Unit of Measure Schedule in Dynamics GP: Why does it matter?
This post was written by SalesPad partner FMT Consultants. We’re delighted to share their insights on why your Dynamics GP unit of measure schedule is so important.
When configuring inventory items in Microsoft Dynamics GP, you need a clear understanding of the types of transactions that occur against your items. You purchase items, sell them, transfer them between sites and bins, consume them during production, and produce them. That’s a lot of transactions! You might already enter these transactions using Microsoft Dynamics GP, so why not let Dynamics GP track your inventory for you?
Where do you start?
You need to know which items are considered inventory items, and you need to know where your items are located. Equally important is your unit of measure schedule. We just mentioned six transaction types above, and each of those inventory transactions can occur in different units of measure. You might purchase a box of 50 units but only consume one unit for each finished good that is produced. Or, you could purchase a box of 50 units from one vendor, purchase a box of 100 units from another vendor, and then sell a case of 25 units.
Putting all of this together — multiple purchases, multiple sales transactions, multiple manufacturing orders, all with various units of measure within one period — can be quite confusing. This is exactly why setting up a correct unit of measure schedule is so important.
Take the next steps
The first step to setting up a well-designed unit of measure schedule is to ask the following questions about your company’s inventory items:
- How they stored in your warehouse and how are they counted during cycle counts?
- What are the different purchasing units of measure for them?
- In which units of measure can they be sold?
- In which units of measure can they be transferred to different sites or bins?
- If using manufacturing, what is the lowest unit of measure in which items are consumed? Each, mL, grams…?
After asking these questions, begin building your unit of measure schedule. First, determine the lowest common unit of measure. Now consider the different purchasing, sales, and/or consumption units of measure for the items. Lastly, determine each unit of measure’s equivalency to the lowest unit of measure.
Take this example:
You have three items: item A, item B, and item C, all which have the lowest unit of measure schedule as “Each.” Item A and B are purchased and consumed during the manufacturing process. Item C is a product that is both purchased and sold. When the items are purchased, they are purchased in different units of measure. The chart below represents the lowest unit of measure, default purchase unit of measure, consumption unit of measure, and the selling unit of measure for items A, B, and C.
To include all units of measure when looking to create a schedule for the base unit of measure of “Each,” we would need a unit of measure for Each, Case of 25, Case of 50, Pack of 10, and Pack of 50. Let’s create a Unit of Measure Schedule ID called EACH (see screen shot below) with a Base Unit of Measure set to “Each.” Next, we need to define the unit of measure lines.
The first line will be the base unit of measure, so we create Each = 1 Each. The following lines will define the alternate units of measures to its equivalency in “Each”. Notice the additional lines are set to define Case25 equals 25 Each, Case50 equals 50 Each, Pack10 equals 10 Each, and Pack50 equals 50 Each.
This EACH Unit of Measure Schedule ID now will allow a user to purchase item A in a case of 50, purchase item B in a case of 25, purchase item C in a pack of 10, consume items A and B during production in one each, and sell item C in a pack of 50. Not to mention that by defining all units of measure down to the base unit of measure, you are allowing Dynamics GP to track your inventory quantities accurately through each item transaction. Ahh-mazing — you probably didn’t even know Dynamics GP had this functionality!
Final thoughts on your unit of measure schedule
Before we finish, there are just a few additional notes to make when designing your unit of measure schedules:
- Pay attention to the decimal place quantity in your Unit of Measure Schedule ID. In our example for EACH, we set this equal to zero. However, if you use Liters and need a unit of measure for Milliliters, you will want to change the quantity decimal places to four or five.
- You can set up multiple Unit of Measure Schedule IDs — so you could set up an ID for EACH, LITERS, GRAMS, or others that you need. However, only one Unit of Measure Schedule ID can be assigned to an item. This is why it is important to understand all the different measurements used to record an item transaction (purchased, consumed, or sold).
- If you want to create a measure with an equivalency to something other than the base unit of measure, you must still create the equivalency in the base unit of measure. Continuing with our example, if you want to create Pack50 equals 5 Pack10, you must first create Pack50 equals 50 Each, then create Pack50 equals 5 Pack10.
- When using units of measure with lot-numbered items, even though these items can be transacted upon in various unit of measures, the lot numbers will need to be assigned by the base unit of measure.
We looked at only three sample items, but you probably have hundreds of SKUs. So you can imagine that it takes dedicated time to design an accurate and useful unit of measure schedule. However, in doing so you allow the system to accurately track your inventory balances and better manage your inventory.