Packaging types

Michał Wasiewicz Updated by Michał Wasiewicz

Path: Inventory management/Setup/Shipping packaging

A packaging type is based on/linked to an item to enable the tracking of its prices and on-hand levels. In this form we define the behavior of the various packaging types and link them to the items used when selling, returning, or tracking the type. "Packaging types" control the way we are handling the specific packaging Id's:

  1. "Return" is for packaging that is expected to be returned to us. For this type we track the handling inventory-wise, and whenever its content is sold, we transfer this to a 'custom' site and warehouse setup on the customer/vendor/carrier behind the scenes. The current on-hand of the packaging material in different sites and warehouses, can be seen from the packaging ID i.e., the item number linked to the type. This type can be balanced against the Business relation i.e., Customer or Vendor as well as the Carrier moving the packaging.
  2. "Invoice" is for packaging that the customer or we must pay for as a regular item on an invoice. When a quantity is registered, a line per packaging type to be invoiced, is automatically added to the sales- or purchase order and will be invoiced as part of the sales/purchase order invoicing of the goods sold/purchased. Packaging that is invoiced to a customer will be consumed from 'our' inventory and will thereafter not be part of the on-hand stock anymore. Packaging that is invoiced to us will be available as on-hand at our site/warehouse. This packaging type cannot be balanced towards a carrier, but only the Business relation (vendor/customer) AND it will be posted as if it was a type 'Returnable' as there is no order reference to add an invoiceable line to. NOTE: Remember to allow for overdeliver on the products representing Invoiceable packaging in case you register more than the configuration on the product is setup for.
  3. "Disposable" is for packaging that the company does not want to/need to track after having used it. Examples are shrinking wrap foil or onetime/disposable pallets that the customer is not invoiced for. The packaging will be consumed out of our own inventory and 'lost' (via an inventory adjustment journal). Disposed packaging cannot be on-hand and will not be listed on the packing slip nor the Packaging receipt report.
  4. "Pool" is for packaging that belongs to an external packaging pool, and therefore must be accounted for towards the pool owner. An example could be CHEP pallets ([http://www.chep.com/](http://www.chep.com/)). This type cannot be balanced towards anyone but can be received using an ordinary purchase order or just by creating a new receiving of packaging material using a shipping note. When used (registered as outbound) on a sales order it will (behind the scenes) move the packaging from 'our' warehouse to the customers packaging warehouse using a Movement journal and then adjusted out of this warehouse using an Adjustment journal.
  5. “For calculation only” is for a "virtual" packaging, solely for the purpose of calculation. An example could be a virtual "layer" in scenarios where layers of boxes are stacked on a pallet or in a crate. This setup can be used if working with the advanced packaging calculation as described in section 4.5

The checkbox field "Mixed content" controls whether the type allows to hold more than one item number when calculating the quantity of packaging needed for a sales/purchase order. If marked YES, the quantity for two order lines, one needing 1/4 space and one needing 1/2 space will be calculated as '1' in total. If unmarked, each line will be calculated to 1 resulting in 2 in total. The value of field "Balance towards" controls to whom transactions of the packaging type will be balanced towards. Several options are available:

  1. "Blank": Used for packaging material related to a packaging pool or for disposable packaging material.
  2. "Business relation": Balance from sales orders is registered to the customer. Balance for purchase orders is registered to the vendor.
  3. "Carrier": Balance is registered to the carrier registered on the order. Carrier is related to the mode of delivery.
Value of the field "Pool ID" controls the packaging pool Id used for the packaging type. The pool Id must be setup separately [Product information management / Setup / Shipping packaging] before being available on the packaging types. Value of the field "Equipment code" is the Id needed to identify the type of packaging against the pool owner.

Packaging transactions can be grouped into 3 categories:

  1. For transactions (in- or outbound) made against a purchase- or sales order, the packaging types are used. This means that transactions with the type 'invoiceable' will result in an order line (positive or negative) on the current order.
  2. Transactions made against a carrier, a customer, or a vendor as only reference, when registering in- or outbound packaging on a shipping note without an order linked to it will result in transfers from 'our' warehouse to the carriers/customers/vendors or vice versa.
  3. Settlements carried out on the carrier- the vendor- or the customer account will also result in transfers from 'our' warehouse to the carriers/customers/vendors or vice versa.

The allowed combination of "Packaging type" and "Balance towards", can be seen below.

Although it is possible to register packaging of a type of setup as 'Invoiceable' against a vendor or customer, it will be posted as a Returnable type would, as we have no order reference to attach an invoiceable line.
The system allows multiple uses of the same Item number, but each occurrence must be unique in relation to Packaging type, Mixed content, Balance towards, Pool ID, and Equipment code. This means that it is possible to add two entries in Packaging types: one entry defining the item as Packaging type = Invoice, and another as Packaging type = Return.

This approach enables handling two different customers in such a way that, for example, in the case of a local customer, a specific type of packaging is returned, while for a customer in e.g. the USA or China, the same packaging is invoiced.

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