Hello,

We plan to use our distribution centre for one of our subsidiary (delivery from our warehouse to the final customer, stock reordering).
The subsidiary (financially independent) stays owner of the material. Our IT system will be used.

Do you have any experience with such a configuration? We are thinking of creating a new company with only the necessary data and without financial integration.
Creating a specific warehouse in our company seems to generate a lot of difficulties.

Any advice or ideas?

Regards

Hi richard,
it mostly depends on the legal requirements I think. We actually run both scenarios. Our frensh subsidiary "shares" the warehouse in the same logistical company, but runs it's own financial company (multi finance/single logistic). The subsidiary in the US is completly independent from the parent company except some basic tables such as itme master data etc. (multi finance/multi logistic).
The major reasons for the different US setup where legal requirements, an own home currency and an own MRP run for the US warehouses.

Regards,

Martin

Richard

If you have the subsidiary as a separate company, then your mechanism for moving stock between them cannot be DRP and replenishment orders, but would probably finish up as sales and purchase for simplicity of transactions. You then have the problem of stock appearing in one company and disappearing from the other, and you would have to keep the standard costs in line so as not to corrupt your stock valuation. The financial integrations of the sales and purchase orders would also need to be fixed so that your company reporting is correct.

Would it not be simpler to have a separate warehouse? It's planned stock levels can be managed by MRP or SIC and stock replenished by purchase or replenishment orders. Then if you want to hold the stock separate from a financial perspective, you can value that one warehouse, and reconcile movements to and from it. You my need to have a different ledger account for the consignment stock, but it seems easier than being in a separate company.