SytelineMaster

Today, many, if not most, US manufacturers have operation in China.  They either build out manufacturing facilities to take advantage of global supply chain, or setup sales/marketing operation to catch China market potential, and may be both.  With US headquarter and operation running in Syteline, it is nature to put Syteline into China branch as well.

But what do you need to know in order to have a successful Syteline implementation in China?

From 1996 to 2004, I was the country manager for Symix/Frontstep/Mapics in China.  I had involved in over 130 Syteline implementations in China, many of those, especially the early ones, are US manufacturing companies.  I was also leading the major Chinese localization project in Syteline, like Chinese Financial Module, which is still the central part of Syteline Chinese country pack today.   After coming back to US in 2006, my Syteline consulting practice still crosses Pacific ocean often.  Just last year, I completed three Syteline 8 implementation projects for US companies in China.  With all that said, I think I am in a good position to talk about what you need to know for a successful Syteline implementation in China.

Let’s run down the list.

1) What additional software components you will need?

If you need the Chinese user interface, and/or if you want to keep your financial book in Syteline, you will need the China Country Pack, which is an extra software component you need to purchase from Infor.  The Country Pack includes the Chinese UI and a Chinese Financial Module to handle the special regulation requirement for accounting system in China.

2) Where should you put your servers?

You have options of centralizing servers in your US headquarter, or putting server locally in your China branch.  They both have pros and cons.
With centralized servers, you can utilize knowledge and resource in US HQ for system administration, so you don’t need a dedicated IT person in your China branch.  You may also leverage your hardware/software investment that you already made in US HQ.
The biggest drawback for centralizing server is performance.  In general, the remote access from China to your US HQ will be slow.  Increase the internet bandwidth in both of your HQ and China branch would help, but may not fully resolve the problem, due to the bottleneck may be in the internet connection between the two countries.  Also, the so called “Great Wall” firewall setup/controlled by Chinese government may sometime block your connection without reason.  Recently, one of my client even experience connection problem with Infor Saas hosting server.  By the way, proxy server is not a solution to get around the Great Firewall, since Syteline would not work at all with Proxy.

So if you do want to centralize your servers in US HQ, do set it up and have your users in China try it out first, to see if they are OK with the connection and performance.

3) How should you setup your multi-sites environment?

The multi-sites structure would of course be based on your company situation.  Normally, if you need to consolidate financial statement, you will need to setup a site DB and an entity DB, both of them are in CNY currency, for your China branch.

When creating DB for your China site, just remember to use CNY as domestic currency and select proper China time zone for it.  By doing that, your China user will see the correct local time zone, even though your server may located in US.

If you are going to do data replication between your US site and China site, ITAR compliance may need to be taking into consideration.  You may need to modify your replication rule.

4) Multi-currency is a must.

You would most likely need to setup multi-currency for your China branch DB, with CNY as domestic currency and USD/others as foreign currency.  When setting up USD currency, make sure to check the “Rate is Divisor” box.  This will reduce the transaction rounding error.

5) What do you need to know about the China VAT tax system?

In some extent, China VAT tax system may be considered simpler than US sales tax system, since there are not that many differ tax jurisdictions as US does, and tax rates do not change as often as US.

But you do need to setup VAT tax system in both sales and buy side.  Tax paid with your purchasing will be credit against to your tax liability in sales side.  Please check out my another post for detail in setting up China VAT tax system.

In that nature of China VAT tax system, a VAT tax invoice you collected from your supplier actually has cash value, just like bank notes.  And that is why Chinese government has tie control on VAT Invoice.  VAT invoice can only printed out from a dedicated tax control machine that issued from government, and the invoice# is pre-assigned and controlled by government.  Syteline invoice# can only used for internal control, not really the one that you can present to your customer.

So, to help accounting people reconcile Syteline invoice# and official VAT invoice#, a modification would be required to put VAT Invoice# into various AR forms, like “Invoice, Debit/Credit Memo”, “AR posted transaction”, and “AR payment quick application”, and may also need in AR reports like “AR Aging”.

6) What is the Chinese Financial Module, and what is that for?

Chinese accounting regulation requires an unique voucher number for each accounting transaction (combined multiple debit/credit entries), something similar to control number today we have in Syteline 7 & 8.  But the early version of Syteline (before and include SL6) don’t have that function, and that was the major driving force for developing Chinese Financial Module back in 2001.

Today, Chinese Financial Module is still crucial for any Syteline implementation in China.  It is pretty much a GL system that allow user to enter/maintain voucher, to print voucher form, and to print Chinese accounting book.  Those are generally required for compliance with Chinese accounting regulation.

