Second Unit Of Measure-(UOM)

September 20, 2018

ERPAG 5.1

Second Unit Of Measure (UOM)

How to set up a second unit of measure? Generate reports and get an inventory overview. Track and convert raw materials in work orders.

1. Introduction

UOM stands for “Unit of Measurement.” It’s like using a specific ruler to measure things so we can keep track of them better. Imagine you have a big box of crayons. Instead of saying “I have a lot of crayons,” we say “I have 24 crayons.” That “24” is the UOM for crayons. It helps us understand exactly how much we have.

What is UOM? –  Definition:

“UOM, or Unit of Measurement, is a way to describe and quantify items in inventory management. It helps you keep track of how much of a particular item you have and how you measure it. For example, UOM could be used to specify whether you’re counting items by pieces, weight, volume, or any other standard unit. Having a clear UOM helps you accurately manage and track your inventory, making it easier to order, sell, and organize your products.”

Examples:

  1. Apples: In a grocery store, they don’t just say “apples.” They say “1 pound of apples” or “1 kilogram of apples.” Here, “pound” and “kilogram” are UOMs.
  2. Screws: In a hardware store, they don’t just say “screws.” They say “100 screws” or “1 box of screws.” “Pieces” and “box” are UOMs.

Standard UOMs:

In the metric system (used by most of the world):

  • Weight: Grams (g), Kilograms (kg)
  • Volume: Milliliters (ml), Liters (L)
  • Length: Centimeters (cm), Meters (m)

In the imperial system (used in the USA and some other places):

  • Weight: Ounces (oz), Pounds (lbs)
  • Volume: Fluid Ounces (fl oz), Gallons (gal)
  • Length: Inches (in), Feet (ft)
 
 
Often, goods from a wholesaler or producer are ordered in larger quantities. In such procurement, suppliers have a different unit of measurement (UOM), from the one we use. A simple example is when we sell in “pieces” (pcs) while our supplier delivers us in palettes (Pallet / pl), or the supplier delivers us in kilograms (kg) and we store our stocks in Libra (lbs). This process in ERPAG is called the “second unit of measure” and there are two ways to manage it.
The first method is a fixed parity, in which the “second uom” (which is required by the supplier) and “default uom” (unit of measure with which we run our stores) is invariable. For example. 1 kg = 2.205 lbs / 1 box = 10 pcs.
The second method is changeable, where the ratio of the “second” and “default” units of measure is changed from case to case. In this case, it is necessary to measure each procurement in order to calculate the parity. The best example is in mechanical production, when the supplier delivers us 10 lbs of “screws 5×12”, and we place 512 pieces in our stocks. With the next purchase of 10 lbs, we counted 506 pcs.
2. Item settings
Like everywhere in ERPAG, we tried to make the process as simple as possible, so we placed it in the ‘Barcode /Second UOM’ section.
 
Second Unit Of Measure (UOM)
 
We inserted the setting together with barcodes as this allows two options to be set at once. I.e. when scanning the barcodes, the amount will be calculated (in the example, if the scanned code is “2000000000039” the quantity will be “80 pcs”), while when purchasing the column “quantity” means the ratio to “default UOM” (in our example “1 pl = 80 pcs”). When adding an item to the table, ERPAG automatically assigns a barcode (EAN13 custom range), which can be retyped in as appropriate number for you, or if you do not need it, leave the field blank.
 
Although the process name itself is the “second UOM”, in ERPAG you can have more than two units of measurement (UOM). In our case, the first one had three. The first data “pcs” (ie quantity = 1) is “default uom”, the other “box” corresponds to “10 pcs”, the third is “pl” is corresponding to “80 pcs”. In determining the parity, the parity is always towards “default UOM”.
 
In the second case, we will do the “conversion from kg to lbs”, i.e. when we order in kg from our supplier.
 
Second Unit Of Measure (UOM)
 
3. Manual Purchase Order entry
 
In order to achieve the simplicity of ERPAG and higher productivity, some data is dynamically displayed or hidden.
 
When the new Purchase Order is created, the data for the second UOM entry will not be visible, they will only appear if we select one of the items that have its second UOM defined in its settings.
 
Second Unit Of Measure (UOM)
 
Second Unit Of Measure (UOM)
 
 
The newly opened columns are divided into units containing the “second UOM” data from/for the supplier and the “default” UOM where the data that comes in our stock is recalculated. Any data that changes (fixed parity) will be automatically recalculated. In our example, if you enter the second UOM quantity as 12 and the price “$900” in “default” the data will be 120 pcs at a price of $90.00.
 
