QAD Routings Implementation

Sheri Forrest – RFBPNadia Truxell – Logan Consulting

Routings – Introduction

• Introduction• Ralcorp Frozen Bakery Products• Routings - Why Use them?• Routings – Implementation at Ralcorp• Review Process Changes – Scheduling, Backflushing• Review GL Transactions with Routings - Variances• Reporting Needs

Introduction – Sheri Forrest

• Ernst & Young-Auditor– Manufacturing– Banking– Entrepreneurial Services

• Ralcorp Holdings, Inc. –Finance Manager Frozen Bakery Division Responsible for financial and management reporting for 9 plants.

– 9 QAD implementations– Upgrade from 7.2 to EB2– Major re-implementation completed in 2009– Routings– BOM Standardization

Introduction – Nadia Truxell

• Operations/Materials Manager – Scherdel Sales & TechnologyAutomotive Supplier of Springs and StampingsImplemented QAD

• Project Manager – Logan ConsultingQAD Implementations and Business Process ConsultingAutomotiveFood & BeverageConsumer GoodsIndustrial Products

Introduction – RFBP

Bread, Griddle, and Cookie products for Industrial, Foodservice, and Retail markets

9 Manufacturing plants across the US and Canada Advanced Repetitive processing

Why Implement Routings?

• Efficiency

• Utilization

• Productivity

Why Implement Routings?

Productivity

Efficiency X Utilization

Routings – Why Implement?

Routing = Sequence of Operations used to define the production process for a finished good item or sub-assembly

• Capacity Planning – Work Center and Department Load

• Improved production reporting

• Improved variance reporting – Labor Costs reported at Standard

• Ability to compare actual to standard

• Lays framework for more sophisticated shop floor RF process

Routings – Effects

EFFECTS OF ROUTINGS

The system uses routing data to:

o Calculate the cost of producing an item

o Calculate the time it takes to manufacture an item

o Schedule operations for work orders and repetitive schedules

o Backflush components in the Repetitive and Advanced Repetitive modules

o Calculate work center and department load

o Print routings for work orders

o Obtain operation feedback using programs in Shop Floor Control, Repetitive, and Advanced Repetitive

o Calculate component yield when Use Op Based Yield is Yes in MRP Control

Routings – RFBP Implementation

Routing “999” for all Items

No Labor Costs booked at time of backflush – Method Variance

No visibility for Capacity planning/Department/Work Center Load

Routings – RFBP Current State

Routing “999” for all Items

No Labor Costs booked at time of backflush – Method Variance

No visibility for Capacity planning/Department/Work Center Load

Routings – Future State

QAD Routing Implementation - Phase 1

Create Routings to measure standard Machine and Labor Time

Provide ability to obtain improved reporting at a production line level

Lay the framework for a more sophisticated reporting process and standard methodology for creating costs for manufactured items.

Project Timeline

Routings - Setup

DepartmentsWork CenterRouting MaintenanceAlternate Routing MaintenanceItem Site Planning Maintenance

Departments

Departments

Use Department Maintenance to define departments and set up labor capacity and general ledger (GL) accounts for each department.

Department – Code representing Department within Plant:Current State: 53000 = Ogden, 53500=FridleyDiscussion Point

Define Accounts and Sub Accounts for:Cost of ProductionLaborBurdenLabor Usage VarianceLabor Rate VarianceBurden Usage VarianceBurden Rate Variance

Accounts Default from Product Line Maintenance or Work Order Account Maint

Work Centers

Work Center Maintenance

Use Work Center Maintenance to define work centers, which are production areas with one or more people or machines having identical capabilities.

Work center data controls processing in four areas:

o Scheduling: When a routing operation is specified at this work center, lead time fields (Operation, Queue Time, Wait Time, and Machines per Op) default to those for the routing.

o CRP: Capacity for this work center is the number of machines in a work center (machines/work center) multiplied by the number of available hours (from Calendar Maintenance).

o Costing: Manufacturing costs are calculated in Routing Cost Roll-Up. Labor costs are calculated by multiplying the setup and run times at each operation by the setup rate and labor rate. Burden costs use machine burden rate, labor burden rate, and labor burden %. Subcontract costs are taken from subcontract cost at the operation level.

o Accounting: Each work center belongs to a department, which determines the GL accounts that track variances, labor and burden costs.

Work Center Maintenance

Work Center: Enter Code representing the Work Center within a Department

Machine: Enter standard headcount (staffing) required to run this work center. This functions as a sub record of the work center.

