Handling Co-Products and By-Products

In DEACOM, Formulas may be setup to handle co-production and by-production scenarios.

A co-product is produced along with the main product in an unknown quantity and generally carries equal importance, i.e. kerosene is a co-product of crude oil production. Co-products hold commercial value and add positively to the cost of goods manufactured. Co-products are often reused in the production process or sold to customers. In DEACOM, when finishing on jobs that contain co-products, the default quantity is set based on the quantity of the co-product specified on the job. This quantity is often set to zero under the assumption that co-produced quantities are often variable and not known until the production process has been started, but users may specify a default besides zero if desired. Additional information is contained in the Process section below.

A by-product is not a planned product and is produced after carrying out the process, i.e. ethanol is a byproduct of the sugar industry. Co-production situations must be defined on the Bill of Material prior to production. In DEACOM, the use of by-products assumes that the quantities of the by-product(s) are known as the result of the formulation specifications and processes. By-production situations may be defined on the bill of material prior to production or during the production process via the use of Custom Adds. Additionally, when defined on BOMs, MRP takes into account the quantities of any by-products from Jobs in case they are needed for future production/sales.

Configuration

Configuration information is contained within the Process section below.

Process

Setting up Co-Products

Co-products require a unique Part number, a co-product formula, must be added to the formula for the primary item being produced, and can be classified as Subassemblies or Finished Goods. Co-product BOMs appear on the BOMs of the primary products and the BOMs typically match (contain the same Raw Materials) but that is not required.

  1. Create an Item Master representing the co-product. If the co-product will sold, configure the item similar to a saleable part and ensure the "Saleable" flag is checked on the Properties tab.
  2. Create a BOM Revision for this co-product and assign it to the co-product. This revision represents the items that will be relieved/consumed during production of the co-product. It must have at least one BOM line, but may contain more. The co-product revision may be similar to the revision for a regularly produced item. The items on the co-product BOM represent the items that will be consumed during production and relieved from inventory.
  3. Assign this co-product Item Master to the BOM Revision for the primary item that will be produced together with the co-product on production jobs. This is accomplished by clicking the "New" button on the revision and adding the co-product item number in the "Part Number" field on the Edit BOM Line form within Bills Of Material.
  4. When adding the co-product to the BOM Revision for the primary product, users must specify the co-product revision in the "Co-production revision" field on the Edit BOM Line form within Bills Of Material. This field needs to be filled in on the revision for the primary product that is being produced along with the co-product. This field is not to be filled in on the revision that was created for the co-product item master. When a revision is indicated in this field, the item on the BOM line will be added to the production job that uses this revision. The revision created for the co-product should indicate the material that will be relieved when the co-product is produced.
  5. Specify a default co-production quantity in the "Co-Product Quantity" field on the Edit BOM Line form. This value is used in the calculation of the default quantity that will be set on the job line for the co-product. As indicated previously, this quantity is often to set to zero under the assumption that co-produced quantities are often variable and not known until the production process has been started. However, users may enter any value in this field to define the default. During job finishing, users will need to enter the actual quantity of co-product being finished. The calculation used by the system to define the default co-product quantity on jobs is defined as “AL/AY * |AC| “ where:
    1. AL = quantity of the primary product being produced as specified on the job
    2. AY = batch yield specified on the BOM for the primary product being produced 
    3. AC = absolute value specified in “Co-Product Quantity” field
  6. Optionally, users may select how co-produced quantities will be costed via the "Co-production cost" field on the Edit BOM Line form within Bills Of Material. This field defines how the co-product will be costed.
  7. Navigate to Production > Options > Finishing tab and check the "Show Lines With Zero Left To Finish In Input Production" flag and save. When marked as true, the input production will still show lines that have zero remaining quantity to produce. If all job lines have zero remaining quantities, this flag will allow users to finish more against any line in the scanner. This field must be checked if using the co-production feature in DEACOM.

Note: When creating multi-line jobs in MRP, the system will group co-products with the same part number and co-product revision into one line on the job. The quantity on the job line will be the sum of each co-product quantity.

Using Co-Products

Entering Co-Production quantities via the Close/Relieve form

  1. Navigate to Production > Job Reporting.
  2. Select the appropriate job in the "Job Number" field.
  3. Click the "View" button to display the "Job Summary" form.
  4. Click the "Close/Relieve" button to display the "Close/Relieve Job" form.
  5. Select the co-product line/part and click the "Modify" button to display the "Close/Relieve Job" line form.
  6. Enter appropriate values on the form including the "Finish Quantity" and "Leftover" fields.
  7. Enter any additional information on the form.
  8. Once all the information has been entered, click the "Save" and "Exit" button to close the "Close/Relieve Job" line form.
  9. Click the "Save" button on the "Close/Relieve Job" form to complete the process.

Entering Co-Production quantities via the Input Production form

  1. Navigate to Production > Input Production.
  2. Select the appropriate job in the "Job Number" field.
  3. Click the "Part Number" drop down field and select the co-product.
  4. Enter the correct value in the "Completing" field.
  5. Enter any additional information on the form as necessary.
  6. Click the "Finish" button to complete the process.

Note: The process above can also be performed in the DEACOM WMS application.

How Co-Production quantities are used during job creation

When a job is created manually or via MRP, the system will add a line to the job for the co-product, together with the co-product revision and default quantity. Users may override the default co-product quantity as required.

Setting up By-Products

To enable by-products, the following fields on the Edit BOM Line within Bills Of Material form must be defined:

  • "By-Product" flag - This property must be checked if this item is a by-product and is only available when the BOM quantity is a negative number.
  • Negative BOM lines - BOM lines that are by-products must contain a negative quantity in the "Quantity Per" field. By-products are created during job finishing but are skipped during issuing and relieving.
    • Note: If running in FIFO or Average cost modes, by-product costing options may be set Accounting Options.

Using By-Products

Entering By-Product quantities via the Custom Adds form

  1. Navigate to Production > Job Reporting.
  2. Select the appropriate job in the "Job Number" field.
  3. Click the "Modify" button to display the Edit Job form.
  4. Click the "Custom Adds" button to display the Custom BOM form.
  5. Click the "Add" button to display the Edit Custom BOM form.
  6. Select the appropriate part in the "Part Number" field, enter a negative quantity, and check off the "By-product" flag. The by-product flag will only be enabled when the quantity is less than 0. See the "Edit Custom BOM line" help section for additional information on this form.
  7. Fill in any additional information as necessary, then click "Save" and "Exit" button to close the "Edit Custom BOM" line form.
  8. Click the "Save" and "Exit" button to close the "Custom BOM" line form.
  9. Finally, click the "Save" button on the "Edit Job" form to complete the process.