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Understanding Kits on Sales Orders

Understanding Kits on Sales Orders

Concept

When you sell a collection of inventory items, you typically sell them collectively as a kit.

 

In distribution systems, the word kit has a different meaning than in a manufacturing environment:

• Distribution systems use the bill of material (BOM) to locate and assemble the group of items that form the kit.

• Manufacturing systems use the BOM to create a parts list for a work order. When you create a work order, you are preparing to produce a product; the parts list indicates the material and quantity that you need.

Procedure

In this topic, you will learn the process to create kit items and use them on sales orders.

Step Action
A kit is typically made up of several types of inventory items or components.
A parent item represents the assembled item. Generally, the system does not carry inventory for a parent item.

You must set up a parent item in the Item Master File table (F4101) and designate the item with a stocking type of K for kit. The Item Master record determines how the system calculates the price.

Components are the actual inventory items that are contained in a kit. You set up components in the F4101 table as regular stock items.
Features and options are additional items for a kit. Feature items have a stocking type of F for feature.

The system recognizes feature items as second-level parent items because the system does not carry inventory for the feature items. You set up the actual inventory items in the BOM.

Step Action
This diagram illustrates an example of a distribution kit that contains a parent and associated component items.
You store several computer components, such as the monitor, hard drive, keyboard, and mouse in your inventory system.

When selling the computer to customers, you collectively sell all of the components as a kit.

The parent item is the computer system, and the component items are the monitor, hard drive, keyboard, mouse, and printer.
The standard features of the computer are a hard drive, mouse, and keyboard.
Customers select the desired monitor; the monitor is a feature item.
Customers can also add a color or laser printer, which is not a required item.

Step Action
Kits and BOMs can have up to 999 levels. A level consists of components, features, and options. Each level can consist of various parts.

For example, you define a feature in a parent kit’s component and then enter the feature as a parent. The feature’s parent is the first level. The feature becomes a second level or child of the first level.

Level information for BOMs include:

• A single-level BOM lists only the subassemblies, parts, and raw materials at one stage of the manufacturing and assembly process (such as Step 7 in a process with 10 steps).

• A multi-level BOM lists more than one stage of the manufacturing and assembly process (such as Steps 4 through 7 in a process).

• A multi-level BOM might list all subassemblies, parts, and raw materials at all stages for a finished product.

To enter BOMs, you must set up your inventory kit and enter each level in the kit separately. If you are entering BOMs for a kit that contains a feature, you:

• Enter the BOMs for all of the kit components except the feature.

• Reenter the BOM for the feature using the feature as the parent item.

• Add the individual items that are part of the feature to the BOM.

On a BOM, you specify the quantity of a component, whether the component is required, and whether the component is categorized as features or options. If this kind of information is not indicated for a product, the system cannot generate a sales order correctly.
If you have set a processing option so that the system does not validate the existence of an item branch record, you do not have to set up the location of a component in the branch/plant where the kit is created. However, the item information must be available in the item master.

Step Action
This flowchart illustrates the steps to enter a sales order for a kit item.
You create a sales order and enter the kit parent item number in the detail information.
When you enter an item number for a kit, stocking type K, the system automatically displays the Kit Selection form.
You select the features and options available for the kit. Options are components that are not required; features are components that are required, but you may select which item you receive.
You review and save the order. You can change quantity and price information for the parent item on kit orders. When you do so, the system recalculates the price of the kit. Any price changes affect only the current order. You make permanent price changes in the base price records.

When you cancel a parent item, the system cancels all component lines that are associated with that kit item.

Step Action
This flowchart illustrates the process for quote and blanket orders for kit items.
You create a quote or blanket sales order and enter the kit parent item number in the detail information.
When you enter an item number for a kit, the system automatically displays the Kit Selection form where you select the features and options available for the kit.
If you create a quote order and your customer authorizes the purchase of the quoted items, you can use the quote to create a sales order.

When the customer releases a quantity from a blanket order, you can use the original blanket order to create a new sales order.

When you convert quote or blanket orders to sales orders, the system:

● Derives the sales order price from the quote or blanket order price.

● Copies the component items from the quote or blanket order onto the new sales order.

● Maintains the quantity open for the quote or blanket on the kit parent item only.

The system does not display the Kit Selection form.

Step Action
The system does not enable you to use all sales order processing functionality for kit items. Kit restrictions include:

• Preferences

• Automatic freight calculations

• Item cross-references

• Direct sales orders

• Transfer sales orders

These preferences do not function with kit items:

• Print messages

• Product allocation

• Inventory commitments

You cannot set up automatic freight calculations for the parent item. You must set up automatic freight calculations for each component for the system to calculate the appropriate charge.
You can use substitution and replacement item cross-references for kit component items. You cannot use complimentary or promotional cross-references for kit component items. Also, you cannot perform item cross-reference checking for kit parent items.
You cannot enter kit information on a direct ship order or a transfer order.
In summary, a kit is a collection of inventory items, called components, which are associated with a description name, called a parent item. A BOM is a listing of all the subassemblies, parts, and raw materials that are needed to produce one unit of the finished kit parent item. The system displays the Kit Selection form automatically when you enter an item number for a kit during sales order entry.

End of Procedure.

Ayman Refat
Over 20 years of experience in IT area, working as Oracle JD Edwards Developer with expertise in Windows Server, SQL Server and Microsoft Exchange Server, experience in Linux operating systems (Debian and Redhat), VMWare ESX / ESXi, Novell Netware, relational databases like Oracle 10/11g and backup solutions from Computer Associates. Large experience in high-end servers from Dell and HP, having the following certifications: Microsoft: MCP, MCSE, MCDBA, MCSA and MCT (2008 ~ 2013), Computer Associates: Technical Specialist – Storage and Backup Solutions,
http://www.AymanRefat.com

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