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US Foreign-Trade Zone (FTZ) Management

FTZ Management: Knowledge Based Articles - Standard Manufacturing Flows

Manufacturing flow

This document provides images representing the standard manufacturing process flow through the Foreign Trade Zone (FTZ) solution.
Background
Clients who manufacture in the zone have a bill of materials (BOM) that represent the work orders used to create the manufactured finished goods that ship out of their zone. The BOMs systematically build the finished goods when shipped and consume the appropriate receipt layers in the system to complete the BOM.
Relevant Transaction Codes
Codes used to represent and build the BOM
  • PPIM – Positive production of an inventoried manufactured product
    • Use a PPIM to represent the finished good parts that have assembly’s underneath them
  • IPIM – Positive production issue of an inventory manufacturer product
    • Use an IPIM to represent subassemblies within a finished good such that the IPIM part is used to create the top-level PPIM, but also has assemblies that were used to make it as well
  • IPPC – Positive production of a purchase component
    • Use an IPPC to represent the lowest levels of your finished good and will represent the inventory needed to consume in order to build the BOM
Transaction Fields
The following fields are needed for the BOM to process correctly.
  • ProductNum
    • Used to represent the products in the zone
  • OrderNumWork
    • Used to represent the BOM with internal data such as an invoice number, move ticket number, etc.
  • TxnQty
    • Used represent the quantity you have in the zone for the parts you are processing
  • QtyPerIm
    • Only need the QtyPerIm on IPIM and IPPC transactions
  • Used to represent how much of the component part is needed to make one of the finished good
    • Depending on business processes, the system can calculate the QtyPerIm based on the PPIM to IPIM/IPPC quantity relationship or it can be specified on the FIFO transactions
  • IMLot
    • Used to signify the finished good Lot/batch number
    • Used to connect PPIM to IPIM or IPPC based on the IM Lot
  • PCLot
    • Used to signify the purchase component lot/batch number
    • When an IPIM, PCLot is the lot/batch number of the subassembly from BOM processing
    • When an IPPC, PCLot is the ending lot/batch number of the BOM and then will consume inventory of that same lot/batch number
note
Work order numbers should not be reused after closing out a work order.
Standard Manufacturing Process
In the below example the top-level PPIM on this BOM is a Bicycle, meaning a bicycle is being manufactured to ship out of the zone.
To create the bicycle, a Seat and Body is needed. The Seat is an IPPC, which means this is purchase component and will consume inventory. The Body is an IPIM, which means it is a subassembly and requires other components to make the body prior to being able to create the Bicycle.
The Body will need to consume Wheels and Frames in order to complete its work order. The Wheel and Frames are IPPCs, which means they will consume inventory. When the Body’s work order is complete, the Bicycle can be finished being built and shipped out of the system.
In the below image a more detailed breakout of BOM processing is shown, where subassemblies play a part, and when inventory will be consumed. In this example, the PPIM to IPIM/IPPC flow connects by the OrderNumWork and a match is needed in order to properly consume inventory and build the BOM.
note
The transactions that signals the BOM to consume inventory is the IPPC transaction as this always represent the purchased components.
SPNM Manufacturing Process
A second form of manufacturing processing through the system is with the use of SPNM transactions instead of SPIM shipments for finished good parts. When using SPNM transactions, the entire bill of material must be sent at that time.
A SPNM is a shipment of a non-inventoried manufactured product and there are 2 types of ProductTypeCodes to process with. There will only be one SPNM/NM ProductTypeCode and it will be linked with its respective SPNM/PC ProductTypeCode transactions with the OrderNumWork.
NM – used for the finished good
PC – used for the components to connect to inventory and consume inventory
The below image is a high-level breakdown of SPNM processing.

This article applies to:

  • Product: ONESOURCE Global Trade
  • Sub-Product: US Regimes & Connectivity

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