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2017-0901 – LPOne White Paper - ENG
SUMMARY
SUMMARY ............................................................................................................................................................... 2
INTRODUCION AND CONTEXT .......................................................................................................................... 3
PRODUCTION SYSTEMS ........................................................................................................................................... 3 MAIN CLASSIFICATIONS OF PRODUCTION SYSTEMS ....................................................................................... 4
Three-axis classification (Garetti-Brandolese) .......................................................................................................... 4 Wortmann classification (MTS-ATO-MTO-ETO) ...................................................................................................... 5
LEAN MANUFACTURING ......................................................................................................................................... 7 TARGET MARKETS .................................................................................................................................................... 9
Target markets based on Type/Structure of the Company ......................................................................................... 9 Target Markets based on SIC Code ......................................................................................................................... 10
SAP CERTIFICATIONS .........................................................................................................................................11
SAP BUSINESS ONE INTEGRATION CERTIFICATION, 21/01/2011.................................................................... 11
THE PRODUCT ......................................................................................................................................................12
TECHNOLOGICAL AND APPLICATION PREREQUISITES ................................................................................. 12 WHY LPONE ................................................................................................................................................................ 12
BRIEF DESCRIPTION OF THE MAIN FUNCTIONS .........................................................................................13
MASTER DATA .......................................................................................................................................................... 13 SUBCONTRACTING.................................................................................................................................................. 14 PRODUCTION ............................................................................................................................................................ 15 PLANNING ................................................................................................................................................................. 16
MRP – Material Requirements Planning ................................................................................................................. 16 CRP - Capacity Requirements Planning .................................................................................................................. 16 PPC – Production & Planning Control ................................................................................................................... 16
POSTING AND FINAL CALCULATION .................................................................................................................. 17 Manual Posting ........................................................................................................................................................ 17 Posting in “Start & Stop” mode .............................................................................................................................. 17 Web Time Sheet ........................................................................................................................................................ 17 Integration of Terminals for data gathering ............................................................................................................ 17
VALUATIONS ............................................................................................................................................................ 18 VERTICAL/SPECIAL FUNCTIONS .......................................................................................................................... 18
QUALITY ................................................................................................................................................................19
TOOLS .....................................................................................................................................................................19
OUR ADDRESSES ..................................................................................... ERRORE. IL SEGNALIBRO NON È DEFINITO.
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INTRODUCION AND CONTEXT
PRODUCTION SYSTEMS
A production system can be defined as a whole of men, machines, equipment and organisation linked
by a common flow of materials and information aimed at converting raw material into finished
products.
Four key production parameters are used when analysing a production system:
• Cost
• Time
• Quality
• Flexibility
correlated in what is called the Production Tetrahedron.
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MAIN CLASSIFICATIONS OF PRODUCTION SYSTEMS
Three-axis classification (Garetti-Brandolese)
Industrial plants can be classified in keeping with the guidelines of Garetti, Brandolese (1988,
Politecnico di Milano), which theorize a subdivision according to three Cartesian axes.
• On the market axis, the following are classified according to terms and conditions of sale:
o based on single or repetitive projects; in this case, it is said that products built are
already sold
o stock production based on sales forecasts (the products are built, and the sale takes
place at a later time); in this case it is said that products already built are sold
• On the technological axis, the following are classified in accordance with how the product is
built in:
o processing plants (where the production concerns profound chemical-physical
transformations and it is not possible to easily return to the initial components starting
from the final product)
o manufacturing plants, which in turn are divided into:
▪ production plants
▪ assembly plants
• On management axis, the following are classified in accordance with how the volume to
produce is made:
o unitary productions
o in batches
o continuous
Obviously some intersections are not feasible (for example, a continuous plant is unlikely to
produce for individual orders).
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Wortmann classification (MTS-ATO-MTO-ETO)
Another possible classification is that of Wortmann, which divides the plants according to the
customer decoupling point, that is according to when the production changes from being based on
forecast to being based on the customers' orders. In this way we have plants that produce:
• M.T.S. (Make to Stock), a production of standard products which corresponds to the
productions (for stock) of products with limited complication on the basis of sales forecasts.
They are generally goods of a unit value not too high and for which there is a vast market
outlet;
• A.T.O. (Assembly to Order), assembly when the order is in hand, but the component parts
have already been manufactured. It has two distinct operating modes:
o production based on forecast of standard subgroups
o the subsequent personalisation of the finished product during final assembly according
to what the order requires.
