A kit item is a collection of items that can be issued as a single item. The kit item is defined in the Item Master application and the components of the kit are assembled into a kit in the Inventory application. A kit can also be disassembled reducing the balance of the kit item and adding to the balances of each component which is part of the kit.
Kit items were originally created for electric utilities and we will be using the item KIT134 – Parts Kit for Utility Pole Maintenance – Code134.
In the Item Master application there is a check box in the right-hand column “Kit?” which marks the item as a kit item. You’ll notice that the Rotating, Condition Enabled and Lot Type fields are all read-only. When creating a new kit if you had marked the record as rotating, condition enabled or with a lot type of LOT then the “Kit?” field will be set as read-only.
The other point you will notice fairly quickly is that you cannot mark an item as a kit item until you have created an item assembly structure, you will receive error “BMXAA8961E – You must specify an item assembly structure before you indicate that the item is a kit.”.
The Item Assembly Structure tab is used to specify the items and their quantities that make up a kit item. In this case:
- BOLT125 Quantity 4
- BRACKET Quantity 2
- CAPACITOR100 Quantity 6
- RESISTOR2112 Quantity 2
The items that can be added as children to the kit item, like their parent, cannot include rotating, lot or condition enabled items, the following error will be raised when attempting this “BMXAA2089E – Rotating, lotted, and condition-enabled items cannot be added to a kit structure.” However, these do appear in the Select Value for the item field, in the Children table window.
You can add a service item and a tool item to the kit. A service item doesn’t make sense because it cannot exist in a storeroom, but you won’t get as far as being able to add the kit item to a storeroom because there is a validation that each item has an issue unit, and there isn’t one for a service item. A tool item in the kit could be useful.
The kit item itself cannot be referenced as a child item – “BMXAA2061E – A child item may not have the same item number as its parent.” However, a kit item can be referenced within another kit item. That will be an interesting test.
You use the action “Add Items to Storeroom” in the same way you would for regular items. If the kit item has a balance you will not be able to change the kit structure, (use the new row or delete row buttons), or change the quantities (they become read-only), you will receive the error “BMXAA2046E – Kit KIT134’s structure cannot be modified because it has already been added to inventory storerooms.”. The message isn’t quite accurate because I had another kit item which I had just added to a storeroom and yet I could still add new items in the Item Assembly Structure tab. I eventually tracked down the point at which the structure becomes unchangeable, and that is as soon as there is an inventory balance record with a quantity. I used the Current Balance inventory adjustment to take the quantity back down to zero, and the kit item in the Item Master application allowed me to make changes in the Item Assembly Structure tab again.
You may get some messages when using the “Add Items to Storeroom” action:
- The component items need an issue unit, when adding items to a storeroom you may receive the error “BMXAA2045E – The following components of kit AJE04 do not have an issue unit specified: 140-2916. Please specify issue units for these components before adding this kit to a storeroom.” The message usefully tells you which items do not have the issue unit; it may be more than one.
- When adding a kit item to a storeroom you may receive the message “BMXAA2043E – Kit components that do not exist in the specified storeroom will be added to it.” This will create an INVTRANS transaction with type INSERTITEM for each item which was not in the storeroom that the kit item was added to. This should be read as a warning to complete the entry of the inventory record for any new items that were added; reorder details, standard or average costs depending on the issue cost type, default bin, vendor details, etc.
Note. If you had added the kit item to a storeroom and then before adding any balances you made an amendment, then it is possible to be in a situation where an item in the kit doesn’t actually exist in the same storeroom as the kit. It doesn’t add it automatically as it does when you add the kit item to a storeroom. In case you were wondering – an item cannot be added to the storeroom a second time.
The kit item KIT134 exists in the CENTRAL storeroom with a current balance of 27.00 and it is at ACTIVE state with an AVERAGE Issue Cost Type, it currently has an average cost of 0.00. Its components similarly exist in the CENTRAL storeroom:
- BOLT125 Balance 1,691, ACTIVE state, AVERAGE Issue Cost Type, average cost 0.18
- BRACKET Balance 403, ACTIVE state, AVERAGE Issue Cost Type, average cost 0.92
- CAPACITOR100 Balance 669, ACTIVE state, AVERAGE Issue Cost Type, average cost 0.89
- RESISTOR2112 Balance 304, ACTIVE state, AVERAGE Issue Cost Type, average cost 0.92
In the Inventory application there are two actions Assemble Kit and Disassemble Kit. We’ll start with Assemble Kit.
When the Assemble Kit dialog opens, the Assemble Quantity is empty, I added 1 kit to assemble, it will keep the maths simple. The Possible Quantity of 111.00 is calculated by taking the available balance of each item and dividing by the quantity required by the kit to work out the possible quantity that each component could create, from this the minimum possible quantity of a component is used, presumably rounded down.
- BOLT125 Balance 1,691 / 4 = 422.75
- BRACKET Balance 403 / 2 = 201.5
- CAPACITOR100 Balance 669 / 6 = 111.5
- RESISTOR2112 Balance 304 / 2 = 152
The item CAPACITOR100 is the item that causes the least possible kits to be assembled, hence when rounded down gives a possible quantity of 111.00.
After pressing OK the current balance for KIT134 is now 28 and it has an average cost of 0.35.
