AIS Chapter 12

–Meet customer demands (functionality, durability, quality)
–Minimize production costs (65-80% determined during product design)

Bill of Materials
Operations List

Identifies components (e.g. quantity, item number, description) needed for each product (Ingredients)

Operations List is the sequence of steps, equipment, and time required to produce each product (Recipe)

Develop a production plan to efficiently meet existing & anticipated orders while minimizing inventories (RMI & FGI)

Manufacturing Resource Planning
Lean Manufacturing

Balance existing production capacity and raw material needs to meet forecasted sales demand (push mfg.)
–More appropriate for products with predictable demand (12 month forecast)

•Focus on minimization of inventories (RMI, WIP, FGI)
•Produce to meet actual sales; short-run production (pull mfg.)
–Useful for products with unpredictable demand, short lifecycles, etc.)

Master Production Schedule
Production Order
Materials Requisition
Move Ticket

Plan indicating which items, how many, when, and where to produce goods.
•Based on customer orders, forecasted sales, & existing FGI
•Complexity increases with the number of factories
•Plans can be modified, inputs are ordered in advance (BOM)

Provides authorization for a specified quantity of product to be produced

Is the authorization to move materials from storeroom for staging to factory floor
•(date needed, production order #, item # and quantity from BOM)

Document to transfer materials RMI->WIP->FGI

–Bar coding of materials to improve speed and accuracy,
–RFID tags can eliminate human intervention of scanning
•Up to 40 times quicker than bar-codes
•No impediment of dirt or line of site
•Easier for warehouse workers to locate goods with broadcast

Ensure the AIS collects and reports costs consistent with the company’s production planning techniques