Item Numbers in QAD’s MFG/PRO

Introduction to QAD–Item Numbers

Item numbers are the bedrock of the QAD system. In general terminology, the item number is the identification number assigned to an item.

Also called a part number, SKU number, or SKU (Stock Keeping Unit), an item number can represent a service as well as a physical item. It is good practice to establish an item number for any billable entity. For example, one item number might represent a box of finished goods that are shipped to the customer, while another might represent a monthly rental fee. The rental fee is not a stocked or inventory unit which you can find in the warehouse. But assigning an item number to a service helps to improve data accuracy and unification.

MFG/PRO Item Master Overview

Items in MFG/PRO are part of the core master data and are used in nearly all system modules, such as manufacturing, distribution and others. Item master maintenance is located in the following menu: 1. Item/Sites->1.4. Item data menu. This submenu includes several programs, which allow the user to maintain various item parameters, such as basic data, inventory data, planning data and costing data.

Menu is used to create a new item and maintain all its parameters in one screen. At the same time, the corresponding subscreens can be found in other standalone programs, such as or . Item master information, defined in (or in , , and ) is utilized as a master template, which can be used later to define site-specific data. In any MFG/PRO built-in transaction (for example, MRP, Work Order release or Sales Order maintenance) the system always is looking first – for site-specific record, and only if it is not found, it will use the general (template) record.

Sites

The Site usually represents a physical place, where you manufacture or store inventory. It can be a distribution center, warehouse, manufacturing facility, or a combination of these. Inventory control and planning information is maintained by site, including inventory availability, manufacturing methods and costs, sales and purchasing data, manufacturing plans and orders, and forecasts. Sites are created and maintained in 1.1.13 Site Maintenance.

Business Considerations

Business Flow

One of the reasons to have multiple Item master sub-screens is the fact, that usually in the organization different people (departments) are responsible for different master data. For example, Item planning data (maintained in menus 1.4.7 and 1.4.17, such as planning quantities and periods, lead times etc.) is updated by the company planner or scheduler. Warehouse personnel are most likely responsible for the Item inventory data (maintained in menus 1.4.5 and 1.4.16, such as cycle counting intervals, default site and lot/serial control). Item Costing information (menus 1.4.9 and 1.4.18) is close to the heart of Financial group – accountants and cost specialists.

Security access management becomes very easy with separate Item data maintenance programs. Some organizations choose the following business flow:

– 1.4.1 menu – Item master maintenance is not accessible by the user community (administrators only)
– Engineering department – Create a new Item in 1.4.3
– Planning department – Update Item Planning Data and/or Item-Site Planning data
– Warehouse department – Update Item Inventory Data and/or Item-Site Inventory Data
– Financial group – Update Item Site Cost data and/or item-site Cost Data

This model helps to ensure that first of all – only certain people are responsible for creating new items, and second – that certain information can be only modified by particlular people. Usually this business model also includes a well-defined and strict change control process, where absolutely no data change can happen without proper multi-level authorization and process documentation.

Segregation of Duties, Ownership and Centralized maintenance

It is every company’s internal decision how to implement the item number creation process. In most cases the engineering department is responsible for assigning the number s and other vital product/item parameters. In multi-site MFG/PRO implementation the situation may arise where different company subdivisions (sites) are responsible for different items (for example, primary Sales and distribution office – for Finished Goods and Manufacturing division – for components and sub-assemblies. Though this practice is acceptable, it is always recommended to centralize Item Master maintenance to avoid problems in item standardization and unification, such as different descriptions or ABC classification. If multiple MFG/PRO databases are used, this becomes both business and technical challenge. First of all, the company management should agree that only one department is responsible for the new item creation. (Site- specific information will be still maintained locally). Then, some sort of data synchronization should be implemented. It will help to copy master data between MFG/PRO databases automatically, and to minimize manual input as well as to reduce the potential number of errors and the risk of data inconsistency. To synchronize item master (as well as some other master files), one can use the following options:

– QAD Data Sync Product
– Automatic CIM load (where information is sent from the master database to the target databases)
– Semi-Automatic (automatic notification about data changes in the master database, and then manual local input)
MS Excel Based 32 Soft Data Loaders

In Multi-system operation – when MFG/PRO coexists with other systems, such as Financial, Supply chain or any other – master data synchronization becomes even more important. In this case master records have to be maintained in one system, and then replicated into another. It is still recommended to have only one source of master data and to make the synchronization process as automatic as possible.

Item Numbering

Item numbering concepts are being discussed in the business community as long as ERP systems exist. Two major approaches are:

– Item number has some meaning, for example, it may indicate, that this is a Finished Good, manufactured at the Plant A, to be stored in cold place.
– Item number has no meaning at all – it is just a code, assigned randomly or (if it is a number), sequentially.

Both concepts have their pros and cons. Meaningful Item numbers may be very user-friendly, helping system users to identify the products easily. At the same time there is always a possibility (and it happens quite often), that the company will run out of option at some point.

Here is an example: let’s say the second digit of an item number represents the color. When the number system was implemented (years ago!), the company had only 3 colors of this product, and everybody was sure, that the opening for 10 different colors is good enough. But years passed, the number of products and their options increased, and now the product may be manufactured in 15 different colors. 15 options means 2 digits in the item number, when there is only one position. What are the choices? To create an item number with 2 digits for color? But this will change the code length and as a result will affect the way the item number is printed or displayed in various reports and documents. To substitute the digit with the letter? This will change the initial numbering system, and still will not guarantee that similar things will not happen in the future.

In contrast, the meaningless item number is free of all the problem, discussed earlier. It is just a sequential number, it does not mean anything, and every new product or component will just be represented by a new number. Of course, in this case a lot of people will complain, that there is no system in numbering (and they will be absolutely right), and therefore it is more difficult to remember. But some researches show, that our mind can remember anything, regardless of whether we understand the meaning of it or not.

So it is every company’s internal decision, which approach to take. Be careful!

Item Descriptions

Item description in MFG/PRO consists of two lines, but the second line is not always printed on the reports. Therefore, it is recommended to include as much as possible information into the first 24 characters. Also, it is recommended, for the similar items to keep the description in similar format. It will help in looking for an item while using lookups. For example:

Item A       BOX, WOOD   ,12”x15”
Item B       BOX, PLASTIC, 8”x15”

In this case, when pressing F2 for a lookup, and sorting items by description, you will get all your similar items (Boxes in this example) together.

Data Accuracy

Data accuracy is extremely important for the successful MFG/PRO implementation. Here is a few examples. Inventory data is critical for the warehouse operations. Incorrect ABC class and cycle counting interval for an item will directly affect inventory accuracy, since the item will not be counted in time. Inaccurate location type, which controls the storage, where this item can be placed, may result in item displacement and potential physical loss.

Planning Data is essential for the proper production scheduling and procurement planning. Order Policy controls the way the item is planned by MRP, and its wrong value may have a direct effect on the product availability and production.

Item Cost Data (GL Cost Set) is used by the system to generate GL transactions and to evaluate the inventory in the warehouse. Erroneous item cost will result in the wrong account balances and incorrect financial statements. Here we tried to cover only the most essential aspects of item master maintenance in MFG/PRO.

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