The cost of each component in the kit was:
- BOLT125 Average cost 0.18 x quantity 4 = 0.72
- BRACKET Average cost 0.92 x quantity 2 = 1.84
- CAPACITOR100 Average cost 0.89 x quantity 6 = 5.34
- RESISTOR2112 Average cost 0.92 x quantity 2 = 1.84
Total expected average cost of the kit would be the sum of each component item multiplied by the quantity required = 9.74. The average of 0.35 occurred because we have taken the 9.74 and averaged it out across a current balance of 28. 9.74 / 28 = 0.34786 or rounded to 2DP = 0.35.
You need to be on the kit item to use the Assemble Kit action, otherwise you will receive an error message like “BMXAA1776E – BOLT125 is not a kitted item and cannot be assembled or disassembled.”
From a financial transaction point of view when you assemble a kit the kit item has a receipt (MATRECTRANS) and the items in the kit have an issue (MATUSETRANS). The transaction types are KITMAKE.
- The kit item transaction will be found in Receipts & Transfers tab in the View Inventory Transactions action. It has positive quantity and line cost as you are increasing the balance.
- The items in the kit each have a transaction that will be found in the Issues & Returns tab in the View Inventory Transactions action. They have a negative quantity and line cost as you are decreasing the balance. The internal unique key (MATRECTRANSID) of the kit item is written onto each of the MATUSETRANS records for the items of the kit, to link the two transactions together.
The Issue Cost Type for a kit item can only be AVERAGE and STANDARD. ASSET exists in the lookup, a kit item can’t be a rotating item and you will receive error “BMXAA1943E – Asset cost is for rotating items only.” The items in a kit can have an Issue Cost Type of AVERAGE, STANDARD, LIFO or FIFO. If you use a mix of Issue Cost Type for items in a kit, then you may have additional testing to perform during an implementation.
I am using the Inventory Adjustments – Average Cost action to change the New Average Cost to 9.74 so that it aligns with the average cost of each of the items in the kit multiplied by their quantities. The Cost % field was calculated as the difference between new and the existing average cost. Standard Cost of item KIT134 is still set at 0.00.
The Cost % is calculated as the value of the balance of item at new average cost minus the value of the balance of item at current average cost, dividing the result by the value of item at current average cost and then multiplied by 100 to turn into a percentage, rounded to 2DP, or in this case ( ((9.74 x 28) – (0.35 x 28)) / (0.35 x 28) ) x 100 = 2,682.86%.
When we use the action Disassemble Kit in the Inventory application, we need to enter a quantity to disassemble, I have chosen 1 again. The Disassemble Quantity cannot be more than the Current Balance otherwise you will receive error “BMXAA1854E – Quantity of kits to disassemble cannot exceed the kit current balance.”. You have to be on a kit item to disassemble it.
The result is that the current balance of item KIT134 is back at 27 and the average cost is 9.74.
The items in the kit have returned to their previous balances and there is no change to their average costs:
- BOLT125 Balance 1,691 average cost 0.18
- BRACKET Balance 403 average cost 0.92
- CAPACITOR100 Balance 669 average cost 0.89
- RESISTOR2112 Balance 304 average cost 0.92
From a financial transaction point of view when you disassemble a kit the kit item has an issue (MATUSETRANS) and the items in the kit have a receipt (MATRECTRANS). The transaction types are KITBREAK.
- The kit item transaction will be found in Issues & Returns tab in the View Inventory Transactions action. It has negative quantity and line cost as you are decreasing the balance.
- The items in the kit each have a transaction that will be found in the Receipts & Transfers tab in the View Inventory Transactions action. They have a positive quantity and line cost as you are increasing the balance. The internal unique key (MATUSETRANSID) of the kit item is written onto each of the MATRECTRANS records for the items of the kit, to link the two transactions together.
When I planned how to explain the subject of a kit item, that was about all I was going to cover. The kit item can be used in Issues, Returns and Transfers just like a regular item. But inevitably as you proceed through your testing you consider other points to test. Here is a summary of the results of other tests I performed.
- You can purchase a kit item. When you receive the kit item it adjusts the balance of the kit item according to the quantity received, there is no change to the items in the kit.
- If one of the items in the kit doesn’t exist in the storeroom then you cannot assemble the kit as the possible quantity will be zero. It doesn’t matter if the item exists with balances in another storeroom of the same site.
- If the kit item included another kit item, then during assembly of the kit the child kit item was depleted by the balance required.
- When assembling the kit, the default bin was used first and then it used a secondary bin to make up the remaining quantity.
- If you allow Negative Current Balance (Organizations – Inventory Defaults) it will make no difference when assembling the kit, the possible quantity will still be zero, or you will receive an error message “BMXAA1853E – Quantity of kits to assemble cannot exceed possible kit quantity.”
- The tool item was included when the kit was assembled – nice.
- You may receive a KITCOSTVAR adjustment in the Inventory Transactions (INVTRANS) table, when assembling a kit and you have an Issue Cost Type of STANDARD for the kit item.
- It debits the Kit Items Inventory Cost Control Account
- It credits the Storeroom’s Receipt Variance Account
- Line Cost is the difference between the Standard Cost of the kit item and the costs x quantity of each component using their costing method. If that figure is lower than the kit item, then the line cost on the INVTRANS record is positive.
I could continue testing, of course – but that concludes this article. There is an article on the Financial Processes of Kitting which you can find here: http://maximosecrets.com/2020/06/02/financial-processes-in-inventory-5-of-8/