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Back flushing requires no data entry of any kind until a finished product is completed. At that time the total amount finished is entered into the computer system, which multiplies it by all the components listed in the bill of materials for each item produced. This yields a lengthy list of components that should have been used in the production process and which is subtracted from the beginning inventory balance to arrive at the amount of inventory that should now be left on hand. Back the entire production process. Given the large transaction volumes associated with JIT, this is an ideal solution to the problem.
However, there are some serious problems with back flushing that must be corrected before it will work properly. They are :
1. Production reporting : The total production figure entered into the system must be absolutely correct, or else the wrong component types and quantities will be subtracted from stock. This is a particular problem when there is high turnover or a low level of training to the production staff that records this information, which leads to errors.
2. Scrap reporting : All abnormal scrap must be diligently tracked and recorded; otherwise these materials will fall outside the black flushing system and will not be charged to inventory. Since scrap can occur anywhere in a production process, a lack of attention by any of the production staff can result in an inaccurate inventory. Once again, high production turnover or a low level of employee training increases this problem.
3. Lot tracing : Lot tracing is impossible under the back flushing system. It is required when a manufacturer need to keep records of which production lots were used to create a product in case all the items in a lot must be recalled. Only a picking system can adequately record this information. Some computer system allow picking and back flushing system to coexist, so that pick transactions for lot tracing purpose can still be entered in the computer. Lot tracing may then still be possible if the right software is available; however, this feature is generally present only on high-end systems.
4. Inventory accuracy : The inventory balance may be too high at all times because the back-flushing transaction that reliefs inventory usually does so only once a day, during which time other inventory is sent to the production process; this makes it difficult to maintain an accurate set of inventory records in the warehouse.
