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The process warehouse is the warehouse where production actually happens. It is also known as shop floor.

Classification of products with method of direct or indirect appropriation makes it possible to follow up balances of warehouses, specially process warehouses when appropriation is indirect.

Appropriation D - Direct

Direct appropriation products are the ones of easy control and count. They are requested directly at their storage location for consumption.

It is every material consumed in the production process, which can be directly combined with the product manufactured, such as: raw material, parts, components ready for assembly. Example: wood for furniture manufacture.

Practical Application

Four screws are used to produce a given machine. The screws are part of the machine structure and are ordinarily requested for its production. Exactly four screws are requested for each machine the factory has to produce. This product characterizes a direct appropriation; the exact amount requested is used.

Appropriation I - Indirect

Indirect appropriation products are the ones of hard control and count. Usually, they are required in a higher amount than the amount demanded to the process warehouse defined in parameter MV_LOCPROC.For example: paint, glue and thread for furniture manufacture.

As products are consumed, this balance in process is requested through the standard theoretical consumption (allocation write-off). These products' actual consumption is usually different from the theoretical consumption.

Practical Application

A company sells painted wooden chairs. The paint is part of the production structure of the chairs. However, it is very difficult to measure the exact amount of paint applied to each chair. It would be unlikely as well to request this amount to the warehouse every time a chair has to be painted. In this context, the product paint is a material that fits the indirect appropriation category.

Therefore, when the chair has to be painted, the paint can (which is kept in the process warehouse) is requested to the warehouse, and is used as the factory produces chairs.

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