e-Prelude.com The Bookcase Exercise

Start the application Open the site: www.e-prelude.com/soft 2 - Enter your e-mail address and your access code 1- Hit the F11 key to turn on the full screen mode

Open the folder 3- Click on ‘Open’ 2- Select the folder ‘Bookcase-05’ 1 – Select the directory ‘Public Folders in English’

A Bookcase Bookcases manufacturing and sales A very simplified model

The Folder Administration Page 1 – Click on ‘Save Folder’

The Planning Process S&OP Items Forecast BOM Master Production Schedule Orders Master Data Resources Inventory MRP Routings Shipment Work Orders Purchase Requisitions A gauche en jaune, le bloc de gestion des données techniques Cliquer sur un pavé pour accéder directement à la diapo détaillée Des boutons RETOUR figurent sur ces diapo pour revenir ici. Scheduling Work Order Release Purchase Orders Costing General Ledger Production Activity Control Receipt

Session 1: Items

Item Types Items represent all the materials of which you want to manage flows and inventories Two Item types depending on their source Manufactured items They will have a routing Purchased items They will have a preferred vendor To create an item, its type must be selected first (the item type cannot be changed later) Note: there are other item types which will be not be discussed here

Item Page Check required data in codification tables The Unit of measure table (Engineering menu) filled with: EA: Each The Warehouse table (Logistics menu) contains: FGW: Finished Good Warehouse SFW: Semi-Finished Good Warehouse RMW: Raw Material Warehouse

Access: Engineering Menu, Item Table Maintenance Option Item Page Access: Engineering Menu, Item Table Maintenance Option

Item List

Unit of Measure Table Access: Engineering Menu, Unit of measure Table Maintenance Option

Access: Logistics Menu, Warehouse Table Maintenance Option FGW: Finished Goods Warehouse SFW: Semi-Finished products Warehouse RMW: Raw materials Warehouse

Enter data into tables The Accounts receivable and Accounts payable functions require additional information located in four tables: VAT Rate Table Item Category Table Term of Payment Table Payment Mode Table

VAT Rate Table Access: AR&AP Menu, VAT Rate Table Maintenance Option 1. Enter a VAT code (‘1’ for example) then a description 2. Enter the VAT rate (’20’ for example)

Access: AR&AP Menu, Terms of Payment Table Maintenance Option 1. Enter the code ’CASH’ then a description 2. Select options - Cash - None

then a description ‘Check’ Payment Mode Table Access: AR&AP Menu, Payment Mode Table Maintenance Option 1. Enter the code ‘CHK’ then a description ‘Check’

1. Enter its code and its name (other fields are optional) Vendor Table Access: Purchasing Menu, Vendor Maintenance Option 3. Click on ‘Catalog’ 1. Enter its code and its name (other fields are optional) 2. Select payment term

1 – Select the Purchasing Unit 2 – Enter the purchasing price Vendor Catalog 1 – Select the Purchasing Unit 2 – Enter the purchasing price 3 – Enter the lead time

Standard Purchasing Prices Access: Costing Menu, Standard Purchasing Price Option

Multiple vendors A purchased item can be sourced from several vendors All the vendors should be entered in the data base (with the selling price and lead time) One vendor is selected as the preferred vendor for the item (it is the vendor on which the purchase requisitions will be automatically issued)

Preferred Vendor Selection Access: Purchasing Menu, Purchased Item Vendor Selection Option

Session 2: Bills Of Materials

Product Structure Tree The bill of materials describes which components are used in the manufacturing of a product Parent Item Link Coefficient Specifies the number or the quantity of component in a parent item 1 2 0.5 Component A Component B Component C Bills of materials are entered for each level which are related to item manufacturing steps

At lowest level, only purchased components or raw materials BOM Levels Levels Finished Good 1 S/A 1 S/A 2 2 Part A Material 2 Material 3 Material 4 Part B 3 Material 1 Material 5 At lowest level, only purchased components or raw materials

To create, modify or delete product structure links Managing BOMs Access: Engineering Menu, Bill of Materials Maintenance Option Parent Item Id Management functions To create, modify or delete product structure links Inquiries Component List

BOM Link Link number Component Id Quantity of component in one parent item

The BOM of an item is described only once Common Components FG1 FG2 S / A Common sub-assembly Material 1 Component 1 The BOM of an item is described only once

BOM Inquiries Single level BOM Purchase BOM Summarized BOM Multilevel BOM

Single level where-used Cumulative where-used Multilevel where-used Where-used Inquiries Single level where-used Cumulative where-used Multilevel where-used

Product Tree Structure Graph

Checking for loops in BOM Avoid infinite loops in the processing of BOMs Example of loop in a BOM: Product A Material Component C1 Loop Component C4 Product A

