17 Work with Work Orders
As you work with work orders you can view the effect of each step on manufacturing accounting.
This chapter contains the following:
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Section 17.2, "Attaching a Parts List and Routing Instructions,"
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Section 17.7, "Reviewing the Open WIP Balance by G/L Account Report."
17.1 Creating a Work Order (P48013)
From Shop Floor Control (G31), choose Daily Order Preparation * Discrete
From Daily Order Preparation - Discrete (G3111), choose Enter/Change Order
Create a work order as the first step in the process of understanding the cycle of a work order and its effect on manufacturing accounting.
When a work order is entered, the parent item's Sales/Inventory cost method for the F4105 is retrieved and stored in the F4801T field called WALEDG. The value in this field will determine if costing of the work order is standard or actual. Valid cost methods are 02 for Actual Cost or 07 for Standard Costing. Work order processing, completions, outside operations receipts, manufacturing accounting and close actual cost work order will use this field to determine how values are calculated and written.
As an alternative to entering work orders manually, you can use the Manufacturing Work Order Entry Z File (P48013Z) program to import an extensive amount of work orders into your system. See Appendix H, "Import Mass Data into Manufacturing Systems" for more information.
On Enter/Change Order
Figure 17-1 Enter/Change Order (Create a Work Order) screen
Description of "Figure 17-1 Enter/Change Order (Create a Work Order) screen"
Complete the following fields:
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Item Number
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Requested
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Effective
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Quantity Ordered
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Branch/Plant
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Charge to Business Unit
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Cost Code
| Field | Explanation |
|---|---|
| Item Number | A number that the system assigns to an item. It can be in short, long, or 3rd item number format. |
| Requested | The date that an item is to arrive or that an action is to be complete.
Form-specific information For Shop Floor Control When you change the requested date:
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| Effective | The date on which a lot becomes available. The system uses this date for availability and commitment processing to indicate that the lot is available on or after the date that you specify. You must complete this field when inventory first becomes an on-hand quantity for the lot. If you leave this field blank, the system calculates the effective date of the lot by using the value for Effective Days in the Item Branch Master (F4102) or the current date if the value for Effective Days is zero. |
| Qty Ordered | The quantity of units affected by this transaction.
Form-specific information For Shop Floor Control Discrete Manufacturing:
The operation start and complete dates, if the lead times are variable In the process industry: The quantity of co-/by-products produced by the process. |
| Branch/Plant | A code that represents a high-level business unit. It can be used to reference a branch or plant that might have departments or jobs, which represent lower-level business units (data item MCU), subordinate to it. For example:
Business unit security is based on the higher-level business unit. Form-specific information For Shop Floor Control and Manufacturing Accounting: This field identifies the branch/plant in which the item resides. |
| Charge to CC | An alphanumeric field that identifies a separate entity within a business for which you want to track costs. For example, a business unit might be a warehouse location, job, project, work center, or branch/plant.
You can assign a business unit to a voucher, invoice, fixed asset, and so on, for purposes of responsibility reporting. For example, the system provides reports of open accounts payable and accounts receivable by business units to track equipment by responsible department. Security for this field can prevent you from locating business units for which you have no authority. Note: The system uses this value for Journal Entries if you do not enter a value in the AAI table. Form-specific information The default business unit for journal entries for the work order. The business unit on the AAI tables must be blank. |
| Cost Code | A subdivision of an object account. Subsidiary accounts include more detailed records of the accounting activity for an object account.
Form-specific information For Shop Floor Control and Manufacturing Accounting: If a value is not entered in the AAI table for subsidiary account, the system uses this value as a default in journal entries. |
17.2 Attaching a Parts List and Routing Instructions
From Shop Floor Control (G31), choose Daily Order Preparation * Discrete
From Daily Order Preparation * Discrete (G3111), choose Order Processing
You can attach the parts list and routing instructions in one of three ways:
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Manually
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Interactively
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Running the Order Processing program
When you run Order Processing (P31410), it attaches the parts list and routing for a work order and updates the Production Cost table (F3102). The program generates costs in the Standard Amount and Current Amount columns of Variance Inquiry (P3102) if the order is using standard cost. If using actual cost, the Current Amount column contains the original cost of the work order but this program does not create variances.
You can attach a work order parts list from a bill of material or you can enter it manually.
