Transcript ERP A MANUFACTURING PERSPECTIVE

ERP A MANUFACTURING PERSPECTIVE
Chapter-4
COMPUTER AIDED DESIGN / COMPUTER
AIDED MANUFACTURING (CAD / CAM)
1. Computer Aided Design (CAD) is a popular tool for
product design and is major focus area for
manufacturing sector.
2. CAD systems are computer programs or integrated
packages for work station hardware and software that
allow the user to draw and easily modify product
designs on a computer screen.
3. Eg-aerospace & automotive are largest user of
CAD/CAM. Like M&M
Advanced CAD systems provide designers with at least
three major benefits: -
A. GRAPHICS CAPABILITIES:
 CAD systems allow the designer to view a
product from different perspectives, including
three-dimensional rotations, and various crosssections.
 The designer can also make proportional
changes in scale, or change the angle of an arc
with the click of a computer mouse rather than
having to redraw the entire product.
B. DESIGN, STORAGE & RETRIEVAL:
1. Some CAD systems can store the design characteristics of
existing products & components.
2. Example, if a company needs a gear for a new product, the
designer can enter relevant information about the gear,
such as it diameter, tooth pattern and required hardness,
into the CAD system .
3. The CAD system determines whether the company is
already using an identical or sufficiently similar gear, in
which case a new one in unnecessary, if not, then use the
design of this similar gear as a starting point for the new
gear.
4. This capability not only promotes the use of common
components but also reduces design time.
C. AUTOMATIC EVALUATION OF SPECIFICATIONS:
 1. One of the most time-consuming aspects of design for
highly technical products is calculating whether or not product
specifications, such as strength, heat resistance or
aerodynamic drag, are satisfied.
 2. These calculations can be programmed into some CAD
systems so that whenever the designer changes the design
(by altering the shape or material to be used) these
performance characteristics are recalculated automatically
and compared to the product requirements.
 3. This is sometimes called Computer-Aided-Engineering
(CAE)
The overall benefits of CAD systems can be substantial.
The features described above reduce the development time
and cost, and they improve product quality because more
design options can be evaluated in greater detail more quickly
MATERIALS REQUIREMENT PLANNING(MRP)
1. MRP is a method for ordering components than the
independent demand inventory models
2. MRP : It is a phase in the development of computerized
methods for planning the use of company resources ,
including scheduling raw materials, vendors, production
equipments and processes.
3. MRP evolved into a comprehensive priority planning
system.
4. MRP provides a method that helps keep order due dates
valid even after the orders have been released to the shop
floor or outside vendor.
5. MRP systems can detect when the due date of an order –
the date the order is scheduled to arrive- is out of alignment
with its need date , the date the order is actually required.
6. The expanded MRP system became known as closed
loop MRP, because it provided feedback from the
execution function to the planning functions, so
manufactures could change plans if necessary.
7. The new system, which was called manufacturing
resource planning (MRP-II), was a comprehensive
approach for the effective planning of all resources of a
manufacturing organization.
8. Production & materials planning is critical to the success
of a manufacturing company.
9. A company can have the best product design, the newest
manufacturing facilities, the latest equipment & all the
latest production technologies like CAD/CAM, robotics ,
automated guided vehicles (AGVs) etc. but not the ability
to compete.
10.MRP has proved to be an effective production & inventory
planning system in a wide variety of environments.
11.An MRP system requires 3 types of information:
 Master Production schedule (MSP)
 Bill of Material (BOM)
 Inventory Records (IR)
11.The MSP is detailed production schedule for finished gods or
end items that provides the major input to materials
requirement planning process.
12.Associated with each finished product is BOM , which
describes the dependent demand relationships that exist
among
the
various
components
materials,
parts,
subassemblies , etc.- comprising the finished product.
13.The entire set of BOMs for the company finished products is
called BOM file.
14.Inventory status data for each product or component such as
stock-in –hand, stock-on order, etc, .are provided by the
inventory records, which also contains planning factors like lead
time, safety stock, re order, and so on.
15.MRP logic uses the MPS, the BOM file & the inventory records
to determine the following for the components:
 Planned order quantities
 Planned order release dates (to shop floor/suppliers)
 Planned order due dates
16.The MRP system calculates the release dates & due date
taking into consideration the lead times required to produce or
procure the components and by recognizing the order in which
they are assembled into the finished product.
17.If the MRP process is carried out in conjunction with the
capacity planning, the production facility should have to
complete the orders on time.
BILL OF MATERIAL (BOM)
 A BOM defines the relationship of components to end
items. The BOM identifies all components used in the
production of an item, the ordered quantity & the order in
which components are assembled.
 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 odf
materials .
