Understanding Production Processes: Discrete, Repetitive, and Process Manufacturing, Slides of Business Policy and Regulation

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The Production Process docsity.com Introduction  Production is both a SCM function and an accounting function  Simply put, the process involves turning raw materials into finished goods docsity.com 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 into its raw materials  Production lines set up and torn down to make batches of different materials  Hewlett Packard docsity.com Types of Production (2)  Repetitive manufacturing  Similar to discrete manufacturing  The same finished good is produced over time on the same production line  Used when production lines are very expensive  Intel (Chips)  Seagate (Disks) docsity.com 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 docsity.com 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 docsity.com Bill of Materials (SAP)  SAP implements BOM as a flat structure  Hierarchical BOMs can be created using “component” materials  The BOM structure should mimic the manufacturing process  See the BOMs in Figure 6-4 on page 184 docsity.com 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  Header section  Applicable to the finished good  Items section  The raw materials that go into making the finished good docsity.com Bill of Materials (Illustration) (© Material BOM — Ecit @ | Display material BOM: General Item Overview | @ Blbeater ‘petriood| Juxe Touring Bike (black) DLO) Plant Dallas Material Plant B Lsubitems alternative BOM [1 | _/ Material | Document General _| ©@@ CHE S45 ABH eR L, L. Component: Quantity We & S.. Valid From Valid to. ici} oolo L TRWA1O00 2 EA o ol/01/2010 la/31/999 = 0020 L TRFRIOOO 1 EA OO ©) o1/o1/20l0 12/31/7999 ~ 0030 L DGAM1000 1 EA o o 01/01/2010 12/91/999 0040 L TRSK1000 1 EA oO oO O1/O1/2010 la/31/999 ooso L ‘TRHB1OOO 1 EA o o O1/01/2010 12/51/3993 oo6o0 L PEDL1000 1 EA o o ol/ol/2010 12/31/999 oo7oL CHAN1O00 1 EA o o OL/Ol/2010 L2/31/999 ooso L BRET1000 1 EA o o 01/01/2010 12/91/999 oo90 L wboc1o00 1 EA oO oO O1/O1/2010 la/31/999 ol00 L PCKG1000 1 EA OO) ©) olsol/2olo 12/31/7999 a ap docsity.com BOM Complexity  A 747-400 contains  6.5 million parts  The process requires that many parts are inspected before, during and after installation docsity.com Bill of Materials (Navigation)  Logistics / Production / Master Data / Bills of Material / Bill of Material / Material BOM  CS01 – Create  CS02 – Change  CS03 – Display docsity.com 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 docsity.com Work Centers (SAP)  Control keys define how an operation is scheduled  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 docsity.com Work Center Categories [Ooo2 Stat. WkCtr Mchnecrp 0003 Labor 0004 Stat, WkCtr LaborGrp 0005 Plant maintenance 0006 Project management OO07 Production line 0008 Processing unit 0009 Personnel resource 0010 Production line 0011 Zone 0012 Station 0014 Stor. resource 0015 Proc. unit/Stor.res, 14 Entries found docsity.com Work Center (Scheduling) Change Work Center: Scheduling Bb GaHAvs SeHerarchy [) Template Plant LOO Plant Dalas Work center {ASSY1000 DDL Assembly Basic Data_ (Default Values _ Capacities Costing | Technology Scheduling basis Capacity category Person Capacity Standard Day Shift Execution time Setup formula Prodi; Setup time Prod. Labor time Processing formula Teardown formula Other formula Interoperation times a Location group Std, queue time | Min, queue time [| Dimension and unit af measure of work ‘Work dimension | Work unit (Bh) (@_camscty seo Ferm |g Federer constnts_| docsity.com Change Work Center: Cost Center Assignment