [MSFT]
2007-02-12 20:08:49 UTC
Permalink
Hi Carmie,

Thanks for the post to the Microsoft Dynamics Newsgroups!

To setup a Kit, you will first want to setup the components/items that will
help to make up the Kit item. This can be done under Cards-Inventory-Item.
Once you have all of the components setup, then to create or setup the
kit, you will go to Cards-Inventory-Kit. Here you will specify the name of
the kit as well as the components and the quantity that will make up the
kit. Here are a few other notes about Kits:

-Kits are not tracked in inventory. Quantities are tracked for the
components of a kit. When you enter a kit on an order or invoice, each
component is checked for shortages.

-A kit can not be a component of another kit.

-Kits can only be sold in Sales Order Processing. They cannot be sold in
Invoicing.

-A kit can not be purchased through Purchase Order Processing or by
entering an increase adjustment for the kit. The components must be
purchased because the components are tracked in inventory, not the kits.

-You can not partially transfer kits. For example, for a kit item on an
order, the Quantity to Order is 5. You can not transfer 2 to an invoice and
3 to a backorder. You must either invoice or backorder all 5. The same goes
for all other transfers (on backorders, invoices and returns).

- The distribution accounts will come from both the kit and the kit
component, depending upon which account type it is. Posting accounts used
for kits are as follows:

Account Type
Posting Account From:


Receivables
Customer


Sales
Kit or Customer, depends on Sales Order Processing Setup


Commission Expense
Posting Account Setup for Sales Series


Commission Payable
Posting Account Setup for Sales Series


Inventory
Kit Component


Cost of Goods Sold
Kit Component or Customer, depends on Sales Order Processing Setup

-Dynamics will allow you to create a kit without assigning components to
it. However, when the kit is entered on an order or invoice, no unit cost
will default in and no adjustment will be made to Cost of Goods Sold or
Inventory, even if a current and standard cost are entered for the kit in
Item Maintenance (Cards - Inventory - Kits). You must have a component
assigned to the kit to trigger a journal entry to Cost of Goods Sold and
Inventory. The amount for the entry will be the actual or standard cost of
the component(s), depending on the valuation method used for the component.



-You will not be able to return to multiple return quantity types on a kit.
This is because you have the ability to change or add components to a kit
when entering the transaction and because kits do not track quantities. You
can go into the Sales Item Detail Entry window, click on the Kits button,
highlight a component item and click on the expansion button by Extended
Kit Quantity. Through this window you can return individual components to
multiple return quantity types. Keep in mind that the only quantity field
that gets updated for the kit is the quantity sold. The return quantity
type that you enter for the kit is just a default for the components and
can be change per component.

Diana Van Raden
Microsoft Online Support Engineer



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Micheal LoPatriello
2007-02-12 20:09:04 UTC
Permalink
Hi Carmie,
Without getting too deeply into the differences between a bill of materials,
kits and assemblies, I will try to explain some options to you.

If you are merely looking to sell goods in groups, then kits are the
simplest way. Essentially a kit is comprised of other inventory items and
will allow you to sell a kit for a given price. Inventory is decremented
accordingly as orders are places.

A Bill of Materials on the other hand is used when you want to create
finished goods in the form of assemblies. Assemblies are inventory items that
are comprised of other items but often have labor attached to them, or other
factors associated with costing. This is the best option if you are a
manufacturing company.

So depending on your company setup, you will want to choose one of the two
options above. Kits are simple and straightforward and can be found in the
inventory item cards. Assemblies on the other hand require some planning and
should be implemented with your GP partner if you are new to those.

-Mike
--
Micheal LoPatriello
Coordinator,
Luna Development
***@lunadevelopment.com
http://www.lunadevelopment.com
Post by Carmie
Until Oct 2006 I was running great plains DOS and was able to create
Finished Goods items in inventory using other inventory items.
I was told with Dymanics, I would need the Bill of Materials module in order
to do that. But recently I was told I could create a "KIT" in the same
fashion that would grab other inventory items and create one completed item.
Is that so and how do I go about doing it.?
Carmie
Richard L. Whaley
2007-02-12 23:29:00 UTC
Permalink
You have several good answers here so I won't repeat anything already said,
just add a couple of items to help in your decission.

Kits cannot be stocked. They are only sales structures. If you need to
"make" the parent item and put the finished parent on the shelf, you need
BOM, not kits.

If all you want to do is sell one item on the SOP transaction but deliver a
group of parts in the box, kits rule!

Kits don't allow substitution after order entry so the "assembly" team
cannot substitute items.

Kits don't have work orders for the assembly team.


