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.
Sage Certified Consultant