appendix c manufacturing information systems management information systems 8/e raymond mcleod, jr....
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Appendix CManufacturing Information Systems
MANAGEMENT INFORMATION SYSTEMS 8/ERaymond McLeod, Jr. and George Schell
Copyright 2001 Prentice-Hall, Inc.C-1
Manufacturing Information Manufacturing Information SystemSystem
Used to support efforts to produce productsUsed to support efforts to produce products Evolution of computer use in manufacturingEvolution of computer use in manufacturing
– Systems keyed on reorder pointsSystems keyed on reorder points– MRP MRP – JITJIT
Consists of three input and four output Consists of three input and four output subsystemssubsystems
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The Computer as Part The Computer as Part of the Physical Systemof the Physical System
Focuses on computer-controlled machines Focuses on computer-controlled machines in the production areain the production area– CAD (computer-aided engineering)CAD (computer-aided engineering)– Design databaseDesign database– CAM (computer-aided manufacturing)CAM (computer-aided manufacturing)– RoboticsRobotics
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The Computer As an The Computer As an Information SystemInformation System
Term “manufacturing information system” Term “manufacturing information system” used to describe the CBIS subsystem that used to describe the CBIS subsystem that provides information concerning the provides information concerning the production operationsproduction operations
Goes by many other namesGoes by many other names– ROP, MRP, MRP IIROP, MRP, MRP II– JIT, CIMJIT, CIM
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Reorder Point (ROP) Reorder Point (ROP) SystemsSystems
Key TermsKey Terms– Reorder point, stockout, lead time, safety stockReorder point, stockout, lead time, safety stock
ROP formula: R = LU+SROP formula: R = LU+S Still used by many firmsStill used by many firms
– Well suited to retail inventoriesWell suited to retail inventories
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Reorder Point With No Safety StockReorder Point With No Safety Stockand With a Safety Stockand With a Safety Stock
Reorder point
Lead time Time
Safety stock
Balanceon hand
Balanceon hand
A. No safety stock
B. Safety stock C-6
Material Requirements Material Requirements Planning (MRP)Planning (MRP)
Looks to the future and identifies the Looks to the future and identifies the materials neededmaterials needed
Components:Components:1. Production scheduling system -- produces a master 1. Production scheduling system -- produces a master
production schedule that encompasses the longest lead production schedule that encompasses the longest lead time plus the longest production time.time plus the longest production time.
2. MRP system -- explodes the bill of materials. Converts 2. MRP system -- explodes the bill of materials. Converts the gross requirements into the net requirements.the gross requirements into the net requirements.
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Material Requirements Material Requirements Planning (MRP)Planning (MRP)
Components (cont.):Components (cont.):
3. Capacity requirements planning system works with 3. Capacity requirements planning system works with MRP system to keep production within plant capacity. MRP system to keep production within plant capacity. Produces outputs: reports and planned order schedule.Produces outputs: reports and planned order schedule.
4. Order release system produces reports for shop floor 4. Order release system produces reports for shop floor and purchasing.and purchasing.
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Customerorder file
Sales forecast
file
Finished-goods
inventory file
Produc-tion
capacityfile
Bill ofmaterial
file
Plannedorder
schedule
Rawmaterialsinventory
file
1.Productionscheduling
system
2. Materialrequirements
planning system
3. Capacityrequirements
planning
Purchasingsystem
Order releasereport
4.Order releasesystem
Order releasereport
Shop floorcontrolsystem
Performance reports
Planning reports
Exception reports
Changes to planned orders
An MRP SystemAn MRP System
Masterproduc-
tionschedule
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Manufacturing Resource Manufacturing Resource Planning (MRP-II)Planning (MRP-II)
The purpose is to integrate MRP with all The purpose is to integrate MRP with all systems that affect materials managementsystems that affect materials management– Organizational systemsOrganizational systems– Accounting information systemAccounting information system
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Materialrequirements
planning
Executive information
system
Orderentry
Accounts payable
Accountsreceivable General
ledger
An MRP II SystemAn MRP II SystemOther functional information systems
Purchasing
ReceivingBilling
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MRP-II BenefitsMRP-II Benefits
More efficient use of resourcesMore efficient use of resources– Reduced inventoriesReduced inventories– Less idle timeLess idle time– Fewer bottlenecksFewer bottlenecks
Better priority planningBetter priority planning– Quicker production startsQuicker production starts– Schedule flexibilitySchedule flexibility
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MRP-II Benefits [cont.]MRP-II Benefits [cont.]
