As explained in Part 1 of this blog, there are pros and cons of direct issue and backflush consumption methods supported by ERP systems. Accuracy of component traceability and inventory levels are often the main decision factors when choosing which method should be used.
There is another mode that combines values of direct issue with automated component consumption. This requires the consumption execution to be moved from ERP to MES.
MES usually handles more detailed level of inventory, including the exact consumption locations. Additionally, MES can support special mechanisms that automate data collection and allow operators to validate the information on the fly. This in consequence leads to more detailed traceability data and accurate inventory levels. Here are some examples:
- MES tracks components stock levels at individual consumption points. When components are replenished or consumed, the stock is updated. Even when MES is using the backflush mode, consumed inventory can be tracked more precisely by not allowing to consume more inventory than there is physically in a particular location.
- MES can recognize when the location is empty and force the operator to confirm the stock level. Similarly, the operator can be asked to validate stock levels at the beginning of an order or at the end when materials are returned. This “event triggered” ad-hoc counting helps in keeping the system and physical inventory levels aligned, without an extensive effort or production disruption.
- MES can provide an efficient and semi-automated way for scrap/waste declaration. For example, using barcode readers or automated scales, user can update the stock instantly instead of post factum. This approach saves time on data re-entry and prevents the user from omitting certain data.
- MES can also perform real-time manufacturing data crosschecking and highlight potential inaccuracies. Typical example would be to show significant component consumption deviations when compared with the BOM while the order is still being executed. MES can raise an alert when users forget to report some components or when reported quantities do not match.
Thanks to the use of business specific validation formulas and automated data collection, MES can off-load the shop floor staff from labor intensive reporting. Yet, it can still provide very accurate traceability and inventory information.
It is worth to remind that MES should keep ERP updated about the inventory levels. This can be done in an aggregated mode, typically once a shift or at the time of production declaration. This is much more reliable than doing manual data entry in ERP or consuming inventory by doing a backflush.
To conclude, it is worth considering MES for execution of material consumption because it is better suited to supports different production scenarios. Traceability requirements are continually changing and becoming more stringent. Keeping genealogy data like lots and serial numbers is a bare minimum. Various regulations demand traceability of particular pallets, boxes and their flows. This is one of the additional features we could discuss in another post.