QAD Routings Implementation

1. QAD Routings Implementation Sheri Forrest – RFBPNadia Truxell – Logan Consulting

2. Routings – Introduction • Introduction • Ralcorp Frozen Bakery Products • Routings - Why Use them? • Routings – Implementation at Ralcorp • Review Process Changes – Scheduling, Backflushing • Review GL Transactions with Routings - Variances • Reporting Needs

3. Introduction – Sheri Forrest • Ernst & Young-Auditor • Manufacturing • Banking • Entrepreneurial Services • Ralcorp Holdings, Inc. –Finance Manager Frozen Bakery Division Responsible for financial and management reporting for 9 plants. • 9 QAD implementations • Upgrade from 7.2 to EB2 • Major re-implementation completed in 2009 • Routings • BOM Standardization

4. Introduction – Nadia Truxell • Operations/Materials Manager – Scherdel Sales & Technology Automotive Supplier of Springs and Stampings Implemented QAD • Project Manager – Logan Consulting QAD Implementations and Business Process Consulting Automotive Food & Beverage Consumer Goods Industrial Products

5. Introduction – RFBP Bread, Griddle, and Cookie products for Industrial, Foodservice, and Retail markets 9 Manufacturing plants across the US and Canada Advanced Repetitive processing

6. Why Implement Routings? • Efficiency • Utilization • Productivity

7. Why Implement Routings? Productivity Efficiency X Utilization

8. Routings – Why Implement? Routing = Sequence of Operations used to define the production process for a finished good item or sub-assembly • Capacity Planning – Work Center and Department Load • Improved production reporting • Improved variance reporting – Labor Costs reported at Standard • Ability to compare actual to standard • Lays framework for more sophisticated shop floor RF process

9. Routings – Effects EFFECTS OF ROUTINGS The system uses routing data to: o Calculate the cost of producing an item o Calculate the time it takes to manufacture an item o Schedule operations for work orders and repetitive schedules o Backflush components in the Repetitive and Advanced Repetitive modules o Calculate work center and department load o Print routings for work orders o Obtain operation feedback using programs in Shop Floor Control, Repetitive, and Advanced Repetitive o Calculate component yield when Use Op Based Yield is Yes in MRP Control

10. Routings – RFBP Implementation Routing “999” for all Items No Labor Costs booked at time of backflush – Method Variance No visibility for Capacity planning/Department/Work Center Load

11. Routings – RFBP Current State Routing “999” for all Items No Labor Costs booked at time of backflush – Method Variance No visibility for Capacity planning/Department/Work Center Load

12. Routings – Future State QAD Routing Implementation - Phase 1Create Routings to measure standard Machine and Labor Time Provide ability to obtain improved reporting at a production line level Lay the framework for a more sophisticated reporting process and standard methodology for creating costs for manufactured items.

13. Project Timeline

14. Routings - Setup Departments Work Center Routing Maintenance Alternate Routing Maintenance Item Site Planning Maintenance

15. Departments

16. Departments Use Department Maintenance to define departments and set up labor capacity and general ledger (GL) accounts for each department. Department – Code representing Department within Plant:Current State: 53000 = Ogden, 53500=FridleyDiscussion Point Define Accounts and Sub Accounts for:Cost of ProductionLaborBurdenLabor Usage VarianceLabor Rate VarianceBurden Usage VarianceBurden Rate VarianceAccounts Default from Product Line Maintenance or Work Order Account Maint

17. Work Centers

18. WorkCenter Maintenance Use Work Center Maintenance to define work centers, which are production areas with one or more people or machines having identical capabilities. Work center data controls processing in four areas: o Scheduling: When a routing operation is specified at this work center, lead time fields (Operation, Queue Time, Wait Time, and Machines per Op) default to those for the routing. o CRP: Capacity for this work center is the number of machines in a work center (machines/work center) multiplied by the number of available hours (from Calendar Maintenance). o Costing: Manufacturing costs are calculated in Routing Cost Roll-Up. Labor costs are calculated by multiplying the setup and run times at each operation by the setup rate and labor rate. Burden costs use machine burden rate, labor burden rate, and labor burden %. Subcontract costs are taken from subcontract cost at the operation level. o Accounting: Each work center belongs to a department, which determines the GL accounts that track variances, labor and burden costs.

19. WorkCenter Maintenance Work Center: Enter Code representing the Work Center within a Department Machine: Enter standard headcount (staffing) required to run this work center. This functions as a sub record of the work center. Department: Select the Department Code for the Work Center Mach/Op: Leave as default (1) Setup Crew: Optional – Reference Only Run Crew: Optional – Reference Only Labor Rate: Enter the Average Labor Rate per hour required to run this Work Center.

20. Routing Maintenance

21. Routing Maintenance Routing Code: Code Representing Product/Family manufactured through a Work CenterExisting Convention: 53001-01 (Routing 1 on Ogden Line 1) Operation: Enter “0” for Machine Hours, “5” for Labor Hours, “99” for Backflush Start Date: Enter beginning effective date of the Routing Work Center: Enter the Work Center associated with this Routing Description: Enter the Description associated with this Routing Run Crew: Defaults from Work Center Maint – Reference Only Run Time: Enter the amount of time it takes for one unit of this item/family to be processed. Use Routing Maintenance Rate Based to enter units/hr Auto Labor Report: Check Box to report labor at standard

22. Alternate Routing Maintenance

23. Alternate Routing Maintenance Use Alternate Routing Maintenance to assign approved alternate routings to items and sites. When an item can be made different ways, using different operations, work centers, machines, and perhaps different components. Each of these is called an alternate. Item Number: Enter the Item Number the Alt Routing is associated with. Site: Enter the site where the Item is manufactured.

24. Item-Site Planning

25. Scheduling Concept

26. Backflush Transaction

27. GL Impact – Backflush with Labor

28. GL Impact - Examples

29. GL Impact - Variances • Labor Usage Variance • Labor Rate Variance • Burden Usage Variance • Burden Rate Variance • Method Variance

30. Rep Operations Acct Report

31. RFBP Custom Report Labor Variance Report: 99.29

32. RFBP Custom Report Labor Variance Report Selection criteria • ID: Leave blank or specify a range • Work Order: Leave blank-repetitive/Specify range –discrete work order • Site: Enter site range • Line: Leave blank or specify a range • Work Center: Leave blank or specify a range • Machine: Leave blank or specify a range • Routing: Leave blank or specify a range • Operation: Leave as default or run for 0, 5, 99 • Department: Leave blank or specify a range • Effective date: Specify a range • Report Total: Check for a single operation, No check for the default.

33. RFBP Custom Report

34. Routings – RFBP Implementation Routing Implementation Challenges • Data collection- not all need information currently collected. • Data Input- scarce resources, training. • Data integrity- Shop floor data accuracy and completeness questionable. • Current ‘Home-grown’ production reporting system providing needed information—Why change? • QAD out-of-the-box reporting tools inadequate. • Additional steps to the new item setup process at the plant. • Interpreting routing data- What does it mean? How will we use it?

35. Routings - RFBP Questions?