Discrete Manufacturing: Batch or Lot Manufacturing
What is Batch or Lot Manufacturing?
Batch or lot manufacturing is when a manufacturer manufactures a batch or lot of a certain product every week, month or period. This is especially applicable in the food industry. It is assumed that the manufacturer does not need a recipe or formula management.
A discrete manufacturer which manufactures a certain peanut butter every two weeks. The ingredients need to be ordered on time.
What does that mean for the manufacturing management and the inventory management?
For each food product line a BIll Of Material (BOM) will be created, the MRP will be run which will create planned production orders based on stock levels of end product and components, on ROP and Order Quantity for end product and ingredients, on forecast and sales orders, and on POs and SOs in transit. Product management will issue ingredients, and actuals will be measured to determine actual costs. This is in fact the MTS manufacturing method.
The quality of the product can be monitored by using the ISV application of eWorkplace or QDMS.
Regarding inventory management, the determination of the ReOrder Point (ROP) and the Order Quantity is very important.
The Challenges with Batch or Lot Manufacturing
The two main drawbacks of the MTS manufacturing method apply.
What solution does Acumatica have to manage Batch or Lot Manufacturing?
The video (12 mins, 5/2020) below describes how a manufacturer of chocolate can use the Acumatica Manufacturing management application.
Click here to learn more about the BOM and production order creation and management.