OFFICE CHAIR
BACK CUSHION
ADJUSTTNER Mechanism
CHAIR FRAME
BASE UNIT
SEAT CUSHION
Wheels
Fig : Bill of material for a office chair
FASTENERS
Fasteners.
Closed Loop MRP
 Closed loop MRP uses capacity planning & feedback to
improve the ability of the production system to complete
work as planned.
 To determine how well the planning factors & tools are
working ,MRP planners need feedback from the
shopkeeper and purchasing department.
 With effective feedback MRP planner can revise the
planning factors and techniques so that better materials
can be developed for future.
DISTRIBUTION REQUIRMENT PLANNING
 DRP is having same logic as of MRP into Physical
distribution System. DRP assist companies that maintain
distribution inventories in fields warehouse, distribution
centers by improving the linkage between marketplace
requirements & manufacturing activities.
 It helps mgmt to anticipate future requirements which
closely match the supply of products to the demand for
them.
 A DRP system also improves savings through improved
planning of transportation capacity needs , vehicle
dispatching & warehouse receipt planning.
 DPR has a central role in phsical dist. system., similar to
MRP’s role in coordinating material in manufac. system.
MANUFACTURING RESOURCE PLANNING
(MRP – II)
 1. MRP was originally developed as a computer system that
was limited to materials planning.
 2. MRP –II is an expansion of closed loop MRP for managing
an entire manufacturing company.
 3. MRP II system provides information that is useful to all
functional areas & encourages cross- functional interaction.
 4. MRP II supports sales & marketing by providing and
orders- promising capability.
MRP-II is expansion of closed loop .
 5. Order promising is a method of tying customer’s orders to
finished goods in the MPS.
 6. This allow sales personnel to have accurate information
on product available & gives them the ability to give
customers accurate delivery dates
 7.MRP II supports financial planning by converting
materials schedules into capital requirement.
 8. A company can use MRP II to simulate the effects of
different master production schedules on material usage,
labor, & capital requirement. MRP II provides the
purchasing department with information for developing
long range buying plans .
 9. It is common for suppliers to directly access a
customers MRP system to receive up to date information
on the customers planned materials needs.
 10. Information in the MRPII system is used to provide
accounting with information on materials receipts to
determine accounts payable. Shop floor control
information is used to track workers hrs for payroll
purposes.
 11. MRP II system increases a company’s efficiency by
providing a central source of management information.
Just In Time (JIT)/KANBAN :
1. JIT means to produce goods & services when needed, not
too late or not too early.
2. It is time Based & often has quality and efficiency targets.
3. The JIT is a production philosophy. It is also known as zero
defects & synchronous production.
4. The JIT system also uses the method of scheduling
material flow (KANBAN).
5. A JIT system aims to make goods available just in time,
and these can be parts, products or sub-assemblies.
6.
The benefits are as follows:
i. Increase Flexibility
ii. Reduction of Cost
iii. Increased Quality
iv. Simplicity of System
7.
The increased flexibility allows the company to react to the
changing needs i.e. change in the customer orders or
design modification.
Increased Productivity means that the shortest time and
minimum of resources are required to make the product.
To achieve the objectives of the JIT three principles are
applies to the organization
8.
9.
i. Elimination of waste
ii. Total Quality Management
iii. Total Employee Environment
 ELIMINATION OF WASTE
It means that all the activities which do not add any
values and do not increase product value and are costly
to the company should be eliminated. For Eg: the
traditional production method.
 TOTAL QUALITY MANAGEMENT
Total quality management eliminates the defects in a JIT
environment. The aim is to prevent defects from
occurring and this can be achieved by detecting the
problem at their source.
 TOTAL EMPLOYEE ENVIORNMENT
It means that the management must provide the
leadership which result in the employees to be more
participative in the process, continuous education &
training is provided.
KANBAN
 1. The manufacturing organization considers the making of a
product as continuous activity from design, manufacturing,
distribution, sales and customer services.
 2. For many companies the heart of this process is KANBAN.
It is a Japanese term which means “Visual Record”. It was
developed at Toyota in 1950 and it was considered to
manage the material flow on the assembly line.
 3. It is a highly efficient and effective production system,
which has an optimum manufacturing environment, which
leads to global competitiveness.
 4. The KANBAN process involves more than fine tuning
production and supplier scheduling system, where
inventories are minimized by supplying the components only
when required in production & work in progress is monitored.
 It also encourages industrial re-engineering & group
production techniques & employees are encouraged to
participate continuously.
 6. The Japanese refer to KANBAN as a simple parts movement system that depends upon the cards & boxes to
take part from one station to another.
 7. The essence of KANBAN concept is that the supplier
or the ware house should only deliver components to
the production line as & when they are required so that
there is no storage in the production areas.