Finished goods are at level 0 Low level code Finished goods are at level 0 Level 0 FG1 FG2 Comp. C SA10 SA21 SA22 Level 1 Level 2 Comp. C In the BOM of FG1, component C is at level 1 In the BOM of FG2, component C is at level 2 Low Level Code of C is 2

Session 3: Cost Centers, Work Centers and Routings

Description of a manufacturing process Routings describe the manufacturing process to elaborate a product with its direct components This process requires often several steps (or operations) For each operation, one specifies which resource(s) is/are required the times to complete the operation Time to prepare the resource (set-up time or change-over time) Run time (time to perform the operation on one single part)

Routing = steps of the manufacturing process Routings - Definition M 1 Routing = steps of the manufacturing process M 2 Op. 010 Op. 020 Op. 030 Op. 040 Manuf. Product Px S / A Materials, components, fabricated parts and sub-assemblies

Routing usages Computation of work load Calculation of manufacturing costs Production activity control Performance Measurement

Routing creation process Creation of cost centers Creation of work centers Creation of routings Attachment of a routing to each manufactured item

Standard Costs Calculation Process Budget Line by type of cost Cost Centers Totals by type of cost Budget Line Work Centers Hourly rates by type of cost Sub-contraction Work centers Hourly rate entered Purchased items Price/cost entered Routings Hourly rates by type of cost Fixed and Variable Costs Overhead (rates entered) Bills of Materials Valuation Options (Item Cost Roll-up) Manufactured items Costs by type of cost

Cost Center Hourly Rates Cost Centers represent a group of work centers (workshops for instance) with the same hourly rates From the company budget, for each cost center, on should specify: the total amounts for each budget line the numbers of working hours for Machine, Set-up Labor and Direct Labor The hourly rates are calculated for each type of cost

Access: Costing Menu, Budget Line Table Maintenance Option

Cost Centers Maintenance Access: Costing Menu, Cost Center Maintenance Option To enter Totals by type of cost Budget Working Hours Hourly rates per type of cost

Budget Line Maintenance

Work center - Definition A Work Center is: A group of machines or work stations One single machine Several machine performing the same type of operation A manual work station An assembly line Its capacity is defined by a calendar

Work Center Types Finite Capacity (F) Multiple work stations (M) regroups one or more machines (the features of which can describe individually) Multiple work stations (M) Are not individually described The number of work stations is specified in the “Capacity Coefficient” field Infinite Capacity (I) Its work loads are not calculated The type of a work center cannot be changed

Work Center Maintenance Access: Engineering Menu, Work Center Maintenance Option

Machine Maintenance

Manufacturing routings A routing is described with a routing header a set of operations for each manufacturing step

Routing Maintenance Access: Engineering Menu, Routing Maintenance Option Total times for all the operations Operation List

Routing Operation Maintenance 1- the operation number 2- the operation description 3- the work center 4- the setup time… (for machine and labor) 5- the run time... (for machine and labor) 6- ...for the quantity of parts 7- the move time

Operating Times Set up Time Run Time Move Time Fixed time (independent of the quantité processed) Time is proportional to the quantity processed Can be specified as a unit time or as a production rate Fixed time to move the parts to the next operation Induce work load on the work center

Operating time definition Case Run Time Quantity per time Time per part in hours 1.2250 1 Hourly production rate 1 230 Time per part in minutes 2.5 60 Time per part in seconds 2.5 3600 Time for a fixed quantity 3.5 2000 Daily production rate 7.5 600  All the times are given in hours (with 4 decimals)

Time totals Work Center 1 Op. 010 Setup Run Time Move Work Center 2 Op. 020 Setup Run Time Move Work Center 3 Op. 030 Setup Run Time Move Total manufacturing time for a batch Setup Run Times Move Independent of lot size Proportional to lot size Independent of lot size

Attachment of routing to manufactured items Each manufactured item should have (at least) one routing On routing should be selected as release routing Several items can share the same routing

Item – Routing Attachment Manufactured Item A manufactured item should be linked to a routing Routing Op. 40 Op. 30 Op. 20 Op. 10 Operations are usually number from 10 to 10 during the creation of the routing to enable insertion of additional operation

Routing sharing Item X red Item X green Routing The two items have the same manufacturing process (but their BOM are different) Op. 40 Op. 30 Op. 20 Op. 10

Item – Routing Attachment

Resource graph for the manufacturing of an item Access: BOM Maintenance Page, Graphs button, Resources button

Standard cost calculation Parent Item Work center 3 030 Time (030) x hourly rate of WC P3 020 Time(020) x hourly rate of WC P2 Work center 2 010 Work center 1 Time(010) x hourly rate of WC P1 Component 1 Component 2 Cost C1 Cost C2

