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Fabrication Module Design
Overview
Daniel Brody
Jan 2007
Fabrication Concepts
• Fabrication is a value-
added process that takes
components that have
been manufactured using
standard ERP control and
combines them with
purchased or outside
manufactured
components to make a
Batch or Lot of finished
inventory items.
• Fabrication extends the
standard ERP paradigm
and could work
independently of ERP
• A ERP production work
order may be completed
when the required
components are released
to component inventory
(make to stock for
fabrication)
Fabrication Concepts
• A fabrication work order
may be a new control
document that is
independent of the
original production work
order or an extension of
an existing production
work order. (if the original
production work order
was for a batch of
finished goods item)
• The final product is
specified in the sales
order line, with the
required quantity, delivery
date etc.
• The final product could
comprise the assembly
from several production
work orders, plus several
purchase orders and
external processing
Overview
• Steel products are processed
to a semi-finished stage using
standard ERP processing
• They are then received into a
Component Inventory for
inclusion in a fabrication BOM
and routing process
• Fabrication occurs and creates
a finished goods product or
sub-assembly component that
can be inventoried
Steel Components are created using SEMS
Instead of being shipped
they are received into component Inventory
Fabrication lots are
picked and assembled
based on BOM and Routing
The
finished
Lot is
shipped from inventory
Fabrication With ERP input
Sales Order Lines
Work Order
Grouped for Production Work Order
Complete normal SEMS production processes
Begin Fabrication Process
Schedule Fabrication
when all components available
Work Order N
Receive Completed Steel items into Component inventory
Fabrication independent of ERP
input
Begin Fabrication Process
When all components are available
Routing based on standard
Product Routing
Bill of Material for finished
product based on
standard product BOM
Work Center 1 Work Center N
Finish Fabrication
Work Centres
• A work center has a
competence and capacity
to complete a defined
task
• Machine work centers are
grouped into an
administrative work
centre to add labour costs
and provide a throughput
capacity and accounting
point
• Capacity is rolled up to
the Administrative work
center
Machine 2
Work Centre
Machine 4
Work Center
Machine 3
Work Center
Machine 1
Work Center
Administrative
Work Centre
Work Centers
• Processes
– serial – machine 1
operation has to be
completed for an order
then machine 2 operation
can begin
• Quality control usually
occurs after a batch is
completed
– Parallel - Operation of
Machine 1 work center
overlaps with the Operation
of Machine 2 work center
for example
– These grouping are
dynamic and user defined
Machine 2
Work Centre
Machine 4
Work Center
Machine 3
Work Center
Machine 1
Work Center
Administrative
Work Centre
Bill of Material
• Bill of materials (BOM)
specify what inventory
items are needed to
fabricate a finished goods
item or a sub-assembly
• Sub Assemblies may be
inventoried or not
inventoried – phantom
• BOM can have multiple
levels or specify a sub-
assembly with an
independent BOM
Bill of Material
• Company is the highest entity
– within the group of business
entities
• Parent is the finished goods
part code
• Component is the code for this
inventory component (n
number of components)
• Line no is the sequence to
display this line
• If A is made from B and C and
C is made from D and E, the
parent for E and D is C, the
parent for B and C is A. The
line number is a unique
identifier under the parent.
Bill of Material
• Position relates to the position
on the design drawing of the
finished item or sub-assembly
• Operation_no defines the
grouping of components that
when they are completed the
accounting can be performed –
back flush.
– To receive an item into
inventory, all back flushing
must be completed
• Lead time adjust – an amount
of time to postpone purchase
of required component or
cooling or curing time needed
before component can be used
in fabrication.
Inventory
BOM type describes the general
category of the inventory – do we
buy it, make, it, sell it, get
someone else to make it, use it as
a component to assemble
something else
– 0 -We made it from parts
(manufactured or purchased)
– 1 - Made from Steel by us
– 2 – Made from parts manufactured
outside
– 4 – Sub assembly that is not
recorded in inventory
– 5 – Steel raw material
– 6 – Purchased from supplier
– 7 – Customer supplied this
component
– 9 – Any documents or drawing
that we keep in inventory and
send with the product –
instructions etc.
• BOM Type
– 0 – Internally Manufactured Assembly
– 1 – Manufactured Parts
– 2 – Externally manufactured with
supplied components
– 4 – Fictitious Assembly (phantom)
– 5 – Raw Material
– 6 – Purchased Parts
– 7 – Customer Supplied
– 9 – Documents
Inventory
• Stock Type describes how to
manage the rules of
accounting for inventory,
– stock is accounted for on each
Fabrication work order on a
per basis
– Floor stock is assumed
consumed based on the BOM
– nuts and bolts for example,
– Consumables are Grease,
Paint, Welding rod etc. that
are costed against the
Fabrication work order based
on standard percentage and
operation number
• Status controls if this Inventory
item can be used in a BOM. If
any item in a BOM becomes
inactive the BOM is inactive.