go BP Gaxams § FaHierarchy [0 Template Plant DLOO Plant Dallas work center {assyiooa) {DL assembly ] Basic Data |) Default Values \ Capacities Scheduling “Costing | Technology | | Validity Start date (Seren 5) End Date 12/31/9999 | Link to cost center/activity types Controlling Area {wano| GBI North America Cast Center WAPRLOOO Production Costs Activities Overview Alt, activity descr, Activity Type Activity Unit | R.. | For... | Formula description Setup 7 LABOR ( SAP005 Prod: Setup ramts Machine ¥ oO lLabor * LABOR ( $aP007 Prod.: Labor rqmts ” Oo + o - ~ o 7 ar a, ActType Int.Proc. LABOR | Labor hours (1) SaPo08 ProfRomtsNetwkMaint | Link to business process ] Business Process Oo Incentive wages ind f Record Type Group [| docsity.com Routings (Introduction)  These are the detailed operations performed by one or more work centers to produce a finished goods  Think of the detailed operations required for an assembly line to run  Routing Sequences Have  Operations that get performed  Material required docsity.com Production (DXTR1000 Change Routing: Operation Overview Routing for (Operations) «> SBE EG aa Dre workcenter Qcompalloc sequences .QPRT © inspection Characteristics BG Material DXTR1000 Deluxe Touring Bike (black) Grp.count’ Sequence [0 Operation Overy, BB) 0... |S... | Wark... | Pa Descrigtion Li Pa GO, PG. S. Base Quantity |W. | Setup U. Acti... | Machine ona —_assyioa0 poo Material staging Olololalo! jobs EA MIN LABOR oo2z0 AgSY1000 DLOO Ag3Y Attach seat to frame oaqoaa Oa. EA MIN LABOR: 030 ASSY1000 DLOO ASSY ‘Attach handle bar assembly ololoolo oO. EA MIN LABOR onan ASSY1000 DLOO ASSY Attach derailleur gear assm, to wheel O|o|o|\o\o0 oO. EA MIN LABOR oosa ASSY1000 DLOO Assy Attach front and real wheels to chain oaaqoaqa O41 EA MIN LABOR: oo6a ASSY1000 DLOO ASSY Attach brakes oooaoo on EA MIN LABOR 0070 ASSY1000 DLOO ASSY Attach peddles oaaqoaqa O11 EA MIN LABOR: ‘oosa IMSP1000 DLOO ASSY Test bike olololola oO. EA 2 MIN LABOR 0090,‘ PACK1000 DLOO ASSY Disassemble olololalal [ob EA MIN LABOR clog PACKLO00 DLOO AgSY Pack bike ojo|o|o\o oO. EA MIN LABOR 0110, PACK1000 DLoo assy Move to storage Olololalo! [obs EA MIN LABOR olz0 DLOO oaooaa O11 EA 0130 Dio olojoolo ou EA oan Dioo olalolaloal [ob EA ols DLOO oa oa00 O11 EA coisa DLoo olololiolo oO. EA docsity.com Production Routing (Materials)  The materials needed to produce the good  This information comes from the BOM docsity.com Production Routing for (DXTR1000) Routing Display: Material Component Overview (Material: BB OB Rg com Bros ict (amiooo | [bt00) ey Material Aoperation Deluxe Touring Bike (black) Group s0000000)sequence [0 | BOM coao6oo AlGOM 1 Item Overview |p |L. [Path |. | component oo oo10 TRWaxo00 0 0 0020 TRFRI000 Ooo 0030 pcamioo0 | 0 0040 TRsk1000 | 0 0 0050 TRHB1000 | 0 0 0060 PEDL1000 | 0 0 0070 cHaNio0a | 0 0 0080 BRkT1000 | 0 0 0090 wooczo0a | (0 o 0100 pcke@1o00 or | Quantity |s.[u EA EA EA EA EA EA EA EA EA EA 2 Item... |B O.. | Sea, |_| Material Description Hy Touring Aluminum Wheel Assembly a “Touring Frame-Black ~ Deralleur Gear Assembly Touring Seat kit Touring Handle Bar Pedal assembly chan Brake Kit Warranty Document Packaging a> docsity.com 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 docsity.com 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 docsity.com 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 docsity.com Goods Issue  Raw materials are removed from storage triggered by the production order release  Material staging takes place  Backflushing docsity.com 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 docsity.com Actual Production  We make the material and record production times docsity.com