Access: Costing Menu, Item Cost Roll-up Option Select these options

Overhead Rates

Item Cost List

Item Cost Detail

Routing Costs

Session 4: Sales and Operations Plan

Sales and Operations Plans Can be stated as follows: Given a set of (usually monthly) forecasts of demand for a family of products (output), what should be specified for each period in terms of: Size of work force Rate of production Quantity shipped Establish a production plan: Minimizing the expected total costs or maximizing the margin over a given planning interval (6 to 24 months)

S&OP Goals Meet demand Balance projected workloads and resource capacities Meet inventory policy Minimize total cost (or maximize margin): Labor Inventory Plant and Equipment Subcontracting

S&OP Strategies Pure Strategies: 1. Chase strategy (change capacity) Change inventory levels Vary work force size by hiring or layoffs Vary production capacity thru overtime or idle time Subcontracting, part-time workers PRODUCTION = DEMAND 2. Level Strategy (anticipate demand) Constant work force Inventory builds up in slack period and backlog in high demand period Influence demand CONSTANT PRODUCTION

Pure Strategies Demand Demand Production Production Production = demand "Chase Strategy" Inventory Constant production Creation of inventories "Level Strategy"

A compromise strategy Compromise Strategy Combines the two previous options Based on both quantitative and qualitative factors An attempt to obtain the minimal overall cost which is a function of the costs structure Demand Production

Costs involved Base production costs (internal production and contracting) Costs of altering resource capacities Cost of over capacity utilization: Ex: overtime, external warehousing Inventory caring costs Shortage costs (or backlog costs)

The S&OP Process Definition of S&OP periods Definition of Family Items Entry of Sales and Operations Plans S&OP Assessment Definition of Resource Items Definition of Resource Item capacities Creation of Resource BOMs Analysis of Resource Capacity Utilization S&OP Valuation / Optimization Definition of Commercial and Planning BOMs S&OP Disaggregation

The S&OP function Requires two fictive items Family Items (type P) Item groups for which Global sales forecast are made A production plan is set Resource Items (type R) Represent critical resources Are a bottleneck in the production process Machine hours, labor hours, …

Access: S&OP Menu, Plan Period Maintenance Option S&OP Periods Access: S&OP Menu, Plan Period Maintenance Option

Family Item Maintenance Access: S&OP Menu, Family Item Maintenance Option

Access: S&OP Menu, Sales and Operations Plans Maintenance Option Family Plans Entry Access: S&OP Menu, Sales and Operations Plans Maintenance Option

Access: S&OP Menu, S&OP Appraisal Option

Resource Item Represents a critical resource Definition of resource capacity Bound or not to a calendar Labor capacity depends on working hours Warehousing capacity does not Capacity Coefficients (number of capacity units) Percentages of overcapacity allowed (ex: overtime)

Resource Item Maintenance Access: S&OP Menu, Resource Item Maintenance Option ou

Resource Capacity Maintenance Access: S&OP Menu, Resource Capacity Option Capacity Coefficients per period Percentages of over-capacity per period

Three BOMs dedicated to S&OP Access: S&OP Menu, Bill Of Materials Maintenance Option Resource BOM Commercial BOM Planning BOM

Resource BOM Critical Resources Family Resources Bookcase Family (1.9 hour) (0.85 hour) Production Assembly Resources Critical Resources Specifies Family Item Resource Consumption

used by one unit of Family Item The Resource Link Quantity of resource used by one unit of Family Item

Calcul du PIC Calcul des charges Évaluation des équilibres à travers les nomenclatures ressources sur chacune des ressources Évaluation des équilibres par période en cumul

Access: S&OP Menu, Resource Load Profiles Option

S&OP Valuation Access: S&OP Menu, S&OP Valuation Option Diagnostic du PIC (respect des contraintes)

S&OP Disaggregation We have now a plan which meet resource capacity constraints We must convert it into a sales plan and a production plan Two BOMs are used Commercial BOM to disaggregate the sales plan Planning BOM to disaggregate the production plan Time buckets are different: we have to pass from a monthly bucket to a weekly bucket

Commercial BOM List sold products which are part of the family and the weight they represent in the family Can include only purchased or manufactured items The family sales plan will be disaggregated into sales forecast for those products Bookcase Family (0.50) (0.50) BC100 BC200

Double disaggregation of Family Sales Plan 160 215 250 Disaggregation per period per product Production Plan 205 Inventory 125 170 215 260 305 295 250 Forecasts W1 W2 W3 W4 W5 W6 Product A (Black45%) 18 22 Le PIC est la mise en cohérence entre la prévision de demande du commercial et le niveau de production ainsi que du plan financier par la ligne stock Product B (Blue 25%) 10 10 10 10 10 10 Product C (Red 30%) 12 12 12 12 12 8 Total 40 40 40 40 40 40