SUPPLIERS
CUSTOMERS
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This category comprises productions having a very broad mixture of finished product codes
that are however characterised by having some standard subgroups in common. Therefore,
this category is a combination of forecast-based and project-based production;
• M.T.O. (Make to Order) is similar to the previous category, but with the sole difference that
the design/engineering activities can be carried out before the order is acquired. Choosing the
production method to implement depends on the company's positioning on the market, and it
is the result of the assessments that in addition to operations involve marketing and numerous
other company functions
• E.T.O. (Engineer to Order), manufacture only after having received the order. The products
in question are such that their production cannot begin until the customer's order has been
acquired; the design/engineering operations are set in motion only at the time of order. In this
case the typical elements of the single projects, generally of high unitary value, are recognised.
Please note that in this case the design becomes an integral part of the production process, and
therefore the time required for execution may also be very long;
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LEAN MANUFACTURING
The term lean manufacturing (or lean production) identifies an industrial philosophy that draws its
inspiration from the Toyota Production System, which aims at minimising waste to the point of
eliminating it.
The Lean principles are:
• Eliminate waste;
• Precisely specify the value from the end customer's viewpoint;
• Clearly identify the process that delivers value to the customer (so-called value stream), and
eliminate steps that do not add value;
• produce the remaining steps that add value in an uninterrupted stream by organising the
interfaces between different steps;
• let the customer be the one that pulls the process – do not produce anything until it is needed,
then produce it quickly;
• Pursue perfection through continuous improvements.
The production process is therefore treated in a comprehensive manner in order to minimize the
complexity of production by focusing on its flexibility, involving all business functions from the
beginning; in this way we can identify a number of areas:
• design: the product is designed considering the problems connected with its production (DFX)
so as to avoid its redesign, meaning waste created by being unable to "do it right the first time"
• production: just in time
• valorisation: "total quality" TQM of W. Edwards Deming
There is a wide variety of waste that that we try to eliminate. In lean production we have:
• raw material waste
• waste due to downtime
• unused inventories
• overproduction waste
• waste associated with deficiencies in the process
• unnecessary transportation
• defective products
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The term lean production was coined by the researchers Womack and Jones in their book "The
Machine that Changed the World", in which the two researchers were the first to analyse in detail and
compare the performance of the production system adopted by the world's leading manufacturers of
automobiles with the Japanese company Toyota, revealing the reasons for Toyota's clear superiority
over all the competitors.
Lean production is therefore a generalisation and dissemination of the Toyota Production System -
TPS in the West, which surpassed the limits of mass production (developed by Henry Ford and Alfred
Sloan) applied at the time (and still today) by almost all Western companies.
In Italy, Lean Production is being studied in the Management Engineering course as part of the
Logistics-Production specialisation, which corresponds to what is called "Industrial Engineering" in
the rest of the world.
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TARGET MARKETS
On the basis of an analysis of market opportunities and needs in the sector, the markets in which the
LPOne philosophy goes well are listed below.
It was decided to represent the target based on two types:
1) Type of customer in terms of size/structure
2) SIC code that uniquely identifies the sector/type of production
Target markets based on Type/Structure of the Company LPOne is a management system suitable for SMEs (Small and Medium Enterprises) because it
completely solves all the needs of small and medium enterprises that not only produce
independently, but also for the subsidiary companies of large international groups that operate
locally. In this sense, the localisation in about 40 countries and the perfect compatibility with SAP
R/3 that distinguish SAP Business One favour adopting LPOne in a wide variety of enterprise
contexts.
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Target Markets based on SIC Code
As a reference we have chosen the SIC Code, universally known as Standard Industrial Classification.