In terms of Financial Statement, local Chinese government do have some standard format requirement.  But I have found that with Syteline Excel Addon, it is quite easy to fulfill whatever format requirement is.

7) Other special consideration during implementation.

There are some other special considerations that need to be taken into account during your Chinese implementation.  Here I list a few.  The solution to each of them may vary, depend on company situation.

• Chinese accounting regulation has some standard on top level chart of account setup.  In most case, you company will need to follow that standard.  If you are going to consolidate financial statement to US headquarter, some sort of account mapping will need to setup properly before hand.
• Duty free imported material keep in bound location.  Custom regulation requires that those duty free imported material to be kept in special bound location, and has full tractability to prove that they are only used on products that will export out later.
• Company may be required to declare their earning and pay income tax in monthly base, instead of yearly based in US.  That means you may need to do GL adjustment to move P/L to retain earning in monthly base.
• It is normal accounting practice in China to fully allocate your actual overhead cost into COGS in monthly based.

8) Implementation, local support consideration.

Needless to say, a suitable consulting team is crucial to your implementation project success.  Capabilities you should look for are,

• Understand both western and Chinese business culture and best practice.
• Deliver training and consulting service in both English and Chinese.
• Able to facilitate better communication between US headquarter and China local team
• Provide long term local support.

CRP – INVENTORY CONTROL

• Set up parameter files
• Determine item structure for Item Master.  Determine what will be inventory items and non-inventory items.
• Determine structure for Product Codes/Distribution Accounts.
• Set up master files
  • Item Master
    • Purchasing information
    • Manufacturing information
    • Costing information
    • Engineering information
    • Sales information
  • Product Codes/Distribution Accounts
  • Warehouse Master
  • Stock Locations
    • Nettable/non-nettable
    • Temporary/permanent
  • Reason Codes for miscellaneous inventory transactions
  • Set up Customer/Item and Vendor/Item Cross References
  • Determine valid item/stockroom locations for each inventory item & ranking
  • Determine use of lot tracking and/or serial tracking
  • Determine use of item reservations
    • Procedures to be considered and tested, including how-to, responsibility, frequency, reporting requirements:
      • Item maintenance, including BOMs
      • Product Code/Distribution Accounts maintenance
      • Warehouse orders and transfers
      • Use of miscellaneous inventory transactions
      • Cycle count
      • Physical inventory
      • Periodic procedures and utilities
        • Rebalance utilities
        • Cost roll-ups
        • Roll current unit cost to standard unit cost
        • Delete transactions/locations/lots/serial numbers
        • Set item PTD and YTD totals to zero
• Determine reports and/or documentation to be used for all procedures – SyteLine and internal
• Establish guidelines for retention of documents and reports – printing hard copies or printing to the terminal

CRP – BOM

• Set up master files
  • Work Centers – scheduling & costing information
  • Machine Master
  • Maintenance schedules
  • Cells
  • Create current routings and bills of material for manufactured items
  • Perform BOM utilities to create standard routing/BOM
    • Low Level Processor
    • BOM Cost Roll-up
    • Roll Current Unit Cost to Standard Unit Cost
• Procedures to be considered and tested, including how-to, responsibility, frequency, reporting requirements:
  • BOM maintenance
  • Periodic procedures and utilities
    • Cost roll-ups
    • Roll current unit cost to standard unit cost
    • Delete utilities
    • Substitutions
• Determine reports and/or documentation to be used for all procedures – SyteLine and internal
• Establish guidelines for retention of documents and reports – printing hard copies or printing to the terminal

CRP – ENGINEERING CHANGE NOTICES

• Set up codes
  • Priority Codes
  • Reason Codes
  • Distribution Codes
• Procedures to be considered and tested, including how-to, responsibility, frequency, reporting requirements:
  • Use of Engineering Change Notices for items, estimates, and/or jobs
    • Guidelines for use
    • Requests
    • Flow of documentation through system
    • Changes to
    • Revision tracking
    • Approval
• Determine reports and/or documentation to be used for all procedures – SyteLine and internal
• Establish guidelines for retention of documents and reports – printing hard copies or printing to the terminal

