Author: Kiu Global

• Overview

Landed costs include all charges associated to a good transfer.

Landed cost includes = Cost of product + Shipping + Customs + Risk

All of these components might not be applicable in every shipment, but relevant components must be considered as a part of the landed cost. We have to identify landed cost to decide sale price of product because it will impact on company profits.

• Configuration

• Go to Inventory ‣ Configuration ‣ Setting. Check accounting option Include landed costs in product costing computation & Perpetual inventory valuation, then click on Apply to save changes.

Landed Cost Types: Start by creating specific products to indicate your various Landed Costs, such as freight, insurance or customs duties. Go to Inventory ‣ Configuration ‣ Landed Cost types.

• Then go to the Purchase ‣ Configuration ‣ Setting. Choose costing method Use a ‘Fixed’, ‘Real’ or ‘Average’ price costing method, then click on Apply to save changes.

Note: Landed costs are only possible for product configured in real time valuation with real price costing method. The costing method is configured on the product category

• Link landed costs to a transfer

To calculate landed costs, go to Inventory ‣ Inventory Control ‣ Landed Costs.

Click on the Create button and select the picking  you want to attribute landed costs. Select the account journal in which to post the landed costs. We recommend you to create a specific journal for landed costs. Therefore it will be easier to keep track of your postings.

Click the Compute button to see how the landed cost will be split across the picking lines. To confirm the landed cost attribution, click on the Validate button

For a product, you can only choose Inventory Valuation Method between Perpetual (automated) or Periodic (manual). 

If you want journal entries posted automatically, you should set Raw Material category as Perpetual (automated). You can also replace Stock Output Account by account Cost of Goods Sold if you want to skip allocation step.

Then the process in the system will be as follows:

1. Create a BoM (Bill of Material): Manufacturing ‣ Master Data ‣ Bill of Material ‣ Create BoM

Coffee bean, Sugar and Milk are Stockable Products and belong to Raw Material category.

Milked coffee are Consumable Product and belong to Finished Product category.

2. Purchase 3 raw materials that have been listed above (e.g: 10kg coffee bean, 10kg sugar, 10L milk)

Once you receive goods, the journal entries will be generated automatically.

3. Sell 1 cup of Milked Coffee on POS ‣ Validate the payment ‣ The journal entries will be generated automatically after payment (If you set Stock Output as Cost of Goods Sold, the entries will be generated accordingly)

Inventory Valuation Report will be updated automatically according to BoM

4. When you close the session, the journal entries will be generated automatically as following:

5. At the end of the month, you can check the Inventory Valuation in your warehouse and update the actual quantities if the theory data is different from the incurred data.

There are 2 ways to update it. One is manually updating one by one product. Second is using Import File.

Make sure that your products have been set Cost price already. (Cost price is set on your product form)
‣ See How to update Cost price of Product by import in 1.2.5. How to adapt an import template & How to import data into Kiu BMP

Go to Inventory Module ‣ Inventory Control ‣ Inventory Adjustment ‣ Create ‣ Choose to adjust all products/ product categories/ one product… ‣ Start Inventory

In this example, I choose one product “Milk” as below

Then Validate Inventory Adjustment form:

The journal entry will be generated as follows: (If you set Stock Output of Milk product as Cost of Goods Sold, the entries will be generated accordingly)

→ How to update cost price of product by import?

You can download and have a look at Update cost price template file here.

From Inventory Module ‣ Inventory Control ‣ Product ‣ Choose view type as List at the right top screen ‣ Choose products to export ‣ Action ‣ Export ‣ Choose excel format ‣ Choose these following fields: Name, Cost Price ‣ Save to file

Update cost price in the exported file ‣ Import the file into the system ‣ Choose “Don’t Import” column Name of product

Then Validate ‣ Import

→  How to import Inventory Adjustment?

Please download Inventory Adjustment Import Template here.

Step 1: Export Products. Fields are needed to export: Name, Internal Reference, Unit

Step 2: Fill data from exported file into Sheet named Product in Import Template

Step 3: Inventory Module ‣ Configuration ‣ Locations ‣ Export Location list to get Location ID

Step 4: Fill data from exported file into Sheet named Location in Import Template

Step 5: Fill data into Green column into Sheet named Inventory Adjustment in Import template.

The ID column in the sheet can be any value but you need to make sure that it’s unique for Inventory Adjustment. Or the data you input will be merged with other Inventory Adjustment.

After finishing, Delete the 1st Row in that sheet. Your file is ready to import now.

Step 6: Inventory Module ‣ Inventory Control ‣ Inventory Adjustments ‣ Import ‣ Load File ‣ Validate ‣ Import ‣ Start Inventory ‣ Validate Inventory

• Overview

Removal strategies are usually in picking operations to select the best products in order to optimize the distance for the worker, for quality control purposes or due to reason of product expiration.

When a product movement needs to be done, the system will find available products that can be assigned to shipping. The way Kiu BMP assign these products depend on the removal strategy that is defined on the product category or on the location.

• Configuration

Go to Inventory -> Configuration -> Settings. Check Track lots or serial numbers, Manage several warehouses, each one composed by several by stock locations and Advanced routing of products using rules, then click on Apply.

Then, open Configuration ‣ Locations and open the location on which you want to apply a removal strategy

• Types of removal strategy

• First In First Out (FIFO)

A First In First Out strategy implies that the products that were stocked first will move out first. Companies should use FIFO method if they are selling perishable goods. Companies selling products with relatively short demand cycles, such as clothes, also may have to pick FIFO to ensure they are not stuck with outdated styles in inventory.

