Reorder Point and Order Cycle factor

October 24, 2013 at 5:26 PMIan Benoliel

A reorder point is great tool to identify which products to order from your suppliers.   Generally the reorder point is defined as lead time demand plus safety stock.     So lets say your lead time is 30 days and during that period your usage will be 70 units and safety stock is 30 units making the reorder point 100 units.    Now lets assume you have 105 units in stock and your next PO will be in 30 days.     This product will not be flagged for reorder because it is not below the reorder point.   By the time you issue your next purchase order,  you will have 35 units left or 15 days supply but the product will not arrive for another 30 days which will result in back order of 35 units!   

To avoid this issue, safety stock should include a factor for order cycle which is generally demand until the next order cycle.  Revisiting the above example, if the reorder point where to include 170 units then the product would be flagged during the reorder analysis and a back order avoided.   



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Batch Control and Tracking for Food and Beverage Manufacturers

October 7, 2013 at 10:02 AMIan Benoliel

How to control and track batches

One of the questions I get asked a lot is how to control and track batches that go into multiple pack sizes. Here is the scenario. A manufacturer of juice creates several batches of juice each day. As part of their manufacturing process, each batch is stored in a temperature controlled environment for a period of time until it is poured into several pack sizes.

Create a multi-level bill of materials

A bill of materials or BOM is also known as the formula, recipe, or ingredients lists. It is simply a list of the ingredients and their quantities of each needed to manufacture a product. However many food manufacturers create a multi-level or indented bill of materials structure. The first BOM would be for the batch and would contain all the raw materials or ingredients to create one unit (pound, gallon etc). The second BOM would be for each pack size that you sell. One of the ingredients in the pack BOM will be the batch BOM. For example the pack size for a 4 ounce pack may contain 4 ounces of the batch, a carton and label.

Use lot or batch numbers

Now that you have the bill of materials set, each time you create a new batch you assign a batch or lot numbers. Each time you create new packs you also assign them a lot number. You need to keep a record of which batch number was used within each pack you create (the lot number of the pack does not need to be the same as the batch number). Using this methodology, knowing the lot number of the pack you can trace back to the batch and even to the lot number of the ingredients used in the batch.

How to do this in All Orders

In All Orders you would create an 'Item' of type 'Assembly' for batch BOM and the BOM. You would indicate that these items have 'lot numbers'. When you create a batch you would create a 'Work Order'. You would indicate on the work order the quantities (and lot numbers) of the ingredients uses and assign the back a unique lot number. You can even print a label directly from the work order. When you create the pack BOM you would also create a work order and similarly indicate the quantities and lot number of the batch used.

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Customer Spotlight: Quality Bakery Products

October 2, 2013 at 10:33 AMHeidi Bragg


  • Founded – 1993
  • Sales Manager – Michael Tills
  • HQ – Houston, TX
  • Industry – Bakery Industry
  • Employees – 70

Problem: The management of Quality Bakery Products knew the company needed to update its purchasing and production systems. At the time, they were using paper records of their formulations and tracking inventory by hand. Though they used QuickBooks for accounting purposes, it didn’t offer the flexibility they needed for the rest of their enterprise resource planning (ERP) purposes.

Solution: After investigating different ERP software programs, the company’s management contacted NumberCruncher, the makers of All Orders. All Orders offers a QuickBooks-compatible, affordable ERP solution. NumberCruncher’s CEO, Ian Benoliel, worked with the Tills to test and implement the software. Now, Quality Bakery Products has all their records digitized and can better meet the needs of their clients.

Mike Tills has been in the bakery products industry for over 50 years. His first job was working in his family’s bakery supply company when he was a teenager. Mike’s son, Michael, grew up with his father’s business and has been working in this industry for 8 years. Their latest venture is Quality Bakery Products, a Houston-based bakery products manufacturer and supply company.

According to the American Bakers Association, “The baking industry is a dynamic part of the U.S. economy, accounting for about $311.0 billion in total economic output or roughly 2.1 percent of GDP. Bakers, product wholesalers and retailers directly or indirectly employed approximately 1.76 million Americans in 2010.” Quality Bakery Products (“Quality”) serves both independent and in-store bakeries nationwide.

Back in 2009, Quality was using QuickBooks accounting software but still kept all their recipe formulations in a binder and tracking inventory by hand. Mike Tills wanted to find a better solution, especially for their bill of materials (BOM) needs. He began researching enterprise resource planning software options.

Mike Tills was also looking for a greater measure of security, according to his son, Michael. “My dad likes to prep for the ‘worst case scenario’ – whether it’s weather, fire, etc.” Quality Bakery Products wanted to “get with the times” to bring the company into the digital age. “We wanted the security of knowing that if our facility was in a hurricane or if some other calamity occurred, we wouldn’t have to start from scratch. It’s important that we’re able to continue doing business and have access to our formulas no matter what happens.”

After evaluating a variety of options, Quality approached CEO Ian Benoliel of NumberCruncher. NumberCruncher’s All Orders software is compatible with QuickBooks and specifically designed to meet the ERP needs of small- to medium-sized businesses. Benoliel worked with Quality as they demoed bills of materials, sales orders, purchase orders, and other functions available in All Orders.

When describing this testing period, Michael Tills says, “The team at NumberCruncher was amazing. They’re very technical, as well as being very people-oriented. While we were testing the software, Ian was personally involved and helped us configure everthing to our needs. He cared enough to help us make sure the software was exactly what we needed.” Michael spent 6 months converting all the company’s paper formulations to spreadsheets, which were then uploaded to All Orders.

As they started began to implement All Orders, Mike Tills says another benefit was that it looks and functions much like QuickBooks. “When we started testing the software, it was very easy for our employees to learn the new software. We had very little resistance from them about adapting to the new system.”

The greatest benefit to Quality has been the flexibility of the bill of materials functionality in All Orders offers. “Our previous purchasing manager and co-founder had put the BOM information into QuickBooks, but it didn’t offer the planning flexibility we needed. All costs were static, and we were limited to just a bill of materials per unit,” remembers Michael Tills. He continues, “With All Orders, we can produce a large variety of reports, work orders, and other materials to use for forecasting. We use work orders as both a day-to-day production tool and a forecasting tool. For example, if we expect a 5,000-unit order in the near future, I can create a dummy work order to determine all the raw materials we’ll need to fill that order. And since our inventory and purchasing functions are also in All Orders, we can make sure that we have the right materials in stock at the right time.”

In the past two years, the company has added both All Orders Web and All Orders Mobile. Michael Tills says customers had been asking for the ability to order online, and the web version of All Orders has made that an easy solution for them. “We’re able to see the orders instantly and they’re integrated with all our other All Orders software functions,” he explains. “We also use the mobile function on all our scanners.” The ability to have inventory and order information available company-wide is key for Quality Bakery Products. “Some businesses are more compartmentalized. We’re a small company and we work closely together, so it’s important for us to have visibility across all job functions.”

Both Mike and Michael Tills are extremely pleased with how All Orders has helped their business, and with the continual product innovations NumberCruncher provides. Michael Tills continues, “QuickBooks sends out an update once a year, and they rarely implement product suggestions from their customers. But All Orders is always making frequent improvements to help their customers, and they really listen to our feedback.” Michael Tills concludes by saying, “We feel like we have a custom software solution designed specifically for us.”

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