Additional Manufacturing Functionality

With substitute items, you can predefine valid alternates for an item to use when that item is unavailable. Using PeopleSoft Inventory, when an ordered item is unavailable (either temporarily or permanently), the proper replacement item is automatically substituted to fill the order. When using substitute items with PeopleSoft Manufacturing, PeopleSoft Supply Planning automatically suggests the substitute item when the original is in short supply. You can define substitute items at three levels:

You can define substitutes for an item in the Item Definition and Item Attributes by Unit pages and use them as defaults when maintaining components on a BOM. When defining substitutes, you can specify start and end dates, as well as a conversion factor. The conversion factor defines how many of the substitutes are required to replace the original item. You can set a priority by which the substitute item with the highest priority or lowest number is substituted first in the PeopleSoft Supply Planning solvers.

Using the Item Definition pages, you can define substitutes for an item. You can define user security and limit access to those individuals permitted to define the substitutes.

You have the option to push the item level substitutes to the Item/BU level. If you create an effective date for a substitute, the item can only be substituted within the effective to obsolete date range.

Use the BOM Maintenance Substitute page to define substitutes for BOM components. The system calculates the quantity based on the conversion factor specified (if defined at the item level) and the original item's quantity per.

You can copy the substitute list from the item attributes at the business unit level to the BOM/EBOM level. This functionality isn't available if substitutes don't exist at the BU level.

BOM inquiries include the list of substitutes for each component. Additionally, you can search for components defined as substitutes using the Component Where Used Inquiry.

When copying and transferring BOMs and EBOMs, you can also copy and transfer the substitute list for the BOM/EBOM components. Additionally, mass maintenance on the substitute list is supported.

PeopleSoft Supply Planning enables you to set the level of substitution that occurs during solving. Define these settings at the BU level:

PeopleSoft Supply Planning passes the list of valid substitutes to the planning engine. When the projected on-hand quantity of the primary item cannot meet the demand, the feasible and enterprise feasible solvers can use substitutions when creating new planned production, if these criteria are met:

• You selected the Allow Item Substitution option on the BU group definition.

• You selected options for allowing substitutions during the running of the corresponding solver.

• No partially completed operations exist for the item.

• Items have not been issued for the operation.

• Item substitution is not frozen for the order.

When a production ID or production schedule is identified as frozen for substitutes, no substitution is performed. Solvers use substitutions for dependent demand only. They do not use substitutions for end items, such as sales orders, transfers, or forecasts. Solvers consider substitute items (all of the items effective for the period considered) according to the order of their priority.

The substitute item projected quantity on hand must meet the total demand of the substitute item quantity needed for each primary item multiplied by the conversion factor. The solvers do not use partial substitutions. If the solvers cannot meet this demand with substitutions, they plan supply for the primary item.

Once a substitution occurs, the original item required and the substitute item are received and applied. When the system creates the component list, substitute items are distinguished from the original required component.

Using PeopleSoft Manufacturing, you can make manual substitutions during the picking process and when recording component consumption. You can also indicate a substitute on the component list in advance, viewing the list of valid substitutes for that component. Alternatively, you can request a list of valid substitutes if insufficient supply exists for the original item when generating a production pick plan. During the review plan process, you can indicate that a substitute item was picked, rather than the original.

When recording completions and scrap, you can indicate a substitute item was consumed. You can also freeze the component list to prevent further substitutes from occurring when the next planning optimization occurs.

Frequently, you may need the ability to plan for end of life of components and beginning of life for their replacements. This occurs when one component is replaced by another component for reasons such as an engineering change, a more technically advanced component, or lower cost.

Here are some examples when you might want to use this functionality:

• You want to replace a component with another component at a certain point in time, and you want the system to help plan for this occurrence.

• The system should use up the remaining stock of an old component before introducing the new component into production.

• From the key date to begin use of the new component, PeopleSoft Supply Planning needs to plan for the new component while continuing to use the old stock until such time as the old component is used up.

You can define items that are going to be used up or phased out, drive the inventory level of the use up item to zero, and then manually replace the discontinued item on the BOM with a new item. You can store the use-up date for the item at the BU level because each BU can discontinue items with different use-up dates. Use up works in conjunction with item substitution. After the use-up item is consumed, one of the substitutes for the use-up item on the BOM substitution list can replace it on that particular production order or schedule. If no substitution items are defined for the use-up item and the obsolete date for the item has not been changed, the use-up item will be short.

At the Item Attributes by Unit level, you indicate a discontinue date for the item. After this date, PeopleSoft Supply Planning does not create any planned production, purchase, or transfer orders for that item. Define two new statuses, one representing the current item status and the other representing the future status of the item. To use up the item, set the future status to Discontinued. When you select a future status, you also define the date that the future status becomes effective, which is the date that planning begins to use up existing supply of the item.

PeopleSoft Supply Planning verifies the current and future status for the item. If the status is set to Discontinued, PeopleSoft Supply Planning begins to use up the item on the date indicated.