For more details:
http://en.wikipedia.org/wiki/Standard_Industrial_Classification
Codice SIC Descrizione SIC (Standard International Code)
20.5 BAKERY PRODUCTS
30.5 GASKETS, PACKING, AND SEALING DEVICES AND RUBBER AND PLASTICS HOSE
30.6 FABRICATED RUBBER PRODUCTS, NOT ELSEWHERE CLASSIFIED
30.8 MISCELLANEOUS PLASTICS PRODUCTS
34.2 CUTLERY, HANDTOOLS, AND GENERAL HARDWARE
34.3 HEATING EQUIPMENT, EXCEPT ELECTRIC AND WARM AIR; AND PLUMBING FIXT
34.4 FABRICATED STRUCTURAL METAL PRODUCTS
34.5 SCREW MACHINE PRODUCTS, AND BOLTS, NUTS, SCREWS, RIVETS, AND WASHE
34.9 MISCELLANEOUS FABRICATED METAL PRODUCTS
35.1 ENGINES AND TURBINES
35.2 FARM AND GARDEN MACHINERY AND EQUIPMENT
35.3 CONSTRUCTION, MINING, AND MATERIALS HANDLING MACHINERY AND EQUIPME
35.4 METALWORKING MACHINERY AND EQUIPMENT
35.5 SPECIAL INDUSTRY MACHINERY, EXCEPT METALWORKING MACHINERY
35.6 GENERAL INDUSTRIAL MACHINERY AND EQUIPMENT
35.7 COMPUTER AND OFFICE EQUIPMENT
35.8 REFRIGERATION AND SERVICE INDUSTRY MACHINERY
35.9 MISCELLANEOUS INDUSTRIAL AND COMMERCIAL MACHINERY AND EQUIPMENT
36.1 ELECTRIC TRANSMISSION AND DISTRIBUTION EQUIPMENT
36.2 ELECTRICAL INDUSTRIAL APPARATUS
36.3 HOUSEHOLD APPLIANCES
36.4 ELECTRIC LIGHTING AND WIRING EQUIPMENT
36.5 HOUSEHOLD AUDIO AND VIDEO EQUIPMENT, AND AUDIO RECORDINGS
36.6 COMMUNICATIONS EQUIPMENT
36.7 ELECTRONIC COMPONENTS AND ACCESSORIES
36.9 MISCELLANEOUS ELECTRICAL MACHINERY, EQUIPMENT, AND SUPPLIES
37.1 MOTOR VEHICLES AND MOTOR VEHICLE EQUIPMENT
37.2 AIRCRAFT AND PARTS
37.3 SHIP AND BOAT BUILDING AND REPAIRING
37.4 RAILROAD EQUIPMENT
37.5 MOTORCYCLES, BICYCLES, AND PARTS
37.6 GUIDED MISSILES AND SPACE VEHICLES AND PARTS
37.9 MISCELLANEOUS TRANSPORTATION EQUIPMENT
38.1 SEARCH, DETECTION, NAVIGATION, GUIDANCE, AERONAUTICAL, AND NAUTICA
38.2 LABORATORY APPARATUS AND ANALYTICAL, OPTICAL, MEASURING, AND CONTR
38.4 SURGICAL, MEDICAL, AND DENTAL INSTRUMENTS AND SUPPLIES
38.5 OPHTHALMIC GOODS
38.6 PHOTOGRAPHIC EQUIPMENT AND SUPPLIES
38.7 WATCHES, CLOCKS, CLOCKWORK OPERATED DEVICES, AND PARTS
39.3 MUSICAL INSTRUMENTS
39.4 DOLLS, TOYS, GAMES AND SPORTING AND ATHLETIC GOODS
39.5 PENS, PENCILS, AND OTHER ARTISTS' MATERIALS
SIC (Standard International Code) description
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SAP CERTIFICATIONS
SAP BUSINESS ONE INTEGRATION CERTIFICATION, 21/01/2011
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THE PRODUCT
TECHNOLOGICAL AND APPLICATION PREREQUISITES
LPOne is a product created in the laboratory and based on a careful analysis of those that were the
GAPs of the standard SAP Business One product with respect to the real needs of Small and Medium
Enterprises, again in keeping with the Lean Production principles.
The major reasons that "guided" product development can be briefly summed up in the following
four points:
1) Completion of the basic records in order to strengthen planning
2) Subcontracting Management
3) Lean Management of the Requests for Offer
4) Management of the Production Projects (ETO)
WHY LPOne
The product has been entirely developed with utmost observance of the SAP standards of
development of solutions natively integrated with SAP Business One.