CRP – ORDER ENTRY

• Set up parameter files
• Set up master files, creating examples of each possible type of record or situation that may occur
  • Customer Master
  • Ship-To Addresses
  • Salesperson Master
  • Billing Terms
  • Ship Via Codes
  • Shipping Return Reason Codes
  • Customer Hold Reason Codes
  • Set up Customer/Item cross-references
  • Determine use of Drop Ship To’s
  • Tax codes
    • Determine requirements for reporting on sales tax collected
    • Establish required tax codes
    • Establish procedures for assessing sales tax on orders
    • Pricing
      • Review requirements
      • Establish pricing by some combination of available methods
      • Determine procedures for price changes
      • Determine procedures for exceptions to existing pricing
      • Determine procedures for new item pricing and/or modifications to items
• Procedures to be considered and tested, including how-to, responsibility, frequency, reporting requirements
  • Customer Order Entry – steps
    • Create order
    • Print Order Verification
    • Verify on-hand, available to ship
    • Print Order Pick List
    • Ship items
    • Print Packing Slip
    • Print Bill of Lading
    • Invoice order
    • Close order after invoicing
  • Customer Order Entry – types of orders to consider
    • Regular/blanket in stock
    • Regular/blanket manufacture to order
    • Regular/blanket conversions
    • Regular/blanket spare parts
    • Regular/blanket services
    • Other

CRP – ORDER ENTRY (contd.)

• Changes to existing orders
• Managing back orders – completing/not completing
• Expediting orders
• Progressive billing – use and management
• Stopping/re-releasing orders
• Order cancellations
• Shipping return procedures
  • Use of RMAs to manage
  • Flow of documentation through the system
  • Notification to shipping department and customer service/accounting          for credit to customer
  • Perform shipping return
  • Inspection of returned goods and return/not return to inventory
  • Generation and control of credit memos
  • Un-ship (prior to invoicing)
  • Use of credit holds and credit limits
    • Compliance and exceptions
    • Changes to credit limit
  • Order Inquiry handling by customer service
  • Reserving inventory for orders
  • Adjustments to price after invoicing
  • Commissions
    • Use of SyteLine commission structure or external
    • Management of calculation
    • Adjustments to
    • Payment through AP or Payroll
  • Routine utilities and procedures
    • Closing orders
    • Purge Customer Order Audit Trail
    • Rebalance Customer Order/Posted Balance
    • Balance History
    • Period/Year end Procedures
    • Delete and purge transactions
• Determine reports and/or documentation to be used at each step – SyteLine and internal
• Establish guidelines for retention of documents and reports – printing hard copies or printing to the terminal

CRP – PURCHASING

• Set up parameter files
• Set up master files, creating examples of each possible type of record or situation that may occur
  • Vendor Master and remit to vendors
  • Billing Terms
  • Ship Via Codes
  • Drop Ship To’s
  • Receiving Return Reason Codes
  • Set up Vendor/Item cross-references
  • Determine use of Drop Ship To’s
    • Procedures to be considered and tested, including how-to, responsibility, frequency, reporting requirements
      • Purchase Requisitions – if and for what items
      • Purchase Order Entry – steps
        • Create purchase order
        • Verify cost
        • Print Purchase Order
        • Print purchasing Receiving List
        • Receive items
        • Close order after vouchering (AP)
  • Purchase Order Entry – types to consider
    • Regular/blanket for inventory stock items
    • Regular/blanket for non-inventory items
    • Regular/blanket Customer Orders – cross-reference or not
    • Regular for Job Orders – cross-reference or not
    • Regular for inter-company purchases
  • Lot/serial controls on purchases
  • Expediting Purchase Orders
  • Canceling Purchase Orders
  • Managing back orders – completing/not completing
  • Receiving returns
    • Use of RMAs to manage
    • Flow of documentation through the system
      • Notification to receiving department and accounting for credit from vendor
    • Perform receiving return
  • Un-receive (prior to vouchering)
  • Use of PO Change Orders
    • Determine use of Vendor Communications Log

CRP – PURCHASING (contd.)

• Routine utilities and procedures
  • Closing Purchase Orders
  • Closing Change Orders
    • Review and update Purchased Current Unit Cost if vouchered cost does not equal received cost
    • Purge Purchase Order Audit Trail
    • Rebalance items
    • Delete utilities
    • Determine reports and documentation to be used – SyteLine and internal
      • Determine how purchasing requirements will be determined – Purchase Requirements Report or MRP
      • Determine if tax codes are to be used for purchasing
        • Establish tax codes as required
        • Establish procedures for assessing use tax
        • Determine reporting requirements for use tax on purchases