You can attach a work order routing from a routing master or enter it manually. The work order routing allows the entry of Employee Number and Machine Number. Actual cost orders will use the source for labor and machine rates from the Manufacturing Constants to determine these values. If employee rates and machine billing rates are chosen in the Manufacturing Constants and they are not entered, you will get a warning message and the system will use the 02 work center rates.
If you perform costing by work center, the system creates records in the Production Cost table (F3102) at the work center level. Work centers are associated with material by operation sequences. By matching the operation sequence number in the work order parts list to the operation sequence number in the work order routing, the this program links the component to the work center. The program associates any mismatched operation sequences with blank work centers.
See Also:
17.3 Issuing Parts to Work Orders
From Shop Floor Control (G31), choose Daily Order Preparation * Discrete
From Daily Order Preparation * Discrete (G3111), choose Inventory Issues
Issue the necessary parts to the work order. There are four ways to issue parts:
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Manually
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Preflushing
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Backflushing
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Super backflushing
Whichever method you use, when you issue parts to a work order, you create:
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One source of an actual variance, if the cost of materials issued is different from the cost of materials specified on the parts list
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Unaccounted units in the Parts List table
For example, to understand its effect on manufacturing accounting, issue the parts manually using Work Order Inventory Issues (P31113).
At the time inventory is issued, the system will use the following to write the Cardex IM transaction. The component cost is calculated using the parts list quantity multiplied by the P4105 Sales/Inventory cost of the component item(s). The unaccounted units are written to the CTS1 field. For actual cost orders, the cost is written to the CST4 amounts field in the F3111. For actual cost orders, the P31802 uses CTS4 for the material issue journal entry value. For standard cost orders, the P31802 uses the frozen component cost from Cost Components (P30026).
For standard cost (07) parent items, use processing option number 22 of the Inventory Issues program (P31113). This option determines, for standard cost work orders, whether the P4105 cost or the P30026 cost is used for the components issued when P31802 writes the journal entry. However, it should be noted that manufacturing variances are designed to be efficiency/usage variances. Using this option will add material cost into the variance.
Note:
For standard cost, if the cost for the item in P4105 at the time of issue is not equal to the value in P30026 at the time Manufacturing accounting is run, the journal entry will not match the Cardex value.On Inventory Issues
Complete the following fields:
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Order Number
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Issue Material For
| Field | Explanation |
|---|---|
| Order Number | A number identifying the original document. This can be an invoice number, work order number, sales order number, journal entry number, and so on. |
| Issue Material for | The number of parent items you want to process. The system calculates lower-level values in quantity per the number of parent items requested. For example, if 3 components are needed for a parent item, and the requested quantity is 10, the system plans for 30 components. |
You can set the Work Order Inventory Issues (P31113) Processing Option for Actual Costing Warning Messages to 1 to provide a warning message or a 2 to receive a hard error, when any component unit cost does not exist or is less than or equal to zero.
17.4 Recording Hours and Quantities Used
From Shop Floor Control (G31), choose Daily Order Preparation * Discrete
From Daily Order Reporting * Discrete (G3112), choose Hours and Quantities
As you produce items on a work order, you record the hours spent on production and the number of items completed in that time.
When you record hours and quantities used, you create:
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One source of an actual variance, if the cost of machine and labor reported differs from the cost of machine and labor as specified on the work order parts list and routing instructions
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Unaccounted units in the Routing Instructions table
Hours & Quantities (P311221) retrieves machine and labor rates for actual cost orders based on the sources in the Manufacturing Constants or they can be manually input.
The labor rates sources areas follows:
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Frozen Work center rates from the F30008 work center rates for the 02 cost method
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Employee labor rates table (31/ER in F00191)
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Manual entry (Manual entry will over-ride any of the other rates)
The machine rate sources include:
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Frozen Work center rates from the F30008 work center rates for the 02 cost method
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Equipment rental rates from F1301
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Manual entry (Manual entry will over-ride any of the other rates)
Labor by Shop Floor Control (P061181) is another way to process hours and quantities. You can activate this program and the related manufacturing fields by turning on processing options 10 through 12. This processing option updates the F31122 work order Time Transaction table with actual employee hours and labor rates charged to each work order. Enter a value of 1 in the option field to set an exit to the regular time entry screen for manufacturing.
