Manufacturing
Manufacturing transactions in the ERP (Enterprise Resource Planning) system refer to the process of recording and managing data related to the production of goods or services in a company. SOFICloud ERP is an integrated information system for managing all aspects of business, including manufacturing.
In the context of manufacturing, transactions that occur include the procurement of raw materials, production, and distribution of finished products. Raw material procurement involves the purchasing process and receipt of goods from vendors, while the production process includes planning (manufacturing order), processing (assembly process), and production control. Finally, the distribution of finished products includes the process of delivering products to customers. Some examples of manufacturing transactions that occur in the SOFICloud ERP system include:
- Inbound Instruction: is an order given from related parties in a business to prepare or send inbound goods to a warehouse or other storage facilities. This happens for consignment goods schemes that belong to the customer.
- Stock Receipt: is a transaction that records the receipt of goods from the customer for a consignment goods scheme. After the goods are received, they will be received and recorded in the system.
- Purchase Order: is a transaction used to order raw materials or goods that will be used in the production process.
- Goods Receipt Note: to record the receipt of goods based on the Purchase Order that has been issued.
- Sales Order / Work Order: is a transaction used to start the production process. The Work Order contains details about the product to be produced, the number of products, and the production stages to be completed.
- Bill of Materials (BOM): is a list of components and raw materials needed to make finished products.
- Production Order: is a transaction used to record the production process. The production order stores information about the number of products produced, production time, and production costs.
- Assembly Process: is a transaction to record the production process that results in WIP or Finished Goods and reduces raw material.
- Goods Issue: is a transaction that records the expenditure of goods from the warehouse for the production process or delivery to customers.
The SOFICloud ERP application is a system integrated with other modules such as inventory management, sales and distribution, and financial accounting. This allows companies to manage the production process more effectively and efficiently, and provides better visibility into the entire manufacturing process.
Production Flow
The following is a general flow of how the manufacturing process stages (production) start to produce finished goods (finished goods) in the SOFICloud application:
Important steps in starting production are preparing Master Data Production. Master data production is the "Bill of Material" of finished products consisting of Raw Material components, Consumables, Direct Labor Cost allocation, and Factory Overhead Cost allocation. In addition, we must register the production sequences into Routing and the Production Machine used. If there is a change in the production formula, we can make a new production formula version with different versions as needed.
Manufacturing Order functions as a work order used by the production section to produce a product. This transaction form will contain information about the Finished Goods to be produced, as well as information on the Bill of Material and Production Routing to be passed. In addition, another important thing is related to the amount and target completion date of the product must be done. The process of making a Manufacturing order can be done based on 2 things, the first is the Sales Order or PO from the Customer. In this first scheme, production is carried out based on orders received. The second scheme is production carried out to meet warehouse stock needs.
The production process in the SOFICloud application can be carried out in several stages (routing), according to the registered BOM definition. This process will be carried out in the Production/Assembly Process transaction menu. To facilitate production operators in updating production data, SOFICloud uses a Production Order Tag that contains a barcode / QR code and also detailed information related to Finished Goods and Raw Material used as in Figure 7.1.2
Finished products that have not completed their production process at the end of the period will be recorded as Work in Process (WIP). WIP contains components of raw material costs and conversion costs up to the last production routing sequence it has gone through. SOFICloud makes it easy for you to track and know the detailed value of all WIP that occurs.
If the production stages (routing) that are passed are long and also require a long production time, then production monitoring tools are needed that can facilitate us in controlling and knowing the status of the product has reached which stage. SOFICloud helps make the product traceable, thus assisting management in monitoring the production process that occurs. The Manufacturing Order will present the status and stages of the production process that have been carried out. The system will also display how many finished products or goods in process (WIP) have been produced.
Each production routing sequence contributes to the Cost of Goods Manufactured. Its main components consist of Raw Material, Direct Labour (DL), and Factory Overhead (FOH). Each of these items must be set their standard costing through a detailed and in-depth product costing analysis process. At the end of the period, the system will compare the Actual Cost Production that occurred with the Cost Apply (Standard Costing) charged to the product. The difference information between Actual Cost and Standard Cost Apply will be displayed as a Cost Adjustment to illustrate how much Production Efficiency has been carried out.