• Stock Type
– S - Stock
– FS – Floor Stock
– CN – Consumable
• Status
– A – Active
– I - Inactive
– D – Discontinued
– S – Superseded
– T – Terminated
Back Flush
• Typically accounting for
inventory occurs after an
administrative work center
completes it’s tasks and
creates a new inventory item
or batch of items.
• Sometimes it is desirable to
assume completion of
preceding routing steps by the
fact that the finished item has
been completed. Back flush
points are identified in the
BOM by operation number.
• If a batch is back flushed, the
associated routing plan and
BOM is used to explode back
to inventory usage and work
center loading used.
• If no other labour time,
machine time or wastage
inefficiency has been entered
against this fabrication work
order, the standards in the
routing and work centers are
used, otherwise the entered
values are used.
Product Category
• Product Category is assigned
to every item on the Inventory.
• The main function is to divide
the Inventory Cost Report by
category, and is used as a
search parameter for inquiry.
• An example would be “plow
blades” or “cab assemblies”.
• The general ledger accounts
assigned to every product
category facilitates automatic
posting of sales and work in
process to general ledger.
Routing
• Operation_no is the
sequence number of the
operation to be performed
• Work center is the
machine work center
– (administrative work center
is defined for the machine
work center)
• Process_Code defines
the process to be
performed cut, assemble,
press, QC etc.
Routing
• Routing type is “parallel”
or “serial”
• Vendor number is for
external process only
• Revision level of the
routing shows which
version of the routiong
was used
– (maintained by the revision
sub-system)
• Set up time to set up the
machine for operation in
minutes in this routing
Routing
• Queue days is time in
days for moving the order
from one work center to
another – or through an
external process
• Machine time is the
amount of time in minutes
required to process 1 part
• Labour time is the
amount of time in minutes
required to process 1 part
Accounting
• Actual costing is used to
determine real costs of
the work order through to
a component or finished
goods level of inventory.
• Where actual costs are
unavailable (i.e. there is
no genealogy for a
specific subcomponent),
standard cost is used.
• Standard (or actual –
Ron) costs are used to
post items into inventory
• The total actual cost is
rolled up to the finished
item
• Purchased components
are added to the cost roll
up at average cost
• All cost components of
the finished goods items
in the sales order line
item are totaled to allow
comparison of quoted
price versus actual total
cost

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ERP Fabrication Module Design Overview

  • 2. Fabrication Concepts • Fabrication is a value- added process that takes components that have been manufactured using standard ERP control and combines them with purchased or outside manufactured components to make a Batch or Lot of finished inventory items. • Fabrication extends the standard ERP paradigm and could work independently of ERP • A ERP production work order may be completed when the required components are released to component inventory (make to stock for fabrication)
  • 3. Fabrication Concepts • A fabrication work order may be a new control document that is independent of the original production work order or an extension of an existing production work order. (if the original production work order was for a batch of finished goods item) • The final product is specified in the sales order line, with the required quantity, delivery date etc. • The final product could comprise the assembly from several production work orders, plus several purchase orders and external processing
  • 4. Overview • Steel products are processed to a semi-finished stage using standard ERP processing • They are then received into a Component Inventory for inclusion in a fabrication BOM and routing process • Fabrication occurs and creates a finished goods product or sub-assembly component that can be inventoried Steel Components are created using SEMS Instead of being shipped they are received into component Inventory Fabrication lots are picked and assembled based on BOM and Routing The finished Lot is shipped from inventory
  • 5. Fabrication With ERP input Sales Order Lines Work Order Grouped for Production Work Order Complete normal SEMS production processes Begin Fabrication Process Schedule Fabrication when all components available Work Order N Receive Completed Steel items into Component inventory
  • 6. Fabrication independent of ERP input Begin Fabrication Process When all components are available Routing based on standard Product Routing Bill of Material for finished product based on standard product BOM Work Center 1 Work Center N Finish Fabrication
  • 7. Work Centres • A work center has a competence and capacity to complete a defined task • Machine work centers are grouped into an administrative work centre to add labour costs and provide a throughput capacity and accounting point • Capacity is rolled up to the Administrative work center Machine 2 Work Centre Machine 4 Work Center Machine 3 Work Center Machine 1 Work Center Administrative Work Centre
  • 8. Work Centers • Processes – serial – machine 1 operation has to be completed for an order then machine 2 operation can begin • Quality control usually occurs after a batch is completed – Parallel - Operation of Machine 1 work center overlaps with the Operation of Machine 2 work center for example – These grouping are dynamic and user defined Machine 2 Work Centre Machine 4 Work Center Machine 3 Work Center Machine 1 Work Center Administrative Work Centre
  • 9. Bill of Material • Bill of materials (BOM) specify what inventory items are needed to fabricate a finished goods item or a sub-assembly • Sub Assemblies may be inventoried or not inventoried – phantom • BOM can have multiple levels or specify a sub- assembly with an independent BOM
  • 10. Bill of Material • Company is the highest entity – within the group of business entities • Parent is the finished goods part code • Component is the code for this inventory component (n number of components) • Line no is the sequence to display this line • If A is made from B and C and C is made from D and E, the parent for E and D is C, the parent for B and C is A. The line number is a unique identifier under the parent.
