Integrated Production Processes (IPP)

1. Integrated Production Processes (IPP)

2. Learning Objectives • Appreciate contemporary production trends. • Understand role of ERPs in integrating total manufacturing environment. • Know principal components of Integrated Production Processes (IPP). • Recognize effects of automation on IPP. • Understand key inputs, outputs, files, processes. • Identify principal challenges/opportunities. • Introduce supply chain management software

3. ERPs - SAP Automotive Modules • Business Planning • Controlling • Finance & Accounting • Suppliers • Original Equipment Manufacturers • Aftermarket

4. Managing Throughput Times • Push Manufacturing • Sales forecast drives production plan • Goods produced in large batches • Jobs wait until machines ready • Pull Manufacturing • Idle machine pulls job from previous machine • Theoretically, job = “batch” of one unit

5. Features of Pull Approach • Short production runs • Continuous flow operations • Factory cells - all machines together • workers run more than 1 machine • Reduced WIP & FG inventories • Reduced floor space • improved layout/less inventory

6. Cost Management/ Accounting - Trends • Shift to reporting to assist strategic planning/decision making • Increased emphasis - managing costs v. accounting for costs • Attack waste Vs. reporting variances • Flexible cost systems - responsive to change • Shift - cost structure - variable to fixed costs

7. Cost Management/ Accounting – Trends ..contd. • Less DL - less use of DL to apply OH • Increase in OH component of total cost • 4th category (direct technology) added to DM, DL, OH • Use of Activity Based Costing (ABC) systems • Real-time data capture in factory • Shift from Std. cost systems to actual • Reduction in data-gathering costs • Collecting statistical + financial data

8. Cost Management/ Accounting – Trends ..contd. • Replace detail reporting by shop order and/or operation with actg. for cell throughput time • Use cell throughput time v. DL to apply OH • Trend towards process cost systems v. job order systems • For mgt. purposes, abandonment of absorption costing • Accumulation of costs for decision making vs. valuing inventories

9. Overview–ERP-Driven Manufacturing

10. Production Planning/Control Systems • Manufacturing Resource Planning (MRP) • Master production schedule • Materials requirements planning (mrp) • Shop floor control • Just-in-time

11. Just-in-time Objectives • Zero defects • Zero setup times • Small lot sizes • Zero lead times • Zero inventories

12. JIT Implementation Features • Arrange factory in U-shaped work cells • Assign 1 worker to multiple machines • Give production workers authority to stop the line if they are behind schedule or if they discover defective parts • Require nearly constant parts production schedule • Develop vendor cooperation re deliveries • Simplify system for tracking movement of goods through factory

13. Flexible Mfg. Systems Components • Group Technology • Computer-aided manufacturing • Computer-aided process planning • computer numerical control • robotics • automated guided vehicles • automated storage/retrieval systems • digital image processors • Automated data collection devices

14. Overview: Production planning & control & cost accounting.

20. Inventory system controls • Effectiveness of operations • maintain sufficient inventory to prevent stockouts • maintain sufficient inventory to maintain operational efficiency • minimize cost of carrying inventory • Efficiency of system operations • JIT materials acquisition • Warehouse bin locations • Resource security • periodic physical inventory counts • locked storerooms

21. Summary • Contemporary production trends. • Role of ERPs in integrating total manufacturing environment. • Principal components of Integrated Production Processes (IPP). • Effects of automation on IPP. • Key inputs, outputs, files, processes. • Supply chain management software