CRP – ACCOUNTS PAYABLE

• Set up parameter files
• Set up master files, creating examples of each possible type of record or situation that may occur
  • Vendor Master and remit to vendors
  • Salesperson Master
  • Billing Terms
  • Ship Via Codes
  • State Master
  • Vendor Payment Hold Reason Codes
  • Bank Codes
  • Set up Vendor/Item Cross-references
  • Establish tax codes as required
    • Establish procedures for assessing use tax
    • Determine reporting requirements for use tax on purchases
• Procedures to be considered and tested, including how-to, responsibility, frequency, reporting requirements
  • Vouchering
    • From purchasing
    • Manually through Vouchers & Adjustments
    • Generating recurring vouchers
    • Distributing manual and recurring vouchers
  • Voucher Adjustments
    • From purchasing returns
    • Manually through Vouchers & Adjustments
    • Distributing voucher adjustments
  • Payment processing
    • Manual check posting
    • Generation of standard checks
    • Manual addition of standard checks
    • Selection of check distributions
    • Check printing and posting
  • Void checks prior to posting and after posting
  • Putting vendors and/or vouchers on hold
  • Use of Vendor Communications Log
  • Routine utilities and procedures
    • Year end procedure
    • Delete transactions
    • Deactivate posted transactions
    • Generate currency gains/losses
    • Purge Vendor Master Audit Trail

CRP – ACCOUNTS PAYABLE (contd.)

• Determine reports and documentation to be used – SyteLine and internal
  • Establish procedures for retention of documents and reports – printing hard copies or printing to the terminal

Accounts Payable Cut-Over Procedures:

• Order checks
• Set up recurring vouchers
• Enter all AP open vouchers at cut-over date into Vouchers & Adjustments (this includes those items vouchered in the existing system – i.e. already recorded in general ledger on the existing system)
• Enter all AP open payments, if any, such as an un-applied deposit on a vendor’s account at cut-over date into Payments
• Post Vouchers & Adjustments and Payments files to AP Distribution Journal
• Purge AP Dist. of all transactions
• Print AP Aging.  Verify vendor balances to AP Aging on existing system.
• Enter outstanding checks into Bank Reconciliation file

CRP – ACCOUNTS RECEIVABLE

• Set up parameter files
• Set up master files, creating examples of each possible type of record or situation that may occur
  • Customer Master
  • Ship-To Addresses
  • Salesperson Master
  • Billing Terms
  • Ship Via Codes
  • Bank Codes
  • Establish tax codes as required
    • Determine requirements for reporting on sales tax collected
    • Establish procedures for assessing sales tax on orders
• Procedures to be considered and tested, including how-to, responsibility, frequency, reporting requirements
  • Invoices, debit memos, and credit memos
    • Generate from Order Entry
    • Price Adjustments generated in Order Entry
    • Create and print from Accounts Receivable
      • Uses for AR invoices, debits, and credits
      • Distributing AR invoices, debits, and credits
    • Invoice posting
    • Transactions review
  • Payments
    • Distributions to invoices
    • Prepayments tied to Customer Orders
    • Open payments
    • Non-AR payments
    • Payment posting
    • Re-application of open payments
    • Re-application of open credits and debits
  • Add bank deposits to Bank Reconciliation file
  • Process finance charges
  • Review posted transactions for open transactions
  • Collections, statements, dunning letters
  • Use of Customer Communications Log

CRP – ACCOUNTS RECEIVABLE (contd.)

• Routine utilities and procedures
  • Rebalance Customer Order/Posted Balance
  • Balance History
  • Period/Year end Procedures
  • Delete and purge transactions
  • Deactivate Posted Transactions
  • Purge Customer Audit Trail
  • Generate Currency Gains/Losses
  • Determine reports and/or documentation to be used – SyteLine and internal
    • Establish procedures for retention of documents and reports – printing hard copies or printing to the terminal

Accounts Receivable Cut-Over Procedures:

• Order invoices and statements
• Enter all AR open invoices at cut-over date into Invoices, Debits, & Credits screen (this includes those items invoiced in the existing system – i.e. already recorded in general ledger on the existing system)
• Enter all AR open payments, if any, such as an un-applied deposit on a customer’s account at cut-over date into Payments
• Post Invoices, Debits & Credits and Payments files to AR Distribution Journal
• Purge AR Dist. of all transactions
• Print AR Aging.  Verify customer balances to AR Aging on existing system.
• Enter deposits in transit into Bank Reconciliation file

CRP – GENERAL LEDGER

• Establish Chart of Accounts
• Set up parameter files
• Determine financial reporting requirements
• Determine use of Budgets and Plans
• Set up accounting periods
  • Procedures to be considered and tested, including how-to, responsibility, frequency, reporting requirements
    • Posting journals
    • Standard entries and recurring journals for those entries
    • Correcting journal entries
    • Creation and generation of financial statements
    • Using Bank Reconciliation
    • Periodic procedures and utilities
      • Updating accounting period
      • Maintaining budgets and plans
      • Maintaining chart of accounts
      • Year-end closing
  • Account analysis
  • Determine reports and/or documentation to be used – SyteLine and internal
    • Establish procedures for retention of documents and reports – printing hard copies or printing to the terminal

