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NOVEMBER 2022 I SMT007 MAGAZINE 61 through a small allowance made by ERP on a general basis. Practically however, the accu- mulation of spoilage can quickly exceed con- trol limits, making such allowances only a short-term buffer. e practical way to prevent the accrual of stock level inaccuracies between physical stock and ERP inventory levels, requires gath- ering data about any material-related actions as they are being performed in an automated way. Specific material consumption from machines or operator tasks must be set into context with any last-minute selections of alternative or sub- stitute materials allowed in the BOM. e modern MES solution, with built-in unique-ID-based material management sup- port, gathers and contextualizes all material information in a way that other solutions and manual efforts cannot. Each individual mate- rial or carrier of materials is uniquely identi- fied, which is used to manage every aspect of the material's journey and usage throughout the factory. e location and status of each material is always known in a far more compre- hensive way than ERP, including designated warehouses, point-of-use stores on the shop- floor, or being loaded onto or near a manufac- turing process. Both production and materials operators must be trained to understand the value and importance of the disciplines needed behind day-to-day physical material management. For example, materials must not be trivially discarded, used in a different application than intended, or, if compromised in any way during logistics, etc., issues must not go unreported. As part of their operation, following paper- less work instructions, any spoilage or other losses should be easily reported as part of their normal role. e exchange of information between MES and ERP is essential, such that ERP can replace unexpectedly spoiled materials where nec- essary. ERP performs more effectively, accu- rately differentiating materials that are freely available, allocated, partly used, or may require testing and inspection prior to further use. Operational risk can only be managed effec- tively by ERP knowing the situation related to real physical inventory levels. In summary, there are some easy and estab- lished routes towards great inventory manage- ment, which should not be kept secret: • A good ERP solution: › e ability to set rules for purchasing against individual material part numbers › e capability to handle complex BOMs › Management of local purchasing decisions with engineering approvals › Great communication with MES • A great MES solution: › Complete, continuous visibility of exact material quantities, locations, history, and status › Automated gathering of material consumption, spoilage, and other data, including scrapped materials and products, from automated machine processes as well as from manual operations ere are many other functions that manu- facturers may like to see from their ERP and MES solutions, though these can be a distrac- tion from ensuring that the very basic require- ments, without which the modern manufactur- ing operation, based on the evolved "random" business logic of customers, will find it very hard to be successful. e secret is to never compromise on inventory accuracy. SMT007 Michael Ford is the senior director of emerging industry strategy for Aegis Software and an I-Connect007 columnist. To read past columns, click here.