1 | 20

2017-0901 – LPOne White Paper - ENG

White Paper

2 | 20

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.

3 | 20

2017-0901 – LPOne White Paper - ENG

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.

4 | 20

2017-0901 – LPOne White Paper - ENG

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).

5 | 20

2017-0901 – LPOne White Paper - ENG

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

6 | 20

2017-0901 – LPOne White Paper - ENG

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;

7 | 20

2017-0901 – LPOne White Paper - ENG

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

8 | 20

2017-0901 – LPOne White Paper - ENG

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.

9 | 20

2017-0901 – LPOne White Paper - ENG

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.

10 | 20

2017-0901 – LPOne White Paper - ENG

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

11 | 20

2017-0901 – LPOne White Paper - ENG

SAP CERTIFICATIONS

SAP BUSINESS ONE INTEGRATION CERTIFICATION, 21/01/2011

12 | 20

2017-0901 – LPOne White Paper - ENG

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

13 | 20

2017-0901 – LPOne White Paper - ENG

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.

14 | 20

2017-0901 – LPOne White Paper - ENG

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)

15 | 20

2017-0901 – LPOne White Paper - ENG

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

16 | 20

2017-0901 – LPOne White Paper - ENG

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.

17 | 20

2017-0901 – LPOne White Paper - ENG

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.

18 | 20

2017-0901 – LPOne White Paper - ENG

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.

19 | 20

2017-0901 – LPOne White Paper - ENG

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

20 | 20

2017-0901 – LPOne White Paper - ENG

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