Variations in Multisite Operations

Wide variations exist between companies with multiple locations. The following scenarios illustrate some of these variations.

Scenario #1: Autonomous Locations with Centralized Order Entry

Each location operates autonomously, with no material movement between locations. Company-wide information is defined for customers, sales prices, vendors, and items; SKU information is defined for each location. Sales orders can be taken for shipment from any location, with the ship-from location designated for each sales order line item. Approved vendors and purchase agreements apply to purchased materials at all locations. A centralized purchasing function coordinates delivery of common raw materials, with purchase order line items designating the ship-to locations. A centralized group handles accounting ”such as receivables, payables, and general ledger ”for all locations.

Scenario #2: Central Location Supplying Other Location(s)

The central location may represent a distribution center or a manufacturing plant. The other locations may represent a variety of situations, such as a remote finished goods warehouse, consigned inventory stocked at a customer site, or a separate service parts inventory. Transfer orders replenish inventory at the other locations based on SKU planning data.

Scenario #3: Inventory Stocked at a Subcontractor Location

Inventory stocked at a subcontractor location can represent three different cases. Purchased components can be shipped directly to the subcontractor, material components can be transferred to the subcontractor from another location, and the manufactured item (built via an outside operation) can be stocked at the subcontractor. The manufactured item has a master bill defining the supplied material and a master routing with the outside operation performed by the subcontractor.

Scenario #4: One Manufacturing Plant Building an Item for Another Plant

This scenario has two variations that can be labeled transfer complete and subcontract . In the transfer complete scenario, the parent item at the supplying plant is identified as manufactured (in the SKU planning data), while the same item at the consuming plant is identified as transfer (in the SKU planning data). The consuming plant does not return the completed item.

The subcontract scenario involves supplied material and a completed item that is returned to the supplying plant. The completed item is built at the consuming plant using the supplied material. At the consuming plant, the SKUs for supplied components are identified as transfer and the completed item s SKU is manufactured. At the supplying plant, the completed item s SKU is designated as transfer.

Scenario #5: One Manufacturing Plant Building Items Using Components from Another Location

Components are normally located at the same location as the production order for the parent item, but some multisite operations require an exception to this rule. Two examples will help clarify this exception. One example involves a manufacturing plant and a separate service parts location, where production orders in the service parts location use components stocked at the manufacturing plant. A second example involves a manufacturing plant with an adjoining raw material warehouse treated as a separate location; components for production orders are issued directly from the adjoining warehouse. These two examples could be modeled using the company-wide setup policy concerning the location of components, or by using the SKU s Components at Location field to indicate the alternate source of components. This enables planning calculations to correctly interpret requirements for replenishing inventory at the adjoining location.

Scenario #6: Multiple Manufacturing Plants that Build Different Items

The manufacturing plants have common raw materials but build different subassemblies and products identified by unique item numbers . Each of the manufactured items has a master bill and routing, where work centers for all locations are defined in the work center master.

Requirements for raw materials are driven by production orders, where the production order location drives location-specific requirements for raw materials. The purchase order line items identify the ship-to locations for purchasing common raw materials.

Scenario #7: Multiple Manufacturing Plants that Build the Same Item

Two or more manufacturing plants build the exact same item, where the item may be a subassembly or finished good. The master bill provides a company-wide standard for component materials. The planning calculations correctly interpret component requirements based on the production order location (which reflects item demands for the location).

Some manufacturing environments require a different bill of material for building the exact same item at different locations; a company-wide standard does not apply. One solution approach employs different versions of the master bill for each location-specific bill. This represents an authorized recipe approach. Firm planned production orders can be used to specify location and the bill version to be used.

The authorized recipe concept also applies to different routings for building the exact same item at different locations. Different versions of the routing reflect location-specific work centers or processing times. Firm planned production orders can be used to specify location and the routing version to be used.

Scenario #8: Multisite Operations Segmented into Multiple Companies

The segmentation of multiple locations into different companies often reflects different countries for the locations. Each country has unique accounting requirements that can be better served by a separate company within the database or by a country-specific version of Microsoft Navision. A separate company has separate information about items, locations, customers, and vendors. Trading between two companies involves a customer-to-vendor relationship, and transfers between locations in different companies involve the use of purchase orders and sales orders. The Biztalk documents for purchase orders and sales orders can automate the required transaction processing.

Case Studies

Case #47: Centralized MPS

A diaper manufacturing company had several plants spread around the United States that produced the exact same items ”different types of diapers ”using the exact same equipment.

Production volumes at each location reflected the local demand, but production was sometimes shifted between plants when one was overloaded. This required centralized master scheduling. Different versions of a master routing were defined that identified location-specific work centers, and firm-planned production orders for each location specified the correct routing version. A work center group was defined for these work centers to provide aggregate capacity planning and support centralized master scheduling.

Case #48: Multinational Food Products

A multinational food products manufacturer had multiple plants and distribution centers around the world. The manufacturing plants were located close to the source of raw materials, while the distribution centers were located close to the customers. Each location operated as a separate company, so that the transfers between locations were handled as a sales order shipment and purchase order receipt. The placement of purchase orders at a distribution center automatically created an associated sales order at the manufacturing plant. The sales order shipment (at the plant) automatically created a purchase order receipt (at the distribution center) into a bin location representing in-transit inventory.

Case #49: Food Bank Distributor

More than 100 autonomous food bank distributors use a customized version to handle unique requirements for inventory and financial management. This includes FIFO inventory handling rules with exceptions for product lot expiration dates, inventory repack and kitting, and donations management. It includes business logic for qualifiers about shoppers and agency orders (such as food kitchens), and support for grant usage and fund accounting. Each distributor operates as a stand-alone business entity with a separate copy of the software.

Case #50: Offshore Sales Company

An equipment manufacturer had four plants spread around the United States that operated as autonomous companies. The firm s chief executive lived on a Caribbean island, which was also the location of an offshore company that processed sales orders for the manufacturing plants. A sales order was entered for a piece of equipment with a drop-ship purchase order communicated to one of the four vendors that were the manufacturing plants. The company associated with each manufacturing plant had only one sold-to customer (the offshore company) and many bill-to customers (the firms that bought the equipment).

[1] See SecondHarvest.org for more information.