Planning BOM Used to disaggregate Family Production Plan to set inventory targets to manufactured items Not necessarily items sold: example: Assembly to order Anticipation inventory is set on semi-finished products Bookcase Family (0.50) (0.50) BC100 BC200

Inventory Variations Family Production Plan disaggregation Does not create directly work orders But generate inventory variations positive or negative positive during the anticipation inventory creation period negative during the anticipation inventory consumption period

Access: S&OP Menu, S&OP Disaggregation Option Permet de répartir les plans commerciaux et industriels (définis sur les périodes PIC, généralement des mois) sur les périodes de prévisions (généralement des semaines) au prorata du nombre de jours ouvrables dans les deux calendriers

Access: S&OP Menu, Inventory Variation List Option Inventory Variations Access: S&OP Menu, Inventory Variation List Option Positive inventory variations represent an internal requirement to create the anticipation inventory on manufactured items Positive inventory variations will be included in the Material Requirement Planning process

Sales Forecast generated by S&OP Disaggregation Access: Sales Menu, Sales Forecast Option Prévisions calculées issues de l’éclatement du plan commercial de l’article Famille au prorata du nombre de jours dans les périodes de prévision

Les variations de stock issues de l’éclatement du plan industriel Access: Planning Menu, Master Schedules Option Les variations de stock déterminées dans le PIC figurent dans la ligne ‘Besoins internes’ en positif ou en négatif

Session 5: Inventories

Main inventory transactions Workshops Component Issue Work Order Receipt Receipts Warehouses Shipments Vendors Customers Vendor Returns Customer Returns Fabricated Products receipts Component Shipping Contractors

Inventory Control All the items are stored in warehouses A warehouse is a physical place where goods are stored Any change in a quantity of an item in a warehouse is made through an inventory transaction manual Automatic Inventory location and/or ownership Manage flows and inventories of products inside and outside the company Belonging or not to the company

Inventory status In a warehouse, items can have several status ; three main status: AVAIL = good is available RESV = reserved for production PREP = prepared to be shipped Physical Warehouse Parts available Parts reserved

Many types of inventory transactions IN : physical inventory counting OR : vendor order receipt AI : issue from Available RR : receipt into Reserved for production RI : issue from Reserved for production AR : receipt into Available OI : issue for sales order shipment etc.

Physical Inventory Counting Access: Logistics Menu, Physical Inventory Counting Option

Inventory Transaction History Access: Logistics Menu, Inventory Transaction History Option

Inventory Inquiry per Warehouse Access: Logistics Menu, Inventory Inquiry per Warehouse Option

Inventory Inquiry per Item Access: Logistics Menu, Inventory Inquiry per Item Option

Session 6: Material Requirements Planning (MRP)

Calculation of quantities to make and to source General principle: Materials Requirements Planning (MRP) Alternate method: Managing inventories La gestion sur stock de type “mini-maxi” est très peu utilsée sauf pour les articles de faible valeur comme les consommables ex : film étirables, huile de coupe ...

MRP Principle It starts with end-items (level 0) to generate quantities of immediate components (level 1) using the BOM. These are called gross requirements By taking into account the existing inventories, it computes the net requirements at this level = Gross requirements – Inventory on hand + Inventory desired level (safety stock) Future requirements are eventually regrouped (lot sizing) Similarly, all other levels are analyzed To position the requirements in time, it takes into account the production/procurement lead times of the items

MRP Principle Level 0 : Finished goods Level 1 : Sub-assemblies Master Schedule Level 0 : Finished goods FG Inventory and assembly WIP Finished Good Net Requirements Finished Good Assembly Orders Level 1 : Sub-assemblies Finished Good BOM Sub-assembly Gross Requirements Sub-assembly inventory and manufacturing WIP Sub-assembly net requirements Sub-assembly Manufacturing Orders Level 2 : Parts Sub-assembly BOM Part Gross Requirements Part Inventory and fabrication WIP Part Net Requirements Part Fabrication orders La procédure de planification se déroulera en deux phases : - niveau MPS (produits finis) - validation manuelle des ordres proposés - niveau MRP (tous les autres articles) Part BOM Level 3 : Materials Material Gross Requirements Material Inventory and open purchase orders Material Net Requirements Purchase Requisitions

Taking into account the production lead time Parent Item Release Date Parent Item Requirement Date Manufacturing Lead Time Date of component requirements To determine the release dates (for the parts to be produced) and those of the purchase orders (for the parts to be purchased), one must take into account the lead time required to obtain the parts (expressed in days). For purchased parts, the lead time is the Delivery Lead Time of the supplier For the parts produced internally, it is the time required to complete all the production stages of a batch of products. This time is defined in the routings.

