INDUSTRIAL & FINANCIAL SYSTEMS

Set your business free.

IFS Manufacturing
IFS Training
Set your business
free.

INDUSTRIAL & FINANCIAL

 The Component
Approach
CONSTRAINT EQUIPMENT
BASED PERFORMANCE
SCHEDULING

EQUIPMENT
COSTING MONITORING

REPORT CUSTOMER SHOP FLOOR SHOP FLOOR

SCHEDULING SCHEDULING
GENERATOR REPORTING REPORTING

CONSOLIDATED SKILLS & PREVENTIVE

CONFIGURATION CRP
ACCOUNTS CERTIFICATION MAINTENANCE

FIXED CUSTOMER WORK

ASSETS ORDERS MRP PAYROLL
ORDER

ACCOUNTS INVOICING SHOP PAYROLL EQUIPMENT

RECEIVABLE ORDER INTERFACE

ACCOUNTS PURCHASING REPETITIVE TIME PROJECT

PURCHASING
PAYABLE PRODUCTION MANAGEMENT DELIVERY

GENERAL MASTER TIME & PDM

INVENTORY INVENTORY
LEDGER SCHEDULING ATTENDANCE CONFIGURATION

IFS
IFS IFS IFS IFS IFS
RESOURCE
FINANCIALS DISTRIBUTION MANUFACTURING MAINTENANCE ENGINEERING
MANAGEMENT

QUALITY ACCOUNTING DOCUMENT

PROJECT MANAGEMENT RULES MANAGEMENT

IFS FOUNDATION1

INDUSTRIAL & FINANCIAL

 IFS
Manufacturin
g
Basic terminology,
concepts and
principals.
INDUSTRIAL & FINANCIAL
 Fundamentals in MPC-systems
Basic terminology

IFS
Applications The goal of this
presentation is to
CONSTRAINT
BASED EQUIPMENT
PERFORMANCE
SCHEDULING

COSTING
EQUIPMENT explain and describe
REPORT CUSTOMER SHOP FLOOR
MONITORING
SHOP FLOOR
basic and fundamental
SCHEDULING
GENERATOR SCHEDULING REPORTING REPORTING
terms that occurs in
CONSOLIDATED SKILLS & PREVENTIVE
ACCOUNTS
CONFIGURATION CRP
CERTIFICATION MAINTENANCE IFS Manufacturing
FIXED
ASSETS
CUSTOMER
ORDERS
MRP PAYROLL
WORK
ORDER and in MPC theory.
ACCOUNTS SHOP PAYROLL
INVOICING EQUIPMENT
RECEIVABLE ORDER INTERFACE
ACCOUNTS
PURCHASING
REPETITIVE TIME
PURCHASING
PROJECT
After this session you
PAYABLE
GENERAL
PRODUCTION
MASTER
MANAGEMENT
TIME &
DELIVERY
PDM
will have knowledge
INVENTORY INVENTORY
LEDGER SCHEDULING ATTENDANCE
IFS
CONFIGURATION
about general
IFS
FINANCIALS
IFS
DISTRIBUTION
IFS
MANUFACTURING
RESOURCE
MANAGEMENT
IFS
MAINTENANCE
IFS
ENGINEERING principals and
PROJECT
QUALITY ACCOUNTING DOCUMENT strategies in using
MANAGEMENT RULES MANAGEMENT
MPC-systems.
IFS FOUNDATION1

INDUSTRIAL & FINANCIAL

 Pull vs.
Push
Pull Push
In Production:
Only produce items to
actual demand from
downstream operation.
In Material control:
The using operations
demands for inventory
issues.
Material not issued
until signal comes from
the user.
In Production:
The production of
items at times given
by a time phased
schedule.
In Material control:
The issuing of material
according to a given
schedule.
Issue material to a job
at its start time.
INDUSTRIAL & FINANCIAL
 Pull vs.
Push
Demand Demand

BOM BOM

Demand for an end item is Demand for an end item is transferred

transferred to nearest
underlying level.
Generates a demand for
parts at this level.
Same for all levels.
Thusthe product is pulled
through the system.
to all underlying levels at the same
time.
Planning pressure.
Manufacturing starts at lowest level
and is delivered to the next for further
processing. We push the product
through the manufacturing system.

