The concept of backflushing is simple and has been put in place as a means of more quickly processing material through the shop floor, i.e. Work in Progress (WIP).

The concept is that, rather than issuing material from inventory to the work order (job, batch record, manufacturing order) and then receiving the assembly back into inventory, nothing would be done until the work order is completed and ready to be received into stock.

At this point the work order is “back flushed” when the assembly is received in inventory by referencing the assembly’s Bill of Material (BOM), finding the component parts and decrementing inventory by the amounts of those various parts.  Thus in one transaction the components are taken out of inventory and the assembly is put back in.

Obviously this is easier than recording the component issues as you stage and issue them to the assembly work order and then, later on, receive the assembly back into inventory.

So, given that it is quicker and for that reason easier to use, let us look at the issues that need to be addressed:

1. The Bills of Material
   1. That the “quantity pers” are very accurate – one error will reflect in numerous backflushing transactions
   2. That accurate yield data is in place (this will also increase the accuracy of the standard costs)
2. Product cycle time

Backflushing needs to be done often, at least once every few days, and it would be better if it were done daily.  Remember the period between backflushings is a “black hole” and there is no visibility as to the sub-assembly or the component parts during that time.

3. Effect on MRP

MRP, to be totally effective, needs accurate, timely information from inventory and WIP.  To the extent which that is delayed, will compromise the accuracy of MRP’s outputs (planned orders and action/exception messages).

4. Labor tracking

By this is meant that an accurate routing is in place and is linked to the bill of material, a backflushing flag is in place so that the backflushing can be done at regular, short period, intervals.

5. Inventory issues/cycle counts

Cycle counts and other inventory issues become problematic when there is a long backflushing period (the black hole).  If an item is being counted in an inventory cycle count and some of those items have been issued to WIP but have not been recorded yet, this causes an extra level of reconciliation.  While a company may keep adjusting its inventory accordingly it is not doing the root cause analysis which is the primary reason for doing periodic cycle counts.

I have experience one company that had full control of its backflushing operations.  It had accurate BOM’s and routings, and its backflushing was done every shift.  There were specific written procedures at each backflushing operation that enabled operators to record rejects and waste at both the assembly and component levels.

So, to summarize.  Backflushing is a useful tool if done well.  It needs accurate data in the BOM’s and routings as well as a high degree of inventory and WIP data accuracy.  The most important item to remember is that backflushing needs to be done after short periods.  The shorter the period the more accurate and useful will be the backflushing operation.