Taking into account the procurement lead time (for purchased items) Material requirement date Date of purchase order issue Procurement lead time Specifies in days on the item window

Lot-Sizing Decisions MRP calculates net requirements and tries to optimize orders Avoid creating too many work or requisition orders in a short period of time Thus reduce the number of production orders releases or purchase orders which generate fixes costs (clerical work, changeover time, transportation, …) Main Techniques: Lot for lot Economic Order Quantity (EOQ) Part Period Balancing … Disadvantages : they increase the levels of inventories (because a requirement is anticipated)

Item Management parameters Reorder policy and Lot sizing rule define the way the item will be planned The Lead Time specifies the number of days normally required to get items from a vendor (purchased items) from the plant (manufactured items)

Item Management Parameters Access: Planning Menu, Item Reorder Policy Option 1 - Select the Reorder policy 2 - Select the lot sizing rule 3- Specify the production lead time

A production process Routing Routing Routing Material Sub-assembly X SA 1 Part A Finished good Sub-assembly SA 2 Material Y Part B La gamme décrit le processus pour passer d’un niveau de la nomenclature au niveau supérieur Sub-assembly SA 3 Routing Routing Routing

Cumulative Lead times Manufactured component Manufactured component Manufacturing lead time Purchased component Purchasing lead time Manufacturing cumulative lead time Total cumulative lead time

Lead Time Offset Graph Access: Engineering Menu, BOMs Maintenance Option > Graphs > Offsets

Production planning steps Requirements Manufactured items Purchased items MRP calculation Planned Work Orders Planned requisition orders Conversion Conversion Firm Work Orders Firm requisition orders Order release Purchase order entry Open Work Orders Purchase Orders Execution Receipt Closed Work Orders Closed Purchase Orders

Successive Work Order status Planned WO Generated ny MRP Work Order Conversion Firm WO Work Order Release Open WO Production Activity Control Closed WO

Work order status depending on the time horizon Current date Closed WO Open WO Firm WO Planned WO time WO Release end date WO Conversion end date MRP Calculation end date

A calendar The plant calendar defines working days Requirements offsets are calculated on working days Example: There is a requirement for item A with a lead time of 6 days for Wednesday of week 3 The release date is calculated by moving backward on the calendar of the number of days of the lead time Release Requirement 6 days Mo Tu We Th Fr Sa Su Week 1 Week 2 Week 3

Materials Requirements Planning Access: Planning Menu, Materials Requirements Planning Option Specify a calculation end date to avoid generating orders for far demands Items are processed by increasing level order

Planned Work Order List Access: Planning Menu, Planned Work Order List Option

Access: Planning Menu, Planned Work Order Maintenance Option A Planned Work Order Access: Planning Menu, Planned Work Order Maintenance Option

Access: Planning Menu, Master Schedules Option Item Master Schedule Access: Planning Menu, Master Schedules Option Les ordres suggérés apparaissent sur les programmes directeurs

Planned Purchase Requisition List Access: Planning Menu, Planned Purchase Requisition List Option

Planned Purchase Requisition Access: Planning Menu, Planned Purchase Requisition Maint. Option

Scheduling and Capacity Utilization WO are scheduled using infinite capacity loading One after the previous without taking into account the number of available machines on the work center Operations are placed with times calculated from the routings on work center time slots (calendar) forward (starting from the release date) backward (starting from the due date) Work loads are cumulated on each time slot

Work center schedules Using the calendar, determination of working time slots for each work center WC 1 8h 8h 8h 8h 8h Mo 8:00 Tu 8:00 We 8:00 Th 8:00 Fr 8:00 WC 2 8h 8h 8h 8h 8h

Scheduling of a Work Order Example Release date: Monday Due date: Friday (must be finished on Thursday night) Operation 010 on WC 1, duration 10 hours (setup time + run time) + 3 hours for transfer Operation 020 on WC 2, duration 12 hours (setup time + run time) + 3 hours for transfer

Forward scheduling Release date Due date WC 1 8h 8h 8h 8h 8h Mo 8:00 Tu 8:00 We 8:00 Th 8:00 Fr 8:00 WC 2 8h 8h 8h 8h 8h Op. 010 10h 3h Op. 020 12h 3h Slack: 4h Earliest end date

Backward scheduling Release date Due date WC 1 8h 8h 8h 8h 8h Mo 8:00 Tu 8:00 We 8:00 Th 8:00 Fr 8:00 WC 2 8h 8h 8h 8h 8h Op. 010 3h Slack: 4h 10h Latest start date Op. 020 3h 12h