General Ledger Cut-Over Procedures:

• Enter accounting periods for current year and other years, as applicable
• Enter net monthly GL account balances into a Balances journal for the current YTD and prior year, if applicable (this includes those items posted in the existing system – i.e. already recorded in general ledger on the existing system)
• Load budgets and plans
• Post Balances journal
• Reconcile posted GL balances to current system

CRP – PRODUCTION PLANNING/CONTROL

• Set up parameter files
• Set up master files
  • Shop Calendars
  • Holidays
  • Employees
• Procedures to be considered and tested, including how-to, responsibility, frequency, reporting requirements
  • Determine how manufacturing requirements will be determined – Purchase Requirements Report or MRP
  • Job cycle – steps
    • Create job and copy item routing/BOM
    • Modify job routing/BOM
    • Release job
    • Job paperwork and dispatch list
    • Post transactions through backflushing or transaction entry
    • Lot controlled items on jobs
    • Job analysis
    • Close job
    • Lot/serial tracking finished goods
  • Job cycle – types
    • Manufacture to stock
    • Manufacture cross-referenced to Customer Order
  • Production schedule cycle – steps
    • Create production schedule and copy item routing/BOM
    • Modify PS routing/BOM
    • Set up PS releases
    • Paperwork and dispatch
    • Issue material to floorstock locations as appropriate
    • Report production to work centers
    • Report complete production
    • Run end of period costing procedure
    • Review variances
  • Modifying job/production schedule routing/BOM
  • Determine use of backflushing and/or manual reporting
  • Cross-referencing Purchase Orders
  • Job splitting
  • Job merging
  • Stopping  jobs/production schedules
  • Canceling jobs/production schedules

CRP – SCHEDULING/CAPACITY PLANNING

• Set up parameter files
• Set up master files
  • Departments
  • Shop Calendars
  • Holidays
  • Work Centers – Scheduling & Costing
  • Cells
  • Machine
  • Machine Maintenance
  • Determine scheduling methods – finite/infinite, backward/forward, move, queue
  • Determine scheduling method for each Work Center
  • Determine how to use scheduling priorities
    • Procedures to be considered and tested, including how-to, responsibility, frequency, reporting requirements
      • Use outputs to review Work Center capacity
        • Analyze job schedules and production schedules in terms of load on Work Center capacity
  • Use global priority setting and scheduling methods
  • Use individual priority setting and scheduling methods

CRP – COSTING

• Determine costing method(s) to be used
• Set up parameter files
  • Procedures to be considered and tested, including how-to, responsibility, frequency, reporting requirements
    • Determine cost type & method by item
    • Overhead rates
      • Basis – material, labor, machine
      • Valuation
      • Changes
      • Routine evaluation
  • Work Center costing
    • Labor and machine rates
    • Efficiency
    • Crew size
    • Period based accounts setup
    • Changes at Work Center
    • Changes to Job/Production Schedule routing
    • Routine evaluation
  • Employee Labor Rates
    • Valuation determination
    • Changes
    • Routine evaluation
  • Determine Current Unit Cost for purchased and manufactured items
  • Roll Current Unit Cost to Standard Unit Cost for standard cost items
  • Costing method changes to existing items, new items
  • Item cost reviews (cost comparison)
  • Product Code account determinations
  • Maintenance of BOM costs
    • Review of and utilities to update
    • Scrap factor determination
  • Purchase costing review
    • Differences in Purchase Order Plan Cost and Item Cost
    • Update of Purchased Current Unit Cost for vouchered cost
    • Freight cost analysis
  • Capitalization of landed costs
  • Job cost analysis
  • Period based costing analysis
  • Review of material transactions

CRP – COSTING (contd.)

• Review of journal entries
  • Purchasing variances
  • Non-inventory item costs
  • Job costing variances
  • Period based costing variances
  • Sales and cost of sales
  • General Ledger analysis
    • Budget vs. Actual
    • Current vs. Prior Year
    • Departments

CRP – MRP

• MRP Logic – methodology
• Forecasting – data requirements
• MPS – schedule, controls
• Rough Cut Capacity Planning – capabilities, process
• MRP Detail Information – ownership
• MRP “Firm” Planned Orders – process, paperwork
• Exception Messages – priority, control, paperwork
• Regeneration vs. Net Change – when, how, who