Microsoft Dynamics NAV has several ways to record RAW material consumption on a production order. These are called flushing methods. Neville Foyn, Lead ERP Consultant at EBS analyses these methods.
Forward flushing is when the production order starts. The idea is that at the start of work, all raw materials are collected and put in a pile in the workshop (figuratively speaking) and therefore you want them to be removed from inventory up front.
Back flushing is when you want all the inventory to be consumed at the end of the process. This process is simpler, as when you process your output, the consumption also happens from inventory. This method is commonly used by companies who carry a lot of spare stock or have a fast manufacturing time. This is then the simplest option.
Routing Links helps control the stock out of inventory by linking specific steps in the production process to specific raw materials. It means that as you finish a step, the system consumes the stock from that step. This is a lot more accurate compared to the other methods and works well, however on complex Bill of Materials it can be a monster to set up and manage.
Manual Flushing is the best way to do it if your processes can support it or if you have automation built into the system. This involves consuming the raw materials manually using a journal, and can be done at any time. The value is gained by consuming the raw materials as they are taken from inventory, leading to accurate, to the minute stock, as the raw material is being recorded as it is consumed. This handles where extra raw materials are consumed against the production order – something that is not as direct in the other methods.
Automation can also be built and follows the basic idea of having a production order print with a barcode on the top of it (a Job Card effectively). The workshop hands it to the stock controller who scans the printed sheet with a barcode scanner and then the raw materials he is handing over. In the background, the system then processes the consumption. This means that you have up to the minute stock levels and the system automatically handles differences in the required quantity of raw materials.
By Neville Foyn, Lead ERP Consultant at Evolution Business Systems
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Evolution Business Systems (EBS) specialises in business management solutions that give you the freedom to focus on your business. Melbourne based EBS does this by automating your core business processes and integrating your specialist business applications to deliver the right financial management solution. With deep expertise in leading financial applications including Arrow Financials and Microsoft Dynamics™ NAV, EBS works beside clients to ensure their software solves problems rather than creating more. EBS has a detailed implementation strategy that is tailored to customers in terms of timelines, requirements, risks and responsibilities as well as project variations and external requirements. While it does not sell or support hardware or site network environments, EBS informally partners with selected specialists in these areas to provide clients with a “total solution”.’
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