Outside Processing Configuration: Implementation Activity

In this implementation activity, you will learn how to implement production processes that include outside operations.

Story

Suppose that SweetLife Fruits & Jams has started to receive many customer orders for assembled juicers. The current capacity of work centers has been reached, so the production manager has decided to outsource the assembly of some of the juicers to an outside vendor, Custom Assembly Services. The materials required for juicer assembly will still be stored at the SweetLife Fruits & Jams warehouse and will be shipped to the vendor. The materials are the same as for in-house assembly. The vendor will use their own tools and charge SweetLife Fruits & Jams for their service in the amount of $50 per juicer. The assembled juicers will be received to the warehouse and then inspected by a warehouse worker. Suppose that the warehouse worker inspects four juicers per hour and no specific setup or tools are required for this operation.

Acting as the implementation manager, you need to configure outside processing for juicer assembly in the system. That is, you need to create a work center for outside processing, a work center for inspection, and a bill of material to be used for the outside assembly of juicers.

Configuration Overview

The following entities, which you will use in this activity, have been predefined in the U100 dataset:

  • On the Warehouses (IN204000) form, the WORKHOUSE warehouse
  • On the Stock Items (IN202500) form, the CFJFRUIT, PULPCONT1L, JUICECUP05L, MRBASE, FNSIEVE, and GRDISC01 stock items
  • On the Vendors (AP303000) form, the CSEMBLY vendor (which provides the subcontractor services for juicer assembly)
  • On the Work Calendar (CS209000) form, the MAIN work calendar, which is used for standard working hours
  • On the Non-Stock Items (IN202000) form, the MFGSUBCON non-stock item

Process Overview

In this activity, you will do the following:

  1. On the Production Preferences (AM102000) form, review the default settings related to outside processing.
  2. On the Work Centers (AM207000) form, create a work center for outside processing.
  3. On the same form, create a work center for inspecting the juicers assembled by the subcontractor.
  4. On the Bill of Material (AM208000) form, create a bill of material for producing juicers that will be assembled by the subcontractor.

System Preparation

Before you start performing the activity, do the following:

  1. As prerequisites to the current activity, complete the following activities in the specified order:
    1. System Preparation for Manufacturing Implementation: Implementation Activity so that the needed settings have been made in a company with the U100 dataset preloaded
    2. Configuring Production Cost Drivers: Implementation Activity so that the needed cost drivers have been created in a company with the U100 dataset preloaded
    3. Configuring Work Centers: Implementation Activity so that the shift for standard working hours has been created
  2. Sign in to the company in which the prerequisite activities have been performed. You should sign in as a system administrator by using the gibbs username and 123 password.

Step 1: Reviewing Default Settings for Outside Processing

In a production system, you would need to specify the settings related to outside processing before you start processing production orders that include outside operations. These settings have been predefined in the U100 dataset for simplicity. In this step, you will review them settings. On the Production Preferences (AM102000) form, do the following:

  1. In the Numbering Settings section of the General tab, make sure that AMVSHIP is specified in the Vendor Shipment Numbering Sequence box.
  2. In the Vendor Shipment Settings section, make sure that the following has been specified:
    • Hold Shipments on Entry: Selected
    • Validate Shipment Total on Confirmation: Cleared

Step 2: Creating a Work Center for Outside Processing

To create a work center for outside processing, do the following:

  1. On the Work Centers (AM207000) form, add a new record.
    Tip: To open the form for creating a new record, type the form ID in the Search box, and on the Search form, point at the form title and click New right of the title.
  2. In the Summary area, specify the following settings:
    • Work Center: OUTPROC
    • Description: Work center for outside assembly of juicers
    • Warehouse: WORKHOUSE
    • Active: Selected
  3. On the General tab, specify the following settings:
    • Standard Cost: 0
    • Basis for Capacity: Crew Size
    • Scrap Action Default: No Action
    • Backflush Materials: Selected
    • Backflush Labor: Selected
    • Control Point: Cleared
    • Outside Process: Selected
  4. On the Shifts tab, do the following:
    1. Make sure that the row for the 0001 shift has been added. (The row for the first shift is always added automatically because the work center must have at least one shift.)
    2. In this row, specify the following:

      Make sure that the values in the Diff Type and Shift Diff columns (Amount and 0.0000, respectively) have been copied from the shift settings on the Shifts (AM205000) form.

