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Do you know how much your inventory is costing you? – Part 5

Posted on 3 September 2015 by Wouter Combrinck

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If you recall from my last blog I almost ended up with egg on my face!  Not literally - my egg whites were beaten into submission and stayed firmly in their place. My awkward moment only came when I took the wrong approach to combining the eggs with the other ingredients.

Thinking about this ‘egg-sperience’ makes me think about SYSPRO’s lot traceability. Let me explain how I made the connection.

Due to our hot summers I store my eggs in the fridge and not the pantry.  Since my fridge has a holder for 18 eggs, I tend to purchase eggs in packages of 18 at a time to ensure that I can pack all of them into the space provided. 

I have noticed that most of the recipes I make call for 5 eggs, which can be a little inconvenient. If I have too many eggs to fit into the egg trays, I leave the eggs in the container and put it in the fridge.  My dad instilled a FIFO discipline in me and I will consume the oldest eggs first. However, my partner is not bound by these traditions and prefers to empty the container first (thus following a LIFO discipline).

However, the important thing here is not necessarily how we pick but what gets picked and used in the new batter.

I might have 3 eggs left from Joe’s and then I buy an additional 18 eggs from Farmer Brown.  When whipping up a new batch of Oopsies (see my previous blog) I need 8 eggs and, if I do the picking to issue to the new mixing job, I will pick the oldest eggs first resulting in a pick of 3 eggs from Joe’s and 5 eggs from Farmer Brown.

When performing inspection after baking (when receiving the finished goods from the job) I might notice that something looks a bit odd.  Upon further inspection and analysis I conclude that the problem can be attributed to the eggs.  The challenge now is to determine whose eggs ruined my batter.

SYSPRO solves this dilemma with its powerful lot traceability functionality.  When receiving the same stock code (in this case, eggs) I can allocate a lot number to the batch and SYSPRO will keep track of the lot quantity.  When issuing to a job I can issue from the different lots (or alternatively issue from a single lot).

When performing the job receipt and my finished item is also lot traceable then I can further link the specific component lots to the finished item’s lot.  This not only enables full traceability but also allows me to perform recalls if necessary.

The lot traceability functionality in SYSPRO is so powerful that I can even elect to have actual costing by lot.  This means that if the egg price differed between Joe’s and Farmer Brown then SYSPRO will silently keep track of these actual costs and issue the actual cost to the job as well.

Who could ever imagine that an item as simple as an egg can have such powerful traceability in ERP?  Perfect if you do not wish to keep all your eggs in one basket!

See - Do you know how much your inventory is costing you? – Part 1, Part 2 and Part 3 

 Supply_chain_tools

 

Topics: ERP for Manufacturing, Managing inventory with ERP, Supply Chain Management, Inventory Management


Wouter Combrinck

Wouter Combrinck, Solution Architect and Specialist Services for SYSPRO Africa, joined the company in 2010.

With his passion for the manufacturing environment and his love for data management, Wouter drives collaborative interaction of software and flow processes to provide workable solutions for the manufacturing business.

 

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