Outside Production Processing for Sheet Metal Coils in Dynamics 365

If your manufacturing company is engaged in further processing of sheet metal coils or similar products using outside processing mills, you might want to consider a new feature for Microsoft Dynamics 365 Finance and Supply Chain Management (D365 FSCM) to enhance and streamline the production process.  

Many companies using third party production processing will send the material to the processing mill and then wait for production completion before updating their internal ERP with the data the producing mill provides. This data includes the produced coil ASTM specifications, weight, gauge, width, length, and scrap amount of the finished coils. Different mills can also have different methods of calculating the service charge for each production process. These could be billed at initial or start weight, or output/produced weight minus any scrap produced. Currently there is no easy way to both convert the original item to the newly produced item and capture the individual item processing costs down to the serial item level. 

To solve this, we have taken the standard D365 production BOM journal and enhanced it to add the following features: 

• Coil reservation that still allows transfer to the processing mill. 
• Capture of processing mill billing method (original tonnage or produced tonnage). 
• Multiple mill processes. (Paint, slit, pickle, stipple, galvanize, etc.) 
• Link to customer sales order (if production is presold for a specific customer and item specification) 
• Multiple different children coils produced from same parent coil. 
• Multiple different parent coils in same production run. 
• Capture of estimated scrap and actual scrap reported by the mill per produced child item. 
• Return to stock functionality for unused parent coil remainder. 
• Capture of all the desired specs of the children coils created including out of spec defects. 
• Different child widths from single parent coil (slit to width operation) 

How to Use This Feature for Outside Production Processing

First step is to create a processing purchase order to capture the services the mill will perform. Each service then needs a separate service item on the production purchase order with the associated cost for each line and if that service is start weight or produced weight. 

From within the processing PO, the user can then select the coils to be reserved for this order. The system will prefilter to the available coils and list in a sub screen for selection, including the current specifications of the stock material. 

The selected coils are then available to the processing PO production BOM journal. 

When the Outside Processing Production Entry screen opens the parent items preselected are in the Raw material section and the user will add the desired child items to the lower table for each parent selected. The enhancement automatically updates the entered child detail and calculates the cost apportionment to each per the selected costing method. 

Once the user has everything in the child section entered as desired, they will then create the Production BOM journal for the entered outside processing production run. 

Here’s an example of exploded allocation Production BOM journal created from the process: 

The user can then post the BOM journal, which will then add the children coils to inventory as well as the parent items deduction with all associated GL and cost apportionment from parent to child allocated. 

Have any questions about using the enhanced outside production processing feature in Microsoft Dynamics 365 Finance and Supply Chain Management? Please reach out to our experts at any time!