In Process Manufacturing based industries, it is common to encounter multiple use cases that involve production of an intermediate bulk item or items that are later packed into multiple packages depending on the product offerings of the distribution chain. This is typically known as containerized packaging and usually requires a fine tuned and well-planned production cycle to help obtain the best yield for right amount of intermediate finished goods manufactured. Microsoft Dynamics 365 for Finance and Operations (D365FO) helps address these needs with the assistance of a feature called Consolidated Batch Orders.
Consolidated Batch Orders help manufacturers plan their production processes from creation of common intermediate finished goods and link it with the production packaging processes in order to give the most economical batch sizes and quantities while reducing waste of resources and optimizing finished inventory levels.
To better illustrate this with an example, please consider the case of a plastic container production unit which involves utilizing a formula to produce a specific blend that is sold in multiple package sizes, each having its own marketability and margins. Typically, a manufacturer would either plan the production of the intermediate finished goods separately from the packaging process cycle or manually calculate the demand forecast for a particular finished good and backtrack to the required quantity of intermediate product.
Consolidated Batch Orders aim to reduce the complexities involved with the execution of the whole cycle without any stops allowing to minimize the costs typically associated with changeovers, set up time etc. The above diagram shows the processes that consolidated batch orders encompass.
Consolidated Batch Orders consist of 2 types of orders that are combined together:
- Bulk Orders
- Packing Orders
In Bulk Orders, the raw materials that are attached to the batch order are processed to produce the necessary intermediate products that need to be packed into 1 or more packages. The pack orders will consume the intermediates and the packaging materials in order to complete each of the orders.
The intermediate product is set up as a bulk item in the system and final finished good will be set up as a pack item. The important part of the product setup is to ensure the production type of Formula is selected in the case of both items as shown in images below.
Next setup the bulk item’s formula and approve and activate the formula versions for use.
Once that’s completed, define the relationship between the bulk item and the pack item. Please select the Bulk item conversion under the packaging section of the Manage inventory tab for either bulk or pack item and setup the conversion. The next step is to key in the number of Bulk units that will be packaged in to the packed finished good and its conversion factor if any.
The final stage of the puzzle would be to define the formula lines of the packaged finished good to mirror the bulk item conversion line and map the formula to the right bulk item. The configuration is complete and ready to test out consolidated batch orders.
To test the setup create a planned order of type production for the packaged finished good which will auto create planned batch order for the for both the pack item as well as it’s requisite intermediate bulk item.
Select the planned batch orders that need to be consolidated and proceed to firm and consolidate those orders together.
Voila … a consolidated batch order with it’s own ID is created combining the bulk item batch orders and pack item orders.
One can consolidate the batch order with other existing orders by selecting the “Add to consolidated batch order” button. This will allow adding orders with the same bulk item and pack item orders and conversions linked to the same bulk orders. The consolidated quantity of the batch order will be refreshed once the “Update consolidated batch order” button is clicked.
The users can plan ahead and combine orders with various packaging sizes to be consolidated and be executed in an efficient manner. This makes consolidated batch orders a valuable tool that can be used to simplify and optimize your production processes.