Second Unit Of Measure (UOM)
 
When adding an item to the Purchase Order, the second unit of measure will be suggested. If we have more than two, then we will have the possibility to change it.
 
Second Unit Of Measure (UOM)
 
 
It is also possible to combine different “second UOMs” for the same item in the same Purchase Order.
 
Second Unit Of Measure (UOM)
 
4. Purchase Orders from the Fulfillment
 
For example, we will create the Sales Order (in our ‘default UOM’).
 
Second Unit Of Measure (UOM)
 
And we will do the fulfillment.
 
Second Unit Of Measure (UOM)
 
 
We got two Purchase Orders (one for each supplier).
 
Second Unit Of Measure (UOM)
 
In the Purchase Order, the quantities are recalculated to the ‘second UOM’.
 
Second Unit Of Measure (UOM)
 
 
In the items that have more than two ‘second UOMs’, the fulfillment will always be formed for the second in order. In our example, for the ‘Item 01’ will be ‘box’.
 
Second Unit Of Measure (UOM)
 
5. Receive the quantities from the Purchase Order.

When you receive the items from the Purchase Order, you will be able to choose whether you want to receive the items with displayed ‘second’ or ‘default’ unit of measure.

Second Unit Of Measure (UOM)

If you use the barcode scanners to evident the received items, the unit of measure will recalculate automatically when the barcode is scanned.

Second Unit Of Measure (UOM)

In the mobile application, if the second unit of measure exists, it will be possible to enter it. For example, if we receive items in ‘kg’, ERPAG will recalculate it to ‘lbs’ and vice versa.

Second Unit Of Measure (UOM)
Second Unit Of Measure (UOM)
Second Unit Of Measure (UOM)

Note that if you scan (or manually enter) the barcode which has the assigned quantity, it will be automatically recalculated. In our example if we scan the barcode for the ‘box’, the automatically recalculated quantity will be added.

Second Unit Of Measure (UOM)
 
6. Printing out the Purchase Order
 
When printing a purchase order, “second UOM” will be printed, if it exists. This is done because our supplier expects an order in the unit of measure with which he is working.
 
Second Unit Of Measure (UOM)
 
Second Unit Of Measure (UOM)
 
7. Working with variable parity
 
As we noted at the beginning of the text, there are cases when purchases are with different parity. We will take an example from machine production, the purchase of screws. Suppliers of “screws” sells in boxes that are 1 lbs heavy, depending on the model of production of the screws in that 1 lbs can be from 480 to 520 individual screws. If we want to be precise, we need to manually count for each reception. Since we have unknown or variable parity, we will enter “0” in the “quantity” section of the “barcode / second uom” section.
 
Second Unit Of Measure (UOM)
 
Since the ‘parity’ is unknown, we are able to enter both quantities without automatic recalculation.
 
Second Unit Of Measure (UOM)
 
Note – in the Purchase Orders that are generated from the Fulfillment, since the ‘parity’ is unknown, the quantity of the ‘second UOM’ will be ‘0’. This must be manually adjusted.
 
Second Unit Of Measure (UOM)
 
8. Entering purchase prices by the second unit of measure
 
Suppliers display their prices by their units of measure (eg “1 pl = $ 105.00”, “1 kg = $ 3.00”), which would require the manual conversion of the purchase price in the item settings.
 
Of course, ERPAG has an adequate solution to this problem.
 
When setting, the price has a lot of influence. Item may have multiple suppliers, there may be a “Tier Quantity”, as well as an international trade, the supplier can display the price in other currencies (e.g., “EUR”).
 
Second Unit Of Measure (UOM)
 
 
 
Determining the purchase price of the “second UOM” in the item setting would further complicate the form and it would not be practical. Starting from the fact that the most frequently the price lists of suppliers are changed, in this form we have included options for defining purchase prices with the “second UOM”. By simply clicking on the key of the supplier, the form of the given supplier with his price list opens.
 
Second Unit Of Measure (UOM)
 
 
If there are “second UOMs” on the items then the subject columns will be visible. Please note that the setting is only possible with another unit of measure, although ERPAG allows you to enter multiple units of measure.
 
Some vendors provide us with price lists in our units regardless of what we have in ERPAG, so when importing data we need to determine in which option we want to process it.
 
Second Unit Of Measure (UOM)
 
 
 
 
 
 
Please read more about Inventory and manufacturing:

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