More About Lot Tracking In A Manufacturing Company

Manufacturers often need to track lot numbers for one of two reasons (sometimes both):

1. They need to uniquely identify the source of raw materials.
2. They need to identify the destination of a group of finished goods.

Many inventory management systems offer lot tracking capabilities and have provisions for capturing the lot number of raw materials you receive as well as the lot number of customer shipments. In a manufacturing environment, the task of lot tracking gets more complicated because a manufacturing company typically uses the lot-tracked raw materials to create lot-tracked finished goods.

Imagine a raw material Item A being used in a sub-assembly Item B, Item B used in sub-assembly Item C, and Item C used in finished good Item D. If Item A is lot-tracked, the software needs to be able to record the lot number whenever Item A is received. Likewise, if finished-good Item D is lot-tracked, the software needs to be able to record the lot number whenever Item D is produced.

Whether Item B or Item C are lot-tracked themselves is not so important (they may or may not be), except that these sub-assemblies perform a role in consuming the lot-tracked raw material, Item A. This is to say that, in a manufacturing environment, it is important to be able to track the “use” of a lot-tracked component step by step through the manufacturing process to the finished good.

There are two views of the manufacturing process that regulatory agencies require you to meet:

1. A view of where a lot-tracked item was used (the lot-tracked component item looking forward).
2. A view of the lot-tracked item(s) used in a finished good (the lot-tracked finished good item looking back).

If your manufacturing process requires lot-tracking, be certain that the software you are evaluating delivers both views. Be careful because some software (and some software vendors) try to fake it.

If the job of tracing lot-numbers through the entire manufacturing process wasn’t difficult enough, there’s another complexity of lot tracking that many manufacturing software products gloss over.

Going back to the example of raw material Item A being baked into finished good Item D, consider this: the production of sub-assembly Item B may require more of Item A that exists in a single lot. So, to build Item B, multiple lots of Item A are consumed. The manufacturing software needs to know how many of Item A was used from each lot. Then when sub-assembly Item C is produced, the manufacturing software cannot lose track of the various lots of Item A included in Item C. Likewise, the production of the finished good Item D, includes various lots of Item A. But which lots? Regulatory agencies require you to know. Make sure the manufacturing software you are evaluating can tell you accurately.

The lot tracking capabilities of the MISys Manufacturing are specially designed to be able to trace a lot-numbered raw material throughout the entire production process, regardless of how many levels of sub-assembly are involved, and deal accurately with the consumption of multiple lots. As you might imagine, this is a massively complex process, management of which few MISys competitors can match. If you are required to accurately trace lot numbers through the entire multi-level manufacturing process, by choice or necessity, MISys Manufacturing is up to the task. See www.misysinc.com/ for more details.

Complexities of Lot Tracking

When you are looking for a right-sized manufacturing software system, lot tracking is another one of the “deal-breaker” features that, if you need to perform this level of tracking, will eliminate a great many prospective manufacturing solutions.

Lot tracking is difficult by any measure.

First, the software required to track lot numbers in a manufacturing environment is difficult to write (we have seen a number of totally unworkable lot tracking systems).

Second, the task of accurately maintaining records detailing the movement of tracked items from raw material receipts to customer shipments is time-consuming and error-prone.

So why do lot tracking? Because regulatory agencies require it.

If you are in the pharmaceuticals manufacturing business, the Food and Drug Administration will require you to track lot numbers and maintain a detailed audit of every production run. FDA won’t ask you if you would like to do lot tracking. It is a requirement – no matter the cost.

Some of the most basic and low-cost manufacturing software products claim to feature lot tracking, but the devil is in the details: beware!

For some manufacturers (well, actually very few manufacturers) lot tracking simply means making a permanent record of the lot number of the finished good they just assembled. Their record-keeping amounts to keeping track of the lot lumber of the products they built, the date they built them, and possibly the customer to whom the material was shipped.

If this is all you need (and we suggest you explore this extensively) then consider yourself lucky. The software to perform this task is relatively easy to write, inexpensive to obtain, and is often included as a “feature” in an inventory control system.

However, if the audit requirement is that copious records be maintained for lot-tracked raw materials, through all levels of sub-assembly to the finished good and beyond, then the job gets a lot tougher. The software gets harder to design, more difficult to use, and more expensive.

A manufacturing-oriented lot tracking system (of the sort required by FDA, FAA, and others) must maintain 2 distinct views:

1) A view showing the lot number of every tracked component, tracking its use throughout the entire product structure. We call this the “Where Did It Go” view.

2) A view showing the lot number of every assembled product, tracking its production back throughout the entire product structure to every tracked component. This is what we call the “Where Did It Come From” view.

If the software you have selected does not allow for such a bi-directional view, do not allow the FDA or FAA auditors in the door. You will most certainly fail the audit and be shut down.

Nobody likes to perform lot tracking. But when a regulatory agency says “jump” you do it.

The good news is that manufacturing software with effective 2-way lot tracking does exist, although it is not cheap. In my next blog post I’ll introduce you to the lot tracking capabilities of the MISys Manufacturing System.