Improved customer serviceImproved customer service– Meet delivery datesMeet delivery dates– Improved qualityImproved quality– Lower price possibilityLower price possibility
Improved employee moralImproved employee moral Better management informationBetter management information
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Just-In-Time (JIT)Just-In-Time (JIT)
Faster material flowFaster material flow Small lot sizeSmall lot size TimingTiming Compare JIT to online processing and MRP Compare JIT to online processing and MRP
to batchto batch Kanban pulls material as opposed to MRP Kanban pulls material as opposed to MRP
pushpush Computer not emphasizedComputer not emphasized
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Manufacturing Information Manufacturing Information SystemSystem
DefinitionDefinition– A computer-based system that works in A computer-based system that works in
conjunction with other functional information conjunction with other functional information systems to support the firm's management in systems to support the firm's management in solving problems that relate to manufacturing solving problems that relate to manufacturing the firm's productsthe firm's products
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DATABASE
Accountinginformation
system
Industrialengineering
system
Manufacturingintelligencesubsystem
Productionsubsystem
Inventorysubsystem
Qualitysubsystem
Costsubsystem
Internalsources
Environmentalsources
InputInputsubsystemssubsystems
OutputOutputsubsystemssubsystems
Users
Data Information
A Model of a Manufacturing SystemA Model of a Manufacturing System
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Accounting Information Accounting Information System [AIS]System [AIS]
Data collection terminalsData collection terminals– Track material flowTrack material flow– Gather job data (job reporting)Gather job data (job reporting)– Gather attendance data (attendance reporting)Gather attendance data (attendance reporting)
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TerminalTerminal
Receiving areaReceiving area
Raw-materialsRaw-materialsstoreroomstoreroom
ReceivingReceivinginspectioninspection
Shop floor areaShop floor area
Finished-goodsFinished-goodsstoreroomstoreroom
Shipping areaShipping area
1
2
3 4 5
6
7
8
9
10
11
12
Location of Location of Data Collection TerminalsData Collection Terminals
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Industrial Engineering Industrial Engineering SubsystemSubsystem
The industrial engineer (IE)The industrial engineer (IE) Studies physical and conceptual systemsStudies physical and conceptual systems Sets production standardsSets production standards
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Manufacturing Intelligence Manufacturing Intelligence SubsystemSubsystem
Can be viewed in terms of environmental Can be viewed in terms of environmental contactscontacts
Labor unions (personnel flow)Labor unions (personnel flow)– Formal and informal systemsFormal and informal systems– Personnel informationPersonnel information– Union contract complianceUnion contract compliance
Suppliers (material and machine flow)Suppliers (material and machine flow)
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Labor Unions
•Suppliers•Employment agencies •College &universities•Trade schools
Government
Global community
Competitors
Industrial relationsdepartment
Strategic levelmanagement
Human resourcesdepartment
Employees
Manufacturing management
Personnel Personnel requestsrequests
ApplicantApplicant datadata
Union contractUnion contractperformanceperformance
Formal flowFormal flowInformal flowInformal flow
Flow of Labor InformationFlow of Labor Information
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Units replaced or repaired becauseof defective parts, supplier spareparts availability, and so on
Units rejected upon receipt, unitsrejected during production, reasons for rejection, and so on
Customerservice input
Qualitycontrol input
Supplierinput
Financial strength, quality controlemphasis, past quality and deliveryperformance, and so on
Supplierfile
Input to Supplier RecordsInput to Supplier Records
