1. Chapter 5: The Production Process
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2. Outline A Basic Production Process
Role of Enterprise Systems in the Production Process
Exercise Using Simulated SAP
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3. Basic Production Process
Definition
Plan to produce
Design to produce (customizable products)
Engineer to produce (highly specialized)
Key concepts and assumptions
Conceptual Framework
Physical flow
Data and Document Flow
Information Flow
NO Financial Impact
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4. Key Concepts and Assumptions
Production processes and strategies
Assembling vs. manufacturing
Discrete vs. process manufacturing
Make-to-stock vs. make-to-order
Master Data in the Production Process
What were master data in procurement and fulfillment?
Bill of Material
Work Centers
Product Routing
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5. Production Processes and Strategies
Assembling vs. manufacturing
Components vs. raw materials
Components: nuts, bolts, wheels -> skateboard
Raw materials: plastic pellets -> plastic plate
Discrete vs. process manufacturing
Discrete
Distinct items (countable)
Pencil, computer, coffee cup, skateboard
Component parts generally identifiable
Process manufacturing
Oil, chemicals, beverages
Cannot be easily disassembled
Formulation needed (recipe) vs. bill of material
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6. Production Processes and Strategies
Make-to-order vs. make-to-stock
Make-to-order
Process triggered by response to customer order
Make-to-stock
Process triggered by need to increase inventory
SSB characteristics
Discrete
From components
Make to stock
Material type: assembled product (vs. trading good)
Standard skateboard (vs. entry level skateboard)
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7. Bill of Material (BOM)
Identifies components needed to make one unit of finished product
Result of the product design process which leads to an engineering drawing
SSB BOM for standard skateboard (next slide)
Multiple levels of BOM
A component may have its own components
Example: components of the standard truck assembly
Which components could be manufactured from raw material?
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8. Engineering Drawing of the Standard Skateboard
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9. Bill of Material
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10. Work Center Where the work of assembling the product occurs
One or more tasks are completed in each work center
SSB Work centers
WC# 200: Material staging
WC# 230: Final assembly
WC# 300 Packing and inspection
SSB “Plant” includes
Front office space
Warehouse - storage area
Loading and unloading docks
Shop floor – production area
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11. SSB Plant Layout
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12. Product Routing
Define the steps or operations needed to produce the product
For each operation
Work center
Time needed (for some unit of measure, such as “each”)
Materials used
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13. Product Routing for Standard Skateboard
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14. Production capacity Number of skateboards per unit of time (hour, day)
Approximately 50 per day (8 hours)
Operation
Number
Operation Name
Time (minutes) per unit (or operation)
Time needed for 50 SB
(minutes) 10
Stage Material
5 per 50 5 20
Assemble SB
6 per SB
300 30
Inspect Deck
1 per SB 50 40
Pack in Packing Box
Final Inspection 60
Move to Storage
Total Time
460 = 7.66 hours
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15. Conceptual Framework Physical Flow Document and Data Flow
Planned Order
Production Order
Material Withdrawal Slip
Goods Receipt Document
Information Flow
Instance-level Information
Process-level Information
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16. Physical Flow What is the trigger? What are the steps?
What is the purpose of each step?
Who is involved in each step?
How is communication and coordination accomplished
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17. A Basic Production Process
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18. Planned Order
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19. Production Order – Initial State
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20. Production Order – Completed State
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21. Material Withdrawal Slip
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22. Goods Receipt Document
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23. Role of Enterprise Systems in the Production Process
Execute the Process
Request Production
Authorize Production
Issue Raw Materials to Production Order
Create (Assemble) Products
Receive Finished Goods into Storage
Capture and Store Process Data
Monitor the Process
Instance-Level Information Flow
Process-Level Information Flow
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24. Information Flow Instance level information Process level information
What is the status of a particular planned order
Has it been approved?
Have the skateboards been produced?
What step in the process is the order in?
Process level information
What is the average time needed to make a skateboard?
What is the average time taken to complete each step in the routing?
What percent of the production orders are completed on time? What percent are delayed?
What is the cause of the delays in completing production orders?
What percent of the skateboards fail final inspection and have to be scrapped? Why do they fail?
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25. ES in the Production– Process Execution and Capture and Store
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26. Creating a Planned Order in SAP
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27. Goods Issue for Production Order in SAP
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28. Production Confirmation in SAP
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29. Goods Receipt for Production Order in SAP
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30. ES in Production – Monitor
Instance level
Inventory status report
Stock requirements list
Drill down to a production order
Process level
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31. Stock Requirements List in SAP
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32. Production Order Status in SAP
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33. Process Level Information
Average time to produce a skateboard
Average time to produce an order (of 50)
How many on time? How many delayed?
Reasons for delay
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34. Process Level Information
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35. Exercise Using Simulated SAP
The exercises will take you through the following steps that have been discussed in this chapter:
Create a planned order
Convert the planned order to a production order
Issue materials to the production order
Confirm production
Move finished materials to inventory
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