Comparing Assemblies Across Software – Part 8

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Each Wednesday, we focus on topics related to inventory, warehouse management and manufacturing. Frequently, we look at specific products, including software, that are related to the core purpose of our "Warehouse Wednesday" column.

Today’s article is the eighth (with a few more to go) in a miniseries about "assemblies," in which we compare and contrast QuickBooks to other third-party products that offer assembly functionality.

This week, we're going to look at how pc/MRP configures and makes use of assemblies and bills of materials in the manufacturing process.

pc/MRP is Windows software that provides manufacturing, inventory and order management. It is a fairly economical solution that offers an optional module to permit it to integrate with QuickBooks Pro, Premier and Enterprise.

In terms of the integration between the two products, pc/MRP's QuickBooks Export Module allows pc/MRP and QuickBooks to be used together, eliminating the need for double entry of invoices and receivers.

pc/MRP is used to enter parts, multilevel BOMs, sales orders, purchase orders, receivers, stockroom transactions, invoices and generate material requirement planning reports. pc/MRP users then export all open invoices for recording in QuickBooks as Accounts Receivable. It also exports all pc/MRP receivers to QuickBooks as Vendors Bills within Accounts Payable.

QuickBooks then is used to pay those Vendor Bills, Receive Customer Payments against Invoices, Make Deposits and generate financial reports, as well as handle other non-inventory related financial transactions.

In order to look at how pc/MRP handles Assemblies, Bills of Material and Manufacturing processes, we must first look at how you create parts in pc/MRP. Please note that pc/MRP uses the terms "parts" rather than "items" as used in QuickBooks.

Creating Parts in pc/MRP

Configuring an Assembly in pc/MRP begins by creating a new part. pc/MRP has a unique part numbering design that allows you to use select several different part number schemas and maintain the accuracy of your part number schema by defining the scheme, and then forcing users to adhere to that schema.

Based upon the schema, the software assigns the next available Part Number during the creation of new parts. The next field is the Part Type, which can be Inventory parts, Non-inventory parts, Assembly parts, etc.

The Revision (level) field in pc/MRP is designed to track changes to a part or assembly where the changes remain backward compatible. When such changes are not backward compatible, a new part number should be issued, rather than using a revision level.

One fairly unique feature, which is optional, is Inspection Criteria, which allows for the set-up and tracking of inspection (quality control) criteria.

As with many other sophisticated inventory/manufacturing software packages we have looked at, the set-up of parts involves multiple tabs within the user interface that capture and/or display information.

One such tab is the Quantities/Costs tab, which contains fields like Average Cost, Standard Cost and Last PO Cost. A cost detail button triggers the display of the sum of the components when the part represents an Assembly. Cost components include associated inside labor costs, overhead and outside labor costs.

The same tab also displays quantities on-order representing the quantity of the part on purchase orders, on-demand representing the quantity on open work orders and sales orders, and MRP available, which represents the quantity of the part available for allocation.

Stocking quantities also appear on this tab and include the minimum quantity, the maximum quantity, the standard order quantity and the Order Multiple Quantity field, which is used by pcMRP’s Infinite Bucket module. Lead times and stocking locations also are found on this tab.

pc/MRP’s part configuration has tabs for Vendors to capture multiple suppliers and their costs (with quantity price breaks). 

The Sales Prices tab allows you to configure price levels, quantity price methods and sales related commissions. Licensing and royalty values also can be tracked on this tab – two unique fields for this product when contrasted to other software we have examined.  

A Manufacturers/Models/Alternate Parts tab allows for the capture of details concerning manufacturers and model numbers, as well as alternate (substitute) part numbers that can be used in lieu of the specified part number. 

Another important tab, especially for Assembly Parts, is the Miscellaneous tab. Information captures on this tab includes an image of the part, a general information (free form text) field, and details about the part, including type, value, tolerance, rating, package type, schematic and footprint.

Because pc/MRP offers an optional QuickBooks interface module, when the module is active, a QuickBooks tab is associated with each part. This tab contains the Inventory ID field, which contains the corresponding Item Name/Number in QuickBooks for each pc/MRP part.

This also is where you configure the specific accounting for each part by selecting a QuickBooks Income account, Cost of Goods Sold Account and an Asset Account, as well as an Expense Account (when applicable).

