Why not to ‘Backflush’?
Well, we know that Backflush is used for automatic goods issue during order/operation confirmation. Thus, it’s a great function as it doesn’t involve any manual intervention and components are consumed by the order automatically while posting confirmation.
The backflush can be activated at several levels like Work center, Material Master, Routing or directly in the production order.
However, there are several parameters to be considered while deciding whether to Backflush or to do manual goods issue.
I would like to highlight several cases when you shouldn’t’ choose of Backflush:
- Variance in component consumption: If the component consumption varies for each product or lot then it is not advisable to choose Backflush. Backflush should be used when the component to product ratio is fixed for example you would need two tyres while assembling a bicycle. But whenever the component consumption is not fixed for example in FMCG, Pharma industries etc, you should opt for manual goods issue and capture the actual component consumption.
- Batch consumption varies: The automatic batch determination works on FIFO, LIFO etc. However, if you’re in a specific industry and the business wants to consume a particular batch of a product then you must choose manual goods issue since it gives you flexibility to choose the correct batch during goods issue.
- Long Lead times for production: If the production lead time is significant high for example an operation takes several days, then the components are consumed during confirmation. This could mean there is variance in inventory since the raw materials are actually consumed at the beginning of the process. So it is better to post goods issue at the start of the process.
While there are several advantages of Backflush, there are several disadvantages as well. So, it is quite important to choose wisely whether to Backflush or not.
I agree that in some cases it is not prudent to backflush. Most businesses I have been involved in though do not put enough resources to capture the real component consumption and then end up posting as a stock loss (totally wrong) or posting to a GL Account relating to production.
If staffing levels are sufficient though I would definitely agree that varying component consumption should mean manual backflush or posting additional components to the production order on top of that which the system already takes care of.
That is a very good. concise piece of writing.
I would advise to use backflush of components:
Obviously backflush consumption quantity might differ from the actual one. Hence it is important to introduce a process to periodically count the components and settle the differences.
Backflush is to consume components during a confirmation after the physical use of the component. We need to distinguish between a quick backflush and a careful backflush.
In quick (or blind) backflushing you consume the components pro-rata for the amount of finished material that was yielded + scrapped. In this case I agree with your comments.
But we used careful backflushing very successfully in a pharma, batch controlled, environment. During confirmation the operator will always look at the material movements screen and edit the quantities and batches of the components that are pending goods issue. If she's used up component batch A and dipped into component batch B she will edit those quantities to match what she's physically consumed prior to hitting the confirmation save button.
Very good article; keep them coming!
Also we can activate the bsckflush at configuration (order type), Irrespective of operation,work center or components will be back flushed. It can be suggested to whenever every component auto goods issue to be done.