Visit us at Convergence in booth 624
--
Richard L. Whaley
Author / Consultant / MVP
Documentation for Software Users

For help learning and better using Dynamics GP,... check out our books at
http://www.AccoladePublications.com
Post by Carmie
Until Oct 2006 I was running great plains DOS and was able to create
Finished Goods items in inventory using other inventory items.
I was told with Dymanics, I would need the Bill of Materials module in order
to do that. But recently I was told I could create a "KIT" in the same
fashion that would grab other inventory items and create one completed item.
Is that so and how do I go about doing it.?
Carmie
MSFT
2007-02-13 21:38:32 UTC
Permalink
Hi Carmie,

This is Angela; It looks like there is some great replies. Hopefully they
help in the decision of what you will do.

The biggest question I ask myself when deciding whether ort not to create a
Bill of material or a Kit is whether or not I need to track quantities of
the item. If I have to track quantities then BOM is the way to go. If not,
then Kits should be enough. In both cases the components track quantities,
but the difference will be with the "Finished Good/Kit" item.


Best Regards,



Angela Eckman
Microsoft Online Partner Support

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Carmie
2007-02-13 22:12:52 UTC
Permalink
Well, those were all great answers but after reading them, I realized that I
would want BOM because I do include labor and inventory items and create a
finished product, then put it back into inventory to be sold. And most
times we do a certain amount so I would have them in inventory for a bit of
time.

A kit would work if I left my inventory items as is until I sold a finish
good.
Post by Carmie
Until Oct 2006 I was running great plains DOS and was able to create
Finished Goods items in inventory using other inventory items.
I was told with Dymanics, I would need the Bill of Materials module in order
to do that. But recently I was told I could create a "KIT" in the same
fashion that would grab other inventory items and create one completed item.
Is that so and how do I go about doing it.?
Carmie
Diana Van Raden [MSFT]
2007-02-13 23:11:51 UTC
Permalink
Hi Carmie,

Sounds like BOM is the way you need to go then. Please let us know if you
have any further questions on this.

Diana Van Raden
Microsoft Online Support Engineer



Get Secure! - www.microsoft.com/security

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to assist with break/fix issues and simple how to questions.



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Let us know what you think by posting

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We look forward to hearing from you!

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Sonia Lemke
2007-02-15 16:26:57 UTC
Permalink
Hi Carmie,

Checking in to see if there is anything else we can do for you on this
topic.
Please post again at your convenience and we will be here for you.

Have a great week!



Sonia Lemke

Microsoft Online Support Engineer



Get Secure! - www.microsoft.com/security

==============================================

PLEASE NOTE: The partner managed newsgroups are provided

to assist with break/fix issues and simple how to questions.



We also love to hear your product feedback!

Let us know what you think by posting

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from your newsreader: microsoft.private.directaccess.partnerfeedback.

We look forward to hearing from you!

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Jan Smith (MSFT)
2007-02-19 20:44:45 UTC
Permalink
Hi there

Anything else we can do for you here on this query?

Please post back at your convenience and we will be here for you.
Thanks again for using the partner newsgroups!

Have a great week!



Jan Smith

Microsoft Online Support Engineer



Get Secure! - www.microsoft.com/security

==============================================

PLEASE NOTE: The partner managed newsgroups are provided

to assist with break/fix issues and simple how to questions.



We also love to hear your product feedback!

Let us know what you think by posting

from the web interface: Partner Feedback

from your newsreader: microsoft.private.directaccess.partnerfeedback.

We look forward to hearing from you!

=====================================================

When responding to posts, please "Reply to Group" via your newsreader

so that others may learn and benefit from this issue.

======================================================

This posting is provided "AS IS" with no warranties, and confers no rights.

======================================================
nateray
2007-03-14 16:31:34 UTC
Permalink
After reading this, it appears that I may be able to use kits, but I would
like to clarify something. Kits can be transferred between locations using
Item Tranfer Entries, correct? If so, this could potentially be very nice
for our company.

Thanks,
Post by Jan Smith (MSFT)
Hi there
Anything else we can do for you here on this query?
Please post back at your convenience and we will be here for you.
Thanks again for using the partner newsgroups!
Have a great week!
Jan Smith
Microsoft Online Support Engineer
Get Secure! - www.microsoft.com/security
==============================================
PLEASE NOTE: The partner managed newsgroups are provided
to assist with break/fix issues and simple how to questions.
We also love to hear your product feedback!
Let us know what you think by posting
from the web interface: Partner Feedback
from your newsreader: microsoft.private.directaccess.partnerfeedback.
We look forward to hearing from you!
=====================================================
When responding to posts, please "Reply to Group" via your newsreader
so that others may learn and benefit from this issue.
======================================================
This posting is provided "AS IS" with no warranties, and confers no rights.
======================================================
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