Let’s start off with a simple inventory assembly item. Here is my “Gear Assembly” item, which has three components: One “Clip”, five inches of “Chain”, and one “Sprocket”.
If I run the Lot Numbers in Stock report I can see that my “Sprocket” part has three lot numbers available. This doesn’t show us the quantity in each lot, just that they exist.
If you double-click on the item in this report you get a popup window that shows the three lots, and their quantity. There isn’t a report that shows this, and you have to look at this window item-by-item.
Now let’s build this assembly. We want to build four “Gear Assembly” items, so we need four “Sprocket” items. You’ll note that the first two lots don’t have that many items. But I want to use up my oldest lot!
If I select lot “2013-05-01” and try to build the assembly, I’ll get this warning (if I have enabled lot tracking warnings for the item):
So, what can I do?
- I could change the quantity of the build, so that I don’t need as many items. Then issue a second build for the rest of the items, using a different lot for the components. That is a hassle, though, and not always easy to deal with if the quantities in the lot numbers don’t work out evenly. I will note that if you split a build this way, but use the same lot number for the assembly itself, QuickBooks will add the quantity from the second build to that first lot for the assembly.
- I could use a different lot for that component, one that has an adequate quantity. Again, the numbers might not always work out, AND that might violate your lot consumption rules (in my case, the rule is that I want to use the oldest lot first).
- I could skip using lots – hey, I have to mention it as a possibility. That obviously isn’t a good solution, but QuickBooks does allow you to do that depending on how you set the lot rules on the individual item. That is one of the things I don’t like about this feature in QuickBooks – there is no way to force the system to keep the quantity on hand matched with the quantity in all of the lots for that item.
- I can add another component line, and adjust the quantity consumed to match the lots. This is a manual process and it introduces the possibility of making an error, but it is probably the best workaround that we have.
Let’s discuss how that “add another component line” approach would work.
In QuickBooks Enterprise (but not in QuickBooks Premier) you have the ability to “edit” the bill of material at the time you issue a build transaction. We needed four “Sprocket” items. To match the lots that we want to use, I change the Qty Needed value for “Sprocket” to two (matching my first lot). Then I add a SECOND detail for “Sprocket”, and enter the quantity that I want to take from the next lot.
As long as the Qty Needed doesn’t exceed the quantity in the lot I select, QuickBooks will allow this. I can add as many “Sprocket” lines as I need to match the available lots.
Of course, there is plenty of room for error:
- I have to make sure that I enter the correct Qty Needed value in each line, so that they add up to the original quantity that I should be consuming. I could easily enter 2 for one line and one for the other, which isn’t enough. There is no error checking to catch this.
- I have to make sure that I don’t use one of the lots more than one time. I could, for example, use lot “2013-05-01” in both of the lines above, trying to take four out of the lot of two items. QuickBooks does not catch this error for you, and it will create a situation where you have a negative quantity in a lot. I haven’t explored this in depth, but this can’t be a good thing.
So, not the optimal solution, but it does work around the problem. Just be careful in how you enter your quantities.
