The Gate Entry process causes a transaction named ‘Receive’ in Oracle and a corresponding accounting entry is generated.
The material will be inspected. Upon completion of the inspection, the material will be ‘Delivered’ into Stores. This process creates the ‘Deliver’ transaction in Oracle where Inventory is recorded and the ‘Receiving Inspection’ is reversed.
Receipt Routing Method refers to the number of transactions that we create in ERP to record the above flow.
There are three values for ‘Receipt Routing Method’.
Direct Delivery: In this case the user performs only one transaction in ERP. When the user creates a ‘Receipt’ in ERP, both the ‘Receive’ and ‘Deliver’ transactions are generated automatically in the system. Physically, organization may be doing ‘Gate Entry’, ‘Inspection’ and ‘Deliver’ but in the ERP system, all of them are condensed into one transaction. This reduces transaction load on the system. Normally ‘Direct Delivery’ is associated with either 2-Way or 3-Way Matching.
Standard Receipt: This is used when the user entering the Gate Entry in ERP is different from the user entering the Delivery into Inventory in ERP. This will create two separate transactions in ERP vis. ‘Receive’ (Gate Entry) and ‘Deliver’ (into Inventory). Normally this is associated with either 2-Way or 3-Way matching.
Inspection Required: This is used when Inspection Certified is required while making payment to the Vendor. In this case, ‘Accept’ and ‘Reject’ decisions are taken based on Inspection Certificate. Also based on the quality of the material inspected, the payment will vary. This is used mostly in procurement of Process Chemicals where payment is based on the Concentration of Acid received, for example.
This routing method requires three tasks to be done for each receipt. Receive, Inspect / Accept, Deliver thereby increasing the procurement lead time.
Please note that ‘We do Inspect the material’ is not a good enough reason to go in for ‘Inspection Required’ routing method. This routing method is to be used only when Payment is linked to the Inspection Certificate and the match type is 4-Way Matching.