ERP Systems in Automating Material Transactions on the Shop Floor

Author : boyd
Publish Date : 2021-05-04


ERP Systems in Automating Material Transactions on the Shop Floor

If anything in manufacturing is certain, it is that the greater the materials handling the less efficient the system will be all the way down the production line. Indeed, materials acquisition and issuance has become something of a science since the introduction of lean principles into manufacturing over thirty years ago. The idea of lean in materials management is tied to the notion of estimating the material quantities that will be needed at any moment in the manufacturing operation. Prior to the automation of the shop floor, materials management (as a function of inventory management) was both a labor-intensive and often-inaccurate process as estimates for material were usually based on out-dated data. Today, however, enterprise resource planning (ERP) software systems take the manual process out of the production loop and through the use of real-time data, achieve the automation of materials management.

In essence, the function of materials management boils down to two divergent concepts-buying for inventory versus buying straight to the job. As the less efficient concept, buying for inventory means the "storing" of material (raw and/or components) for future use in production, whether or not that production may be presently pending or unknown into the future. In terms of material clerk efforts, buying to inventory requires a great deal of material handling in terms of turnaround, cycle counting, and issuance. On the other hand, buying straight to the job means less handling of production material within the shop. In a best case scenario, material enters the shop through the loading dock, travels directly to the work center where it is used immediately in manufacturing, and then shipped out just as quickly as finished goods; in other words, material moves straight through the factory. We often see such efficiencies in lean-cell manufacturing operations.

The estimating of material quantity in such a best case scenario is based upon the router (or traveler), which is in itself a quantity dependent document. That is to say, as the quantity of material needed is known in advance, the work order is also quantified, In turn, this makes it easy to know what to buy and what to move from inventory to the job as quickly as possible. Furthermore, ERP software will manage backflushing, whereby material is issued automatically when production is posted against an operation. In short, an ERP backflushing program will make use of the known quantity of jobs completed to calculate through the bill of material the quantities of the components used, and then reduce on-hand balances by this amount. Some ERP systems will even allow the input of quantity to issue material or backflush as initial job steps are completed. Such an option can have a great effect on the reporting of production scrap.

In the end, automating materials transactions on the shop floor through robust ERP systems raises efficiencies in the general materials management functions of inventory clerks. To this end, ERP software achieves the desired goal of the minimization of both material issuance and overall transactions.

Victor Viser, Ph.D., is a corporate and political communications consultant, web content producer, and photographer.

Copyright 2016. All Rights Reserved Worldwide. Reprint Rights: You may reprint this article as long as you leave all of the links active, do not edit the article in any way, and give the author name credit.

If anything in manufacturing is certain, it is that the greater the materials handling the less efficient the system will be all the way down the production line. Indeed, materials acquisition and issuance has become something of a science since the introduction of lean principles into manufacturing over thirty years ago. The idea of lean in materials management is tied to the notion of estimating the material quantities that will be needed at any moment in the manufacturing operation. Prior to the automation of the shop floor, materials management (as a function of inventory management) was both a labor-intensive and often-inaccurate process as estimates for material were usually based on out-dated data. Today, however, enterprise resource planning (ERP) software systems take the manual process out of the production loop and through the use of real-time data, achieve the automation of materials management.

In essence, the function of materials management boils down to two divergent concepts-buying for inventory versus buying straight to the job. As the less efficient concept, buying for inventory means the "storing" of material (raw and/or components) for future use in production, whether or not that production may be presently pending or unknown into the future. In terms of material clerk efforts, buying to inventory requires a great deal of material handling in terms of turnaround, cycle counting, and issuance. On the other hand, buying straight to the job means less handling of production material within the shop. In a best case scenario, material enters the shop through the loading dock, travels directly to the work center where it is used immediately in manufacturing, and then shipped out just as quickly as finished goods; in other words, material moves straight through the factory. We often see such efficiencies in lean-cell manufacturing operations.

 

 

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The estimating of material quantity in such a best case scenario is based upon the router (or traveler), which is in itself a quantity dependent document. That is to say, as the quantity of material needed is known in advance, the work order is also quantified, In turn, this makes it easy to know what to buy and what to move from inventory to the job as quickly as possible. Furthermore, ERP software will manage backflushing, whereby material is issued automatically when production is posted against an operation. In short, an ERP backflushing program will make use of the known quantity of jobs completed to calculate through the bill of material the quantities of the components used, and then reduce on-hand balances by this amount. Some ERP systems will even allow the input of quantity to issue material or backflush as initial job steps are completed. Such an option can have a great effect on the reporting of production scrap.

In the end, automating materials transactions on the shop floor through robust ERP systems raises efficiencies in the general materials management functions of inventory clerks. To this end, ERP software achieves the desired goal of the minimization of both material issuance and overall transactions.

Victor Viser, Ph.D., is a corporate and political communications consultant, web content producer, and photographer.

Copyright 2016. All Rights Reserved Worldwide. Reprint Rights: You may reprint this article as long as you leave all of the links active, do not edit the article in any way, and give the author name credit.

If anything in manufacturing is certain, it is that the greater the materials handling the less efficient the system will be all the way down the production line. Indeed, materials acquisition and issuance has become something of a science since the introduction of lean principles into manufacturing over thirty years ago. The idea of lean in materials management is tied to the notion of estimating the material quantities that will be needed at any moment in the manufacturing operation. Prior to the automation of the shop floor, materials management (as a function of inventory management) was both a labor-intensive and often-inaccurate process as estimates for material were usually based on out-dated data. Today, however, enterprise resource planning (ERP) software systems take the manual process out of the production loop and through the use of real-time data, achieve the automation of materials management.

In essence, the function of materials management boils down to two divergent concepts-buying for inventory versus buying straight to the job. As the less efficient concept, buying for inventory means the "storing" of material (raw and/or components) for future use in production, whether or not that production may be presently pending or unknown into the future. In terms of material clerk efforts, buying to inventory requires a great deal of material handling in terms of turnaround, cycle counting, and issuance. On the other hand, buying straight to the job means less handling of production material within the shop. In a best case scenario, material enters the shop through the loading dock, travels directly to the work center where it is used immediately in manufacturing, and then shipped out just as quickly as finished goods; in other words, material moves straight through the factory. We often see such efficiencies in lean-cell manufacturing operations.

The estimating of material quantity in such a best case scenario is based upon the router (or traveler), which is in itself a quantity dependent document. That is to say, as the quantity of material needed is known in advance, the work order is also quantified, In turn, this makes it easy to know what to buy and what to move from inventory to the job as quickly as possible. Furthermore, ERP software will manage backflushing, whereby material is issued automatically when production is posted against an operation. In short, an ERP backflushing program will make use of the known quantity of jobs completed to calculate through the bill of material the quantities of the components used, and then reduce on-hand balances by this amount. Some ERP systems will even allow the input of quantity to issue material or backflush as initial job steps are completed. Such an option can have a great effect on the reporting of production scrap.

In the end, automating materials transactions on the shop floor through robust ERP systems raises efficiencies in the general materials management functions of inventory clerks. To this end, ERP software achieves the desired goal of the minimization of both material issuance and overall transactions.

Victor Viser, Ph.D., is a corporate and political communications consultant, web content producer, and photographer.

Copyright 2016. All Rights Reserved Worldwide. Reprint Rights: You may reprint this article as long as you leave all of the links active, do not edit the article in any way, and give the author name credit.



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