Production Process Contents: Maintaining bills of material (BOM) Production process

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Transcript of Production Process Contents: Maintaining bills of material (BOM) Production process

  • Production Process Contents:Maintaining bills of material (BOM)Production process

  • In this unit, you will:Create bills of materials for sales and productionPerform the production processView the effects of production on inventory and accounting

    Production: Purpose

  • Your company manufactures technical items such as printers. These items have bills of materials for production.Some items in your product range consist of other items. You assemble these items before they are delivered to the customer. One example of an assembled item is a PC set.These items have two bills of materials for sales and for production.Production: Business Example

  • Production Process OverviewCreate Production OrderRelease to shop floorReport CompletionIssue ComponentsSystem ConfigurationPurchasingWarehouse managementProductionInbound logisticsOutbound logisticsMarketing & SalesServiceFinancial controllingMaster data

  • Bills of Materials: Unit Overview DiagramProductionTopic 1: Bills of MaterialsTopic 2: Production Process

  • Bills of Materials Types

    PrinterPrinterHead1 pc.Power Pack1 pc.

    Memory Boards2 pcs.

    BOM TypesProduction Sales Assembly Template

  • Category of the Item Master Record of the Parent Item in Bills of Material Assembly BOMProduction BOMSales BOMInventory ItemSales ItemPurchased Item(1.) (1.) optionalTemplateBOM TypeItemCategory(1.)(1.)(1.)(1.)

  • Phantom Item

    Board1 UnitAxis2 UnitsScrews8 UnitsWheels4 UnitsTire 1 UnitRim1 Unit

    Screws4 UnitsSkateboard1 UnitPhantom Item(does not appear in production orders and only for information in MRP)

  • Bills of Material: Topic SummaryKey points from the Bills of Material topic:Four types of Bills of MaterialsProductionSalesAssemblyTemplateThe item categories allowed for a parent item in a bill of materials are determined by the bill of materials type.

  • Exercises for Bills of Material

  • Production Process: Unit Overview DiagramProductionTopic 1: Bills of MaterialTopic 2: Production Process

  • Production OrderProduction Orders include:Finished productComponentsComponent issue method

    Production orders can be generated automatically by MRP or created manually.

  • Production Process StepsCreate Production OrderRelease to shop floorReport CompletionIssue ComponentsSystem ConfigurationPurchasingWarehouse managementProductionInbound logisticsOutbound logisticsMarketing & SalesServiceFinancial controllingMaster data

  • Production Order TypesStandard Production OrderProductABCSpecial Production OrderItemXYZDisassembly Production OrderProductABC

  • Steps to Enter a Production OrderSelect production order typeSelect parent itemEnter quantity to be producedEnter a finish date for productionMake any desired adjustments to components, warehouses or quantitiesSave the production order.

  • Release to Shop FloorInitially set as PlannedRelease the order to begin workComponents can then be issued

  • Issue ComponentsBackflush ComponentsManual ComponentsControl quantity issuedPrecise timing possibleCommonly used itemsTypical quantities used

  • Report CompletionWhen you report completion, the system automatically: Receives finished item into inventory Issues backflushed components Calculates the cost of producing the item

  • Stock Changes for Standard Production OrderIn Stock-Committed+Ordered=Available Standard ProductionOrderCompletion reported Status: PlannedComponentsFinished ProductComponentsFinished Product++++----

  • TypeStandard / Special / DisassemblyDue Date20.10.2004StatusPlanned / Released / Closed / CancelledOriginManual / AutomaticProduct No.P1001UserMarc ManagerPlanned Qty2Sales OrderWarehouse01CustomerPost Production Cost Information ComponentsCosts

    Actual Component Cost80 Actual Additional Cost Actual Product Cost80 Total VarianceVariance per ProductVariance % Journal Remark Production Order - P1001

    Production OrderSummaryQuantities

    Planned Quantity 2 Completed Quantity 2 Rejected QuantityDatesDue Date 20.10.2004 Actual Close Date Overdue