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Production SubsystemProduction Subsystem
Used to:Used to:1. Build production facilities1. Build production facilities
2. Operate production facilities2. Operate production facilities Production schedule determines when the Production schedule determines when the
production steps are performedproduction steps are performed Track expected and actual completion timesTrack expected and actual completion times
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Job Flow Through the PlantJob Flow Through the Plant
Rawmaterialsinventory
Plastic top
Plasticcylinder
Step 1
Step 5
Step 6
Step 7
Step 8
Step 2
Step 3 Step 4Step 9
Finishedgoods
inventory
Flashlight
Attach springAttach spring
Install bulbInstall bulb
Install reflectorInstall reflector
Install red lensInstall red lens
Install clear lensInstall clear lens
Attach switchAttach switch
Attach strapAttach strap Add batteriesAdd batteriesPut top onPut top oncylindercylinder
PRODUCTION AREAPRODUCTION AREA
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Inventory SubsystemInventory Subsystem
Importance of determining the inventory Importance of determining the inventory levellevel
Maintenance cost (carrying costs)Maintenance cost (carrying costs) Purchasing costsPurchasing costs Economic Order Quantity (EOQ)Economic Order Quantity (EOQ) Economic manufacturing quantity (EMQ)Economic manufacturing quantity (EMQ)
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---------------------------------------------------
Safety stock
Average inventory level
Safety stock
Average inventory level ------------------------------------------------------
A. Order quantity of 20; average level is 15.
0
5
15
25
0
13
5
21
B. Order quantity of 16; average level is 13.
Bal
ance
on
h
and
Bal
ance
on
han
d
Time
Time
The Effect of Order Quantity on Average The Effect of Order Quantity on Average Inventory LevelInventory Level
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Quality SubsystemQuality Subsystem
Deming’s fourteen points; maintained that it Deming’s fourteen points; maintained that it is not workers but management that is not workers but management that determines qualitydetermines quality
Total quality management (TQM)Total quality management (TQM) Elements of TQMElements of TQM
– Zero defectsZero defects– Quality at the sourceQuality at the source
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TQM Philosophy
*Customer-driven quality standards*Customer-supplierlinks*Preventionorientation*Quality at the source*Continuous improvement
TotalQuality
Management
Graphical Tools
*Process flowcharts*Check sheets*Pareto analysisand histograms*Cause and effect (fishbone) diagrams*Run charts*Scatter diagrams*Control charts
Statistical Tools
*Sampling plans*Process capability*Taguchi methods
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Cost SubsystemCost Subsystem
Periodic reportsPeriodic reports Required ingredientsRequired ingredients
1. Standards1. Standards
2. Information2. Information
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SubsystemSubsystem
User Inventory Quality Production CostUser Inventory Quality Production Cost
Vice president of manufacturingVice president of manufacturing
Other executivesOther executives
Plant SuperintendentPlant Superintendent
Manager of planning and control Manager of planning and control
Manager of EngineeringManager of Engineering
Manager of quality controlManager of quality control
Director of purchasing Director of purchasing
Manager of inventory controlManager of inventory control
Other managers Other managers
How Managers Use the How Managers Use the Manufacturing Information SystemManufacturing Information System
XX XX XX
XX
XX
XX
XX
XX
XXXX XX
XX XX
XXXXXX XX
XXXX XX
XX XX XX XX
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SummarySummary Manufacturing managers have applied computers Manufacturing managers have applied computers
– Physical Physical – ConceptualConceptual
Inventory Inventory MRP IIMRP II JITJIT CIM is management philosophy aimed at CIM is management philosophy aimed at
integrating all CBIS plus factory automationintegrating all CBIS plus factory automation
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