To record hours and quantities used
On Hours and Quantities
Complete the following fields:
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Work Date
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Order Number
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Employee Number
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Operation Number
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Type of Hours
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Hours
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Quantity
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Unit of Measure
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Operation Status
| Field | Explanation |
|---|---|
| Work Date | A date that identifies the financial period to which the transaction is to be posted. The general accounting constants specify the date range for each financial period. You can have up to 14 periods. Generally, period 14 is for audit adjustments.
The system edits this field for PBCO (posted before cutoff), PYEB (prior year ending balance), and so on. |
| Order Number/Rate | A number identifying the original document. This can be an invoice number, work order number, sales order number, journal entry number, and so on.
Form-specific information You can specify the order number or employee number in the processing options for the Hours and Quantities program. |
| Employee Number | A number that identifies an entry in the Address Book system. Use this number to identify employees, applicants, participants, customers, suppliers, tenants, and any other Address Book members. |
| Op Seq | In routings, this number is used to sequence the fabrication or assembly steps in the manufacture of an item. You can track costs and charge time by operation.
In bills of material, this number designates the routing step in the fabrication or assembly process that requires a specified component part. You define the operation sequence after you create the routing for the item. The Shop Floor Control system uses this field in the backflush/preflush by operation process. In engineering change orders, this number is used to sequence the assembly steps for the engineering change. Skip To fields allow you to enter an operation sequence that you want to begin the display of information. You can use decimals to add steps between existing steps. For example, use 12.5 to add a step between steps 12 and 13. Form-specific information This is the sequence number of the routing step on the work order. You must enter this number. |
| T H | A code to indicate the type of time entered. Valid codes are:
1 – Run Labor Hours 2 – Setup Labor Hours 3 – Machine Hours 4 – Quantities Completed 5 – Quantities Scrapped 9 – Miscellaneous (piece rate bonus and so forth) |
| Hours | The number of hours associated with each transaction. |
| Quantity | The number of units committed for shipment in Sales Order Entry, using either the entered or the primary unit of measure defined for this item.
In the Manufacturing system and Work Order Time Entry, this field can indicate completed or scrapped quantities. The quantity type is determined by the type code entered. |
| St | A user-defined code (31/OS) that identifies the current status of a work order or engineering change order as the operation steps in the routing are completed. |
17.4.1 What You Should Know About
| Option | Explanation |
|---|---|
| Type Hours (TYR) 4 and 5 | Type Hours (TYR) 4 and 5 in P311221 are for Shop Floor informational purposes only.
WIP Manufacturing Accounting does not use these types of hour entries to generate completions and/or scrap journal entries. The completed quantities and scrap entries used by Manufacturing Accounting are those entered in the Work Order Completion program (P31114). The value of units completed and scrapped are recorded in the WO header file(F4801) in the (SOQS) and (SOCN) fields respectively. WIP Manufacturing Accounting (P31802) uses these fields to calculate and to generate the completions and scrap journal/entry transactions. |
17.4.2 Hours and Quantities Update (P31422)
Based on the information in F311221, entered from either P311221 or P061181, the Hours and Quantities Update (P31422) program will update F3112 with both unaccounted units and amounts using the CTS1-CTS6 fields:
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CTS1 Unaccounted Direct Labor Units
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CTS2 Unaccounted Setup Labor Units
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CTS3 Unaccounted Machine Units
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CTS4 Unaccounted Direct Labor Amounts
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CTS5 Unaccounted Setup Labor Amounts
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CTS6 Unaccounted Machine Amounts
17.5 Recording Component Scrap
From Shop Floor Control (G31), choose Daily Order Preparation * Discrete
From Daily Order Preparation * Discrete (G3111), choose Component Scrap
When you report the quantity of component material scrapped, and you run Journal Entries for Work in Process or Completions, the program calculates the new A2 cost value for the parent. If the amount of the scrapped material differs from the estimated scrap amount on the bill of material, this difference updates the amount of the actual variance.
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Review the following fields:
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Quantity Ordered
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Quantity Completed
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Ingredient
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Quantities Issued
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Quantities Scrapped
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Complete the following field:
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Quantity to Scrap
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Complete the following optional fields:
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Unit of Measure
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Transaction Date
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Access the detail area (F4).