  • 11. Bill of Material • Position relates to the position on the design drawing of the finished item or sub-assembly • Operation_no defines the grouping of components that when they are completed the accounting can be performed – back flush. – To receive an item into inventory, all back flushing must be completed • Lead time adjust – an amount of time to postpone purchase of required component or cooling or curing time needed before component can be used in fabrication.
  • 12. Inventory BOM type describes the general category of the inventory – do we buy it, make, it, sell it, get someone else to make it, use it as a component to assemble something else – 0 -We made it from parts (manufactured or purchased) – 1 - Made from Steel by us – 2 – Made from parts manufactured outside – 4 – Sub assembly that is not recorded in inventory – 5 – Steel raw material – 6 – Purchased from supplier – 7 – Customer supplied this component – 9 – Any documents or drawing that we keep in inventory and send with the product – instructions etc. • BOM Type – 0 – Internally Manufactured Assembly – 1 – Manufactured Parts – 2 – Externally manufactured with supplied components – 4 – Fictitious Assembly (phantom) – 5 – Raw Material – 6 – Purchased Parts – 7 – Customer Supplied – 9 – Documents
  • 13. Inventory • Stock Type describes how to manage the rules of accounting for inventory, – stock is accounted for on each Fabrication work order on a per basis – Floor stock is assumed consumed based on the BOM – nuts and bolts for example, – Consumables are Grease, Paint, Welding rod etc. that are costed against the Fabrication work order based on standard percentage and operation number • Status controls if this Inventory item can be used in a BOM. If any item in a BOM becomes inactive the BOM is inactive. • Stock Type – S - Stock – FS – Floor Stock – CN – Consumable • Status – A – Active – I - Inactive – D – Discontinued – S – Superseded – T – Terminated
  • 14. Back Flush • Typically accounting for inventory occurs after an administrative work center completes it’s tasks and creates a new inventory item or batch of items. • Sometimes it is desirable to assume completion of preceding routing steps by the fact that the finished item has been completed. Back flush points are identified in the BOM by operation number. • If a batch is back flushed, the associated routing plan and BOM is used to explode back to inventory usage and work center loading used. • If no other labour time, machine time or wastage inefficiency has been entered against this fabrication work order, the standards in the routing and work centers are used, otherwise the entered values are used.
  • 15. Product Category • Product Category is assigned to every item on the Inventory. • The main function is to divide the Inventory Cost Report by category, and is used as a search parameter for inquiry. • An example would be “plow blades” or “cab assemblies”. • The general ledger accounts assigned to every product category facilitates automatic posting of sales and work in process to general ledger.
  • 16. Routing • Operation_no is the sequence number of the operation to be performed • Work center is the machine work center – (administrative work center is defined for the machine work center) • Process_Code defines the process to be performed cut, assemble, press, QC etc.
  • 17. Routing • Routing type is “parallel” or “serial” • Vendor number is for external process only • Revision level of the routing shows which version of the routiong was used – (maintained by the revision sub-system) • Set up time to set up the machine for operation in minutes in this routing
  • 18. Routing • Queue days is time in days for moving the order from one work center to another – or through an external process • Machine time is the amount of time in minutes required to process 1 part • Labour time is the amount of time in minutes required to process 1 part
  • 19. Accounting • Actual costing is used to determine real costs of the work order through to a component or finished goods level of inventory. • Where actual costs are unavailable (i.e. there is no genealogy for a specific subcomponent), standard cost is used. • Standard (or actual – Ron) costs are used to post items into inventory • The total actual cost is rolled up to the finished item • Purchased components are added to the cost roll up at average cost • All cost components of the finished goods items in the sales order line item are totaled to allow comparison of quoted price versus actual total cost