Question

Make vs. Buy - Changes per situation for the same part

  • 16 March 2022
  • 5 replies
  • 370 views
B
Userlevel 1

We fabricate some parts in house and others we buy. We have standard rules for which parts fall in either category; however, depending on lead time, workload, or other factors, we may decide to buy something we traditional make ourselves or vice versa. Our planning team makes this decision.

The issue we’re having is that a part can only be set up 1 way, so it always defaults to one or the other and then the part master has to be updated to get either the PO or job to produce as desired for the specific situation. 

This isn’t working well for us. Because we do buy a lot of fabricated parts, they don’t stand out as an issue to our purchasing team and so once we make a decision one time to buy something we would normally fab, it tends to stay a purchased part. Does anyone have suggestions on how this could be handled better? 

5 replies

D
Userlevel 2

I would think you would default the part to be the most “likely” scenario based on the factors you mentioned… but also, where do these parts get consumed? Are they being used in a job or are the sold? Or something else?

You should be able to affect how the demand suggestion looks on a case by case basis by controlling the job or sales order. 

B
Userlevel 1

Usually on a job. We typically default them to most likely scenario, but were very busy recently and so many parts were created as purchased that would normally be manufactured. I would have liked purchasing to make note of these parts and go back and update the part master, but they didn’t. It’s cumbersome to have to manage this in the part record. The make vs. buy decision is fluid for us. When resources or time are short, we buy even though it costs more.

mwilson
Userlevel 4

You can set the part as type M, but don’t set MRP to process it if you don’t want manufacturing suggestions for it.  You may have to customize something to suggest either making or buying the item, depending on the other factors that go into the decision.  You could also let MRP generate job suggestions, then run something custom that checks for these jobs and suggests either firming them, or creating POs instead.  Once POs are in the system, the Time Phase should see that your quantities will be OK, and not generate the suggestions on the next MRP run.

..Monty. Monty Wilson, Vice-President North America, Epicor Users Group
B
Userlevel 1

Good ideas, thank you. I agree we’d be better off to always set them up as MFG. Then we need a way to make the decision and manually issue PO’s if we decide to Buy

 

D
Userlevel 2

If you are primarily consuming them in a job, you might be able to leverage the Purchase Direct function on the job material. I’ve never tried to do it, but since it’s tied to the material that seems to indicate that you’d have to have the lines on the job setup as material, not as a subassembly. This means that your BOM should be setup with those lines marked as Pull as Assembly = false. All of this, of course, is assuming the part is setup as a Manufactured by default. The Sales Order has a similar function where you can mark the release Buy to Order - which will override the default “Manufactured” settings and instruct MRP to create a PO for the line.

Without a whole lot of effort, as Monty suggested, you could create a dashboard to seek out these types of parts and easily jump back and forth between jobs, POs, etc to make sure all is well. 

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