Manufacturing & Fractional Inventory

Enterprise resource planning (ERP) systems have become an essential tool for many manufacturing companies. These systems help businesses manage inventory, production, and distribution processes efficiently. In this blog, we will explore how ERP systems like Acumatica handle fractional inventory in manufacturing.

What is Fractional Inventory?

Fractional inventory is the amount of inventory that is less than a whole unit. For example, if a company stocks steel bars and the smallest unit of measurement is a 10ft steel bar, then any amount less than 10ft would be considered fractional inventory.

Manufacturing companies often deal with fractional inventory when producing goods, especially when they have a large number of components that need to be assembled. It is essential to track fractional inventory accurately as it can impact the overall production process and lead to wastage if not managed properly.

How ERP Systems like Acumatica handle Fractional Inventory

ERP systems like Acumatica have built-in functionality to handle fractional inventory in manufacturing. They provide an integrated platform to manage various aspects of the manufacturing process, including inventory management, production scheduling, and quality control.

Inventory Tracking

Acumatica’s inventory management system allows businesses to track inventory levels in real-time. It can handle fractional inventory by allowing companies to set up units of measure for each item. For example, if a company produces widgets and sells them in boxes of 10, they can set up a unit of measure for one widget and another for a box of 10 widgets. This way, they can track fractional inventory accurately and know exactly how many widgets are in stock, even if they are not in whole units.

Bill of Materials (BOM)

Acumatica’s BOM module enables businesses to create detailed lists of components needed to produce a finished product. This module allows companies to add fractional quantities of items to the BOM, ensuring that the system knows exactly how much of each component is required to produce the final product. The BOMs can be multi level, and include a combination of both stock and non-stock items.  BOMs can also be used to manage not only QC checks but also standard operating procedures used in manufacturing to ensure consistent results.

Production Planning and Scheduling

Acumatica’s manufacturing module helps companies plan and schedule their production process. The system takes into account the availability of resources, lead times, and production capacity to create a realistic production schedule. With fractional inventory, the system can ensure that all components are available in the correct quantities at the right time, minimizing wastage and production delays. 

Quality Control

Acumatica’s quality control module ensures that finished products meet the required standards before they are released to customers. The system can track fractional inventory during the production process, allowing for accurate reporting on the number of defective products produced. This way, companies can identify any issues in the production process and make necessary adjustments to reduce wastage.

Conclusion

Fractional inventory is a challenge that manufacturing companies face daily. However, ERP systems like Acumatica provide tools to manage fractional inventory effectively. With Acumatica’s inventory management, BOM, production planning, and quality control modules, companies can accurately track fractional inventory, reduce wastage, and improve overall efficiency.