How to Handle Variable Weight When You Purchase by the Pound
For manufacturers who buy raw materials by weight but consume them as discrete units - like rolls, bars, or sheets - receiving inventory accurately can be a challenge, especially when individual units vary in size or weight. Fortunately, Cetec ERP offers a clean and efficient way to handle this scenario using phantom BOMs.
Let’s explore a practical example to see how it works!
The Challenge: Fixed Conversions vs. Real-World Variability
Imagine you purchase material by the pound, but you consume it in rolls. Typically, a roll might weigh around 94.9 lbs and measure 350 ft. But your latest shipment includes 36 rolls that range in weight from 94.9 lbs to as little as 42.1 lbs - all purchased at the same per-pound rate.
The issue? The UOM conversion in Cetec ERP is fixed: one roll equals 94.9 lbs. That fixed conversion doesn’t reflect the actual weights received, and it can distort inventory valuation and invoice matching if you try to receive by roll.
Why Fixed Conversions Don’t Work Here
The system is designed to enforce fixed UOM conversions to maintain consistency. But if you receive by roll using the static conversion, the total received weight won’t match the invoice. And that creates problems for both inventory and accounting.
The Solution: Use a Phantom BOM to Manage the Split
Instead of removing conversions or manually reversing receipts, you can use a phantom BOM (bill of materials) to convert weight-based inventory into piece-based inventory after the receipt. Here’s how this simple process works:
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Receive the Material by Weight: Start by receiving the total weight (e.g., 2,383.6 lbs) directly from the purchase order. This ensures that cost and quantity match the supplier’s invoice.
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Set Up a Phantom BOM: Create a phantom BOM that represents a “conversion” from pounds to rolls. The phantom BOM allows you to consume the material by weight and output variable-weight rolls as finished goods, without impacting costing or requiring a formal work order.
Why This Works
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Accurate Inventory & Costing: You preserve the integrity of your inventory and accounting records by receiving exactly what was invoiced - by the pound.
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Efficient Conversion to Usable Units: The phantom BOM lets you translate raw weight into variable pieces without rigid conversions or receipt reversals.
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Better Visibility: Operators and planners can see individual roll sizes and weights, aiding in production planning and pull decisions.
Tip: Build reusable BOMs for common weight ranges. If you frequently receive rolls in predictable weight categories, you can create reusable phantom BOMs or part synonyms that correspond to those categories (e.g., “Roll_85LB”, “Roll_45LB”) to speed up future builds and simplify warehouse management.
When you’re managing variable unit sizes in a system designed for fixed conversions, a phantom BOM is a powerful tool to bridge the gap. It allows you to receive inventory cleanly by weight while still tracking and using discrete pieces in production, with no need to undo and redo receipts.
Looking for help setting up phantom BOMs or managing unit conversions? Reach out to Cetec ERP support—we’re ready to help tailor the system to your real-world needs.