My company is in the process of installing Baan at a new office (A) that currently handles distribution. We have Baan installed at another site (B) that also handles distribution. We want to install Baan 1st and conslidate distribution 3 months later to site B.

I was told we must go multilogistic if we delay conslidation of distribution for 3 months. Please confirm this is the case.

If we conslidate distribution to site B at go live of Baan at office A, then we can be single logistic / multifinance....correct?

Site A & B are in different countries in Europe. Although they are on the same currency, the countries are different, so we can't use group companies...correct?

Thank you for any input.

Are you going to use Baan Finance? If you have companies A and B in different countries, then it's very likely you will need to have two different finance companies.

What's the logistic data that you want to exchange between the two companies? There is no such thing as a fixed time limit for consolidiation - it actually depends very much on the data volume. I guess those three months are an estimate of somebody, thinking that he/she can manage it still - There is no standard procedure/standard software for such consolidation;

Keep in mind, that when using a single logistic company, you will need additional procedures and most likely also additional software, if you have a supplier/buyer relationship between the two companies. Baan IV does not handle such a relationship very well, especially there are no invoices generated between the two finance companies, just "intercompany bookings". EU tax authorities don't like that. So you will have to find a way for getting the data of intercompany deliveries out of Baan and put in the respective invoices manually. Furthermore, keep in mind that single-logistics/multi-finance does not work at all when you are using the PCS module.

Hope that helps a bit

Ulrich Fuchs

Yes we will be using multiple finance companies. One for each affiliate. So I know we'll be multi finance. The only question was the logistics. It sounds like we'll need to be multi logistic. I say this because our Germany facility will do manufacturing and distribution. They will distribute all products to the affiliates' customers. My VP of distribution want to delay the conslidation of distribution at the affiliates for 3 months after go live...I don't know the reasons why? However, that will require us to go multi logistics, correct?

However, I thought we could use EDI for the intercompany inovices, PO's, etc. for either single or multi logistics? Is that not the case?

Thank you for all your input.

Yes, EDI is possible and normaly used to handle that sort of supplier/buyer relationship - but that's definitly a multi-finance/multi-logistic setup then. Technically speaking, you have two indipendent baan companies then, which just happen to exchange orders (and probably invoices) with EDI.

Uli

Does anyone know why Baan does intercompany bookings instead of invoices in a single logistic / multi finance scenario? I'm sure there's a reason, but I don't know finance well enough to know why.

Thanks.

Baan simply defined at the beginning of time that when movement of inventory between sites involves purchase orders and sales orders, the movement must be between different logistics companies. If inventory movement remains within one site (logistic company), it can be accomplished by transfers, RPL, DRP, etc.

I think the design philosophy in this case is based on Logistics, as much or more than Finance. A purchase or a sale is an “arms-length” transaction that involves a shipment/invoice from one logistic entity to another, where it is received. The second site in such a relationship may (and usually does) have the need for different product structures, cost structures and planning.

In a single logistics environment, the product/cost structures are by definition the same, even if the financial ownership/responsibility differs. When product is moved, for example, from a warehouse associated with one finance company to a warehouse associated with another finance company, it actually stays within the one logistical site and there is no “arms-length” transaction. So from a finance perspective, all that needs to be generated is a booking transaction.

Obviously, you could design the company structures in an ERP system around a different philosophy, but that’s the one that Baan used. Bottom line: if you want to handle a “transfer” of inventory in Baan as a sale/invoice, the transaction must be between separate logistic entities (i.e., multi-logistic).

Scott

Yes, Baan can address a multi- logistics / single finance inventory transfer function, DRP is very good at also tracking the actual movement of orders, as well as timing of inventory.

Another option is to use the Direct Delivery method witha delivery address of the other warehouse, as long as the principal finance location will absorb cost, else, you have to book costs against the receiivng warehouse, not always an advisable process.

Else, there is the 3rd option, which i would not recommend from a finance perspective, but logistics wise, it would get the job done, is to book 0 dollar purchase, and sales orders, with dummy customers / suppliers, to facilitate inventory transfer. But, given finance impact of this, plus allocations, etc, DRP is the best option.

Regards