INDUSTRIAL & FINANCIAL

 Peggi
ng
Used in MRP and MPS.

Capability to identify for a given item the

sources of its gross requirements/allocations.

Where-used in order structures.

100

SO 200 is used in CO 100

200 300
SO 300 is used in CO 100

400 500 SO 400 is used in SO 300, CO 100

SO 500 is used in SO 300, CO 100
INDUSTRIAL & FINANCIAL
 DOP
Dynamic Order
Processing
On line multiple level explosion and automatic
creation of shop orders to any user definable level
supports:
true make-to-order manufacturing.
final-assembly-scheduling in an assemble-to-order
environment.

Full level pegging - all DOP produced shop order, on

any level, can be traced to the customer order that
gave rise to the demand.

INDUSTRIAL & FINANCIAL

 FIFO/LIFO
Inventory
valuation
A system parameter controls whether FIFO,
LIFO or average cost should be used.

Default price is set to current amount of WIP

divided by the quantity to deliver.

Issuing and later returning material to

inventory will change the FIFO/LIFO value to
actual values.

INDUSTRIAL & FINANCIAL

 FIFO/LIFO
valuation
Manufactured parts
SO on 4 pcs part A

WIP WIP
$100 $120
Time

Receiving 2 into inventory Receiving remaining 2 into inventory

FIFO/LIFO-value: $120/2= $60 each
FIFO/LIFO-value: $100/2= $50 each
WIP=0 WIP=0

INDUSTRIAL & FINANCIAL

 FIFO/LIFO
Inventory valuation

10 pcs 15 pcs 14 pcs 12 pcs 17 pcs

5$ 4$ 5$ 3$ 3$
Time

FIFO: LIFO:
Issuing of 12 pcs gives Issuing of 12 pcs gives
10 * 5 $ + 2 * 4 $ = 58 $ 12 * 3 $ = 36 $

INDUSTRIAL & FINANCIAL

 ETO, MTO, ATO,
MTS
Engineer To Order:
Changes to standard products are offered to
customers and only made to order. Lead time
includes the relevant elements of
engineering design and all manufacturing.
Make To Order:
Concerns manufacturing a standard product
(any customization is nominal and does not
increase total lead times) only on receipt of a
customer order or against an agreed
schedule or call off.

INDUSTRIAL & FINANCIAL

 ETO, MTO, ATO,
MTS
Assemble To Order:
Components and sub assemblies have been made
to stock. On receipt of an order, the required
parts are drawn from work-in-process/component
inventory and assembled to order.
Make To Stock:
Finished goods are made ahead of demand in
line with sales forecasts. Customer orders are
delivered from inventory.

INDUSTRIAL & FINANCIAL

 Job shop - Flow
shop
The Job shop is oriented by functionality
with work centers with the same
functionality grouped together. Gives
complex routing with a lot of transport
tasks.

The Flow shop has split up functionality

to several flows which can solve the
same tasks.
Better for high volume manufacturing.
Have alternative routings.

INDUSTRIAL & FINANCIAL

 Job shop - Flow
shop

Turning Turning Turning

Turning Drilling
Milling Milling Milling

Drilling Drilling Drilling

Milling Grinding
GrindingGrindingGrinding

INDUSTRIAL & FINANCIAL

 Master
Scheduling
Master planning.
A grouping of the following activities.
Demand management (forecasting and
order servicing).
Production and resource planning.
Master scheduling.
Master scheduling:
The process where the master schedule is
reviewed.
Adjustments is made to the master
production schedule.
INDUSTRIAL & FINANCIAL
 Master
Scheduling
Master production schedule:

The anticipated build schedule.

It represents what the company plans to
produce expressed in:
Specific configurations.
Quantities.
Dates.
The result from the master scheduling process.
A presentation of:

Demand.
Forecast.
Backlog.
MPS.
Projected on hand inventory.
Available to promise quantity.