Figure 17-5 Component Scrap (Detail) screen
Description of "Figure 17-5 Component Scrap (Detail) screen"
The detail area is only accessible if you have already issued parts to the work order.
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Complete the following optional fields:
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Reason Code
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Explanation
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Date
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| Field | Explanation |
|---|---|
| Quantity Ordered | The quantity of units affected by this transaction.
Form-specific information The work order quantity. |
| Quantity Completed | The number of units committed for shipment in Sales Order Entry, using either the entered or the primary unit of measure defined for this item.
In the Manufacturing system and Work Order Time Entry, this field can indicate completed or scrapped quantities. The quantity type is determined by the type code entered. Form-specific information The quantity completed on this work order to date. |
| Transaction Date | The date that an order was entered into the system. This date determines which effective level that the system uses for inventory pricing. |
| Item Number | A number that the system assigns to an item. It can be in short, long, or 3rd item number format.
Form-specific information These are the components used on this work order. |
| Scrapped | The number of units canceled in Sales Order or Work Order Processing, using either the entered or the primary unit of measure defined for this item.
In manufacturing, this can also be the number of units scrapped to date. |
| Reason Code | A user-defined code (system 42/type RC) that explains the purpose for a transaction. For example, you can indicate the reason that you are returning items, such as the goods were damaged in shipment or too many goods were shipped.
Form-specific information A user-defined code (system 41, type RC) that indicates the reason for the quantity scrapped at this operation. |
| Explanation | This text identifies the reason that a transaction occurred. |
| Quantities Issued field | The quantity of a component that has been issued to date. |
| Quantity to Scrap field | The quantity of a component that is being scrapped on this work order. |
17.6 Recording Completions to Work Orders
From Shop Floor Control (G31), choose Daily Order Reporting * Discrete
From Daily Order Reporting * Discrete (G3112), choose Full Completion
When you finish production of a work order on the shop floor, you must record the completions to inventory. These transactions update records in the Inventory Management system. You can record completions in the following ways:
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Super backflushing
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Partial completion
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Full completion
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Backflushing at completion
When you record completions to a work order, you create:
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One source of an actual variance, if the cost of materials and labor reported differs from the cost of materials and labor as specified on the work order parts list and routing instructions
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Unaccounted units in the Work Order Master table
For example, to understand its effect on manufacturing accounting, record a full completion.
The Work Order Completions (P31114) is a key program for actual costing. All material issues, hours and quantities entry and hours and quantities update should be in place before completing the work order. The entire work order must be completed to a single location. Stock should not be moved from this location until all accounting is complete. Parent scrap is reported at the time of work order completion.
Work order completion does all of the following in Actual Costing:
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Calculates the work order cost.
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Updates the units and amounts to the F4801 CTS1 and F4801T CTS4 fields.
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Creates/Updates unaccounted completions and scrap amounts in the F3102.
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Recalculates weighted average and updates the F4105 with the new unit cost for method 02.
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Updates the Cardex with the completed units and 02 value.
See Also:
To record completions to work orders
On Full Completion
Complete the following fields:
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Order Number
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Quantity Completed
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Quantity Scrapped
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Date Complete
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Work Order Status
| Field | Explanation |
|---|---|
| Scrapped | The number of units canceled in Sales Order or Work Order Processing, using either the entered or the primary unit of measure defined for this item.
In manufacturing, this can also be the number of units scrapped to date. |
| Completed Date | The date the work order or engineering change order is completed or canceled. |
| St | A user-defined code (00/SS) that describes the status of a work order or engineering change order. Any status change from 90 thru 99 automatically updates the date completed. |
17.7 Reviewing the Open WIP Balance by G/L Account Report
Manufacturing Accounting Periodic (G3123), choose Open WIP Balance by G/L Account
Use the Open WIP Balance by G/L Account report (P31450) to view the WIP Account Balances on open work orders. Manufacturing Accounting (P31802) must be run without errors to establish debits and credits that can be verified in WIP accounts for partially processed work orders. These orders include the following:
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Issuing of material without completing order
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Completing an order without issuing material or applying labor
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Reporting machine, direct labor, and setup labor hours without completing order
Figure 17-7 Open WIP Balance by G/L Account report
Description of "Figure 17-7 Open WIP Balance by G/L Account report"