Infinite Capacity Scheduling Capacity Requirements Planning Access: Planning Menu, Infinite Capacity Scheduling Option

Infinite capacity schedule dates Access: Planning Menu, Planned Work Order Maintenance Option

Work Order Slack Analysis Access: Planning Menu, Planned Work Order Slacks Option

Capacity Utilization On each time slot, work loads originating from WO are cumulated For Forward and Backward schedules 8h WC 1 Mo 8:00 Tu 8:00 We 8:00 Th 8:00 Fr 8:00 WO 1 4h 6h WO 2 4h 8h 2h 2h 8h WO 3 5h Work Load 4h 12h 16h 7h

Access: Planning Menu, Scheduling Chart Option

Access: Planning Menu, Workload Table Option

Workload Pegging

Access: Planning Menu, Workload Chart Option

Capacity Utilization Summary Access: Planning Menu, Scheduling Chart Option

Session 7: Sales Order Entry

Sales Order entry Object: record planned and firm sales orders Process: Identify customers Enter the sales orders (header and lines) Validate of sales orders

Customer Maintenance Access: Sales Menu, Customer Maintenance Option Identify each customer by its code and its name Other fields are optional Enter Customer Transportation Lead Time Enter customer payment term (or pick it in the list) Enter customer Credit Limit

Sales Order Structure Customer A Order 1 Line 1 Item X, qty 10 Line 2 Item Y, qty 5 Order 2 Line 1 Item X, qty 20 Customer B Order 3 Line 1 Item Z, qty 3 Line 2 Item Y, qty 8 Order 4 Line 1 Item X, qty 10 Line 2 Item T, qty 100 Line 3 Item U, qty 200

Sales Order Header Access: Sales Menu, Sales Order Maintenance Option 4- Click on ‘LInes’ to enter Order lines 1- Click on ‘ New ’ The first available order number is posted 2- Select Customer Id 3- Enter delivery date

Sales Order Lines 5- Validate 1- Click on ‘ New ’ The first available order number is posted 2- Select Item Id 3- Enter quantity ordered 4- Enter selling price Enter other order lines or Back

The Sales Order

The Item Master Schedule Access: Planning Menu, Master Schedules Option Sales order lines are reported on the item master schedule

Access: Sales Menu, Sales Forecast Maintenance Option

Sales Order Approval As long as an order is not approved, it can be modified or deleted, Approval forbids any later modification ; it is a commitment towards the customer ; he will receive an order confirmation A sales order should be approved only when one is sure that the shipment within the required delivery date is possible

Access: Sales Menu, Sales Order Maintenance Option Sales Order Approval Access: Sales Menu, Sales Order Maintenance Option

Planned to Firm Work Order Conversion Access: Planning Menu, Planned to Firm WO Conversion Option

Planned to Firm Purchase Requisition Conversion Access: Planning Menu, Planned to Firm PR Conversion Option

Session 8: Purchase Order Entry

The Purchasing Process PR : Purchase Requisition MRP Planned PR Conversion to Firm Firm PR Purchase Order entry Purchase Orders Receipt Closed Purchase Orders

Firm Purchase Requisition List Access: Purchasing Menu, Firm Purchase Requisition List Option

The Purchasing Process Logistics Purchasing Department Vendor Purchase order entry and approval Purchase Order Purchase Order Receipt Materials Receiving Note Accounting Department Vendor Invoice verification and recording Invoice Payment Payment

Purchase Order Entry Purchase Orders can be created By conversion of Firm Purchase Requisitions into Purchase Orders By manual entry (independently from the planning process) Purchase Order Creation Enter the Order Header Enter the Order Lines or integrate Firm Purchase Requisitions Purchase Order Approval

Purchase Order Structure Vendor A Order 1 Line 1 Item X, qty 10 Line 2 Item Y, qty 5 Order 2 Line 1 Item X, qty 20 Vendor B Order 3 Line 1 Item Z, qty 3 Line 2 Item Y, qty 8 Order 4 Line 1 Item X, qty 10 Line 2 Item T, qty 100 Line 3 Item U, qty 200

Access: Purchasing Menu, Purchase Order Maintenance Option Purchase Order Header Access: Purchasing Menu, Purchase Order Maintenance Option 1- Click on ‘ New ’ The first available order number is posted 4- Click on ‘PR Integration’ 2- Select the vendor Id 3- Enter Delivery Date

Purchase Requisition Integration 3 - Click on OK to create the Purchase Order Lines 2 – Select ‘Group by itemm’ 1 - Select all the Purchase Requisitions

The Purchase Order

Purchase Order Approval As long as a Purchase Order is not approved, it can be modified or deleted Approval prevents from any later modification ; the purchase order is sent to the vendor ; it is a commitment toward the vendor