INDUSTRIAL & FINANCIAL

 Inventory control
Dependent/Independent
demand
Dependent demand:

Demand that is directly related to the BOM-

structure for other products.
Such demands are calculated with MRP.

Independent demand:
Demand that is unrelated to demand for other parts.
Examples: Finished goods, spare parts
Suitable material planning methods: Master
scheduling or Reorder point system.

INDUSTRIAL & FINANCIAL

 Hedging
For Assemble to order products, Hedging
could be an effective buffering technique.

Provides extended flexibility to the MPS,

by accommodating short term variations of
sales mix.

Requires overstating the forecast (a Hedge

quantity)
The Hedge quantity controls the desired
volume flexibility

The Demand Time Fence will then consume

INDUSTRIAL & Fthe
INANCIAL
 Hedging
To cover up for volume changes the hedge
quantity is added to the forecast for each
period.

If the volume does not change, the hedge is

simply dropped and will be consumed by
next period.

The distance
Demandbetween
Time Fence:DTF and PTF will
4 periods
define the volume of the hedge.
Hedge
If there are no
changes the
Hedge is Periods
1 2 3 4 dropped.
5 6

Actual Period
INDUSTRIAL & FINANCIAL
 Hedging
Can also be used to increase flexibility
against variation from forecast in product
mix.

This is called option mix

Product Family
Hedge. Works
like a safety stock. A

Product Product Product

10 11 12

Variants 1 2 3 Security against worst case scenario:

Distribution 30- 10-30%20-40% Increase demands/Period.

70% Var 1+ 30% Var 2+ 40% Var 3=
/Period 70% 140%

INDUSTRIAL & FINANCIAL

 Safety
stock
Safety stock.
A quantity of stock planned to be in
inventory to protect against fluctuations in
demand or supply.

INDUSTRIAL & FINANCIAL

 Foreca
sts
Forecasts.
An estimate of future demand.
Is often determined by using historical data, time
series.

Sales history over time

months
1 2 3 4 5 6 7 8 9 10 11 12

INDUSTRIAL & FINANCIAL

 Load/Capa
city
Capacity:
The capability for an object to produce output per time
period.
Capacity required/available can be projected:
Short term in Shop Order
Intermediate term in CRP (capacity requirement
planning)
Long term in RRP (resource requirement plan).
Load:
The amount of planned work scheduled and released to
a facility, work center
Usually expressed as standard hours of work or units of
production.
INDUSTRIAL & FINANCIAL
 Backflu
sh
Definition:

Updating inventory levels for the

components of a product, using standard
BOM, when received to inventory or when
operations reported.

No WIP-value.

INDUSTRIAL & FINANCIAL

 MRP
II/MRP
MRP II -Manufacturing resource planning.
A method for effective planning of all
resources in a manufacturing company.
Operational planning in units
Financial planning
Simulation capability to answer what if questions .
Made up by a variety of functions:
Business planning
Sales and operations planning
Production planning
Master scheduling
Material requirements planning
Capacity requirements planning.

INDUSTRIAL & FINANCIAL

 MRP
II/MRP
MRP -Material requirements planning:
A set of techniques that uses BOM data,
inventory data and the MPS to calculate
requirements for materials.
Time phased MRP is accomplished by:
Exploding the BOM.
Adjusting for inventory quantities on
hand or on order.
And offsetting the net requirements by
the proper lead times.

INDUSTRIAL & FINANCIAL

 Service
Level
A measure often given as a percentage.

A measure of satisfying demand in time

to satisfy the customers requested
delivery dates.

INDUSTRIAL & FINANCIAL

INDUSTRIAL & FINANCIAL SYSTEMS
Set your business free.

IFS Research & Development AB

Teknikringen 5, SE-583 30 Linkping, SWEDEN

Tel +46 (0)13-20 15 00

Fax +46 (0)13-20 15 01

Welcome to visit our web sites for the latest news and
information
http://www.ifsab.com/
http://wis.ifsab.se/
training@ifsab.se
INDUSTRIAL & FINANCIAL