In general we use typical terminology used in manufacturing companies, but depending on your industry there could be variations. This is a list of our terminology below, which will also be useful if you are new to manufacturing software.
BOM: Bill of Materials. A list of parts and operations required to produce a product.
SFDC: Shop floor data capture. Real time capture of operation times from production operators.
Sales order (SO): A contract with your customer to provide items at a set price and delivery date
Demand Quantity: The amount of items (parts) required by a sales order or stock replenishment
Works Order (WO): An instruction to works to generate parts from a bill of materials
UOM: Unit of measure eg. mm, kg, ltr, each.
Lot: A certain amount of a part, such as a “set of”, “box of”, “length of”. For example, you can define a part as a length of bar, the lot amount is the length to cut.
Gross Margin: The margin applied to direct costs to determine selling price.
Direct Costs: The total cost of production including parts and labour in a bill of materials.
Set-up Time: For an operation this is how long it takes to set up the machine or process, it is only required once per run.
Run Time: This is the amount of time required to run one item through an operation, this is multiplied by the demand quantity to calculate total run time of each operation.
Capacity:The amount of time available within a certain time frame for a workcenter or employee to process operations. For example, 34 hours a week allowing for employee breaks.
Current Stock: All parts have a stock quantity which is the total number of parts the business has in stock.
Allocated Stock: When a part is marked as “in production” it is allocated to an order. This means some of the current stock has been reserved against the works order.
Free Stock: The difference between the current stock and the allocated stock is the free stock - the number of parts in stock that are available to be used.
MRP (Material Resource Planning): Material Resource planning (MRP) is a system to determine what materials are needed and when. It is used to optimise the quantities and scheduling of deliveries of raw materials or out-sourced parts.
Stock Transactions: A stock transaction is a log of a change in the stock quantity of any part. It can be both negative and positive (removing or adding stock). The stock transactions within Fraction consist if:
Work in Progress (WIP): The WIP value is a calculation at any point in time to determine the current value of orders that are in progress in production but have not yet been invoiced to the clients. This value is required normally for month end financial reporting. The WIP report in Fraction ERP shows all live production orders and their corresponding WIP value.
Resource: A resource is a workcenter or employee that has a defined amount of capacity in order to perform a process or operation within production. It can be a single or group of workcenters or employees and is used for scheduling purposes.
Workcenter: A machine that is used in production to perform an operation. It can be a group of machines or equipment that has a defined capacity availability.
Operator: An employee performing production operations. It can be defined as a single or group of employees that has a defined capacity availability.
Tax Invoice: An invoice known as a tax invoice is a final invoice issued with a date that registers when the tax applies to the sale.
Proforma Invoice: A proforma invoice is a type of document to tell your customer that you have the intent to issue a tax invoice and it contains all the values and quantities that will be eventually invoiced. It is normally used to process a payment prior to production or prior to shipping if credit facilities are not in place.