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Former Member
Dec 06, 2007 at 07:56 AM

Multimode transport for procurement


Hi friends. I am a MM consultant. I need your opinion on the folowing issue.

The client requirement is as follows.

1. They procure coals and ore from mines and ports. For this the Transport of raw material is a significant process in their business. The transport is arranged by the client (and not by their vendor).

2. Often multimode transport is sea, then rail, then road.

3. Separate full fledged PO need to be given to the transporters.

4. Service tax and other relevant taxes are applicable on the transport activities.

5. All these transport cost need to be inventorised (to load on the material procured).

6. A number of other requirements exist due to which I am not willing to use Delivery condition (like FRB1) in main PO and use transporter number for this condition to map this scenario.

I am thinking of using the transportation module to map the scenario. That means

PO -> Inbound delivery -> Shipping -> GR w.r.t. the inbound delivery

My question is

1. Will the cost of transportation be loaded on the material if I use the above cycle?

2. Can I use the above cycle if WM (or lean WM) is not implemented?

Thanks in advance.