1 Chapter 5 The Production Process Outline Magal and Word Essentials of Business Processes and Information Systems 2009 2 A Basic Production Process Role of Enterprise Systems in the Production Process ID: 403284
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Magal and Word ! Essentials of Business Processes and Information Systems | © 2009
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Chapter 5: The Production ProcessSlide2
Outline
Magal and Word ! Essentials of Business Processes and Information Systems | © 2009
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A Basic Production Process
Role of Enterprise Systems in the Production Process
Exercise Using Simulated SAPSlide3
Basic Production Process
Magal and Word ! Essentials of Business Processes and Information Systems | © 2009
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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 ImpactSlide4
Key Concepts and Assumptions
Magal and Word ! Essentials of Business Processes and Information Systems | © 2009
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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 RoutingSlide5
Production Processes and Strategies
Magal and Word ! Essentials of Business Processes and Information Systems | © 2009
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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 materialSlide6
Production Processes and Strategies
Magal and Word ! Essentials of Business Processes and Information Systems | © 2009
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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)Slide7
Bill of Material (BOM)
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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?Slide8
Magal and Word ! Essentials of Business Processes and Information Systems | © 2009
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Engineering Drawing of the Standard SkateboardSlide9
Bill of Material
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Work Center
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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 areaSlide11
Magal and Word ! Essentials of Business Processes and Information Systems | © 2009
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SSB Plant LayoutSlide12
Product Routing
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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 usedSlide13
Magal and Word ! Essentials of Business Processes and Information Systems | © 2009
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Product Routing for Standard SkateboardSlide14
Production capacity
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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
1 per SB
50
50
Final Inspection
1 per SB
50
60
Move to Storage
5 per 50
5
Total Time
460 = 7.66 hours
Number of skateboards per unit of time (hour, day)
Approximately 50 per day (8 hours)Slide15
Conceptual Framework
Magal and Word ! Essentials of Business Processes and Information Systems | © 2009
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Physical Flow
Document and Data Flow
Planned Order
Production Order
Material Withdrawal Slip
Goods Receipt Document
Information Flow
Instance-level Information
Process-level InformationSlide16
Physical Flow
Magal and Word | Essentials of Business Processes and Information Systems | © 2009
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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 accomplishedSlide17
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A Basic Production ProcessSlide18
Planned Order
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Production Order – Initial State
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Production Order – Completed State
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Material Withdrawal Slip
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Goods Receipt Document
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Role of Enterprise Systems in the
Production Process
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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 FlowSlide24
Information Flow
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Instance 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? Slide25
ES in the Production– Process Execution and Capture and Store
Magal and Word ! Essentials of Business Processes and Information Systems | © 2009
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Creating a Planned Order in SAP
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Goods Issue for Production Order in SAP
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Production Confirmation in SAP
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Goods Receipt for Production Order in SAP
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ES in Production – Monitor
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Instance level
Inventory status report
Stock requirements list
Drill down to a production order
Process levelSlide31
Stock Requirements List in SAP
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Production Order Status in SAP
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Process Level Information
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Average time to produce a skateboard
Average time to produce an order (of 50)
How many on time? How many delayed?
Reasons for delaySlide34
Process Level Information
Magal and Word ! Essentials of Business Processes and Information Systems | © 2009
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Exercise Using Simulated SAP
Magal and Word ! Essentials of Business Processes and Information Systems | © 2009
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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