Understanding WIP’s Role
Work in Process tracking is a powerful tool that provides real-time visibility into the manufacturing lifecycle, from raw materials to finished goods. By breaking down the production process into distinct stages, administrators can ensure better control and accountability.
Initiating Work Orders
Issuing Components:
- Before starting a work order, log material consumption by issuing components. This step is crucial for preparation and doesn’t record assembly work.
- Use the Transactions > Manufacturing > Issue Components path to bulk-issue components, filtering by various parameters like item, customer, and location.
- For multiple work orders, the ‘Filter By’ option helps manage committed and available quantities.
Key Tip: When issuing components, ensure accurate recording of material values in the WIP account to maintain financial integrity.
Completing Work Orders Efficiently
Recording Assemblies:
- After issuing components, enter completion transactions to log finished assemblies, indicating production output.
- This step journals the assembly value, updating financial records. The path to access this is Transactions > Manufacturing > Enter Completions.
- For streamlined processes, use the backflush feature to simultaneously complete assemblies and record component consumption.
Administrator’s Note:
- Educate your team about the ‘Projected Value’ field, which displays assembly costs. Encourage them to review these values regularly.
- Periodically perform ‘Work Order Close’ to reconcile costs between assemblies and components, ensuring financial accuracy.
Closing Work Orders and Managing Variances
Finalizing Accounting:
- Use the Manufacturing WIP feature to close work orders, reconciling all associated issues and completions.
- Access Transactions > Manufacturing > Close Work Orders to bulk-close orders, filtering by various criteria.
- Customize the sublist to manage orders by status, ensuring only relevant orders are displayed.
Managing Variances:
- Utilize the ‘Under-Produced Variance Tolerance’ and ‘Production Variance Tolerance’ percentages to filter orders with production and value discrepancies.
- Consider date ranges for order, production start, and end dates to further refine the list of work orders.
Cost Discrepancy Prevention:
- Be mindful of currency decimal precision affecting cost calculations.
- To minimize discrepancies, advise your finance team to reduce decimal precision for component costs to 2, ensuring better accuracy.
Maximizing WIP’s Benefits
- Inventory Optimization: WIP tracking prevents stockouts and excess inventory, optimizing cash flow and resource allocation.
- Real-time Insights: Administrators gain instant visibility into material consumption, assembly progress, and potential bottlenecks.
- NetSuite Integration: Leverage NetSuite’s advanced WIP management for long lead time processes, ensuring every production stage is efficiently tracked.
Training and Communication
- Provide comprehensive training to your team on WIP processes, emphasizing the importance of accurate data entry.
- Encourage open communication between production, inventory, and accounting teams to address issues promptly.
By embracing Work in Process tracking and following these administrative guidelines, you can significantly enhance your manufacturing operations, leading to improved productivity, cost-effectiveness, and overall efficiency. This powerful tool empowers administrators to make data-driven decisions, ensuring a smooth and successful production journey.