We buy sheet metal in coils and then slit them into smaller widths for processing into finished products. Each full coil bought has a lot number under an item code. Each slitted coil also has a lot number under an item code, the item code depending on the slitted width. The slitting process involves some wastage also.Our current procedure in BaaN for this involves the following steps:

1. Remove the coil(lot) from the inventory through an inventory adjustment.
2. Bring into inventory the slitted coils, with each slitted coil having its own lot number.
3. Wastage is written off through an inventory adjustment.
4. In both cases of 1 & 2, a particular account called "slitting of coils" is debited or credited. This account must always have a nil balance to establish control.


I feel that this procedure has a lot of risks due to data entry mistakes e.g. we can miss out on some slit sizes, we can enter certain sizes twice etc.

Can someone advice me on a better procedure e.g., through Production Orders.

Tks and rgds,

Ravi Kumar

Here is one of our scenarios the we deal with on a daily basis. We will feed coils of material into a stamping press which produces two different finished good parts as well as scrap which is then inventoried and sold to a scrap dealer periodically. We have a production order to produce a finished good part #1. The bill of material looks something like this to produce say 1000 parts:

1. stamping material +100 lbs
2. Finished good part #2 -1000 pieces
3. Theoretical scrap of stamping material -10 lbs

When we outbound material to make 1000 parts it also negatively outbounds back into inventory 1000 of part 2 and the scrap material, so when the production order is completed we have the following in inventory:

1000 pieces of Finished Good Part #1
1000 pieces of Finished Good Part #2
10 lbs of scrap material

Would you be able to set up yours in the same manner?

Both Items are lot controlled.
Make BOM for 2nd item using Ist.

Make and report production order for IInd Item showing scrap. What is the problem ?

or if LN use transfer manual in warehouse management Item to Item.

Hi,

We also have a slitter in our production facilities, where the lot number of the slits is based on the lot number of the coil.

We created phantom items with the following BOM :

manufactured item : A (phantom)
sub item : B (coil), net quantity e.g. 1000 kg
sub item : C (slit), net quantity e.g. -1 km (the minus sign is important)

We enter a production order for the phantom item and then we use material issue with outbound for the coil and with inbound for the slits, so we can use the correct quantities and lot numbers.
Also, we use the product configurator to define slits with different widths coming out of the same coil.

Thanks a lot guys. It was really helpful and for the benefit of all, I am giving below the procedure we have adopted. You are most welcome to suggest improvements.

Master Data required
1. Create one open Project (Internal) for each division(a dimension)

2. Integration setup for the above projects to be defined
3. A phantom item (SLITTING) to be defined under each open project
4. Production Order series to be defined for slitting coils
5. Lot number series to be defined for slit coils

Procedure:
1. Create Production Orders with above project and phantom item for qty 1 (inventory unit) and Release Prod Order
2. Maintain Estimated Material with mother coil (+ve qty) and child coil (-ve qty)
3. Maintain Outbound Data for the created prod order (Select the lot number of the mother coil to slit and Maintain new lot numbers for the child coils) and Release it
4. Report Production Order Completed with zero qty
5. Close Production Order after making sure that all estimated qtys are posted to the prod order.


As per the new method, following transaction will occur:
Mother coil qty with amount will get reduced from inventory
Child (Slit) coil qty with amount will get added to inventory
Amount difference between the above two transactions will be calculated as Production Result and accounted to Scrap Written Off A/c (Division will be based on the project number selected)

While we implemented the above procedure, we are facing a problem. For the slit coils, if the parameter set up for standard cost is “average purchase price” (or) “ latest purchase price” BaaN always takes the original cost even though a new mother coil at a different purchase price has been slit. This is because, for the slit coil, no purchase has taken place in BaaN. Is there any way other than manually changing the standard cost each time a new mother coil is slit?

Tks & rgds,

Ravi Kumar

Can someone help me on this?

tks

For slit coils, you can update purchase price by simulated purchase price by keeping simulated purchase price in first priority.