UERNAME : srmi_11 PASSWORD : WELCOME PRODUCTION PLANNING PROCESS KANBAN: WHAT KANBANS ARE: Kanban is Japanese for sign

n or designated place. It is used in manufacturing to mean a visual signal that tells when it is time to get or make more of something. Kanban is a signal that gives an instruction to get, move, produce, order, or take some other activity with production materials. Its literal translation from the original Japanese term, though, is signboard or billboard. Kanban tell you when to order, what to order, how much to order, and where to order it from. WHAT KANBANS DO? 1. Controls the amounts of raw material amounts and of material in Work In Process 2. Smooth out flow, if sized properly 3. Tells when and where there is a problem in the process 4. Assures there is always just enough material on hand to make what is needed TYPES OF KANBANS: 1. Raw Material Kanban tells suppliers when to send how much of a particular item to a particular place. 2. In-Process Kanban determines the amount of WIP (Work In Process) that can be kept between any two operations in a process 3. Finished Goods Kanban determines the amount of a product to be kept on hand at any given time. Removal of material from the Finished Goods Kanban acts as a signal for more of that product to be manufactured.

TYPES OF KANBAN SIGNALS: 1. A calculated amount of material kept in a designated space, such as a bin or between lines on a workbench or on the floor 2. A card that is used to tell the amount of material to be made or ordered 3. The markings on a bin that determine when more material needs to be ordered or made 4. Any other clear visual signal that indicates it is time to get more material WORK CENTER: Work centres are part of the fundamental master data of production planning and control along with bills of material and routings. Work centres are used in the operations of task lists and work orders. Task lists include routings, maintenance task lists, inspection plans, and standard networks. Work orders are created in the form of a network for production, quality assurance, plant maintenance and the project system. The business object Work Centre has a specific available capacity. The work carried out at or by the work centre is costed with allocation records that are defined by the cost centres and activity types. The following units can be defined as work centres: Machines People Production lines Maintenance groups

COST CENTER: A defined area, machine, or person to whom direct and indirect costs are allocated. A distinctly identifiable department, division, or unit of an organization whose managers are responsible for all its associated costs and for ensuring adherence to its budgets. Also called cost pool or expense center. See also profit center and revenue center. A department within an organization that does not directly add to profit, but which still costs organization money to operate. Cost centers only contribute to a company's profitability indirectly, unlike a profit center which contributes to profitability directly through its actions. This type of department is likely to be one of the first targets for downsizing because, on the surface, it has a negative impact on profits. Cost center doesn't produce a profit directly from its activities; managers of cost centers are responsible for keeping their costs in line or below budget. Examples of cost centers include marketing, human resources and research and development. PROFIT CENTER: Profit center is an organizational unit in the Accounting component in the R/3 System. It reflects a management-oriented structure of the enterprise for the purposes of internal control. A business unit or department which is treated as a distinct entity enabling revenues and expenses to be determined so that profitability can be measured. A profit center is a management-oriented organizational unit used for internal controlling purposes. Dividing your company up into profit centers allows you to analyze areas of responsibility and to delegate responsibility to decentralized units, thus treating them as companies within the company

 The profit center differs from a cost center in that cost centers merely represent the units in which capacity costs arise, whereas the person in charge of the profit center is responsible for its balance of costs and revenues. Use Use profit centers to portray the following: Units of the enterprise that bear responsibility for their own results, for example, product areas Corporate strategies, for example: "Clearing up product line" Comparing regional/geographic units of the enterprise "Make or buy" Where to manufacture MATERIAL REQUIREMENT PLANNING: Material requirements planning (MRP) is a production planning and inventory control system used to manage manufacturing processes. Most MRP systems are software-based, while it is possible to conduct MRP by hand as well. It is a solution relatively new to a classic problem of production: control and coordinate the materials in order to find them available when necessary, and without having the necessity of possessing an excessive inventory. Computerized ordering and scheduling system for manufacturing and fabrication industries, it uses bill of materials data, inventory data, and master production schedule to project what material is required, when, and in what quantity. MRP phases orders for dependent-demand items (such as raw materials, components, parts) over a period to synchronize flow of materials and in in-process inventories with production schedules.

 It also computes and tracks effect of hundreds of variables such as new orders, changes in various capacities, overloaded production centers, shortages, and delays by suppliers, and feeds financial data into the accounting system. In contrast to just in time inventory (a demand-pull production system), MRP is a planpush system, and in contrast to advanced planning system (a forward scheduling system) it is a backward-scheduling system. An MRP system has three objectives: 1. Reduction in inventory cost 2. Meeting delivery schedule 3. Improved performance MATERIAL REQUIREMENTS PLANNING SYSTEM ARCHITECTURE

BENEFITS OF MRP: 1. Reducing inventory levels 2. Reduced component shortages 3. Improved productivity 4. Improved customer service 5. Less scrap and Rework