By virtue of its strong bond with SAP Business One, without which the product cannot be used for
initial choice, the targets are:
1) Multilingual Management so it can be implemented both for small and medium national
enterprises and for branches and foreign production units of multinational companies
2) Development/maintenance standards in order to enable customers/partners to manage on their
own personalisations with a certain level of autonomy and ensure alignment with the SAP
Business One as it evolves into new versions that will follow the current one
3) The management of simple/lean processes is the focus around which all product development
and maintenance revolves
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BRIEF DESCRIPTION OF THE MAIN FUNCTIONS
MASTER DATA
The information necessary for piloting the production and valorisation processes is manifold in
production companies. This is why it was decided to enrich the SAP Business One item master data
and standard bill of materials with this information.
For example, the validity dates and links to the phases of the cycle are entered into the bill of
materials, in the item records used by MRP and by project management.
The following archives were also added:
- Manufacturing Phases
- Work Centers
- Routings
- Human and Industrial resources and their main characteristics
- Project Technical Data with references to the persons in charge and filing of the relevant
attachments
Important Bill of Material and Routing Search and Navigation functions have also been added. For
example:
- search where used
- dynamic multilevel explosion with and without displaying costs broken down by
manpower/machine/tooling/outside processes
- cost budgeting and simulation.
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SUBCONTRACTING
To broach a process typical of Italian manufacturing companies (but that is however becoming
popular in other European countries as well), management of subcontracting production has been
developed in the two typical methods:
- Level Subcontracting, situations in which the processing changes the level in the bill of
materials as a result of an operation performed on the materials delivered and that therefore re-
enter with a new code (routing with external single-phase process)
- Phase Subcontracting, situations in which a precise phase of the production process is given to
a subcontractor who carries out the process (routing with several phases, of which one or more
are external)
The functions are basically the following:
- Issue and generation of purchase orders for the external processing phases connected to
production orders already in progress
- Transfer of materials to the subcontractor with a direct connection to the single production
orders
- Transfer of materials to the subcontractor with management of the stock at its facility (the
materials are stored by the subcontractor, which uses them as the orders are sent to it)
- "Quick" input of production orders with external processing phases and immediate issue of the
respective purchase orders
- "Quick" modification of production order data with automatic reversal on the associated
purchase orders (for phase subcontracting orders only, i.e. production orders with a single
external processing phase)
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PRODUCTION
With reference to the Wortmann Classification mentioned in the introduction of this document, it is
considered that the SAP Business One Standard does not adequately resolve the two types in which
the "Customer Decoupling Point" requires a specific production based on the customer's order (ETO
and MTO).
In any case, also the other two types of production (MTS and ATO) have been particularly improved
by enriching them with various implementations of LPOne on both the records (see the specific
paragraph on Records) and function levels.
Then the management of the standard SAP Business One Production Order was boosted by adding
Routing data and an Order Valorisation procedure on both the estimate and actual cost level. The
Subcontracting orders issued against the Production Order were then linked to the Production Order.
With regard to the specific Project to Order (ETO and MTO), the following functions have been
added:
- Management of the standard routings specific for each type of project; they are managed at the
level of the entire project and not for a single production order
- Explosion and precise storage of the structure of the project/project item with link to all the
documents related to it
- Explosion and massive storage starting from customer order rows of the structure of the
project/project item with link to all the documents related to it
- Issue of the production and purchase orders for the items managed by project
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PLANNING
MRP – Material Requirements Planning
In order to better manage problems of modern companies, MRP can no longer simply "suggest", but
it also has to provide tools for analysing the current situation of procurement orders.
Therefore a brand new MRP was created, one that analyses and supplies reports on both Production
and Purchase orders already issued.
These reports are both the "time" type (late orders, orders to bring forward, orders to delay, etc.) and
the "quantity" type (orders to cancel, orders to reduce, etc.).
A Pegging function has also been implemented. Using a "bottom-up" process, it lets us link needs
and orders - whether suggested or in progress - to each other.
It is possible to connect external FCS/APS systems for finite capacity scheduling.
CRP - Capacity Requirements Planning
Report for the infinite load capacity of the work centers analysis. Underloads and overloads of the
single centers based on the work calendars and production order phases - whether in progress or
suggested by MRP - in weekly or monthly periods are reported.
PPC – Production & Planning Control
Graphic and simulation environment in which the elements of the Production and Purchasing Plan
are shown on a modifiable time scale.
The operator can step in to manually resolve overload situations or missed "appointments" between
needs and availability.
