A company needs to be able to distribute indirect costs (e.g., electricity, rent), shared in the manufacture of all parts, and among the unit costs calculated for all parts, in addition to the direct costs, such as raw materials, labor and machines.
Priority allows you to report all indirect costs incurred by a work order - in addition to the reporting of raw materials, labor and machines - by defining such costs as parts in the system and linking them to an inventory transaction (i.e., a bulk issue) performed for the work order in question. The system automatically distributes each indirect cost among the various work orders on the basis of the chosen algorithm (e.g., by weight). Consequently, actual costing by work order takes these costs into account and provides the full cost of each manufactured part.

Managing raw materials that are purchased from vendors by weight (kg) and maintained in the factory in sheets (e.g., sheet metal, sheet rock).
Priority allows you to manage a part in two different units, with a fixed conversion rate between them, where the first unit - in which the part is purchased - is based on weight, and the second unit - in which the part is processed internally - is in sheets (i.e., single part units).

To do so, the following must be defined in the system:

• The buy/sell unit - the unit commonly used in the market for parts of this type (in this case, "kg")
• The factory unit (ea).

Throughout the purchasing process - vendor price quotes, purchase orders, invoices - the buy/sell unit is used.
In internal transactions, such as inventory counts, warehouse transfers and issues to the plant floor, the factory unit is used.
You can use alternate parts to define the sheet in a bill of materials, and to use sheets of various sizes in keeping with the factory's existing inventory.

The Issue:

In factories that process a large quantity of parts, it is too difficult to maintain the various levels of safety stock manually. The solution described here allows you to calculate safety stock for each part in a controlled automatic manner. The calculation is performed on the basis of actual material usage during a defined period, and includes the possibility of adding coefficients or manually revising recommended quantities.

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The Solution:

Priority provides a form that displays the usage of raw materials during the desired period, and recommends the appropriate level of safety stock on the basis of this data, as well as various coefficients. Usage data are taken from issues to the plant floor, warehouse transfers and customer sales.
You can manually revise the recommended safety stock after approving the results displayed in the form. You can also perform a general update of the safety stock on the basis of the form data.

Reusing byproducts (e.g. glass shards) resulting from a manufacturing process, for the production of the parent (work order) part

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When reporting production in the system, you can record a manual issue for a negative quantity of the byproduct, to be returned either to the desired warehouse or to the plant floor itself. Consequently, the byproduct is returned to inventory and the work order is credited with the cost of the reused materials.

To manage subcontractor inventory, you open a warehouse and associate it with the subcontractor. Inventory transactions are made to and from this warehouse. These transactions can also reference the work order to which the parts belong, enabling you to track the subcontractor's progress on the work order. When incoming transactions from the subcontractor are recorded, the work order progresses automatically, raw materials are deducted from subcontractor inventory, and parent parts are added to factory inventory.

Priority enables you to determine that cost components, such as shipping fees, insurance, and assembly, will be included automatically in the price of a transaction, and charged to the customer. These charges are calculated as a percentage of the part price, and rolled over to the customer for payment.

When the sales system is run in parallel with the production control system, you can view the progress of designated work orders at the individual order level, as well as their expected end date by lot (when production planning is run). In addition, you can view existing inventory levels and the availability of each part in the order.

Priority enables you to designate a personalized bill of materials (BOM) for each subcontractor. You can ignore any raw materials that do not need to be issued (because they will be purchased independently by the subcontractor). This personalized BOM is consulted when creating kit lists, and when performing material requirements (MRP) planning and production planning.

Requests for quotes (RFQs) can be generated automatically from purchase requisitions, for select groups of vendors: the preferred vendor for each item, or all vendors that meet a certain standard of quality. The receipt of quotes based on the same RFQ enables you to compare them, select the best one, and convert it to an order.

Priority enables you to record blanket purchase orders, which offer special pricing terms in exchange for a commitment to purchase a specified quantity of parts within a set time frame. The blanket order acts as a basis for the production of multiple purchase orders. The system provides a means of tracking the remaining quantity in the blanket order, as well as the monetary value of the order balance.

Priority enables you to maintain a library of "routings". A routing is a sequence of production operations conducted in work cells (e.g., departments or machines in the factory).
You can attach a specific routing to multiple parts, saving you having to define it again from scratch for each individual part.

You can run Priority's MRP utility as a simulation. This enables you to view planning reports without opening any work orders or preparing issues plans. Simulations enable you to try out a variety of planning parameters and analyze results. When results are satisfactory, you can run the program as an actual plan using the chosen parameters.

For example, you wish to ensure that work orders for a specific part are opened at a maximum rate of one per month, due to the part's lengthy preparation procedures and machine set-up requirements.

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You can set the MRP utility to open a single work order for all requests for a specific part that fall within a designated time frame for that part (demand range). Thus, if the demand range defined for part A is one week, the MRP utility will open one work order for all requests for part A that fall within the first week, a second work order for those requests that fall within the second week, etc.
Alternatively, you can determine that, for all parts, the MRP utility will open a single work order for all requests that fall within a given month (combining work orders on a monthly basis). In this case, a single work order is created for each requested part at the beginning of the month.

For each part, you can map out production priorities and capacities for various subcontractors.

Example:

For a specific part, you can define three subcontractors with the priorities 1, 2, and 3, and the capacities 300, 200, and 100. Based on the required quantity of the part, the MRP utility will generate individual work orders for each subcontractor, from the highest Priority subcontractor to the lowest.
Thus, if the required quantity is 200 units, the MRP utility will generate a single work order for 200 units to be produced by the first subcontractor (with a capacity of 300). If the required quantity is 700 units, the MRP utility will generate four work orders: one for 300 units to be produced by the first subcontractor, another for 200 units to be produced by the second subcontractor, a third for 100 units to be produced by the third subcontractor, and a fourth, for 100 units, once again to the first subcontractor.

Revising the Routing in a Work Order: Sometimes during QA, the lab will recommend revising the routing in a work order (i.e., adding or subtracting operations), or revising the original BOM (adding or subtracting materials).
When opening a work order, the routing defined for the part to be produced is recorded automatically. You can revise the routing for a particular work order, if the desired routing is different from the standard. Production reports, as well as the Backflush utility, will take the special routing into account. Similarly, you can revise the components (raw materials and sub-assemblies) issued in a given work

This module supports optimization of the three basic operations of warehouse management:

• Directed Picking
• Directed Replenishment
• Directed Putaway

These are all subject to constraints defined in advance by the warehouse manager.

You can also use this module to plan other routine warehouse tasks, such as inventory count, return to vendor, warehouse transfer, etc. For each warehouse operation recorded in this module, an appropriate inventory transaction document (e.g., shipping, sales invoice, or warehouse transfer document) is created, using built-in programs.

The module interfaces with automated data collection (ADC) systems, and supports input of inventory data via handheld devices and other data collection tools.

The Outgoing Shipping Vouchers module provides two main functionalities:

• Tracking the outgoing shipment process (from a logistics perspective)
• Allocating outgoing shipment expenses (e.g., shipping, insurance) to the relevant customer invoices, in order to obtain the part's true profitability in sales reports

The general idea is to enable management of all information that is relevant to the outgoing shipping process within a single module, for maximum data control and accessibility.

This module allows you to track and record:

• Shipping data (sender details, dates, etc.)
• Formal shipping documents
• Sales and purchasing invoices related to the specific outgoing shipment
• Management and follow-up of the outgoing shipment is supported by the BPM flow chart.