Creating Bills of Material in pc/MRP

An Assembly Part in pc/MRP uses BOM files to provide pick lists, where-used reports, purchasing consolidation reports, assembly costs. It also correctly issues and tracks inventory. While pc/MRP BOMs are not limited to manufacturing, it can be used to track a recipe or formula.

For purposes of this article, we will look at how they are associated with manufacturing assemblies.

Within pc/MRP, a BOM consists of a list of products required to produce a finished assembly or sub-assembly. According to pc/MRP, its product can handle an infinite level of BOMs. When entering a BOM, users must configure the lowest levels of BOM, because pc/MRP always is checking if the part or sub-assembly exists.

The following flow-chart illustrates the relationship between multiple BOMs and the finished product:

BOMs are first added by establishing their identification numbers and description. Users then begin to configure the components within the BOM. The illustration below shows a BOM in the process of being created, with one item already associated with it:

If you were to edit the first item in the list, you'd see there is a lot of detail you can capture about each item (shown below). This includes the Part No. from the pc/MRP parts list, description, manufacturer, model number, unit and costs. Alternate part numbers may be substituted for each BOM component, Reference Designators (a free form field where you can provide details) and Staging, when components are to be configured in different assemblies.

The BOM’s Miscellaneous tab (shown below) will access the BOM Used and Part Used buttons that will display where they are used, respectively, in other BOMs. The BOM Image and Part Image buttons will display a picture or captured document from either the BOM or Part record. 

This tab also displays the average, standard and last PO costs of the BOM, which can be recalculated to display any cost changes or cost variance. You can add up to 20 lines of routing or assembly instructions for the BOM using the free-form field accessed from the BOM Comments button.

After you have configured your Assembly's Bill of Materials, it is easy to produce an Exploded Bill of Materials Report (shown below) that shows the various components (with costs).

Phantom Bills of Material

pc/MRP uses something they call a "Phantom BOM" when you purchase a sub-assembly from a vendor rather than building it in house. This is accomplished by changing the BOM to designate the Part/Assy/Labr field from an A (for assembly) to a P (for Part). Even though this becomes a part for purposes of purchase, the BOM components still show up as the parts under a sub-assembly within the overall BOM (using an exploded view).

Building Assemblies using Work Orders in pc/MRP

Works Orders are the method by which pc/MRP enters, edits and prints in-house manufacturing builds for stock. These Work Orders contain valuable information, such as manufacturing status, as well as how many assemblies have been completed and returned to the stock room.

Work Orders can be for stock purposes or they can initiate manufacturing of an assembly to fulfill either a specific Sales Order (or another Work Order). The illustration below illustrates how a specific Work Order is dedicated to a specific Sales Order:

Sub-work Orders

Sub-work Orders are used to meet the build requirements of sub-assemblies within a finished goods final assembly. In all such cases, where sufficient sub-assembly stock does not already exist, pc/MRP Sub-work Orders are issues as dedicated work orders. In these cases, all such dedicated sub-work orders are consumable, but will only be used by the top parent work order or another work order dedicated to the same top parent work order.

Completing a Manufacturing Work Order

Work Orders are closed only when the work order issued through the Stock Room to Manufacturing is received back into the Stock Room as finished assemblies from Manufacturing.

Routing Option

pc/MRP offers an optional "Routing module" that allows you to create routing records used to move and track work orders through the manufacturing factory floor from work station to work station.

This feature allows you to display a routing record for a work order by selecting the "Enter Movement" option on the routing menu. The "Enter Movement" screen allows you to configure the "From Area" via a drop down list and the "To Area" from another drop down list. You then designate the quantity being moved between the two locations via the "Move" button.

Another feature associated with the Routing Module is the ability to value percentages of cost of any assembly to each routing stage (shown below). Percentages entered reflect the value of costs and labor of the assembly up to, and inclusive of, a routing stage. Since the values are cumulative, the final stage will always equal 100 percent.

Conclusion

pc/MRP is a far lesser known Inventory and Manufacturing solution than many of those we already have reviewed, despite the fact that it has been around for some time. While they offer in-product accounting, they also offer an optional (additional cost) module that exports invoices and receiver (vendor bill) data into QuickBooks (Desktop). This eliminates the need for duplicate data entry of transactions that ultimately will be completed in QuickBooks.

Many of the more sophisticated features offered by pc/MRP are in fact "optional modules" that must be purchased. So, while the core product is fairly economical, you must consider the additional costs for the specialized feature set you or your client will require.