The movements can be made either manually or automatically by the system, involving a single
element or all the elements linked to each other. One can work with either infinite or finite capacity.
This is a simulation environment where once the Production Plan is defined, and only upon the
operator's request, the data reprocessed on LPOne to become available to the entire company are
reported.
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POSTING AND FINAL CALCULATION
Manual Posting
To make the final calculation of the internal processing phases linked to the Production Orders, a
function for entering hours and "units produced" is made available. It is helpful for achieving accurate
management of the movements on both the Materials and Costs levels.
This function can be fed both manually and through an MES system.
"Massive" postings and issues on two or more production orders can also be made.
Posting in “Start & Stop” mode
This allows the processing phases to be directly calculated in final form in the production department,
with start, stop, resumption and end of the single phases - whether as processes or as tooling -
indicated. It is also possible to propose a group of phases with a single operation, and to specify two
or more operators on a single phase.
This takes place on a terminal (preferably industrial touchscreen) located in the factory and complete
with barcode reader.
Web Time Sheet
This provides final calculation of the activities not strictly tied to the production aspect via web, such
as maintenance, development, design, installation, marketing, sales, etc. activities.
Web development makes it possible to enter information on the activities (time frames, transfer costs,
etc.) in real time, even to operators off the premises.
Integration of Terminals for data gathering
These devices allow the gather, directly from the field, information regarding the logistic/productive
area. The functionalities developed allow SAP Business One and LPOne to obtain and manage the
logistic/productive information.
Thanks to the equipment of bar code reader the "terminals" offered by LPOne solution can work
inside of an internal net (for example a building) interacting with a server where is stored the DB of
SAP Business One, either in local or remote.
It has expected the possibility of working in a specific building/site even with the absent of link with
SAP Business One using a software concentrator.
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The "terminals" provided work with Windows CE and /or Windows Mobile.
The Terminals Integration Module is composed by a series of standard features for working with SAP
Business One and/or LPOne. For example, here below a short-list of functionalities:
▪ Shipping Materials to Subcontractor
▪ Incoming Materials from Subcontractor
▪ Incoming Purchased Materials
▪ Shipping Materials for Customers Delivery
▪ Batches Verifying
▪ Stock Verifying
▪ WIP Managing
▪ Production Posting
VALUATIONS
Introducing routing management has made development and improvement of the standard valuation
SAP Business One encompasses necessary.
This is why a batch function that calculates costs broken down by materials, internal processes,
subcontracted process and tooling starting from the raw materials and going as far as finished products
has been implemented.
An Average Cost Stratified by Year warehouse valuation has also been added to meet several
typically local requirements.
VERTICAL/SPECIAL FUNCTIONS
In some cases certain companies have specific requirements dictated by their businesses and that
might be considered as "complementary" to all the standard LPOne processes.
These needs can be classified in two types:
- Personalisations, developments that are specific of a single user and that cannot be expected to
be reutilised by other users.
- Verticalisations, developments that can instead be replicated in other contexts, based on our
experience.
From the Verticalisation concept perspective, we have gathered these developments into a Product
Module containing these Processes.
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QUALITY
On LPOne has been inserted the possibility of managing the data concerning quality gathered on
the field. These data can be extrapolated from every single productive-logistic movement of SAP
Business One. For this purpose have been added the following features:
Definition of Test: These can be defined with three different typology
▪ Numeric
▪ Descriptive
▪ List
Definition of Control Structure Specifications: Defined as a bundle of test to measure for
every single productive-logistic movement of SAP
Linking to SAP Business One's documents
▪ Item master data
▪ BP master data
▪ Goods Receipt PO
▪ Goods Receipt from Production
▪ Production Order
▪ Project Production
▪ Batches
Data recording: Recording of gathered values for every single test
TOOLS
With the purchase of only one ADV (Advanced) license from LPOne, you will be able to enjoy free
tools for all SAP Business One users in your company, which consist of the following functionalities:
▪ Where used Material Search
▪ Average Costs Warehouse Valuation.
▪ Stock Situation (ATP)
▪ Batch Tracking
▪ Pegging
▪ Item Availability
▪ Production Orders on Delay
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InformEtica Consulting S.r.l.
Viale del Lavoro, 33 – Centro Direzionale E33
37036 San Martino Buon Albergo (VR), Italy
T +39 045 4857630
info@informeticons.com
www.informeticons.com
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