Materials management

proALPHA Materials Management represents the backbone for all business processes involved in the value-added production chain. It manages the flow of materials and therefore arranges process components across the entire company.

proALPHA offers powerful MRP supporting a variety of MRP methods for optimal inventory management. Long-term planning is covered by sales planning and master production scheduling. The numerous methods for stock-taking in proALPHA include cycle counting and stock-taking on a particular date. Storage areas can be organized as random storage areas or with fixed storage locations, and the products can be completely tracked using serial numbers and lots. This level of planning and tracking also serves documentation and supports maintenance and service tasks.

Moreover, materials management serves as the basis for company data relevant to decision-making processes. The synchronous flow of quantity and value allows data such as stock on hand, changes in stock, and material consumption to be mapped in parallel in financial accounting and cost accounting. Consequently, the latest figures from materials management are always available for specific business analyses, including managerial analysis, P&L, and balance sheet. Valuation runs and month-end closings are not required.

Not only do these data have to be correct and consistent, but also comprehensible and traceable. For this reason, information regarding postings associated with movement in stock can be retrieved directly from cost accounting and financial accounting.

Inventory management

Storage area management – the hub for material supply

Storage area management is the central entity for supplying material to the entire company. However, each company has its own processes and priorities. For this reason, proALPHA offers a wide range of functions for processing storage area management. The functions can be used individually and in combination with each other. Therefore, it is possible to manage storage areas with fixed storage locations or dynamically changing storage locations with the same approach commonly used to manage random warehouse storage.

Of course proALPHA can also manage several storage areas. Consequently, a product (part) can be managed at any number of storage areas. These methods can also be combined; for example, there can be a random central storage area, whereas the main storage areas are managed with fixed storage locations. This includes storage areas with specific functions, such as restricted storage areas, receiving storage areas, consignment areas for customers and suppliers, and external storage areas. External storage areas cover the entire process from replenishment orders placed with the supplier, to the automatic generation of withdrawal notices, and invoice auditing.

Moreover, proALPHA allows for further differentiation of the stock on hand. For customized end products, for example, it is not only possible to specifically reference the stock with a CRO, but also to separate the inventory values. This CRO relation is an advantage especially for vital or expensive purchased parts.

With comprehensive lot management that instantly provides information about quantity, place, and time of consumption, proALPHA meets the ever-growing requirements for the traceability of materials used. In the event of a customer complaint, for example, the lot from which the component was taken can be identified right away as well as other orders that may be concerned.

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Serial number management

Consistent product tracking with serial numbers

Besides the lots, the serial numbers can also be used to consistently track products and components in proALPHA. Serial numbers, however, have even more potential. Each element, like an assembly or part, is assigned a serial number and can therefore be uniquely identified. When the part is mounted in other serialized products in the course of the production process, a multi-level structure composed of serialized parts is created, based on which all components or assemblies used can be specifically identified.

This is not restricted to the manufacturing process, but encompasses the entire life cycle of a product. The product file for a particular serial number contains all changes made to each specific product. Not only does the product file document how the product left the company, but also how it is being used after its arrival at the customer location, which components have been replaced, and which alterations have been made. The product file is therefore the central source of information regarding the correct spare parts.

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Staging

Intelligent staging

The objective of materials management is to optimally supply a company with materials. This affects the divisions delivery and production. No matter if the part provided is an end product for the customer or work-in-process for assembly in your own production facilities. In all cases, the storage area provides an internal service provider with the purpose of collecting the goods and making them available as required for the next processing step.

For optimal materials management, proALPHA generates staging suggestions, so that the employee responsible can find the correct storage locations and withdraw the parts from the corresponding lots even when they are located in different storage areas. This is especially useful in random warehouse management, CRO-based procurement, and the restrictions imposed by lot mixing. Sequential documents can easily be generated from the data reported for the suggestions, e.g., the shipping document for the customer.

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Material resource planning

Controlling stocks and dates with MRP

proALPHA offers a powerful MRP tool to answer questions such as which part is required, and when, where, and in which quantity. It does this by reliably determining the requirements regarding end products, assemblies, raw materials, and purchased parts.