Performing Bin Tracking in MISys Manufacturing

My guess is that Bin Tracking grew out of manufacturing software vendors need to track inventory for customers who keep their stock distributed in multiple containers. For example, injection molding companies keep raw plastic pellets in multiple silos. Fabric manufacturers roll finished material on cardboard tubes called “bolts.” Chemical manufacturers may have multiple railcars-full of any particular raw material.

Consider the following scenario: “I’m making this product at Location One and one of the required components, powdered paint, is stored in any one of three 55 gallon drums. I pick up my bucket, scoop, and weigh scale, walk over to one of the drums and take what I need.”
Happens all the time, right?

You should expect the manufacturing software to know how much powdered paint is in stock at Location One. But ask yourself this question: “Do I need to know how much powdered paint is in each drum?” If the answer is “Yes” you definitely need bin tracking capability.

In the MISys Manufacturing System for example, Bin Tracking is an extra-cost module ($1500) that allows you to create what are effectively sub-locations. In your business, the sub-location might be a drum of paint powder, a roll of tape, a spool of wire, a bolt of fabric, a silo of plastic pellets, or a roll of resistors to name just a few.

The important point is that, with MISys Bin Tracking installed, the program will allow you to set up as many Bins as you want (well, up to 4 billion) for any Location. Initially, there is no stock in a Bin even though there may be some stock in the Location at large. Stock transfers allow you to move material from the Location into a selected Bin, or out of a Bin.

When performing any of the stock transfers permitted in MISys Manufacturing, Bin Tracking causes the program to ask you for the Location and Bin number. Thus it is possible to receive material into a Bin, dispense it from the Bin, or move it from Bin to Bin within a Location, or from one Location/Bin to another Location/Bin.

With Bin Tracking enabled, the MISys Physical Inventory functions are automatically expanded to include Bin numbers. That is, the Physical Inventory batch entry function asks for a count for each Location/Bin.

Interestingly, there is no requirement in MISys Manufacturing that the sum of the stock quantities in each Bin equal the quantity reported for that Location. That is because MISys allows you to have stock in the Location at large which is not associated with a Bin. Although this rarely happens (most users transfer all the material in the Location to the specified Bins) it is possible.

Any stock transfer in which the Bin number is left blank is interpreted by the software as a non-bin specific transfer which affects the stock in the Location at large.

Practicality of Capacity Planning

Capacity Planning is technically a component of MRP II. It is a system that analyzes your capacity to produce a product (more likely a long list of products) and compares that to what it knows about your ability to produce the product.

A few low- to mid-range manufacturing control systems advertise capacity planning capabilities. Based on the comparison of production demand and supply, they can alert you to impending “bottlenecks.” We believe system such as this should more properly be called a Capacity Analysis system. While its output can be illuminating, it performs no actual planning, and the benefits achieved are far less than what is typically advertised.

A true planning system, know as Capacity Resource Planning (CRP for short) not only tells you where the production bottlenecks are bound to show up, but they tell you what to do about them to minimize the impact on other tasks.

For example, a CRP system knows that Bill and Fred and Sally are scheduled to work on Project A starting June 1st. It knows that Mike and Sally and Jim are scheduled to work on Project B starting June 15th. It knows that Fred is due for a week’s vacation starting June 12th. It knows that Mary isn’t scheduled to work on any project until July 1st. If Fred leaves on vacation as planned, but Project A isn’t yet complete, a CRP system would suggest someone who could jump in to help (that’s the planning part). It would know that Mary is available in the required timeframe, but that she works 75% as fast as Fred and takes every other Wednesday afternoon off as a community volunteer. If Mary does join Project A, but slows it down and the project isn’t complete until June 20th, a CRP system can plan the impact on Project B which Sally was supposed to start, along with Mike and Jim on June 15th.

Now, if just reading the paragraph makes your head hurt, you’re not alone. Some very complex and very expensive manufacturing control systems claim to do effective CRP.

We have had personal experience with one $20+ million MRP II system that created more bottlenecks than it resolved with each click of the “fix it” button. And the salesman said it was a bargain at $20million. We are not recommending it.

If we have convinced you to steer away from Capacity Planning, the question remains whether the “capacity lite” capability of the software you may be looking at is going to be of any value.

Bear in mind, that to do any capacity analysis/planning, the software must know about every operation associated with the production your client performs. This means that a simple bill of material, even a multi-level bill of material, is insufficient if you intend to perform capacity analysis/planning. The bill of material must include what are termed “routings” or “routing operations” – a step by step list of the processes that must be performed, in sequence, in order to produce a given product. For anyone with rudimentary (or non-existent) bills of material, collecting and entering that level of detail is a big, big task.

Coupled to the bill of material routings, the software must have a detailed description of every work center – area of the plant where some specific task is performed: when the work center is open for business, how fast it can operate, and what additional resources (material, labor, and overhead) it requires.

To perform capacity analysis, the manufacturing software computes the “capacity demand” (derived from the BOM routings) and the “capacity supply” (derived from the work center descriptions). From this, it can highlight any impending “capacity bottlenecks.” It is unlikely that any software can tell you what to do about these bottlenecks.

From our experience, true capacity planning is out of the reach of all but the most sophisticated manufacturers. Capacity analysis is nice to have if you are willing to invest in creating – and maintaining – all the supporting data for routings and work centers.

Since its release in 2009, the Shop Floor Control module of the MISys Manufacturing system (a $1750 add-on to MISys Basic Manufacturing) has proven to be a reasonable and effective alternative to complex and mind-numbing capacity planning systems. For users who need a high degree of production control and costing, MISys Shop Floor Control does the job.

Invest the next ten minutes of your time and take the 6-step tour. Download the MISys Manufacturing brochure, fact sheets, watch the demo videos, get a price estimate and more.

Visit www.misysinc.com

"I just bought MISys Manufacturing... now what?"

Fair question. You have 3 options for implementation.

• Do it yourself
• Use the MISys SureStart program to help you
• Hire a professional to do the work

Do it Yourself (DIY) implementation
In our experience, this rarely works. Implementing a manufacturing system is complicated and can be intimidating. It is possible to do it on your own, and we have customers who have done it, but you will save a lot of time and aggravation if you work... <read more>

  

Best-In-Breed works for Ski Racing Equipment and for Software Solutions

As a former alpine ski racer, I used to mix and match my equipment depending upon the best skis, best bindings, and best boots. Rarely were they the same brand. It worked pretty well. Now, the biggest ski manufacturers own boot and binding brands, so a ski racer will get one brand for all equipment – mostly because of price incentives. It certainly makes it easier as a buyer, but the components are rarely the best in their class. Going with one brand might be a compromise.

The same holds true for software. I often hear about customers wanting “all-in-one,” “end-to-end” ERP systems because they are easier to manage than a group of best-in-breed applications. In theory that is true. But in reality is is not. And, those complete ERP systems rarely perform the best in all areas.

Here are some advantages of going with a “best-in-breed” approach for ski racing equipment and software:

1. Better performance: Just like alpine race equipment, you want the best solutions in the areas most important to you. And you don’t care if the equipment is good at something you will never use it for (like ballet skiing). Settling for one system that is bloated or weak in one area will only hurt your results.

2. Lower Start Up Costs. Best-in-breed solutions have small, bite-size pieces to get up and running rather than implementing a behemoth that reaches into every corner of the organization. In skiing, you can add equipment as you need it instead of buying it all at once.

3. More flexibility. Hey, if the boots aren’t working for you, find another pair that will. If you are locked into a specific brand, you are really limited in what you can choose. Same thing with software.

4. The solution fits you: Imagine that you purchased equipment that required you to change everything about the way you skied. You wouldn’t do that. There are some things you want to change in order to get better, but not everything. Many all-in-one systems require you to substantially change your behavior to fit the system. Yuck. Best-in-breed enables you to laser in on the things that you need to change, while leaving the rest alone. Yea.

What does this have to do with MISys Manufacturing? Everything. MISys leverages the “best-in-breed” approach, focusing on the things most important to a manufacturer: Better performance, lower start up costs, more flexibility and a solution that fits your organization.

See for yourself. Download the brochure, factsheets, watch more than 30 interactive videos, and get a price estimate based on your industry. Visit misysinc.com.

Year-End 2011 Tips

Here are two year-end tips from the very talented Sonia Gray, ERP Practice Manager, http://www.netatwork.com/

Correcting lot tracking assignments
Prepared by Sonia Gray, http://www.netatwork.com/
December 2011

If you’re using Lot Tracking in MISys Manufacturing, year end often includes cleaning up old unassigned lot tracking records and making sure all lots are reconciled.  I often get questions from clients on how they can correct lot assignments or correct quantities on hand of items that are lot tracked.

It is important to note that correcting lot entries in MISys requires that you do them in a particular order. You cannot assign a lot number to a transaction if the system does not have a quantity of that lot to assign. Additionally, items tied to parent items require that you assign the parent item first, then the child items.  Therefore, reversing those transactions require that you do them in the reverse order.

A great tool for correcting invalid lot assignments is the “Undo SLT transactions” function. This function puts the transaction back on the “Assign SLT numbers” screen so you can redo the assignment.

Again, the trick is to reverse things in the right order. Think about the end result of your transaction, then step backwards through it to “undo” it. For example, if you need to correct a lot assignment that reduced stock (i.e., dispense stock transaction) you must reverse it first before you can reassign any other transaction related to it. This puts the lot number quantity back, which then makes it available to reassign. Viewing the lot tracking history will be helpful in retracing your steps.


Redirecting Locked Fiscal Periods
Prepared by Sonia Gray, ERP Practice Manager - http://www.netatwork.com/

One of the new features in Accpac is the ability to lock fiscal periods by module. While this is a great control feature; it can cause errors with other applications trying to send transactions to a locked period. Wisely, MISys has given us the ability to redirect our entries if it encounters a locked fiscal period.

When processing period end (under the “Accounting” menu), simply check the box “Redirect Locked Fiscal Periods” which will allow you to put in a new period end date.  Very cool!

For more on MISys Manufacturing, take the 6-Step Tour at http://www.misysinc.com/