After the item is used up, PeopleSoft Supply Planning uses substitution logic to determine replacement items. PeopleSoft Supply Planning calculates a projected use-up date and passes it back to production. This is the date when the on-hand balance is projected to reach zero or remain constant for the duration of the planning horizon. You can use this date to initiate ECOs or BOM effective and obsolete changes for the used up item.

Numerous transactions in PeopleSoft Inventory, PeopleSoft Purchasing, and PeopleSoft Manufacturing involve converting item quantities from one unit of measure (UOM) to another. You can ensure consistency when stocking and manufacturing item quantities by establishing whole number validation rules. Whole number validation consists of two components:

Rounding rules do not apply within these three areas of PeopleSoft Manufacturing:

• QPA (quantity per assembly).

  Used in BOM maintenance, planning BOM maintenance, component list maintenance, and production option maintenance. The QPA is a precision number and, therefore, should not be rounded. If rounding rules were applied, it would either understate or inflate the number of components required for production. For example, to make 2 assembly A0001s may require 1 component B0004. Thus, when defining the BOM, the QPA for B0004 would be 0.5. If we applied the rounding rules to the QPA, then it would round the QPA for B0004 to 1, thereby incorrectly inflating the QPA and the production costs.

• Cost Roll-Up Process.

  Applying the rounding rules to the Cost Roll-Up process causes production costs to be either understated or inflated. For example, A0007 is a component on assembly NB-5000. The QPA = 1 and the yield = 2/3. When you make one NB-5000, you need 1.5 of A0007. If A0007 costs 1.00 USD, then the cost of using A0007 is 1.50 USD. If we rounded the scheduled quantity during the Cost Roll-Up process, you would need 2 A0007s, which would incorrectly inflate the cost to 2.00 USD. Also, if A0007 is a subassembly, then we would need to explode A0007 into its component parts. The deeper the explosion, the greater the affect of the rounding. Thus, to achieve the most accurate cost, we do not round the component scheduled quantity.

• PeopleSoft Supply Planning - Dependent Demand.

  You have the option to round or not round dependent demand calculations. You may decide to not round the dependent demand calculation because rounding inflates the actual dependent demand. Rounding problems become more visible as the dependent demand explodes down more levels.

PeopleSoft Manufacturing enables you to repair or rework previously completed assemblies to replace defective components, fulfill an ECO or product recall, or refurbish scrapped subassemblies.

Using PeopleSoft Engineering and PeopleSoft Manufacturing, you can define rework BOMs if you typically have a standard rework process that requires additional components. Rework routings enable you to define common rework processes for a large volume of rework production. As with production BOMs and routings, you can define a primary rework BOM and routing and up to 98 alternates each.

When you add a rework production ID, you select from the predefined rework BOMs and routings. When you release the rework production ID, the system automatically creates the component list with the assembly item to be reworked in addition to the components defined on the rework BOM. If you select a rework routing, the system also creates an operation list. If you don't choose a rework BOM and a rework routing, you can manually maintain the component list and operation list.

You must create rework production in the Released status unless the production is in the future, in which case you create Firmed rework production IDs. Once the rework production ID is created, you can either modify the appropriate start and due dates manually, or if capacity and material availability are concerns and you've created a component list and operation list for the rework, you can optimize the production ID using PeopleSoft Supply Planning. PeopleSoft Supply Planning considers rework requirements on a resource the same as regular production, but it won't create rework production recommendations.

In PeopleSoft Manufacturing, rework production is managed with production IDs, not production schedules. The assemblies to be reworked must be picked from non-nettable, non-WIP locations in PeopleSoft Inventory using the Kit Issue method. Additional components must use the Kit Issue method as well. PeopleSoft Supply Planning does not recommend rework production; it reschedules rework production to repair capacity constraints.

You can record completions and scrap at intermediate operations, consume the additional components, and earn labor costs associated with the rework. When you close production, any additional component and labor costs incurred are charged to the rework expense account. You can view all rework costs in PeopleSoft Cost Management.

Often, you need to break an assembly down into its component parts and return the components to inventory. With PeopleSoft Manufacturing, you can:

• Tear down an assembly as built and as planned.

• Base a teardown production ID on an existing production ID so that the original configuration can be retrieved and torn down.

• Specify teardown components on a production BOM and a teardown routing so that you can set up a default configuration and teardown steps in advance, if no existing production ID is available.

Operation yield allows you to specify the quantity of goods expected to make it through the process. The expected loss can then be incorporated into the cost of the usable end items. Additionally, PeopleSoft Supply Planning can take into account process yield and increment the demand by the expected loss to ensure that demand will still be met once the manufacturing process is complete. This function enables you to specify a yield percentage on the routing operation step and calculates the additional resources necessary to meet the scheduled quantity with the anticipated yield loss.

PeopleSoft Manufacturing enables you to trace the location and constituent components of finished goods items and to trace source and usage of component parts during the production process. Serial genealogy tracks the source and destination of any serialized item. A serialized item may be used in a serialized assembly, scrapped, or used in a higher level serialized assembly that is then shipped to a customer.