Department: Select the Department Code for the Work Center

Mach/Op: Leave as default (1)

Setup Crew: Optional – Reference OnlyRun Crew: Optional – Reference Only

Labor Rate: Enter the Average Labor Rate per hour required to run this Work Center.

Routing Maintenance

Routing Maintenance

Routing Code: Code Representing Product/Family manufactured through a Work CenterExisting Convention: 53001-01 (Routing 1 on Ogden Line 1)

Operation: Enter “0” for Machine Hours, “5” for Labor Hours, “99” for Backflush

Start Date: Enter beginning effective date of the Routing

Work Center: Enter the Work Center associated with this Routing

Description: Enter the Description associated with this Routing

Run Crew: Defaults from Work Center Maint – Reference Only

Run Time: Enter the amount of time it takes for one unit of this item/family to be processed. Use Routing Maintenance Rate Based to enter units/hr

Auto Labor Report: Check Box to report labor at standard

Alternate Routing Maintenance

Alternate Routing Maintenance

Use Alternate Routing Maintenance to assign approved alternate routings to items and sites. When an item can be made different ways, using different operations, work centers, machines, and perhaps different components. Each of these is called an alternate.

Item Number: Enter the Item Number the Alt Routing is associated with.

Site: Enter the site where the Item is manufactured.

Item-Site Planning

Scheduling Concept

Backflush Transaction

GL Impact – Backflush with Labor

GL Impact - Examples

GL Impact - Variances

• Labor Usage Variance• Labor Rate Variance• Burden Usage Variance• Burden Rate Variance• Method Variance

Rep Operations Acct Report

RFBP Custom Report

Labor Variance Report: 99.29

RFBP Custom Report

Labor Variance ReportSelection criteria

• ID: Leave blank or specify a range• Work Order: Leave blank-repetitive/Specify range –discrete work order• Site: Enter site range• Line: Leave blank or specify a range• Work Center: Leave blank or specify a range• Machine: Leave blank or specify a range• Routing: Leave blank or specify a range• Operation: Leave as default or run for 0, 5, 99• Department: Leave blank or specify a range• Effective date: Specify a range• Report Total: Check for a single operation, No check for the default.