  • Production Process PostingsIssue For ProductionReceipt from ProductionProduction Order Close100Stock Account(of components)90Stock Account(of Product)100WIP Account90WIP Account-10WIP Account-10WIP Variance Account

  • Production Process: Topic SummaryKey points from the Production Process topic:Three types of production orders: standard, special and disassemblyThe four main steps in the production process are:CreateRelease Issue componentsReport CompletionProduction orders are generated by MRP or created manually.Release signals production is ready to begin.Components can be issued manually or by backflushReporting completion receives the finished product into inventory.

  • Exercises for the Production Process

  • Production: Unit SummaryYou should now be able to:Create bills of material for sales and productionPerform the steps in the production processView the effects of production on inventory and accounting

    The production order is the main document in the production process. It records the progress of the production process for each item produced. The production order supports the planning and assembly of a production item. It also tracks all the material transactions and costs that are involved in the production process.Production orders can come from recommendations in MRP or be created manually.Before work can be done, they must be released. At this point, the production order can begin collecting the costs of production.Components used in the production process can be issued manually as used or backflushed at the end of production.When all work is done, you report completion of the production order. At this point, the finished items are received into the warehouse.Then change the Status to Closed. Even after the production order is closed, details on the production order costs can be found on the summary.

    Production. This BOM is used in the production order. The parent item is a finished material, and the children are the components. You can add labor as one of the components; this will be a non-inventory item with a standard cost. During the production process, you turn the components into the finished product. The Production BOM is the only type used in the MRP run and it is always used in standard production orders. The item at the head of the Production BOM has its own price.Sales. This BOM is used in sales documents. The parent item must be a sales item only. For example, if you sell a gift package that contains multiple products, this could be set up as a sales bill of materials. The parent item will be the package name, and the children will be the inventory items inside the package. Once you selected the parent in a sales document, all its children appear as sub-items. You can update the quantities of the parent or the children; however you cannot delete children or add new sub-items to the package in the sales document. When you set up the BOM, you can select the Hide BOM Components in Printout option, so that when you print the document, only the parent appears. Assembly This BOM is similar to the sales bill of materials. It represents a collection of individual items in a set with a specific price. Unlike the sales bill of materials, only the finished product appears in the sales order document; the components do not appear as sub-items.For both the sales BOM and the assembly BOM, you do not manage the finished product as an inventory item, but rather as a sales item. The components can be sales items and stock items at the same time.Template. This BOM has no restrictions. Both the parent and the children can be any type of items. It can be used in sales and purchasing document. Once you select the parent item, all its children appear. You can delete, add or duplicate rows and make any modification as necessary.

    You have to create item master records for the finished products in the system. These are represented by the parent item in the bill of materials.Depending on the BOM Type you must have a certain category maintained in the item master record of the finished product:For the assembly and sales BOMs the finished product has to be a Sales Item.For the production BOM the finished product has to be an Inventory Item. If you also want to purchase this item, you can define it as a Purchased Item. If you also want to sell it, you can also define it as a Sales Item. If you produce it for stock, as a component of another parent item, then do not define it as a sales item so it will not appear as a choice in a sales document list of items.One tip for defining items in an implementation: Define items in a multi-level bill of materials from the bottom up. First the children then the parent item.Templates can have each of the three attributes (Purchased, Sales, and Inventory Items).The components can also have each of the three categories (Purchased, Sales, and Inventory Items), and can also be purchased or sold individually.The components for Sales BOMs and Assembly BOMs must be sales items.A phantom item is a sub-assembly in the BOM that does not actually exist in inventory. It is used to simplify the BOM. Although the phantom item appears in the BOM, the Production Order will show the components needed to make the phantom item rather than the phantom item itself.An item can be defined as a phantom item in the Item Master Data.MRP: The MRP will explode the phantom items and create recommendations for its components. The phantom item will be displayed in the MRP result window without recommendations, for information only.Pro