Customer-owned versus distributor-owned inventory

A Storeroom-managed warehouse can contain inventory that is owned by either the customer or the distributor. Customer-owned or C inventory, and distributor-owned or D inventory, are tracked separately in Distribution SX.e to maintain accurate costs and balances in the General Ledger.

Products that have C and D inventory quantities, or products that are exclusively customer-owned, show separate balances in Product Warehouse Product Setup-Cost. Because C inventory products have already been purchased, only the on-hand balances and average costs are maintained.

When an order is generated for C inventory, it is a record of stock being taken from the Storeroom warehouse. Because the product was acquired and paid for through the customer’s normal replenishment process, no costs are involved in the transaction.

Each line item on a sales order carries an internal inventory type flag that indicates whether it is customer-owned or distributor-owned. When an order is placed, customer-owned inventory is used first. A separate line for the customer quantity is included on the order, with a C inventory type.

Order lines for C inventory do not cause updates to Sales Manager records or IC or AR accounts in the General Ledger. When average cost is calculated in these functions, balances are first reduced by customer-owned inventory quantities:

  • Sales Entry Processing Invoice Processing Report
  • Purchase Receipt of Inventory Entry
  • Transfer Receipt of Inventory Entry
  • Transfer Shipping Feedback Entry
  • KP Work Order Center Entry
  • Product Qty Adjustments Entry

Transactions for customer-owned inventory movements are stored in the ICETC database table. Transactions for distributor-owned inventory movements are stored in the ICET database table. When the Product Administration Month End Processing Report is run to calculate usage, the ICETC and ICET transactions are included. This ensures that the ordering controls for Storeroom-managed products reflect actual usage rates.

When Storeroom is first implemented, a physical count of the products in each Storeroom-managed warehouse is conducted to establish the beginning balances of customer-owned inventory. This inventory is recorded against the on-hand customer balances in Storeroom.