RFBP Custom Report

Work Center Part WO ID Date WO Status Type

Labor Rate

Quantity Complete Setup

Expected Hours

Actual Hours

Standard Labor

Actual Labor

Macine/Head Count

Act Head Count

Effi ciency Var Act Cs/Hr Rtg CS/HR Std Variance

WO Variance

50514 068615180310 7905332 1/18/2010 R Labor 16.04 2112 0 23.18 178.5 $3,315.21 $2,863.14 8.33 7.44 0.1 11.83152 91.12 $452.07 ($2,491.36)50514 068615180310 7905332 1/18/2010 R Machine 0 2112 0 2.78 24 $0.00 $0.00 0 0 88.02817 758.99998 $0.00 $0.0050514 068615180310 7905332 1/19/2010 R Labor 16.04 156 0 1.71 16.69 $244.87 $267.71 8.33 8.35 0.1 9.34667 91.12 ($22.83) ($240.25)50514 068615180310 7905332 1/19/2010 R Machine 0 156 0 0.21 2 $0.00 $0.00 0 0 78.00312 758.99998 $0.00 $0.0050512 fb010032 7908487 1/18/2010 R Labor 16.04 6 0 1.18 23.05 $202.04 $369.72 2.53 3.84 3.6 0.2603 5.09 ($167.68) ($350.81)50512 fb010032 7908487 1/18/2010 R Machine 0 6 0 0.47 6 $0.00 $0.00 0 0.9 1 12.89 $0.00 $0.0050512 fb010032 7908487 1/25/2010 R Labor 16.04 6 0 1.18 16.77 $202.04 $268.99 2.53 2.97 2.6 0.35778 5.09 ($66.95) ($250.08)50512 fb010032 7908487 1/25/2010 R Machine 0 6 0 0.47 5.65 $0.00 $0.00 0 0.9 1.06194 12.89 $0.00 $0.0050512 fb010028 7908488 1/18/2010 R Labor 16.04 30 0 5.17 59.56 $865.19 $955.34 2.5 3.23 1.8 0.50369 5.8 ($90.15) ($872.38)50512 fb010028 7908488 1/18/2010 R Machine 0 30 0 2.07 18.46 $0.00 $0.00 0 0.5 1.62514 14.5 $0.00 $0.0050512 fb010028 7908488 1/19/2010 R Labor 16.04 39 0 6.72 73.65 $1,124.74 $1,181.35 2.5 3.07 1.7 0.52953 5.8 ($56.60) ($1,073.49)50512 fb010028 7908488 1/19/2010 R Machine 0 39 0 2.69 24 $0.00 $0.00 0 0.5 1.62501 14.5 $0.00 $0.0050512 fb010028 7908488 1/20/2010 R Labor 16.04 39 0 6.72 59.44 $1,124.74 $953.42 2.5 2.48 1.4 0.65612 5.8 $171.33 ($845.56)50512 fb010028 7908488 1/20/2010 R Machine 0 39 0 2.69 24 $0.00 $0.00 0 0.5 1.62501 14.5 $0.00 $0.0050512 fb010028 7908488 1/21/2010 R Labor 16.04 37 0 6.38 161.76 $1,067.07 $2,594.63 2.5 3.6 4.2 0.22873 5.8 ($1,527.57) ($2,492.31)50512 fb010028 7908488 1/21/2010 R Machine 0 37 0 2.55 44.92 $0.00 $0.00 0 1.1 0.82369 14.5 $0.00 $0.0050512 fb010028 7908488 1/22/2010 R Labor 16.04 49 0 8.45 14 $1,413.14 $224.56 2.5 3 0.1 3.50005 5.8 $1,188.58 ($89.05)50512 fb010028 7908488 1/22/2010 R Machine 0 49 0 3.38 0 $0.00 $0.00 0 -0.1 ? 14.5 $0.00 $0.0050512 fb010028 7908488 1/25/2010 R Labor 16.04 30 0 5.17 46.92 $865.19 $752.60 2.5 2.54 1.4 0.63939 5.8 $112.59 ($669.63)50512 fb010028 7908488 1/25/2010 R Machine 0 30 0 2.07 18.47 $0.00 $0.00 0 0.5 1.62425 14.5 $0.00 $0.0050512 fb010028 7908488 1/26/2010 R Labor 16.04 39 0 6.72 73.96 $1,124.74 $1,186.32 2.5 3.08 1.7 0.52731 5.8 ($61.57) ($1,078.46)50512 fb010028 7908488 1/26/2010 R Machine 0 39 0 2.69 24 $0.00 $0.00 0 0.5 1.62501 14.5 $0.00 $0.0050512 fb010028 7908488 1/27/2010 R Labor 16.04 39 0 6.72 0 $1,124.74 $0.00 2.5 3 -0.2 ? 5.8 $1,124.74 $107.8650512 fb010028 7908488 1/27/2010 R Machine 0 39 0 2.69 0 $0.00 $0.00 0 -0.1 ? 14.5 $0.00 $0.0050512 fb010028 7908488 1/28/2010 R Labor 16.04 39 0 6.72 0 $1,124.74 $0.00 2.5 3 -0.2 ? 5.8 $1,124.74 $107.8650512 fb010028 7908488 1/28/2010 R Machine 0 39 0 2.69 0 $0.00 $0.00 0 -0.1 ? 14.5 $0.00 $0.0050512 fb010042 7908489 1/18/2010 R Labor 16.04 19 0 3.78 29.96 $620.90 $480.56 2.53 2.96 1.4 0.63418 5.02 $140.34 ($419.85)50512 fb010042 7908489 1/18/2010 R Machine 0 19 0 1.5 10.13 $0.00 $0.00 0 0.5 1.87561 12.69 $0.00 $0.0050512 fb010042 7908489 1/19/2010 R Labor 16.04 65 0 12.95 92.78 $2,124.14 $1,488.19 2.53 2.68 1.2 0.70058 5.02 $635.94 ($1,280.50)50512 fb010042 7908489 1/19/2010 R Machine 0 65 0 5.12 34.67 $0.00 $0.00 0 0.5 1.87484 12.69 $0.00 $0.0050512 fb010042 7908489 1/20/2010 R Labor 16.04 37 0 7.37 47.52 $1,209.12 $762.22 2.53 2.41 1.1 0.77862 5.02 $446.90 ($644.00)50512 fb010042 7908489 1/20/2010 R Machine 0 37 0 2.92 19.73 $0.00 $0.00 0 0.5 1.87533 12.69 $0.00 $0.00

Routings – RFBP Implementation

Routing Implementation Challenges• Data collection- not all need information currently collected.• Data Input- scarce resources, training.• Data integrity- Shop floor data accuracy and completeness

questionable.• Current ‘Home-grown’ production reporting system providing

needed information—Why change?• QAD out-of-the-box reporting tools inadequate.• Additional steps to the new item setup process at the plant.• Interpreting routing data- What does it mean? How will we

use it?

Routings - RFBP

Questions?