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RE: Doubts on "Internal Stock"
I have read all the threads on internal stock and finding it difficult to understand how this feature helps companies who need to manage internal requisitions. Correct me if I am wrong, but below is what I think is a more suitable purpose for setting up internal stocks transfer.
a) Internal stock or internal requisition is so called because the stock requested by a department is available from the store or warehouse and does not need to be be ordered from a supplier (or at least a check is done internally before a purchase request is sent to vendors)
b) User department makes a request for a stock item. Request is approved by head of department and then forwarded to stores or a procurement department. The request will include quantity and expected date of delivery (more like the date the item will be required to be delivered)
c) stores or procurement dept checks if the item is in stock (it is not the user department that checks the item if its in store). I see that in the current method the user is able to select items, see quantities etc which shouldn't be the case really.
d) If the item requested is in store and in the demanded quantity, stores or procurement will issue the item to the user's department (at this point, the stock has only changed location from stores to the user department). Depending on how the accounting is to be setup, the stock can remain as an inventory item but in a different location, or written off because it is now supplied to a user
e) If the item requested is partially in store or not in store at all and the request from the user department cannot be fully fulfilled, then a Purchase Order is raised to a vendor or vendors who will then quote for the items.
f) The user department will need to know that the request cannot be fulfilled and that an order has been placed with suppliers
g) The user department will need to know the timing of delivery based on the PO that will be processed to suppliers
h) Stores or procurement department must have a way to know that the item once received from the supplier should be delivered to the user department that has made the request. In order words, delivery to the user department will be pending in Stores or Procurement. Once the stores has received sufficient stocks that can meet the request or the pending items, these will then be issued to the user department that made the request originally. If need be, we could fulfil requests partially, leave the request open until fully fulfilled or close the request due to inability to fulfil it.
i) We need to manage multiple requests for same items so that some requests are not left too long while others are attended to promptly. Perhaps something that manages the requests on the basis of first come, first served (FIFO)
There are a few other stuff like "Stocks to be returned". Here I mean, a user is issued a stock item perhaps to do a job but after completing the job, that item needs to be returned back to stores or warehouse. We can think more about what needs to be included.
And finally, the accounting for these transactions needs to be figured out.
In my opinion, this will be a more desirable flow for internal stocks or internal requisitions. Reactions are welcome.
Dare
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