Why Manufacturing ERP Software Needs Serial and Lot Control

First there was MRP, followed by MRP II and then CIM. Ultimately, T. Lee Wylie, the Director of CIM at Gartner, coined the concept of Enterprise Resource Planning (ERP) in 1990 to advance the evolution of MRP applications into the next generation of business systems. ERP software was intended to become a larger whole that reflects the evolution of application integration beyond manufacturing. However, it didn't stay that way.

Today, not all ERP systems are developed from a manufacturing core, especially those residing in the Cloud. Some vendors begin with accounting software while others start out in maintenance or human resources. The problem for the manufacturer is that many imply that they will work in manufacturing or any other sector.

So when looking at ERP systems there are several key features a manufacturer should look for when evaluating the many suites. One is to determine if the ERP software accommodates Lot Serial Control. If you are in a business such as medical supplies, pharmaceuticals, packaged food distribution, beverage distribution, chemical supplies, automotive, aviation, high tech and others, where the law requires you to maintain accurate records for each unique Lot or Serial Number purchase and sale, you already know you need Lot Serial Control.

There are, however, many examples of manufacturers that are not mandated by regulation to leverage lot serial control but realize it gives them improved ability to manage their business. Perhaps they need to track parts that expire, to assure that they are not used in manufacturing your product. A brand new piece of machinery built with dated belts does not make customers happy when a broken belt shuts down work only weeks after the purchase.

If the manufacturer has more than one vendor for a purchased subassembly, they may want to track lots by vendor in order to provide additional information for warranty repair analysis. If a high percentage of the warranty repairs contain parts from a specific vendor, it allows them to quickly make the needed changes.

For those manufacturers that don't think they need this functionality, look at the continuing barrage of forthcoming regulations. In a litigious society, the day is quickly coming when any manufacturer better be able to trace the history of anything they make and sell. While the manufacturer doesn't think they need lot and serial control at present, it nonetheless provide comfort that it is available by simply clicking a checkbox to activate the functionality.

What Should Serial Lot Control Provide?

Serial Lot control registers an inventory item's serial or lot number through the Purchasing Receipts, Inventory movement, Shop Floor Control and Sales Order Fulfillment functions of the ERP system. The Purchasing Receipt function will note the Item Number classification and if lot controlled, the lot number will be assigned to the entire Purchase Receipt for the items being received prior to their acceptance into stock. There should be an option that lets the user assign the receiver number as the lot number, which provides an easy, but practical, application for the lot identification.

If the supplier is not assigned a lot number, this can be assigned by the user instead. If the Item Number is Serial Controlled, then prior to the receipt into stock, the serial numbers can be assigned. The business software will parse the serial field to insure that serial number records are created on the Purchase Receiver and on Item Location Records as well as an item serial record, thereby insuring that only one serial number can be assigned an item.

A complete manufacturing ERP application will allow the serial or lot number to be registered on all inventory additions, adjustments and scrap transactions. While Serial and Lot controlled items are not appropriate for backflush considerations, all other work order and subcontract order issues must should the serial or lot number to be recorded on the issued transaction.

To assure the integrity of lot control, the application must allow the user to record the lot number for 'lot controlled items' on work order supplies before the assembly is received into stock or scrapped. Similarly, the application should allow serial numbers to be assigned before the work order assembly is received or scrapped. Pick lists should be printed with serial number detail and lot information as needed. When the sales order is fulfilled, the serial number of the final assembly can be matched and recorded to the shipment.

The Point Is This

If you are a manufacturer, you really need to make sure that your ERP software has the features that manufacturers increasingly need. A one size fits all approach simply will not work in a manufacturing environment. Verifying that an ERP system has Serial Lot control - among other manufacturing features - will help manufacturers narrow down their software search for the best fit ERP system for their company.

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If a high percentage of warranty repairs contain parts from a specific vendor, serial and lot control tracking allows you to quickly make the needed changes.

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