Session 9: Detailed Scheduling

Access: Scheduling Menu, Firm Work Order List Option Firm Work Orders Access: Scheduling Menu, Firm Work Order List Option

The Detailed Scheduling Function The problem On a short horizon (1 day to 1 month) We assume that the capacity of each work center is balanced with the work load generated by the work orders We have the list of work orders to be manufactured and the description of the operations to be performed Work Centers Standard Times Due dates

Detailed Scheduling Objectives Prepare a realistic work plan Manage the priorities for executing the work orders In order to Provide the workshops a detailed planning of the work to be performed on each machine

Possible objectives Meet the due dates for each work order Additional objectives: Maximize capacity machine utilization (specially for bottleneck work centers) Minimize WIP value (financial objective) Maintain some flexibility (commercial objective) Multiples objectives and partially contradictory

Detailed Scheduling Methods Scheduling Work Order per Work Order Forward scheduling Backward scheduling Choice of the loading priority Scheduling by sequencing rules Choice of a priority rule

Scheduling per work order Centralized system Work of the machine Gantt chart Forward or backward loading Work order per work order (all the operations of a work order are loaded at one time) The results depends on the priority of work orders Becomes wrong if real work differs from planned work due to unexpected event

Loading of a work order Operations Op. 030 Machine 1 Op. 020 Op. 040 time

Preparing the machine schedules Access: Scheduling Menu, Finite Capacity Scheduling Option 3 - Validate 1 - Select a scheduling end date 2 - Select ‘ Prepare Schedule ’

Access: Scheduling Menu, Scheduling Chart Option The Machine Schedule Access: Scheduling Menu, Scheduling Chart Option

Scheduling one Work Order Schedule the work order Launch scheduling

Forward Scheduling Principle: Characteristics: Operations are placed in the routing order One operation is placed as soon as a free time slot with a duration equal to or greater than the operation duration is found Characteristics: Schedule can be accomplished even if due date is missed Increases short term capacity utilization Often causes buildup of WIP Not very flexible (urgent sales order, breakdowns)

Forward scheduled work order

Backward scheduling Principle: Begins with the due date of the final operation Schedules jobs in reverse order One operation is placed as soon as a free time slot with a duration equal to or greater than the operation duration is found Characteristics: Keeps free time in the short term Minimizes WIP A schedule is not always possible

Backward scheduled work order Scheduling starts at the Due Date

Forward scheduling of all work orders Access: Scheduling Menu, Finite Capacity Scheduling Option Select the scheduling order of the WO

Access: Scheduling Menu, Scheduling Chart Option

The work order schedule

Work Order Due Date Analysis Access: Scheduling Menu, Work Order Due Date Analysis Option

Backward scheduling of all work orders Select the scheduling order of the WO

Scheduling Chart

Priority Scheduling

Scheduling Chart

Access: Scheduling Menu, Workload Profile Option

Resource Capacity Utilization Access: Scheduling Menu, Resource Capacity Utilization Option

Session 10: Work Order Release and Production Activity Control

Work Order Release Check availability of components Convert a Firm Order into an Open Order Prepare all documents required for Production Activity Control Shop Traveler Job Tickets

Checking availability of components Access: Scheduling Menu, Component Shortage Analysis Option

Order Release The Firm Work Orders become Open Work Orders Creation of In-process Operations Shop Traveler Components are reserved in the inventory: They change from status AVAIL (Available) to status RESV (Reserved for fabrication) The quantity to process is set for the first operation

Work Order Dependency Level 2 Level 1 Level 0 Sub-assembly 1 WO Finished good WO Component 1 WO This WO can be released only when the sub-assembly WO have been receipted into inventory Sub-assembly 2 WO These WO can be released only when the component WO have been receipted into inventory Component 2 WO

Firm Work Order Release Access: Scheduling Menu, Firm Work Order Maintenance Option Release the order Availability of components

An Open Work Order Access: Control Menu, Open Work Order Maintenance Option Components are reserved

Operations in WIP

Components Reservation WO x item A Quantity 100 Component Warehouse Status Available (AVAIL) Reserved for fabrication (RESV) C1 - 100 + 100 Component C1 Quantity 100 C2 - 200 + 200 Component C2 Quantity 200 The transfer between status is done in the warehouse specified on the item form of each component The type of transactions on components change: from type FR (Firm Requirement) to type RR (Released Requirement)

Component Inventory reserved for Open Work Orders Access: Logistics Menu, Inventory by Item Option

Automatic Work Order Release Access: Scheduling Menu, Automatic Work Order Release Option Releases all the Firm Work Orders if all their components are available sorted by increasing release date with a release date earlier than or equal to the date specified