Go to Inventory ‣ Configuration ‣ Locations, open the stock location and set FIFO removal strategy.

Let’s take one example of FIFO removal strategy.

In your warehouse stock (WH/Stock) location, there are 2 lots of Jelly fruits available.  You can find details of available inventory in inventory valuation report.

Create one sale order 1100 unit of Jelly fruit and confirm it. You can see in the outgoing shipment product that the Jelly fruit are assigned with the oldest lots, using the FIFO removal strategy.

• First Expiry First Out (FEFO)

In FEFO warehouse management, the products are dispatched from the warehouse according to their expiration date.

Go to Inventory ‣ Configuration ‣ Setting. Check the option Define Expiration date on serial numbers. Then click on Apply to save changes.

This will allow you to set four expiration fields for each lot or serial number: best before date, end of life date, alert date and removal date. These dates can be set from Inventory Control ‣ Lots/ Serial Numbers.

• Best Before Date: This is the date on which the goods with this serial/lot number start deteriorating, without being dangerous yet.
• End of Life Date: This is the date on which the goods with this serial/lot number may become dangerous and must not be consumed.
• Removal Date: This is the date on which the goods with this serial/lot number should be removed from the stock. Using the FEFO removal strategy, goods are picked for delivery orders using this date.
• Alert Date: This is the date on which an alert should be sent about the goods with this serial/lot number.

Lots will be picked based on their removal date, from earliest to latest. Lots without a removal date defined will be picked after lots with removal dates.

All dates except removal date are for informational and reporting purposes only. Lots that are past any or all of the above expiration dates may still be picked for delivery orders, and no alerts will be sent when lots pass their alert date.

Expiration dates on lots can also be set automatically when goods are received into stock. After enabling expiration dates on serial numbers, four new fields will become available in the inventory tab of the product form: product life time, product using time, product removal time, and product alert time. When an integer is entered into one of these fields, the expiration date of a lot/serial of the product in question will be set to the creation date of the lot/serial number plus the number of days entered in the time increment field. If the time increment field is set to zero, then the expiration date of a lot/serial must be defined manually after the lot has been created.

Each of these time increment fields is used to generate one of the lot expiration date fields as follows:

Product Use Time –> Best Before Date

Product Removal Time –> Removal Date

Product Life Time –> End of Life Date

Product Alert Time –> Alert Date

To set the removal strategy on location, go to Configuration ‣ Locations and choose FEFO

• Overview

A good warehouse implementation takes care that products automatically move to their appropriate destination location. Putaway is the process of taking products off the receiving shipment and putting them into the most appropriate location.

If for instance a warehouse contains volatile substances, it is important to make sure that certain products are not stored close to each other because of a potential chemical reaction.

A putaway strategy follows the same principle as removal strategies but affects the destination location. Putaway strategies are defined at the location level (unlike removal strategies which are defined at the product level).

• Configuration

Go to Inventory ‣ Configuration ‣ Settings and check option Manage several warehouses, each one composed by several stock locations & Advance routing of products using rules, then click on Apply.

• Setting up a strategy

Let’s take as an example a retail shop where we store vegetables and fruits. We have to store this type of product in different locations to maintain product quality. Suppose there is one warehouse location WH/Stock and there is sub location WH/Stock/Vegetables & WH/Stock/Fruits.

You can create a putaway strategy from Inventory ‣ Configuration ‣ Locations. Open any location where you want to set a putaway strategy, click on Edit and locate the option Put Away Strategy.

Open the roll-down menu and click on Create and Edit. This will open a form view of put away strategy on which you have to set a name for the strategy, and set the method and fixed location for each category.

When you have entered all the necessary information, click on Save. Now, when you purchase products with those categories, they will automatically be transferred to the correct location. To check current inventory, Go to Inventory ‣ Report ‣ Inventory valuation. There you can see current inventory by location.

If you own different warehouses you might want to transfer goods from one warehouse to the other. This is very easy thanks to the inventory module in Kiu BMP 

• Configuration

First of all you have to select the multi locations option. Go to Inventory -> Configuration -> Settings. Then tick the Manage several warehouses, each one composed by several stock locations option. Please don’t forget to apply your changes.

• Creating a new warehouse

The next step is to create your new warehouse. Go to Inventory -> Configuration -> Warehouse Management -> Warehouses. You are now able to create your warehouse by clicking on Create.

Fill in a Warehouse Name and a Short Name. The short name is 5 characters maximum

Note: Short name is very important as it will appear on your transfer order and other warehouse documents. It might be smart to use an understandable one

If you go back to your dashboard, new operations will automatically have been generated for your new warehouse.

• Create an internal transfer

The final step is to create your internal transfer. If you want to transfer 2 units of a product from your first warehouse to another one in Ha Noi, proceed as follows:

From your dashboard, select an internal movement of one of the two warehouses. To do so, click on More ‣ Transfer

A new window will open where you will be able to select the source location zone (in this case our “old warehouse”) and the destination location zone (in this case our “new” warehouse located in Ha Noi).

Add the products you want to transfer by clicking on Add an Item and don’t forget to Validate or Mark as TODO once you are done.

If you select Validate, the system will process all quantities to transfer.

If you select Mark as TODO, the system will put the transfer in Waiting Availability status. Click on Reserve to reserve the amount of products in your source warehouse. Then click on Validate to complete internal transfer