  5. On the form toolbar, click Save.

Step 3: Creating a Work Center for Inspection

To create a work center for inspection of juicers assembled by the outsource vendor, do the following on the Work Centers (AM207000) form:

  1. On the form toolbar, click Add New Record.
  2. In the Summary area, specify the following settings:
    • Work Center: WCR100
    • Description: Work center for inspection
    • Warehouse: WORKHOUSE
    • Active: Selected
  3. On the General tab, specify the following settings:
    • Standard Cost: 10
    • Basis for Capacity: Crew Size
    • Scrap Action Default: No Action
    • Backflush Materials: Cleared
    • Backflush Labor: Selected
    • Control Point: Cleared
    • Outside Process: Cleared
  4. On the Shifts tab, do the following:
    1. In the only row, specify the following:
      • Crew Size: 1
      • Efficiency: 1
      • Calendar ID: MAIN
      • Labor Code: DIRLAB

      Make sure that the values in the Diff Type and Shift Diff columns (Amount and 0.0000, respectively) have been copied from the shift settings on the Shifts (AM205000) form.

  5. On the form toolbar, click Save.

Step 4: Creating a Bill of Material with the Outside Processing Operation

To create a bill of material that includes an outside processing operation, do the following:

  1. On the Bill of Material (AM208000) form, add a new record.
  2. In the Summary area, specify the following settings:
    • Revision: A
    • Hold: Selected
    • Inventory ID: CFJFRUIT
    • Warehouse: WORKHOUSE
    • Start Date: 1/1/2022
    • End Date: Empty
    • Description: A bill of material for outside assembly of configurable juicers
  3. On the form toolbar, click Save.
  4. Add an operation for the outside assembly of juicers as follows:
    1. On the toolbar of the Operations table, click Add Row.
    2. In the row, specify the following settings:
      • Operation ID: 010
      • Work Center: OUTPROC
      • Setup Time: 00:00
      • Run Units: 1
      • Run Time: 00:00
      • Backflush Labor: Selected
    3. On the Materials tab, add rows for the items listed in the following table, specifying the listed settings for each.
      Inventory ID Qty. Required UOM Unit Cost Material Type Subcontract Source Backflush
      MFGSUBCON 50 EA 1 Subcontract Purchase Selected
      PULPCONT1L 1 EA 17.59 Subcontract Ship to Vendor Cleared
      JUICECUP05L 1 EA 16.79 Subcontract Ship to Vendor Cleared
      MRBASE 1 EA 325.89 Subcontract Ship to Vendor Cleared
      FNSIEVE 1 EA 60.95 Subcontract Ship to Vendor Cleared
      GRDISC01 1 EA 42.95 Subcontract Ship to Vendor Cleared
    4. On the Outside Process tab, make sure the Outside Process check box is selected. (The system copied its state from the work center settings.)
    5. In the Vendor box, select CSEMBLY.
  5. Add an operation for inspection as follows:
    1. On the toolbar of the Operations table, click Add Row.
    2. In the row, specify the following settings:
      • Operation ID: 020
      • Work Center: WCR100
      • Setup Time: 00:00
      • Run Units: 4
      • Run Time: 01:00
      • Backflush Labor: Selected
  6. On the form toolbar, click Save.
  7. In the Summary area, clear the Hold box. The status of the bill of material is changed to Active.
  8. On the form toolbar, click Save.

You have successfully created the bill of material that production managers will use to create production orders for juicers to be assembled by the subcontractor.