Topic: Ways to manage real-life manufacturing scenario

Hello guys, I am trying to figure out how to use and manage Manufacturing module as close as it gets to real application scenario and I am kinda stuck at the moment

This maybe more of a Accounting problem rather than the FA System. But however way Accounting designs it hopefully the FA System can support it through this module

We manufacture plastic bags and they are basically mixture of main raw material of plastic granule and other additives like coloring

To create / produce 1 type of black plastic bag for example we can only set estimate of how many additives are added on each product. Let's say, the current ratio is set to 5kg of black additives per 25kg raw material plastic granule

So to have 300kg black plastic bag as output. In theory it would have at least needed 50kg of black additives and 250kg raw material plastic granule as input

But there will always be loss material in the way, materials that are still left in the machines, some operator screw up ( ie more waste generated etc etc ) so that it may actually need, say on that day 312.5kg combined raw material + additives to produce 300kg net black plastic bag. On other day, it may need 315kg input

My question is how do you book these extra 12.5 - 15 kg material loss ?

Inventory Adjustment would book them directly as cost where it should be contributing to either COGM and / or COGS

Cheers
Arief

Re: Ways to manage real-life manufacturing scenario

The standard ratio based minimum output observed to be needed would be what the BoM would start with. Any additional issues to the manufacturing is available in the application and the actual output too may be slightly different from the envisaged output which too is manageable in FA.

Re: Ways to manage real-life manufacturing scenario

Just to expand on what @apmuthu said, use Advanced Manufacturing.  Either use a BOM with the minimum amounts and add issues (ie. raw materials) to cover for the additional amounts or do not use a BOM and just add the issues you actually used.

If you are trying to track the waste separately, that is another question.

Re: Ways to manage real-life manufacturing scenario

Hi @apmuthu, @brad


Thanks, with advanced manufacturing I think it will get closer to reality as possible

What's left are 2 possible scenario(s) and please help me guys because I want to understand manufacturing as much as possible for FA

1.
If computer records showing stock for raw material supposed to 900 kg while in reality is 850 kg, you would use Inventory Adjustment to substract -50 kg from raw material to declare it as cost right ?

2.
What if the exact opposite happen. computer records show raw material 900 kg while in reality there are 950 kg. If you use Inventory Adjustment to +50kg to raw material. How does FA treat this ?