We frequently use raw material that is inventoried as FT. When we go to cut this material, we regularly have salvage
Example: 20 foot linear material is cut into 2 cuts of 8 feet each. This leaves roughly 4 feet of salvage.
Does anyone have a good way of keeping track of what sizes of salvage cuts are left? If we only relieve 16 feet to that part number, the 4 feet is not useable to make another 8 foot cut. Setting up a completely separate part number for each cut length seems excessive. Maybe a salvage part number with lot tracking?
If there isn’t a “usable” salvage value or percentage that can be set as a default on the material, then what we’ve usually done is to issue the 20’ piece to the job (which puts all the inventory quantity and value onto the job itself) and then the finished pieces coming out are costed properly. All the cost of the material is absorbed, and the quantity is relieved. Although the customer is only getting 16 actual feet, you are being charged for using all 20.
This only works if you are literally throwing the salvage piece away (from an Epicor standpoint, meaning you needn’t show that 4’ piece OR its value anywhere). If you actually need to show the salvage amount somewhere, then it gets somewhat more complicated.
Thanks @Ernie. If it isn’t useable salvage, we would consider that scrap. If it is useable, than it needs to be returned to inventory and not a part of the cost to the job. In your example I would use the scrap factor in Epicor to handle this.
Yes, I agree, it is complicated. Is anyone tracking salvage cut sizes?
In a past life, we tracked off-fall from the saw. The tracking isn’t a tough problem. We created a non-nettable location and stored it there. The bigger issue was to have MRP not order new materials if we knew we had stock in the off-fall bin. The trick was to issue it to a job ASAP to cover the demand. But we never got around to automating that, it was on the shoulders of the shop supervisor to let others know that the materials were covered.
The one time I had to actually track it all was a nightmare. A plastics molding company would have, say, a stock size sheet (4’ x 4’) and an order for an odd size that was smaller, and they’d want to keep track of whatever was leftover both for costing purposes and because they would frequently be able to sell the pieces. However unless Epicor actually KNOWS what those pieces are, it can’t keep track of them. What we finally did was just have a weight of “leftover pieces” in one of several categories and that would hold the value, but it was up to sales and shipping to actually know what the sizes were (and it turned out that the easiest way to do that was outside the system). This solution, however, also removed all traceability since their products are all lot-tracked.
We never discovered a method that was both easy enough to use and useful enough to be bothered with.
Your experience is certainly reflective of our current battle. How much tracking of salvage is actually value added to the process rather than granularity for the sake of it, with nothing really gained?
The answer there, as with far too many other questions, is “it depends”. Who needs the information, why do they THINK they need it, and how much will it cost (in your time and your operator’s time) to keep that information fresh?
The best way that I have heard of is to issue the 20 feet to the job. Return the 4 foot remnant to a non-nettable bin and have the operators control the remnants.
This is by no means optimal, and it requires good operators who know when they can use the remnants. But like I said, it is the best I have heard to date.
I had been thinking of serializing/lot tracking every sheet that comes into the building and using Track Multiple UOMs on the part to know exactly what every sheet was. But I did not know how to have MRP check for the needed quantity by individual sheet. I also don’t think this is really viable, but was the only thing I could come up with.
@jkane This is where we were stuck too. If there was a way to filter MRP by lots and/or bin without making a bin non-nettable, you could use additional bins or lots to track the remnants. We would still want the 4 foot remnant to be costed to the next job that could use it. To me, that is the heart of salvage, parts you can use again and you want to ensure the cost isn’t on the job. Scrap you do not have that concern and putting scrap remnants in the method you described could be used for granularity as opposed to the scrap factor of an operation.
I have not looked into any, but I was always told the best way to do what we want is with a nesting program. Supposedly, it works like MRP except it takes all of the scheduled jobs, groups the like material, and then creates a program to optimize sheet usage. Not sure exactly how or if it works, but something you might want to look into.
In a previous life we upgraded V8 to E10.0 and attempted to bring in remnants (and circle drops; for some reason in the steel business only rectangles can be called remnants although in the English language remnant means something remaining) to the system. In the legacy system, the circles and rectangles were considered scrapped by the job (thus not remaining in Epicor at all) but there would be a yard full of circles and rectangles that according to Epicor didn’t exist, so they had to be inventoried in Excel. An order that used some or all of its steel from this source would be offered to a customer in a handful of circumstances, and because issuing was done AFTER manufacturing, the substitution would just be written on the traveler and the substitute materials issued as 0.01 pounds of steel.
In the new system we built, we made separate part numbers for circle drops, and arranged bins according to diameter (granularity every 2", every 5", can’t remember now) and a convention for determining when substitute materials would be used. Likewise, any rectangular remnant with enough square inches to be tracked in the system, would have a bin created for it that indicated size in two dimensions (eg., bin 46x80). Part numbers implied domestic or foreign, and the thickness of the steel. Unfortunately the decision of when to use remnant steel was thus taken out of the hands of Sales and they still needed it there, so last I heard the tracking of circles and remnants was still not fully implemented and the Excel tracking continued there.
Almost forgot: if you issue BEFORE manufacturing, you can do an Epicor transaction called Return Salvage to get the pounds, inches, etc from the main part number into a remnant part number which carries a separately maintained cost. Otherwise the transaction to use is Quantity Adjustment which I thought would strike terror into Finance but they were OK with it as long as well documented.
@MontyMan Thanks for your thorough answer. The idea of issuing by weight for remnants is intriguing. We definitely want to utilize the Return Salvage function it’s just a question of how we setup that separate salvaged part and it’s cost.
At one site I know the shop supervisor still manages all the raw stock manually and coordinates new purchases with the buyers. When too many short pieces have accumulated he will manually scrap via inventory adjustments.
There has been some experimentation with tracking/automating raw stock in Epicor. The results were too mixed for the effort involved.
Raw stock is purchased as PUM each and inventoried as IUM inches, e.g. bars, angles, tubes, channels. Each raw stock will be used in many different parts of varying lengths, from a few inches to several feet long. TBD if nesting would apply?
We have gotten to the point where we do not saw any stock in house. We order it pre-cut. We order in quantities to optimize stock usage from the vendor. We have basically eliminated this issue with bar stock etc.
Yes at this site they have been going back and forth between making and buying component parts for years. (capitol equipment).
I think they’d prefer buy component parts but end up making in-house due to fluctuations in capacity, schedule and vendor pricing.
This is another automation puzzle. How to maintain multiple part masters… type M to build in-house or type P to buy, and then which part/job methods to update. All done manually now.
We have looked at it both ways. It saves a routing step and allows faster velocity through the plant. It makes scheduling so much easier. Our stocking levels always have our minimum run quantity on the shelf for the high volume parts. It is just a matter of scheduling it on a machining center at that point.
Optimizing the raw material size certainly is an area we continue to optimize. I don’t see us ever getting away from needing to track scrap and salvage however.
@bordway - Thanks for sharing your experience. It certainly seems that there are diminishing returns based on the amount of effort required to do this well within Epicor. The manual adjustment of too many small pieces makes sense. I will bring this up with our supervisors and see what they think.