How Openbravo helps manage supply chain complexity with Alternative Unit of Measure
As part of the Advanced Warehouse Operations (AWO), which is at the center of the new Openbravo Supply Chain Suite, the multiple alternative unit of measure (AUM) feature gives organizations more flexibility in defining the base unit of measure (BUM) of a product – typically used for costing purposes – while allowing different users to operate in different units.
In business, a unit of measure fulfills multiple purposes at the same time. Or better put, inventory is viewed by the different functions in the organization and each of these functions is interested in a different aspect. Take for instance timber as a product:
- A finance officer looks at timber in terms of weight, since this product is costed in kilos or pounds, depending on whether metric or imperial measures are used. The finance officer will want to compare timber of different categories using the same unit as the base for the costing; if they don’t, they will not understand the difference;
- A purchase officer is interested in metric tons, including or excluding the scrap raw material that is wasted after processing, depending on the contract terms;
- The sales manager is interested in the finished goods that are made from the timber. These typically will be sold by unit or by weight;
- Finally, the warehouse manager wants to know how much space the various raw materials and finished goods will occupy in the warehouse, so for this purpose it should be presented in a non-mathematical measure of volume, like pallet.
Managing this complexity is now possible with the multiple alternative unit of measure feature in Openbravo AWO. Each product only has one base unit of measure (BUM), which is typically used primarily for costing. Multiple alternative units of measure (AUM) can be created for each product and for each AUM the conversion rate to the BUM is to be specified. Here it is worth stressing that the various AUM are merely for the convenience of the different types of user and all transactions are done internally in BUM.
With the conversion rate specified, the system always knows what quantity is transacted. As well its conversion rate, each AUM can be specified to be Primary, Secondary or Non-Applicable for the business flows of Purchase, Sales and Logistics.
In addition, each AUM can be identified with a GTIN or packaging level, so that scanning the GTIN the system instantly knows what AUM is scanned and subsequently what quantity in BUM is to be transacted.