WIP transfer

Work in process transfers between lines are supported and the following steps are distinguished:

Generation of a WIP transfer warehouse order line.
Issuing of the WIP from the last line station of the line.
Receipt of WIP on the first line station of the next line.

Purpose of WIP transfers

By performing WIP transfers the work in process of a production order is always recorded in the work center that is actually working on the order. This is especially useful in production situations where the WIP represents a high value or when the production lead time is long, for example the production of capital goods, trains, machines.

If work centers belong to different enterprise units and have different reporting currencies, the value of WIP is also an important factor in tax reporting. You can also define invoicing relationships between enterprise units.

Financial transactions

If Use Actual Cost for Receipt Posting check box in the Report Orders Completed (tisfc0520m000) session is selected the cost for WIP transfers and completions are based on actual costs.

If Financial Transactions by Work Center check box in the Production Order Parameters (tisfc0100s000) session is selected, then WIP transfers are used to empty the work in progress by work center and cost component.

If the Financial Transactions by Work Center check box in the Production Order Parameters (tisfc0100s000) session is cleared, completions are used to empty the work in progress on cost component level.

The actual value of the WIP transfers amounts is calculated by selecting all incoming financial transaction related to the operation set minus the outgoing financial transactions. The result is multiplied by the current receipt quantity divided by the total quantity received.

All costs that are not already transferred to the effective cost component structure of the end item are handled using a completion transaction.

Note:

If subcontracting with material flow is used when the Use Actual Cost for Receipt Posting check box is cleared, the value of the subassembly is added to the subcontracting operation it belongs to during WIP transfers.

If project pegging is implemented for the job shop order, using actual costs for receipt posting, subassembly receipt posting, WIP transfers and completions is mandatory.

If the operation is subcontracted with material flow, the work in progress by work center is handled by the subcontracting functionality.

Completions occur if end items are moved to inventory or on work center level if items are moved to quarantine.

WIP transfer method

WIP transfers are carried out when a assembly is moved to another work center:

Always when a quantity is reported completed
Only when a the whole operation is reported completed. This depends on the Transfer WIP method field in the Production Order Parameters (tisfc0100s000) session.

WIP transfers are only available if the following conditions are met In the Production Order Parameters (tisfc0100s000) session:

The Financial Transactions by Work Center check box must be selected.
The Transfer WIP method field must be other than Not Implemented.

Subcontracting and WIP transfer

When a subassembly is outsourced to a subcontractor the costs are registered in the Subcontracting WIP (ticst0607m000) session. These can be calculated based on estimates or the actual amounts of the production costs depending on the parameters specified.

When subcontracting, a subassembly is sent to a subcontractor. As a result, WIP amounts arise that are associated with the subcontracting process. The following amounts are listed in this session:

If the Sending WIP check box in the header is selected, the amounts relate to the subassembly that is issued to the subcontractor's job shop.
If the Sending WIP check box is cleared, the amounts relate to the subassembly that is received from the subcontractor's job shop after work is done.

Subassemblies can be delivered from the shop floor to inventory through partial receipts, when this happens the appropriate portion of the actual production order costs incurred is added to the subcontracting WIP value for the outgoing subassembly.

Depending on the settings of the Use Actual Valuation for Subassembly Receipt Posting check box, the amounts are based on estimated or actual costs.


Use actual costs	Use estimated costs
Actual costing is used for subassemblies within subcontracting with material support.	Estimated costing is used for subassemblies within subcontracting with material support.
Use Actual Valuation for Subassembly Receipt Posting selected.	Use Actual Valuation for Subassembly Receipt Posting cleared.
The Unit tab in the Subcontracting WIP (ticst0607m000) session is hidden.	The Unit tab in the Subcontracting WIP (ticst0607m000) session is visible.

Each time a subassembly is received into the warehouse, the appropriate portion of actual costs incurred on the subcontracting operation are determined. The amount is considered as subcontracting WIP value of the incoming subassembly. To get the amount to be paid to the subcontractor, the quantity received is multiplied with the price listed on the purchase order line.

The actual value of an incoming subassembly is composed out of different elements and reflects the value at receipt of the incoming subassembly already in inventory.

The value related to materials and components issued from the subcontracting warehouse to the subcontracting operation.
The value of the (outgoing) subassembly received from the manufacturer and issued from the subcontractor warehouse to the subcontracting operation.
The amount paid based on the price including the discount of the subassembly on the subcontracting purchase order. This amount represents the costs of performing the operation at the subcontractor location.

Note: If a subcontractor for his part also subcontracts operations, an amount can be split up in an owned part and a not-owned part, which is indicated by the Customer Owned check box.

Multicompany

If the work centers belong to different enterprise units, the multicompany functionality of the Intercompany Trade module can be used. This includes procedures for intercompany invoicing, document printing, and so on.