Plan to produce: BOMs, MRP, production orders and quality

#Purpose and scope

This chapter follows a manufactured product from its bill of materials to finished goods: master data, material requirements planning (MRP), production orders and work orders, capacity scheduling, quality inspection and costing. The Manufacturing home page lists production orders, work orders, BOMs and overdue jobs.

#Before you start

1. Products (finished, semi-finished and raw) exist in the product master, and warehouses are set up (see “Inventory operations”).
2. Work centers exist in Work centers; standard steps exist in Operations.
3. Sales orders, forecasts and existing production orders are the demand MRP reads, so keep them current.

#1. Bills of materials and routings

1. Open BOMs, create the BOM header for the product and add the component lines.
2. Build the routing in Routings with its steps in Routing operations; each step names a work center and a sequence.
3. Submit the BOM for approval, then approve it.

#2. Planning parameters and the master schedule

1. In Planning parameters set, per product, the planning group (Raw Material, Finished Goods, Semi-Finished, Packaging), ABC class, preferred vendor, lead time in days, safety stock, reorder point and reorder quantity.
2. Choose a lot sizing method: LFL (lot for lot), FOQ (fixed order quantity) or EOQ (economic order quantity), with fixed, minimum and maximum order quantities where relevant.
3. Optionally capture demand in Demand forecasts and plan the master production schedule in MPS plans; the MPS workbench shows a product by period matrix with available-to-promise and can recalculate it.

#3. Run MRP

1. Open the MRP dashboard.
2. Set Plan From and Plan To and tick what to include: Production Orders, Forecasts, Safety Stock.
3. Choose the Plan Mode: Regenerative re-plans everything; Net Change re-plans only items whose demand or supply changed since the last run.
4. Choose Run MRP. The run header shows the number, status and the totals for purchase, produce and transfer recommendations.
5. Review each result: planned quantity, net and gross requirement, stock, safety stock, lot method, required date, suggested order date and what it is pegged to. Use the Peg trace to see the demand behind a line.
6. When the run is Completed, choose Confirm to lock it from re-execution.

#4. Convert recommendations

1. Use the All, Purchase, Produce and Transfer tabs (a tab appears only if it has results) and search by product.
2. Select the unconverted lines, then convert to Purchase Requisitions (for bought items) or Production Orders (for made items).
3. Converted lines are dimmed and marked “Converted to …”; they cannot be converted twice.

#5. Production orders and work orders

A production order is created by conversion, from a sales order, or by hand in Production orders (product, BOM, routing, planned quantity, dates, warehouse, department, project, cost centre, priority Low/Normal/High/Critical). The Materials tab lists required materials and can be populated from the BOM.

#6. Capacity and the shop floor

1. In the Capacity schedule drag a work order to another work center or day, or tap it to change the work center and start/end dates. Each cell shows planned versus available hours and the load percentage.
2. The Work center board shows live Andon status and Availability, Performance, Quality and OEE for the last 24 hours.

#7. Quality inspection

1. Define what is measured in Quality parameters.
2. Record an inspection in Quality inspections against a work order or production order: date, inspector, quantity inspected, passed and rejected.
3. Enter a measurement per parameter in Inspection results.

#8. Production costs

Production costs tracks cost lines per production order. Each line has a type — Material, Labor, Overhead or Subcontracting — with quantity, unit cost, total, cost centre and optional work order.