 8. It also limits in the amount of inventory.
 9. KANBAN is a chain process in which orders flow from one
process to another, the production or deliver of components
is made to the production line.
The advantages of KANBAN are as follows:1. It is a simple & understandable process
2. Provides quick and precise information
3. Results in low cost
4. Provides quick response to the changes
5. Limits of over-capacity in processes.
6. Avoids over production
7. Minimizes waste
8. Maintains control
9. Delegates responsibility to the line workers.
Benefits of JIT
The benefits of a properly implemented JIT system are:
1. Increased Flexibility:
i. This can be achieved through small batch sizes which achieves
faster throughput.
ii. A flexible workforce means that the operators must be multi-skilled
which is done through training.
iii. The worker should be free to move from low demand to high
demand areas.
2. Increased Quality:
i. When operating a JIT system, disruption has a major impact, so
quality problems need to be eliminated.
ii. Benchmarking, Quality function deployment and service design can
be used for service operations.
iii. Service employees need to learn the value of providing defect free
services.
3.
Parts Reduction:
i. It seeks to continuously reduce inventory levels of raw material,
work in process and finished goods.
ii. Lower inventory means less space and less chance of the product
being obsolete, damaged or spoilt.
iii. Inventories can be reduced if products are produced, purchased,
and delivered in small lots.
4.
Simplicity of Systems:
i. product mix or volume changes as planned by the master
production schedule (MPS), can be accomplished by adjusting
the number of cards in the system.
ii. Production orders are prioritized by the cards on post.
iii. Production orders for parts that are running low are moved in
front of parts that have more supply.
POTENTIAL PITFALLS OF JIT
 1. Companies fail to understand what JIT is and what it
can mean to them because they fail to implement it
properly.
 2. The system requires the full backing of the top
management so that they are aware of the tasks,
resources, time scale and costs.
 3. The system will fail if an adequate education program is
not provided.
 4. If careful planning process and control movements are
not strictly followed, they will result in JIT not being
realized.
 5. The planning stage requires dedication and time and
also the assistance of an external consultant.
 6. All of the above must be integrated with moves
towards JIT purchasing.
 7. The JIT system should not be viewed as a one off
scheme but as an ongoing continuous process.
PRODUCT DATA MANAGEMENT (PDM)
 1. One of the major manufacturing challenges is to maximize
the time-to-market benefits of concurrent engineering while
maintaining control of the data, and distributing it automatically
to the people who need it, when they need it.
 2. The way PDM systems cope with this challenge is that the
master data is secured once in a secure ‘vault’, where its
integrity can be assured as all changes to it monitored,
controlled and recorded.
 3. Duplicate reference copies of the master data, on the other
hand, can be distributed freely, to users in various
departments for design, analysis and approval.
 4. The new data is then released back into the vault. When a
‘change’ is made to the data, signed and dated, is stored in
the vault alongside the old data which remains in its original
form as a permanent record.
PROCESS MANAGEMENT
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Process management is about controlling the way people
create and modify data-active procedures.
This may sound like a new name for ‘project
management’, but it is not.
Project management concerns itself only with the
delegation of tasks; process management addresses the
impact of tasks on data. Process management systems
normally have three broad functions:
a)
b)
They manage what happens to the data when someone works on
it (Work Management).
They manage the flow of data between people (Workflow
Management).
c)
They keep track of all the events and movements that happen in
functions 1 and 2 during the history of a project (Work History
Management).
MAKE-TO-ORDER (MTO) and MAKE-TOSTOCK (MTS)
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One way to classify the manufacturing operations is by
the amount of processing the product requires, after the
company receives an order from a customer.
At one end of the processing spectrum is the make-toorder (MTO) company.
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This company does not begin processing the material for the
component or product until it has received an order from the
customer.
In some cases, the company may not even procure the material
and components until after it receives the order.
This type of manufacturing operations is practiced when the
company competes on the basis of production planning on firm
customer orders.
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Following figure shows the relation between the output
variety (degree of customization) and the type of
manufacturing operation.
As is evident from the graph, the output variety is highest
when the company is operating in the make-to-order
mode, as the companies can serve each & every
individual customer in the way he/she wants.
But the cycle time will be more and the cost of the product
will also be more.
But in the case of a MTS company, the products are
already made and kept in the inventory for the customer
to pick up.
Here, the customer won’t get any individual attention or
customization; he can buy what is available with the
company.

At the opposite end of the spectrum is the
make-to-stock (MTS) company, which
manufactures products and places them in
inventory before it receives customer orders.
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Either the customer purchases the products directly
from the inventory at a retail outlet, or the company
ships the product ‘off-the-shelf’ from the finished
goods inventory at the factory or at a distribution
centre.
MTS companies rely heavily on market analysis and
demand forecasting in planning the production of their
products with respect to the product mix and volume.