MANUFACTURING SOFTWARE

The Everest Overview is a detailed document that presents Everest Manufacturing Software. The Everest Overview presents the Everest story in words, diagrams and screen shots.

INTRODUCTION TO MANUFACTURING SOFTWARE

Typical accounting software can address the sales, purchasing, and inventory issues that are needed for a company that buys a product and sells it without changing its characteristics or combining it with other products to add value to the finished good.  The complex demands of a manufacturing environment cannot be adequately handled by a typical accounting software package.  The most complete system would incorporate the accounting software with software that can track and monitor the manufacturing process.

Manufacturing software enables the manufacturer to track and manage the manufacturing production cycle from the receipt of raw materials, through the production process to the finished goods.  These processes normally require the tracking and managing of inventory, labor, work centers, and in many situations, outside services.  Additional requirements may be generating work orders and purchase orders or forecasting demand and inventory requirements.

With a properly implemented accounting and software system, management within a manufacturing environment should have the ability to achieve the following:

Work Order

·              Define a bill of materials for all subassembly items and finished good items

·              Define the routing steps and procedures that are to be followed at each routing step

·              Generate work orders from the sales orders

·              Back flush material and costs when a work order is closed

·              Record the actual labor expended for each work order

 

Production Scheduling

·              Generate suggested work orders by looking at both actual demand and forecasted demand

·              Approve suggested work orders to place into production

·              Identify excess capacity requirements

 

Inventory

·              Record the actual inventory usage for each work order

·              Determine inventory requirements

·              Schedule to receive the raw materials in prior to when needed in production

 

Purchasing

·              Generate suggested purchase orders from Production Planning

·              Approve suggested purchases orders and automatically create live purchase orders without re-entering

                the data into a separate purchase order system.

 

EVEREST MANUFACTURING SOFTWARE

Planned and designed with your manufacturing environment in mind, Everest Manufacturing (EM) offers all the features, functions and processes found within other mid-range/mainframe software packages.  The major difference is that Everest Manufacturing is designed to run on a Personal Computer (PC) Network Platform.  From Order Entry to Production Labor Reporting, Everest Manufacturing performs as a total MRP Package. 

Integration with ACCOUNTMATE

EM is specifically integrated with the Visual AccountMate Accounting Package to offer a Complete Business Solution.  However, as a stand alone MRP package Visual AccountMate Inventory Control is all you need.  We do recommend that you include the Purchase Orders, Sales Orders, Accounts Receivable, and General Ledger modules to take full advantage of the abilities of EM.  The minimum ACCOUNTMATE module requirements to operate EM are System Manager and Inventory Control.  The MRP and MPS functions will utilize data that is in Purchase Orders and Sales Orders when they are present. 

Once installed, Everest Manufacturing will function as if it were an ACCOUNTMATE application.  The Everest Manufacturing option will be displayed on the ACCOUNTMATE main menu, the ACCOUNTMATE system manager can be used to define process (or option level) security for the EM system, and the ACCOUNTMATE system manager has access to the tables, indexes, and fields defined within the EM system.

Everest Manufacturing’s newest version, incorporates directly into latest version of Visual ACCOUNTMATE. As is ACCOUNTMATE, Everest Manufacturing is developed in Visual Fox Pro and source code is available to the end-user.  The following functions available in ACCOUNTMATE are also utilized in EM:

i        ACCOUNTMATE Data dictionary

i        Multi-location support

i        Lot number tracking

i        Serial number tracking

i        ACCOUNTMATE file browser

i        ACCOUNTMATE printer selection

Everest Manufacturing incorporates seamlessly into the standard ACCOUNTMATE modules, but yet is not invasive.  The data generated from EM flows into and from the other modules but none of the ACCOUNTMATE programming code is changed.  This means that you can update the ACCOUNTMATE modules or Everest Manufacturing with confidence.  Adding or updating your system with a new build of Everest Manufacturing will not change any programs in your existing ACCOUNTMATE programs.  The reverse is also true.  ACCOUNTMATE can be updated and will not affect the programs in Everest Manufacturing.

Everest Manufacturing Modules

Everest Manufacturing can be utilized in its entirety or by module depending on your manufacturing needs.  Work Order is the basic module required with all the other modules.  Shop Floor Control incorporates the ability to add labor costs and production routing.  Production Planning includes MRP and forecasting, which aid in work scheduling and material requirements.  In depth descriptions for each of the three modules are included later in this document.

The following is a chart that shows the dependency that each module has in order to properly function.  Along the side are the modules with their description.  Along the top are the modules required to properly function.  Those cells marked with an ‘X’ indicate which module(s) are necessary.  For example, to do shop floor control / costing / routing you must have the Work Order module.