Production Activity Control Consists in recording The progress of manufacturing operations Number of parts processed Parts good, scraps Resource consumption Machine hours Labor hours Material and components used Incidents Machine or tool breakdown Waiting for parts handling, for personnel, …

Open Work Order Intermediate status Release: status O (Open) After the first production report: status I (in-process) When all the quantities have been reported at the last operation: status T (completed) Closing: status C (Closed) The operations have the same status

Management of an Open Order Open WO Closed WO Main steps: Work Order component issue Report of quantities processed Report of time used Work Order receipt into warehouse Work Order closing

Management of an Open Order Components Warehouse Workshop Finished Goods Warehouse Component Issue Waiting Op. 010 Op. 020 FG receipt Qty good Waiting Reporting Op. 010 Qty good Reporting Op. 020 Qty completed

Access: Control Menu, Work Order Component Issue Option WO Component Issue Access: Control Menu, Work Order Component Issue Option

Components in-process Access: Control Menu, Open Work Order Maintenance Option Components are issued from Reserved inventory and are located in WIP

Components are issued from reserved inventory Access: Logistics Menu, Inventory Inquiry per Item Option

Work order Tracking The total quantity good at the last operation is the quantity completed on the work order This quantity can be transferred into the warehouse When the quantity receipted into the warehouse is equal to the quantity released, the Work Order can be closed

Work Order Tracking Operation 010 Operation 020 Qty waiting Qty good Becomes quantity waiting for the next operation Reporting of quantity processed, parts good, scrap Reporting of quantity processed, parts good, scrap

Access: Administration Change Folder Date Access: Administration

Access: Control Menu, Production Reporting Option Select Worker Id Select Activity (Setup or Production) Enter quantity good Enter time used Setup should be reported first

The work order is completed Access: Control Menu, Open Work Order Maintenance Option

Completed WO Receiving into inventory Access: Control Menu, Work Order Receipt into Warehouse Option

Access: Control Menu, Open Work Order Maintenance Option Work Order Closing Access: Control Menu, Open Work Order Maintenance Option Click on ‘WO Closing’

Summary of inventory transactions Components MRP Available Planned requirements Planned to firm conversion Firm requirements Available WO Release Reserved for fabrication Component Issue Requirements in process Product receipt Manufactured product Available

Session 11: Purchase Order Receipt

Access: Administration Change Folder Date Access: Administration

Purchase Order Receipt Access: Logistics Menu, Purchase Order Receipt Option Click on ‘ OK ’ to record the receipt of all checked lines Click in the ‘Select’ column to check / un-check a line

Inventory Transaction Access: Logistics Menu, Inventory Transaction History Option

Recording Vendor Invoice Access: AR&AP Menu, Vendor Invoice Entry Option 1 - Click on ‘New’ 4. Validate 2 – Select Receipt Note 3 - Enter (any) vendor invoice number Receipts not yet invoiced are posted

Vendor Account Inquiry Access: AR&AP Menu, Account Payable Inquiry Option

Access: AR&AP Menu, Account Payable Aging Option

Session 12: Sales Order Shipping

Access: Sales Menu, Sales Order Book Option

Sales Order Preparation Three steps Step 1 Sales Sales Order Preparation Preparation Notes Step 2 Logistics Sales Order Shipping Shipping Notes Step 3 Sales Order Invoicing Accounting

Sales Order Preparation Access: Sales Menu, Sales Order Preparation Option If all the goods ordered are available, automatic preparation of all the lines To prepare each order line

Sales Order Shipping Access: Logistics Menu, Sales Order Shipping Option 1- Select the warehouse 3- Validate the shipment 2- Select the preparation note

Invoicing the shipments Access: AR&AP Menu, Customer Invoicing Option 3. Validate 1. Click on ‘New’ 2. Recall the customer Not invoiced shipping notes are posted

Access: Administration Change Folder Date Access: Administration

Recording the customer payment Access: AR&AP Menu, Customer Payment Option 1. Click on ‘New’ 5. Validate 4. Click in the ‘Match’ column to note that the invoice is paid 2. Recall the customer 3. Enter the payment amount Not paid invoices are posted

Accounts Receivable Inquiry Access: AR&AP Menu, Account Receivable Inquiry Option

Accounts Receivable Balance Access: AR&AP Menu, Account Receivable Balance Option

Vendor Payment Access: AR&AP Menu, Customer Payment Option 1. Click on ‘New’ 5. Validate 4. Click in the ‘Match’ column to note that the invoice is paid 2. Recall the vendor 3. Enter the payment amount Not paid invoices are posted

Accounts Payable Inquiry Access: AR&AP Menu, Account Payable Inquiry Option

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