Production in the ERP system

1. THE INTEGRATED
PRODUCTION PROCESS IN
ERP
DPR105: MGMT INFO SYSTEMS
Instructor: Tom Matys
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2. The Goal
Create a finished product using
the most efficient amount of
materials and resources, while
maintaining accurate levels of
inventory, managing time,
people, and costs.
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3. How Product is made
• Make-To-Stock (SSB)
• Make-To-Order (Dell)
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4. Routing (define the steps)
1.Material Staging
2.Assembly
3.Initial inspection
4.Packing
5.Final Inspection
6.Move to storage
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5. Work Centers
• Staging Area
• Assembly Area
• Final Inspection Area
What two types of work centers
can there be?
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6. Direct vs Indirect Costs
Direct costs: Consultants, supplies, travel,
labor, etc.
Indirect Costs: Overhead, functions, rent,
repairs, etc.
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7. Document Flow
1) Planned Production Order
2) Production Order
3) Material issued to Production (Goods
Movement)
4) Confirm Production Order (mfg process
complete)
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8. Planned Production order
• A request to make a specified quantity of goods
• Like a Purchase Requisition except: Instead of requesting
goods from a
vendor, the goods are requested from the company’s warehouse.
• Planned orders are received by a production
controller.
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1. Planned Order Number
2. Request date
3. Material number (finished product)
4. Requested and approved by names
(compare to manual input pg 108) MS4/09/14
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9. Production Order
• Created from a planned order by
the production controller
• Written authorization to make the
goods
• Can contain multiple planned
production orders
• Production Controller considers
resources, capacity, labor,
materials
• A new number created o the
production order, also has planned
order no.
• Is signed off, or checked off for
approval.
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1) Finished Material No.
2) Quantity
3) Date to Finish

10. Goods Issue Materials (Document)
• Request made for materials
• Staging process begins
• Warehouse sends materials to
production
• Goods Issue is created
1) Material
2) Quantity
3) Storage Location to new
location
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11. Make the product
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12. Production Order Confirmation
Once the finished good is created a confirmation is
executed.
1) Material Number
2) Quantity created
3) Posting Date
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13. Warehouse: Goods receipt
1) Production Order Number
2) Quantity received
3) New storage location
Of course, based on any
companies functionality,
the process could be more
complex
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14. Next up….MRP)Materials Requirements Planning
• BOM: Recipe of finished product
• Sales History => Sales Forecast
• Inventory Levels
• Resource Capacity
• Demand Planning
• Stock Requirements List
….and more
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15. QUESTIONS
?
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