1. QAD Routings Implementation Sheri Forrest – RFBP Nadia Truxell – Logan Consulting

2. Routings – Introduction Introduction Ralcorp Frozen Bakery Products Routings - Why Use them? Routings – Implementation at Ralcorp Review Process Changes – Scheduling, Backflushing Review GL Transactions with Routings - Variances Reporting Needs

3. Introduction – Sheri Forrest Ernst & Young-Auditor – Manufacturing – Banking – Entrepreneurial Services Ralcorp Holdings, Inc. –Finance Manager Frozen Bakery Division Responsible for financial and management reporting for 9 plants. – 9 QAD implementations – Upgrade from 7.2 to EB2 – Major re-implementation completed in 2009 – Routings – BOM Standardization

4. Introduction – Nadia Truxell Operations/Materials Manager – Scherdel Sales & Technology Automotive Supplier of Springs and Stampings Implemented QAD Project Manager – Logan Consulting QAD Implementations and Business Process Consulting Automotive Food & Beverage Consumer Goods Industrial Products

5. Introduction – RFBP Bread, Griddle, and Cookie products for Industrial, Foodservice, and Retail markets 9 Manufacturing plants across the US and Canada Advanced Repetitive processing

6. Why Implement Routings? Efficiency Utilization Productivity

7. Why Implement Routings? Productivity Efficiency X Utilization

8. Routings – Why Implement? Routing = Sequence of Operations used to define the production process for a finished good item or sub-assembly Capacity Planning – Work Center and Department Load Improved production reporting Improved variance reporting – Labor Costs reported at Standard Ability to compare actual to standard Lays framework for more sophisticated shop floor RF process

9. Routings – Effects EFFECTS OF ROUTINGS The system uses routing data to: o Calculate the cost of producing an item o Calculate the time it takes to manufacture an item o Schedule operations for work orders and repetitive schedules o Backflush components in the Repetitive and Advanced Repetitive modules o Calculate work center and department load o Print routings for work orders o Obtain operation feedback using programs in Shop Floor Control, Repetitive, and Advanced Repetitive o Calculate component yield when Use Op Based Yield is Yes in MRP Control

10. Routings – RFBP Implementation Routing “999” for all Items No Labor Costs booked at time of backflush – Method Variance No visibility for Capacity planning/Department/Work Center Load

11. Routings – RFBP Current State Routing “999” for all Items No Labor Costs booked at time of backflush – Method Variance No visibility for Capacity planning/Department/Work Center Load

12. Routings – Future State QAD Routing Implementation - Phase 1 Create Routings to measure standard Machine and Labor Time Provide ability to obtain improved reporting at a production line level Lay the framework for a more sophisticated reporting process and standard methodology for creating costs for manufactured items.

13. Project Timeline

14. Routings - Setup Departments Work Center Routing Maintenance Alternate Routing Maintenance Item Site Planning Maintenance

15. Departments

16. Use Department Maintenance to define departments and set up labor capacity and general ledger (GL) accounts for each department. Department – Code representing Department within Plant: Current State: 53000 = Ogden, 53500=Fridley Discussion Point Define Accounts and Sub Accounts for: Cost of Production Labor Burden Labor Usage Variance Labor Rate Variance Burden Usage Variance Burden Rate Variance Accounts Default from Product Line Maintenance or Work Order Account Maint

17. Work Centers

18. Work Center Maintenance Use Work Center Maintenance to define work centers, which are production areas with one or more people or machines having identical capabilities. Work center data controls processing in four areas: o Scheduling: When a routing operation is specified at this work center, lead time fields (Operation, Queue Time, Wait Time, and Machines per Op) default to those for the routing. o CRP: Capacity for this work center is the number of machines in a work center (machines/work center) multiplied by the number of available hours (from Calendar Maintenance). o Costing: Manufacturing costs are calculated in Routing Cost Roll-Up. Labor costs are calculated by multiplying the setup and run times at each operation by the setup rate and labor rate. Burden costs use machine burden rate, labor burden rate, and labor burden %. Subcontract costs are taken from subcontract cost at the operation level. o Accounting: Each work center belongs to a department, which determines the GL accounts that track variances, labor and burden costs.

19. Work Center Maintenance Work Center: Enter Code representing the Work Center within a Department Machine: Enter standard headcount (staffing) required to run this work center. This functions as a sub record of the work center. Department: Select the Department Code for the Work Center Mach/Op: Leave as default (1) Setup Crew: Optional – Reference Only Run Crew: Optional – Reference Only Labor Rate: Enter the Average Labor Rate per hour required to run this Work Center.

20. Routing Maintenance

21. Routing Code: Code Representing Product/Family manufactured through a Work Center Existing Convention: 53001-01 (Routing 1 on Ogden Line 1) Operation: Enter “0” for Machine Hours, “5” for Labor Hours, “99” for Backflush Start Date: Enter beginning effective date of the Routing Work Center: Enter the Work Center associated with this Routing Description: Enter the Description associated with this Routing Run Crew: Defaults from Work Center Maint – Reference Only Run Time: Enter the amount of time it takes for one unit of this item/family to be processed. Use Routing Maintenance Rate Based to enter units/hr Auto Labor Report: Check Box to report labor at standard

22. Alternate Routing Maintenance

23. Use Alternate Routing Maintenance to assign approved alternate routings to items and sites. When an item can be made different ways, using different operations, work centers, machines, and perhaps different components. Each of these is called an alternate. Item Number: Enter the Item Number the Alt Routing is associated with. Site: Enter the site where the Item is manufactured.

24. Item-Site Planning

25. Scheduling Concept

26. Backflush Transaction

27. GL Impact – Backflush with Labor

28. GL Impact - Examples

29. GL Impact - Variances Labor Usage Variance Labor Rate Variance Burden Usage Variance Burden Rate Variance Method Variance

30. Rep Operations Acct Report

31. RFBP Custom Report Labor Variance Report: 99.29

32. RFBP Custom Report Labor Variance Report Selection criteria ID: Leave blank or specify a range Work Order: Leave blank-repetitive/Specify range –discrete work order Site: Enter site range Line: Leave blank or specify a range Work Center: Leave blank or specify a range Machine: Leave blank or specify a range Routing: Leave blank or specify a range Operation: Leave as default or run for 0, 5, 99 Department: Leave blank or specify a range Effective date: Specify a range Report Total: Check for a single operation, No check for the default.

33. RFBP Custom Report

34. Routings – RFBP Implementation Routing Implementation Challenges Data collection- not all need information currently collected. Data Input- scarce resources, training. Data integrity- Shop floor data accuracy and completeness questionable. Current ‘Home-grown’ production reporting system providing needed information—Why change? QAD out-of-the-box reporting tools inadequate. Additional steps to the new item setup process at the plant. Interpreting routing data- What does it mean? How will we use it?

35. Routings - RFBP Questions?