6. Reduced Purchasing cost MRP II: MANUFACTURING RESOURCE PLANNING Material Requirements Planning (MRP) and Manufacturing Resource Planning (MRPII) are predecessors of Enterprise Resource Planning (ERP), a business information integration system. The development of these manufacturing coordination and integration methods and tools made todays ERP systems possible. Both MRP and MRPII are still widely used, independently and as modules of more comprehensive ERP systems, but the original vision of integrated information systems as we know then today began with the development of MRP and MRPII in manufacturing. MRP II is a computer-based system that can create detail production schedules using realtime data to coordinate the arrival of component materials with machine and labor availability. MRP II is used widely by itself, but also as a module of more extensive enterprise resource planning (ERP) systems. Manufacturing Resource Planning (MRP II) is defined by APICS (American Production and Inventory Control Society, Estd. 1957) as a method for the effective planning of all resources of a manufacturing company. Ideally, it addresses operational planning in units, financial planning in dollars, and has a simulation capability to answer "what-if questions and extension of closed-loop MRP. MRP II integrates many areas of the manufacturing enterprise into a single entity for planning and control purposes, from board level to operative and from five-year plan to individual shop-floor operation. It builds on closed-loop Material Requirements Planning (MRP) by adopting the feedback principle but extending it to additional areas of the enterprise, primarily manufacturing-related.

ALMOST EVERY MRP II SYSTEM IS MODULAR IN CONSTRUCTION. CHARACTERISTIC BASIC MODULES IN AN MRP II SYSTEM ARE: Master Production Scheduling (MPS) Item Master Data (Technical Data) Bill of Materials (BOM) (Technical Data) Production Resources Data (Manufacturing Technical Data) Inventories & Orders (Inventory Control) Purchasing Management Material Requirements Planning (MRP) Shop Floor Control (SFC) Capacity planning or Capacity Requirements Planning (CRP) Standard Costing (Cost Control) Cost Reporting / Management (Cost Control) Distribution Resource Planning (DRP)

MRP II systems can provide: o Better control of inventories o Improved scheduling o Productive relationships with suppliers MRP METHODOLOGY: MRP represents an innovation in the manufacturing environment. Thus, its effective implementation requires explicit management action. Steps need to be clearly identified and necessary measures be taken to ensure organizational responsiveness to the technique being implemented. Cookbook like models for implementing MRP does not exist. Each organization poses a unique environment and that means that specific actions need to be taken with due regard to environment specifics. We approach MRP as an organizational innovation and identify the necessary measure which management should adopt in implementing it. Motivational influences underlying MRP implementation include:

1. Recognition of business opportunity for the timely acquisition of MRP. 2. Recognition of technical opportunity for the timely acquisition of the technologies supporting MRP implementation. 3. Recognition of need for solving manufacturing and/or inventory problems using MRP. Given the above motivational factors one may readily identify what and how issues underlying MRP design and implementation. What refers to a generic process model composed of steps and indicative levels of effort to implement each step? How refers to management involvement with respect to the process. MASTER DATA: Master data is the core data that is essential to operations in a specific business or business unit. The kinds of information treated as master data varies from one industry to another and even from one company to another within the same industry. Also called reference data master data is any information that is considered to play a key role in the core operation of a business. Master data may include data about clients and customers, employees, inventory, suppliers, analytics and more. Master data is typically shared by multiple users and groups across an organization and stored on different systems. Some of the most commonly used master data objects are: Customer Master Vendor Master Material Master Pricing data ( and other condition records) HR Master Data Bill of Materials Standard Networks Standard WBS

 Work Centers BOM: BILL OF MATERIALS: A bill of materials (BOM) is a hierarchical list of components used in an assembly. The bill of materials is used chiefly for cost estimates, but is also used for inventory control and tracking where parts are used. A bill of materials may or may not include labor. A bill of materials (sometimes bill of material or BOM) is a list of the raw materials, subassemblies, intermediate assemblies, sub-components, components, parts and the quantities of each needed to manufacture an end product. No physical dimension is described in a BOM. It may be used for communication between manufacturing partners, or confined to a single manufacturing plant. A BOM can define products as they are designed (engineering bill of materials), as they are ordered (sales bill of materials), as they are built (manufacturing bill of materials), or as they are maintained (service bill of materials). The different types of BOMs depend on the business need and use for which they are intended. In process industries, the BOM is also known as the formula, recipe, or ingredients list. ORGANIZATIONAL LEVELS IN PRODUCTION: 1. CLIENT The client is a self-contained unit in the R3 system, with separate set of Master data and its own set of Tables. When a change is made in one client all other clients are affected in the system - this type of objects are called Client independent objects. 2. COMPANY CODE In SAP, the company code is an organizational unit used in accounting. It is used to structure the business organization from a financial accounting perspective.

 It should be created according to tax law, commercial law, and other financial accounting criteria. As a rule, a company code in the SAP system represents a legally independent company. The company code can also represent a legally dependent operating unit based abroad if there are external reporting requirements for this operating unit, which can also be in the relevant local currency. 3. PLANT Each manufacturing facility or branch of a company is defined as a plant in SAP. Plant is assigned to the company code. Storage locations are created under each plant. If the valuation level is the plant, the stocks are valuated at plant level. 4. STORAGE LOCATION An organizational unit allowing the differentiation of material stocks within a plant. All data referring to a particular storage location is stored at storage location level. This applies mainly to storage location stocks.

MATERIAL MASTER RECORD Purchasing storage saks classification accounting costing MRp work scheduling