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Scenario for procurement

All,

Scenario :

I have a material 'sticker' .

Procurement for this is done in 1000's .

ie 1000 is 1EA .

Std cost in material master also put for 1000 Nos.

So which I should take the base unit of measure.?

Please advise the config settings.

regards

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3 Answers

  • Best Answer
    author's profile photo Former Member
    Former Member
    Posted on Feb 25, 2007 at 03:22 PM

    Hello Sandeep,

    It's totally upto the business convenient.

    If they do their major transactions (procurement, storages, issues, inventory counts) with this material in 1000s then yes, it is suggested to have base unit of measure as 1000.

    In your case, it seems that they also do valuation in 1000s and procures in 1000s, so please check out the remaining business process i.e. Inventory counts and issues. if they also do in 1000s then keep UoM in 1000s.

    Also consider that changing UoM will required lots of data conversion.

    Regarding configuration:

    - You need to just define UoM in SPRO-> General Settings -> Measuring Unit. Here you define as Bundle or EA or Unit

    - Maintain this UoM in material master.

    If you use some other UoM as base unit, Purchasing Unit and Issue Unit, you need to define conversion rate in material master with alternative UoM activation.

    Hope this helps.

    Regards

    Arif Mansuri

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    • Former Member PV S

      Hello Sandeep,

      Yes you can use that, also you can use some other relevent UoM, but consider that if you use another unit of measure with this TH or other , you need to mention the conversion rate . Also use appropriate decimal places for this UoM so infuture you will not get any problem during issue, physical inventory.

      Hope this helps

      Regards

      Arif Mansuri

  • author's profile photo Former Member
    Former Member
    Posted on Feb 25, 2007 at 03:41 PM

    Hi Sandeep,

    If u manage the material in your company as 1000 and not 1 then u can maintain 1000 as your base unit of measure.

    You define your unit of measure in spro as mentioned by Arif.

    regards

    Anand.C

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  • Posted on Feb 25, 2007 at 04:44 PM

    Hi Sandeep

    Just adding to Arif's very good explanation:

    Some basics and integration issues on deciding base UOM:

    1) Find out the unit that will be used in purchasing, valuation, BOM, issues to sales/production/maintenance etc and storage unit.

    Normally, the least of these units is maintained as Base Unit of Measure and rest as order unit, issue unit etc

    This is to avoid some rounding-off and calculation errors at a later stage. You might also face stock errors, if you do not follow this principle and may be forced todo stock adjustments frequently.

    2) If you use 1 unit in BOMs and issues but valuation & procurement is done in 1000s, you may face problems in costing in production etc. This can happen if the value of 1000 units is low and hence value of 1 unit is very low. The tables normally support only 2 decimals and value of 1 unit may be below 2 decimals (i.e. 0.0025 etc).

    Sometimes, I avoid this problem by defining BOM header quantity more than 1 (e.g. 100)

    3) If you define 1 unit as base unit, in accoutning/costing views you can define valuation of 1000 units by inputting 1000 in 'price unit' field.

    4) Pl remember that when you define 1 unit as base UOM and 1000 units(say, Pack) as Order UOM. Please note that Purchase requisitions are normally created with base UOM and not order UOM.

    Pl consider all aspects before deciding on the base UOM as changing a base UOM is not at all easy.

    Best regards

    Ramki

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