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Image 1: Lifecycle of Raw Material, Work in Process, and Finished Good Items

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Item Types

NorthScope supports multiple ‘Item Types’ to help organize your item master. These Item Types behave one of two ways with respect to managing perpetual inventory balances. 

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While these types of codes are physically managed in nearly all food companies, not all companies manage them within their ERP system. These are discussed separately from Packaging and Ingredients because they often have a much higher cost, may be in multiple physical locations, and have expiration dates that must be managed.

Image 2: Product Flow

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As raw product is offloaded it is “Graded” (separated by size and/or quality) into 1 of 3 different WIP codes. Each WIP code then becomes the main input for one or more finished good item codes. Assume the truck is unloaded in 45 minutes and each of the 45 WIP Totes were immediately moved to one of 3 different production lines as it was filled. On average, one tote is filled and issued to a production line each minute. As one tote is emptied, the next one is consumed, until they are all gone. If this were recorded manually, the minimum data entry would be:

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1. Do you need to analyze purchases for specific items and/or maintain Vendor specific pricing for these items? If so, having unique item codes will make this possible whereas having a miscellaneous item code will not.
2. Do you need to maintain a perpetual balance of any of these items? If so, having unique item codes, and setting them up as “Sales Inventory” Item Types will be required. If not, you still may want unique items codes but set them up as “Misc. Charges” Item Types.
3. If you need to maintain a perpetual inventory balance, are you able to correctly relieve the correct item codes from inventory and do so in a timely manner?
4. Is it obvious how you would set these items up? You may purchase gloves from different vendors and each vendor may have a different size pack.

Tracking Inventory without integrated data collection for production

Without integrated data collection, every transaction must be manually entered (or uploaded) into NorthScope. While it may be your desire to have everything managed in the system, consideration must be given to amount of manual effort required to do this, and to do it accurately. Attempting to manually keep up with all the data entry may not add any real value. For reasons such as this, we recommend that without integrated data collection for production you START by only tracking inventory balances for Finished Goods and slow moving WIP Items (e.g. Frozen WIP). Once you are running smoothly, you can add additional tracking in future phases.

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Tracking Inventory with integrated data collection for Production

With integrated data collection for production you have more options. At a minimum you should be tracking Finished Goods inventory balances in NorthScope. However, with integrated data collection there are a few other factors that must be considered. For instance, if your data collection system only manages product movement but cannot manage back-dated on-hand inventory balances you may want to consider tracking WIP, Raw Materials, Ingredients, and Packaging in NorthScope. However, if these Items are currently managed in your data collection system then it may be best to leave those as they are. 

What makes Items unique?

In some systems, the Item Master is nothing more than a list of product codes that are only used to save users from manually typing descriptions on sales invoices. In NorthScope, the Item Master is the foundation of the entire system. To best capitalize on many of the features in NorthScope, including those you may not implement until a future date, a dedicated effort should be placed on constructing the Item Master.

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There  There are several factors to consider when creating your Item Master so simply cloning the Item setup from your current system may not be best choice. NorthScope may have different functionality, you may want to manage aspects of your business differently, and/or you may want to set it up to accommodate growth or expansion. There are several areas within NorthScope that rely on Item ID’s including: Inventory, Sales Order, Pricing, Sales Programs, Costing, Manufacturing, and Sales Analysis so having a well thought out plan may save you from costly rework later. Because of this, you should consider this from several angles.

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As you are going through this exercise, you may discover that you have too many options for how you package your product. Companies often find themselves in this situation over time because they may be selling anything “requested” rather than sticking to an intentional list. For example, if you sell Sockeye Salmon Portions, of various portion sizes, packed in a 10# Case your sales may look as follows:

You need to decide if the cost/effort of maintaining all these items is strategic or if simplifying by offering fewer options would be better. The additional labor and management cost of the few orders for 2-3oz or 3-4oz portions may be costing you substantially more per pound in labor than the 2-4 or 3-5 oz.

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We strongly encourage you to NOT to use  use full length intelligent Item Codes.

To re-label or not to re-label

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An on-screen inquiry of non-lot tracked inventory would look like this:

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Lot Tracked

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An on-screen inquiry of lot tracked inventory would look like this (assumes company owned product):

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Even if you decide to setup your items as Lot Tracked, you need to decide what “footprint” you want your lots to cover in NorthScope. There are several procedural options for adding this detail to NorthScope.

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In the figure below, there are 9 cases from 5 production batches meaning there are 5 unique inventory lots represented. If an order were placed for 3 cases, you would need to ensure the correct Lots were allocated so that your perpetual inventory balances remained accurate. The person picking the order would need to accurately record which Lots they took, and you would need to correctly allocate the same Lots to the order. A mistake on this simple order could be the difference in failed product recall.

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In a company with a low volume of orders containing one or two unique items, that has easy communication with the warehouse, this will be much easier to maintain than it would in a company doing more than 50 orders a day containing an average of 10 unique items that are shipping from multiple cold storages.

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The easiest step in managing variable weight items is recording the initial production, but for companies that sell in less than pallet quantities, the hardest part comes later. In the figure below, there are 9 Variable Weight cases in inventory each weighing between 10.00 and 10.25 lbs.

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If an order was placed for 3 cases, you would need to ensure the correct weight was allocated to it so that billing and perpetual inventory balances were accurate. The person picking the order would need to accurately record which cases they took to give you the correct total weight and you would need to correctly allocate the same amounts against the order. A mistake on this simple order could be the difference between 30.06 lbs. and 30.63 lbs.

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 Understanding Key Item Properties