Enterprise Wide Information Systems Manufacturing Planning and Execution (cont.) Instructor: ...

University of Southern California

Enterprise Wide Information Systems

Manufacturing Planning and Execution (cont.)

Instructor: Richard W. Vawter


Topics

Organizational Elements and Master Data Business Process for Manufacturing Planning and

Execution Reporting and Analysis


Manufacturing Planning and Execution

Manufacturing Planning is the process of using forecasts and customer demand to create production and procurement schedules for finished products and component materials.

Manufacturing Execution is the process of producing finished products and component materials and recording all shop floor activities and inventory movements.


Manufacturing Planning and Execution The overall manufacturing planning process comprises:

Forecast values and requirements are first determined Master schedule items are planned Material requirements planning is then calculated

The overall manufacturing execution comprises: Production orders are first released Materials are issued next Completion confirmations are then performed Goods are finally received into stock

The manufacturing process affects capacity, costing, inventory, reporting, and analysis


Five Phases of the Manufacturing Processes

Sales InfoSales InfoSystemSystem

ForecastingForecasting

CO/PACO/PA

Sales & OperSales & OperPlanningPlanning

DemandDemandMgmtMgmt MPSMPS MRPMRP Manufacturing

ExecutionOrder

Settlement

Inventory Costing

Capacity

Production Master Data

Reporting and Analysis

ProcurementProcurement

Planning processExecution process

S O P ProductionOrder exec.

1.

2. 3. 4.

5.


Sales and Operations Planning (Phase 1)The forecast values and/or requirements from customer order management, sales information system, and controlling are inputs to the sales and operations planning phase.

ForecastingSales & Oper

PlanningDemandDemand

MgmtMgmt MPSMPS MRPMRP ManufacturingExecution

OrderSettlement


S O P


Sales and Operations Planning (cont.)

The main steps in sales and operations planning are:1. Creating a sales and production plan

2. De-aggregating the planning values

3. Transferring the planning values to demand management

There are four ways to create a production plan: Based on sales Based on target inventory Based on current days on sales supply Based on running down the inventory to zero


Demand Management (Phase 2)Demand Management links top-level requirements planning (SOP) with materials planning (MPS and MRP).

ForecastingForecastingSales & OperSales & Oper

PlanningPlanningDemand

Mgmt MPSMPS MRPMRP ManufacturingExecution

OrderSettlement


S O P


Demand Management (cont.)

Demand Management... 1. Determines the requirements dates and quantities for important

assemblies and

2. Specifies the strategies for planning and producing or procuring finished products.

The result of Demand Management is the demand program.


Demand Management (cont.)

Demand programDemand program

MPS or MRPMPS or MRP

Maintainplanned

independentrequirements

Copy fromsales plan

Copy fromproduction

plan

Copy fromforecast

Maintaincustomer

independentrequirements

Requirements Input:


Master Production Scheduling (Phase 3)The independent requirements from Demand Management initiate the master scheduling process for process for MPS designated items. The master production schedule is the anticipated build schedule.


PlanningPlanningDemandDemand

MgmtMgmt MPS MRPMRP ManufacturingExecution

OrderSettlement


S O P


MPS Drives MRPMotorcycle

PowerTrain

Chassis

Motor Gear Exhaust FrontWheel

RearWheel

Frame Brake

Run MPS atthis level

Run MRP atthis level

Independent Requirement


MPS RunMPS creates planned orders for top-level items to satisfy independent requirements from Demand Management.

MotorcyclePower Train Chassis

Planned order for themotorcycle creates dependentrequirements for all components

There are no plannedorders at this level, onlydependent requirements.

Independent Requirement


Material Requirements Planning (Phase 4)In material requirements planning (MRP), the system calculates the net requirements while considering available warehouse stock and scheduled receipts from purchasing and production.



MgmtMgmt MPSMPS MRP ManufacturingExecution

OrderSettlement


S O P


Material Requirements Planning (cont.)

In material requirements planning (MRP), the system calculates the net requirements while considering available warehouse stock and scheduled receipts from purchasing and production.

MRP requires exact requirement quantities, which allows you to work with particularly low safety stocks.

The output of MRP is either a planned production order, a purchase requisition, or a planned purchase order.

Note: The purpose of MPS and MRP is to guarantee material availability !


Material Requirements Planning (cont.)

Converting Planned OrdersM P S

Conversion depends on therequirement type and thespecial procurement key.

PurchaseOrder

ProductionOrder

PurchaseRequisition

PlannedOrder

M R P

?

Summary of the Four Planning Phases of the Manufacturing Process.

Each step in the manufacturing planning process corresponds to a different material planning level.

Each planning level provides input to the next level.

Forecasting (Profitability Analysis)- Revenue forecasting- Sales forecasting (quantities)

Sales and Operations Planning- Sales plan- Production plan

Master Production Scheduling- Demand program- Adjusted master plan

Material Requirements Planning- Dependent requirements- Planned production- Procurement plan

Planning Steps Planning Levels

Parts for 1 Parts for 2

Assembly of 2Assembly of 1

Product 1 Product 2

Product group

Co. Region 1 Co. Region 2CO/PA

SOP

MPS

MRP

OK?

OK?

OK?

OK?

Feed

back

/ R

epla

nnin

g


Manufacturing ExecutionManufacturing Execution is initiated by releasing each production order to the shop floor.



MgmtMgmt MPSMPS MRPMRP ManufacturingExecution

OrderSettlement


S O P

Execution Phase


Production Orders: Contents

ProductionOrder

1 2 3 4

5 6 7 8 9 10 11

12 13 14 15 16 17 18

19 20 21 22 23 24 25

26 27 28 29 30 31

1999

Production CostsIncurred

Raw Materials

When to Execute

Quantity of FinishedGoods

Resources


Production Order Execution ProcessProduction orders go through a series of steps:

PurchaseRequisition

PlannedOrderMRPMRP

ProductionOrder

OrderRelease

GoodsIssue

CompletionConfirmation

GoodsReceipt

OrderSettlement

Planning

Execution


Topics

Organizational Elements and Master Data Business Process for Manufacturing Planning and

Execution Reporting and Analysis


Standard Reporting

The standard production reports and analyses provide an overview of production transaction data.

Examples of standard reports and lists displays for each category include:

Master Data Sales and Operations Planning Master Planning Material Requirements

Planning

Production Control Capacity Planning Kanban Product Costing


Logistics Information System (LIS)

SalesInformationSystem

PurchasingInformationSystem

InventoryControlling

Shop FloorInformationSystem

MaintenanceInformationSystem

QualityManagementInformationSystem

Logistics Information Systems

Sales and Distribution

(SD)

MaterialsManagement

(MM)

ProductionPlanning

(PP)

PlantMaintenance

(PM)

QualityManagement

(QM)

SAP’s Logistics Processing Modules

LIS Planning functionality is combined with sales and operations planning (SOP) to form one central planning and forecasting tool.


In Summary:

Manufacturing Planning is the process of using forecasts and customer demand to create production and procurement schedules for finished products and component materials.

Manufacturing Execution is the process of producing finished products and component materials and recording all shop floor activities and inventory movements.

The output of MRP can be planned orders or purchase requisitions. Planned orders are converted into either production orders or purchase requisitions.


In Summary (cont.)

The reporting tools used in the manufacturing environment are: Standard Reporting - e.g. Lists Logistics Information Systems - e.g. Shop floor information

systems

Enterprise Wide Information Systems Manufacturing Planning and Execution (cont.) Instructor: ...

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