Module Dependency Chart

Everest Manufacturing Overview

A work order can automatically be generated from the ACCOUNTMATE Sales Order module when you are using the auto work order feature and a sales order is created for a customer.  The bill of materials or routing can be changed to suit the specific needs of the order.  Inventory allocations are updated.  The work order traveler, pick ticket, and labor tickets are sent to the production department.  As production is completed at a particular work center, production is posted.  When production is posted, material costs, labor costs, and inventory usages are updated.  The work order is closed when production is completed.  Multiple reports and inquiries show the costs and inventory relating to the order.

EM offers the opportunity to schedule future orders without an actual demand.  This scheduling ability generates suggested work orders that can be approved and placed into production so that finished goods are available in a timely matter.  To ensure that materials are ordered in a timely manner, EM breaks down the material requirements for actual and forecasted demand to generate suggested purchase orders.  After these are approved, actual purchase orders are created.  These two features, commonly known as MRP and MPS, ensure that materials are available when needed and production is completed when required.  After suggested work orders and suggested purchase orders are approved, all allocations are updated so management knows the status of all inventory items.

See the following flow chart for a pictorial understanding of the EM overview.

Costing in Everest Manufacturing

Traditionally manufacturers have preferred to utilize a standard costing method of valuing their finished goods.  If the actual costs deviate from the expected standard cost, a variance is posted and the finished goods is valued at the standard cost.  Lately, businesses are discovering that their finished goods may change with each customer’s order and a standard cost cannot effectively be established.  They prefer to value the finished goods at the exact cost of labor and materials and not hassle with variances. 

Fortunately Everest Manufacturing can handle either Standard costing or Actual costing.  At the time of installation, the manufacturing costing method is determined for that company.   To utilize the Actual Costing method for manufacturing, the Inventory Control valuation method must be Weighted Average Cost.  Standard costing for manufacturing will work with either Standard Cost or Weighted Average Cost in Inventory Control.  Everest Manufacturing does not support FIFO and LIFO valuation methods.

Standard Costing

Everest Manufacturing displays an item’s standard cost for labor and material on the EM Inventory Item screen. The purchase item’s standard cost is brought in from I/C.  Everest Manufacturing calculates the standard cost for the finished goods item.  This process occurs by a ”roll up” process which adds all the standard costs for the purchase items on the bill of materials, labor costs associated with the routing steps, and overhead costs established at the work centers.

When production is entered for a work order, actual material, labor, and overhead costs post to their appropriate cost account as well as post to the work in progress (WIP) account.  When a finished goods is completed and received into inventory, the inventory asset account receives the standard cost of the finished good, the WIP account is cleared out of all associated costs, and the difference between the standard and actual costs is posted to appropriate variance accounts.  Variance accounts will require end of the month auditing and analysis.

Actual Costing

Actual costing calculates the cost of a Finished Goods item using the average cost of the materials, the actual post labor hours using the employee rates, and overhead rates based on the posted data.  The cost of the finished goods calculated is the actual and not the standard cost.  In other words what ever goes into WIP will be taken out of WIP at the same costs.  There will be no variances to deal with.  There will be no journal entries to create at the end of the month to clean out the variance accounts.  The average cost of the finished goods is updated in Inventory Control at the Actual cost.

This method of costing is conducive to manufacturing locations that make to order or are a job shop environment.  For example, you can change a bill of materials on a work order, produce an order in a shorter period of time, or utilize an employee who gets paid at a higher rate than expected.  The cost of the finished goods will be calculated on how it was actually produced rather than what the expectation (standard cost) was. 

Manufacturing Items 

The EM Inventory Item Maintenance allows the user to create and maintain manufacturing specific data for all assembly (or make) items used in the EM system.  Direct access to the hard Bill of Materials and hard Routing for a make item is available from this screen.  Component (or purchase) items are also added to EM from this screen.  

Multiple locations are fully supported in Everest Manufacturing. All manufacturing inventory items must be set up in ACCOUNTMATE’s Inventory Control module first and then brought into EM.  Any changes made in the EM Inventory Item screen will also be changed in the Inventory Control item settings screen. 

The first step is to add all assembly, sub-assembly, and purchase items to the Everest Manufacturing database on the EM Inventory Item screen.   The second step is to complete the hard Bill of Material and hard Routing steps for all assembly and sub-assembly items.

Bill of Materials

The Bill of Materials screen is used to define the materials (or components) required by the manufacturing process to create an assembly item.

The following screen is the hard Bill of Materials for an assembly item.  Each of the component items is listed on the grid at the bottom of the screen.

Routing

The Routing Steps define the steps of the manufacturing process to the EM system.  The routing is used in conjunction with the Bill of Materials to define the manufacturing process of an assembly to the system, calculate assembly costs, and produce work orders to the shop floor.  The routing steps is where you would document proper manufacturing procedures for each manufactured item

The following screen is the hard Routing for an assembly item.  Each of the work center’s activities is listed on the grid at the bottom of the screen.

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