With approved MRP methods, suggestions for procuring or manufacturing the required parts and products are calculated automatically. A deterministic order quantity calculation can be based on the pertinent demands and coverages, for example. A reliable forecast for the future can be determined from order points and consumptions of the past by means of stochastic models. Various parameters can be used for controlling. For instance, this is the period of time in the past to be taken into account, the intended demand coverage, or the purchase order frequency.

The suggestions generated by MRP can easily be edited, e.g., to combine quantities, to change the suggested supplier, or to answer a make-or-buy question. The planner can create purchase orders or work orders with just one click – no further manual activities required.

With proALPHA, it is also possible to determine realistic dates for the secondary demands of all manufacturing levels. In contrast to production, proALPHA includes the material as a full-scale resource and does not work with fixed replenishment times in the manufacturing levels. During this process, proALPHA compares the availability of the resources that are stored in the system. This is the case even if there is no work order yet for a make-to-stock part. In this case, the existing MRP suggestion will be used and the product structure will be exploded based on it.

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Sales planning and MPS

MPS – strategy for the future

Periods lying further in the future can be strategically planned in proALPHA with sales planning and MPS. Capacities in production as well as effects on materials management can clearly be observed with this planning method. The demands to be expected are derived from the entire product structure by means of MPS. Thanks to the broad time horizon, changes to be expected as of a specific date can also be included. For example, this is very useful if a supplier ceases to deliver important products. For a convenient overview, it is possible to only observe a number of critical elements.

The planners can view this information together with the operative elements in an MRP account, which enables them to detect discrepancies with the plan in time and to continuously adapt the master production schedule to new situations. As a result, discrepancies in the plan can be detected at an early stage, and the master production schedule can be adapted continuously.

Topic: Sales planning

Physical inventory

Easy stock-taking – cycle counting and periodic counting

Counting of stock on hand in regular intervals is required by law for auditing purposes. proALPHA offers two different procedures to make stock-taking as simple as possible: cycle counting and periodic counting.

Stock-taking with proALPHA does not affect the processes in the storage areas. Therefore the necessary postings can still be performed. With cycle counting, the physical inventory can not only be allocated to the entire fiscal year, but also to specific dates for each part and storage area. It is possible to define triggering amounts, such as ones that cause the stock to be taken at a time when the quantities at the storage areas are fairly low. Additionally, the work effort is considerably reduced since the stock is taken and posted immediately.

Topic: Physical inventory

Stock valuation

Convenient valuation of stock and work-in-progress

Once the quantities have been determined with stock-taking, they have to be valuated. In addition to the stock on hand, the work-in-process is also included in the valuation. For the valuation of purchased parts and merchandise, proALPHA Materials Management supports various valuation rates – from the moving average to last or smallest purchasing values, and sequences of consumption, such as FIFO (First In, First Out). Of course the valuation is based on the lower cost of market principle.

For your company's finished and unfinished goods, proALPHA uses valuation schemes that can be freely defined. They grant the necessary flexibility concerning structure and valuation as they are stipulated by national and international law. This allows for the effects of the valuation on the balance sheet to be simulated before the final valuation is made and transmitted to accounting.

Topic: Stock valuation

Information and controlling system

Transparency for the win – keeping track of stock and movements

For sound decisions in the context of business logistics, proALPHA offers excellent options for analyzing, preparing, and visually displaying data. This guarantees highest transparency in materials management and uncovers potentials for optimization.

MRP data such as stock on hand, back order quantities, and on order quantities can be displayed as accumulated values or sorted by storage area in the proALPHA Information System (Info). The chronological order of planned withdrawals and receipts can be readily viewed in the MRP account. With this information prepared in graphic views, the specialists can tell which coverages can be used for the existing demands, and where there are scheduling problems or shortages. This enables them to quickly take countermeasures.

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Processes in Materials Management

Standard processes described comprehensively

By reading our process descriptions, you can easily make yourself familiar with various standard processes. Processes in Materials Management include: