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The Production Process. Introduction. Production is both a SCM function and an accounting function Simply put, the process involves turning raw materials into finished goods YOUR BOOK DOES A VERY GOOD JOB WITH THIS TOPIC. Production Steps. Types of Production (1). Discrete manufacturing - PowerPoint PPT Presentation
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The Production Process
Slide 2
Introduction Production is both a SCM function and
an accounting function Simply put, the process involves turning
raw materials into finished goods
YOUR BOOK DOES A VERY GOOD JOB WITH THIS TOPIC
Slide 3
Production Steps
Slide 4
Slide 5
Types of Production (1) Discrete manufacturing
The result is an individual unit (or many of them) such as a bicycle
The finished good “could” be decomposed back into its raw materials
Production lines are set up and torn down to make batches of different materials
Hewlett Packard
Slide 6
Types of Production (2) Repetitive manufacturing
Similar to discrete manufacturing The same finished good is produced over
time on the same production line The production line is not changed to
make different products Used when production lines are very
expensive Intel (Chips) Seagate (Disks)
Slide 7
Types of Production (3) Process manufacturing Products are made by means of a recipe Categories
Continuous (flow) Gasoline
Batch Soda and beer
We will not work with these
Slide 8
Means of Production Triggers cause production runs to be
executed Make to stock
Make a batch resulting from MRP or other production trigger
Make to order Make a unit(s) as a result of a customer
order Dell
Slide 9
Production Master Data Bill of materials (BOM) contains
components that make up a product or assembly
Work centers are locations within a plant where production operations are performed
Product routings list the activities involved in producing the product defined by the BOM
Product groups are used in planning to aggregate planning activities
Slide 10
Bill of Materials (Overview) In general, the components needed to
produce semi-finished goods or finished goods
In the case of process manufacturing, we call a BOM a formula or recipe We will focus on discrete manufacturing
Slide 11
Bill of Materials (SAP) SAP implements BOM as a flat structure Hierarchical BOMs can be created using
“component” materials (assemblies) The BOM structure should mimic the
manufacturing process See the BOMs in Figure 6-4 on page 184
Slide 12
Bill of Materials (Organization) A BOM applies to a “plant”
Different plants might make the same finished good using a different BOM
A material can have “alternate” BOMs These might be used for different
processes having different lot sizes This is more common in process
manufacturing We will not work with alternate BOMS
Slide 13
Bill of Materials (Organization) Header section
Applicable to the finished good List the plant and BOM number The purpose of the BOM (production,
engineering, plant maintenance) Base quantity Minimum and maximum lot size
Slide 14
Bill of Materials (Organization) BOM Header
Slide 15
BOM Usage (+must, .can, -cannot)
Slide 16
Bill of Materials (Organization) Items section The raw materials that go into making
the finished good Item type Item Item quantity
Slide 17
Bill of Materials (Organization)
Slide 18
Bill of Materials (Organization)
Slide 19
Bill of Material (Item Categories) Inventory is maintained for stock items (L) Inventory is not maintained for non-stock
items (N) Variable sized items (R) are available in
different dimensions (quantities) Lumber, for example
Slide 20
Bill of Material (Item Categories) Document items (D) represent applicable
documentation Manuals, for example
Class Items (K) are used in variant (configurable) BOMs
Different paint colors perhaps
Slide 21
BOM Complexity A 747-400 contains
6.5 million parts Countless assemblies
The process requires that many parts are inspected before, during, and after installation
Slide 22
Bill of Materials (Navigation) Logistics / Production / Master Data /
Bills of Material / Bill of Material / Material BOM CS01 – Create CS02 – Change CS03 – Display
Slide 23
Work Center (Introduction) “A resource used to produce a material”
It can be a machine, a group of machines, or an entire production line
It can be a person or group of people (labor)
Slide 24
Work Center (Introduction) Work centers can be arranged
hierarchically Work centers have capacities
They can produce finite outputs given a set of constraints
People work 8 hours a day
Machines can perform at some speed
Slide 25
Work Center (Global Bike) We have work centers for
Bike Assembly Inspection Packaging
Slide 26
Work Center Hiererchy
Slide 27
Work Centers (SAP) A work center belongs to a plant Work centers have a category that
describes the work center Machine / Labor / Production line / Etc..
A work center has a standard value key These are activities that consume time
Setup Processing Teardown
Slide 28
Work Center Categories
Slide 29
Work Center Standard Value Key Execution time and costs are calculated
in operations using formulas and standard values
Slide 30
Work Centers (Control Keys) Control keys define how an operation
is processed based on a set of indicators Scheduling – Enables scheduling on the
operation in Quality Management and Production Planning
Capacity – Enables capacity planning for the work center
Indicators to print time tickets and shop papers
Slide 31
Work Centers (Control Keys) Control keys are managed in the IMG
Slide 32
Work Centers (SAP) Default values containing wage data
can be associated with a work center
Note that work centers are associated with cost centers. This is how we allocate production costs
See Figure 6-7 page 189
Slide 33
Work Center (Navigation) Logistics / Production / Master Data /
Work Centers CR01 – Create CR02 – Change CR03 – Display
Slide 34
Work Center (Basic Data) Every work center belongs to a work
center category (i.e. Labor) And has a standard value key for a
dimension (time in this case)
Slide 35
Work Center (Basic Data) The Assembly work center has
execution time for setup, machine, and labor
Slide 36
Work Center (Scheduling) A work center has a capacity category
usually to indicate machine or labor capacity
Formulas that calculate the setup, processing, and teardown time for the work center Formulas are a subject in themselves
Slide 37
Work Center (Scheduling) Formula use “special” variables to
calculate the dimensional value (time)
Slide 38
Work Center (Costing) Here, we allocate the costs of the work
center to a cost center The cost center must exist and belong to
the plant’s controlling area All costs from a work center must be
applied to the same cost center Costs are allocated based on a formula
key Same as scheduling
Slide 39
Work Center (Costing)
Slide 40
Work Center Costing
Slide 41
Routings (Introduction) These are the detailed operations
performed by (at) one or more work centers to produce a finished good Think of the detailed operations required
for an assembly line to run Routing Sequences Have
Operations that get performed Material(s) required
Routings apply to a material and plant
Slide 42
Routing (Header) Task / Usage
(production / plant maintenance / …) Validity information Inspection (QA / QC) information
Slide 43
Routing (Sequences) Routing sequences
Using sequences, you can create standard and parallel sequences
Remember a parallel fork Sequences are performed “in-order” Alternate sequences might be performed
in place of standard sequences Different steps based on the number of
workers
Slide 44
Routing (Sequences) We have only one routing sequence
Slide 45
Routing (Operations) The tasks we perform to manufacture Data
The time it takes to perform the task How many items are processed per
interval of time Setup, labor, machine
Steps in a routing operation are performed in a work center
Slide 46
Production Routing for (DXTR1000) (Operations)
Slide 47
Production Routing (Materials) The materials needed to produce the
good This information comes from the BOM
Slide 48
Production Routing for (DXTR1000) (Materials)
Slide 49
Routing (Navigation Path) Logistics / Production / Master Data /
Routings / Routings / Standard Routings CA01 Create / CA02 Change / CA03
Display
Slide 50
Production Capacity Production has a capacity that relies on
A factory calendar describing workdays and holidays
A capacity for people and machines Some number of shifts that workers work Look at page 195 in your text.
Slide 51
Production Capacity (Factory Calendar) Multiple calendars describe
Public holidays and the current The calendar used by the factory The assignment of a calendar to a plant
Slide 52
Production Capacity (Factory Calendar) Holiday calendar
Slide 53
Maintaining Capacities Each work center in a plant has a
capacity A capacity name (SHIFT for example) A capacity category (machine or person
for example)
Slide 54
Maintaining Capacities Capacity header describes available
capacity
Slide 55
Maintaining Capacities Global Bike runs 1 shift with 1 hours of
breaks per shift
Slide 56
The Production Process (Overview) Request production Authorize production Release production order Goods issue to production order Actual production Production confirmation Goods receipt into inventory
Slide 57
Request Production Production is typically requested
because of a trigger A customer order (make-to-order)
An MRP Manual creation
In the end, a production order gets generated
Slide 58
Authorize Production This is the actual commitment to
produce Production (machine / people) time is
allocated for specific dates Authorization might be created from
planned or unplanned orders
Slide 59
Authorize Production (SAP) Production might be authorized because
of Planned production / a sales order / for a
material (finished good) We get preliminary estimates of cost
Logistics / Production / Shop Floor Control / Order / create C001
Slide 60
Production Order (Illustration)
Slide 61
Release Production Order This is where the authorized order is
actually released to production Production starts the manufacturing
process at a given date and time RTP might happen manually or
automatically Shop papers are generated
Slide 62
Goods Issue Raw materials are removed from
storage triggered by the production order release
Material staging takes place
Backflushing
Slide 63
Goods Issue (2) Raw material inventory is updated Inventory accounts are updated Material costs are added to the
production order See the GL transactions on page 208
Slide 64
Actual Production We make the material and record
production times
Slide 65
Production Confirmation Accounting finalizes the production run Production costs are recorded
Here the produced goods are transferred from production to goods storage
Slide 66
Goods Receipt Here, the goods are released into
inventory Inventory Held for a particular customer Held for QA or other reason
Slide 67
Introduction to Planning