Sage 100 Bill Of Materials

Bill of Materials can be perplexing to new users, especially those who recently upgraded from QuickBooks and QuickBooks Enterprise. In QuickBooks Enterprise you can run an “Assembly”. You must get everyone out of the software, obtain “Single User Status”, run the Assembly on Sub-Assemblies and then run the Assembly on the next level again and again until you have “built” your Assembly.

When users upgrade from that onerous process, many times they don’t understand how to really take advantage of an ERP system that handles Bill of Materials like it is designed to be used.

Sage 100 ERP uses full Bill of Materials with or without the Work Order Module. You can create a “Production Run”, or you can use the Work Order Module in conjunction with Bill of Materials.

Further, in Sage 100 ERP you may choose to use a “Phantom Bill” for sub-assemblies. We can use a Phantom Bill on sub-assemblies that we choose to not assemble “ahead of time”.

Let me give an example of a good use of a Phantom Bill. Let’s say you’re are making a Go-Cart. In order to assemble the Go-Cart, you purchase the raw materials including the engine. In our case the Engine must have a mounting plate attached before it can be mounted to our various Go-Cart models.

We don’t want to attach the mounting plate ahead of time because the engine could be used for various models of our Go-Cart. Further it causes an additional paperwork to create a Work Order or to make a Production Run to simply add the Mounting Plate to the Engine. We have chosen to create a “Phantom Bill”.

The Phantom Bill only has two parts, the Mounting Plate and the Engine. Because we never intend to actually create the Sub Assembly ahead of time, it is a “Phantom”.

When we make our Production Run or move Through the Work Order process, Sage 100 ERP automatically creates the Phantom Assembly for us.

But what if we have Options?

Options always look “tricky”, but they are really very simple.

If your Bill of Materials has various configurations that won’t change the cost or your process, using Options can be very advantageous.

Our Go-Cart can be made in a variety of colors. We don’t want to create a separate Bill of Materials for each color so we make “Color” and Option. When we select the Go-Cart in our Sales Order Processing, the Sales Order automatically asks us to fill in the “Option”. If we choose “Red”, the Bill of Materials will automatically understand that we need Red paint to finish our Go-Cart. The Option will show up in our Production Run for the Assembly, or be listed in the appropriate “Step” in our Work Order.

When The LSI Group sets up your Bill of Materials properly, your ERP system will not only account for your parts along with their costs, it will allow your Sales Process to flow through your Manufacturing Process.

Allan

Sage Certified Consultant

http:\\TheLSIGroup.com

Sage 100 ERP Work Order Module

The Sage 100 ERP Work Order module is probably the most underused and misunderstood programs in the Sage family of ERP software.

Almost everyone knows that Work Order can track production through your process. It also can track labor, perform simple scheduling, and track material that is used in production.

The Bill of Materials Module can also track Material production. I get many questions as to why someone would want to track Material using Work Order rather than just performing an assembly in Bill of Materials. After all, Quick Books Enterprise can perform an assembly, isn’t that enough?

There several scenarios where the Bill of Materials Assembly is adequate for a small to medium size manufacturer. If however, your assemblies are so limited that the component parts are nearly indistinguishable from the final product such as, buying in bulk and packaging in units, I don’t recommend using Work Order unless you need to schedule production and need to track labor.

On the other hand, most Manufacturers are in the business of making a product with multiple parts assembled in multiple work centers and then coated or enhanced before being packaged. Further, Manufacturing in North America today is becoming more flexible than in the past where customers are needing different components on their final product.

Keeping track of the Raw Goods can be a challenge. When I begin consulting with Manufacturers, one of the first questions I ask relates to inventory control. Do you have an overstock of Raw Materials? Do you ever have to stop production because of a lack of one Raw Material? And my favorite cost overrun, do you have to “Overnight Express” parts to meet a deadline.

When my client answers yes to any of the above questions, they need Work Order.

Sage 100 ERP does an excellent job of linking the Work Order to the Replenishment within Inventory Management Module. When using Sage 100 Work Order, item quantities are accounted for in the Inventory Process three ways.

Initially, when the Work Order is created, the Raw Materials will show as being “Needed for Work Order”. This is very effective and is similar to the column that shows “On Sales Order”. When the Work Order is Released to the Factory Floor, the Raw Material items now show as “On Work Order”. Lastly, when the Work Order is completed, the Raw Materials are removed from inventory, while the Finished Good Inventory Quantity is increased along with any bi-products.

Each step will help you track your inventory before you even begin to use MRP Module. The items are calculated into the replenishment process of the Inventory Management Module using Work Order on its own.

Work Order can Automatically Release the Raw Materials, Back flush the items or have you Manually Issue the items within the Work Order Transactions.

But what if I have Customizations? Do I need a separate Bill of Materials? That is a lot of work!

Work Order by Sage 100 ERP allows you to manually change the Materials on each individual Work Order without impacting the “Base” Bill of Materials. It then tracks that Work Order through the completing process all the way into the Customer History so that you can “see” what items were used in Production of the “Customized Bill of Materials”.

Do I need a “Routing?”.

No, you don’t have to use Routings, but you should. We will talk about that more in a later post. I believe the reason Manufacturers don’t use Work Order is because they think they are required to use Routings, required to setup Operation Codes and required to evaluate their Work Centers.

The inner-accountant in me says you really should do all those things. But, if your desire to keep it simple is preventing you from effectively managing your inventory, you are missing out on a very important and beneficial tool with the Sage 100 ERP Work Order Module.

Allan

Sage Certified Consultant

http:\\TheLSIGroup.com