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

2. In this unit, you will: Create bills of materials for sales and production Perform the production process View the effects of production on inventory and accounting Production: Purpose

3. 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

4. Production Process Overview Create Production Order Release to shop floor Report Completion Issue Components System Configuration Purchasing Warehouse management Production Inbound logistics Outbound logistics Marketing & Sales Service Financial controlling Master data

5. Bills of Materials: Unit Overview Diagram Production Topic 1: Bills of Materials Topic 2: Production Process

6. Bills of Materials Types Printer Head 1 pc. Power Pack 1 pc. Memory Boards 2 pcs. BOM Types Production Sales Assembly Template

7. Category of the Item Master Record of the Parent Item in Bills of Material Assembly BOM Production BOM Sales BOM Inventory Item Sales Item Purchased Item (1.) (1.) optional Template BOM Type Item Category (1.)

8. Phantom Item Board 1 Unit Axis 2 Units Screws 8 Units Wheels 4 Units Tire 1 Unit Rim 1 Unit Screws 4 Units Skateboard 1 Unit Phantom Item (does not appear in production orders and only for information in MRP)

9. Bills of Material: Topic Summary Key points from the Bills of Material topic: Four types of Bills of Materials Production Sales Assembly Template The item categories allowed for a parent item in a bill of materials are determined by the bill of materials type.

10. Exercises for Bills of Material

11. Production Process: Unit Overview Diagram Production Topic 1: Bills of Material Topic 2: Production Process

12. Production Order Production Orders include: Finished product Components Component issue method Production orders can be generated automatically by MRP or created manually.

13. Production Process Steps Create Production Order Release to shop floor Report Completion Issue Components System Configuration Purchasing Warehouse management Production Inbound logistics Outbound logistics Marketing & Sales Service Financial controlling Master data

14. Production Order Types Standard Production Order Product A B C Special Production Order Item X Y Z Disassembly Production Order Product A B C

15. Steps to Enter a Production Order Select production order type Select parent item Enter quantity to be produced Enter a finish date for production Make any desired adjustments to components, warehouses or quantities Save the production order.

16. Release to Shop Floor Initially set as Planned Release the order to begin work Components can then be issued

17. Issue Components Backflush ComponentsManual Components Control quantity issued Precise timing possible Commonly used items Typical quantities used

18. Report Completion When you report completion, the system automatically: Receives finished item into inventory Issues backflushed components Calculates the cost of producing the item

19. Stock Changes for Standard Production Order In Stock-Committed+Ordered= Available Standard Production Order Completion reported Status: Planned Components Finished Product Components Finished Product ++ + + - - -- + Indicates increase in quantity - Indicates decrease in quantity

20. TypeStandard / Special / DisassemblyDue Date20.10.2004 StatusPlanned / Released / Closed / CancelledOriginManual / Automatic Product No.P1001UserMarc Manager Planned Qty2Sales Order… Warehouse01Customer… Post Production Cost Information Components Costs Actual Component Cost80 Actual Additional Cost Actual Product Cost80 Total Variance Variance per Product Variance % Journal Remark Production Order - P1001 Production Order Summary Quantities Planned Quantity 2 Completed Quantity 2 Rejected Quantity Dates Due Date 20.10.2004 Actual Close Date Overdue

21. Production Process Postings Issue For Production Receipt from Production Production Order Close 100 Stock Account (of components) 90 Stock Account (of Product) 100 WIP Account 90 WIP Account -10 WIP Account -10 WIP Variance Account

22. Production Process: Topic Summary Key points from the Production Process topic: Three types of production orders: standard, special and disassembly The four main steps in the production process are: Create Release Issue components Report Completion Production orders are generated by MRP or created manually. Release signals production is ready to begin. Components can be issued manually or by backflush Reporting completion receives the finished product into inventory.

23. Exercises for the Production Process

24. Production: Unit Summary You should now be able to: Create bills of material for sales and production Perform the steps in the production process View the effects of production on inventory and accounting