Breakdown. Learn the implications of the breakdown field in Item Master Data

Transcription

1 Breakdown Learn the implications of the breakdown field in Item Master Data Boyum Solution IT A/S beas tutorial

2 TABLE OF CONTENTS 1. INTRODUCTION Process Mode of procurement in beas Breakdown scenarios Configuration Wizard

3 1. INTRODUCTION To understand the concept of breakdown, we should talk first about bill of materials. A bill of materials is a list of the raw materials, sub-assemblies, intermediate assemblies, sub-components, parts, and the quantities of each needed to manufacture an item (finished or semi-finished good). In manufacturing and beas, breakdown or explosion, as it is also known, is the action of breaking apart the bill of materials from each assembly or sub-assembly into its component parts. This definition will help the company define the production strategy of the item, whether it is make to stock or make to order, and will define a combination of scenarios on the production planning and execution processes. For example, beas can automatically create one work order for a finished item with many positions (make to order order ) or several work orders for a finished item and its sub-assemblies (make to stock storage ). For more information about work order positions, please refer to Work Order: Overview tutorial. 2. PROCESS To define the right type of breakdown, it is important to know what was defined in the previous field Mode of procurement. This setting impacts the options available in the Breakdown field Mode of procurement in beas Mode of procurement: Field used to define the procurement method of the item. The available modes are: Buy MRP generates purchase order recommendations for the item. 2

4 IMPORTANT: The Buy method should be selected for the child items at the lowest level of the BOM, or for items which are not part of a BOM. Produce MRP generates production order recommendations for the item. IMPORTANT: In the case of a sales or assembly bill of materials (BOM), no actual production order will be issued for the parent item, only the requirements for its child items. TIP: All parent items should be defined as Produce in order to calculate the requirements for their child items in the MRP run. In beas, we have an item structure that provides an overview of the items created in the system. Additionally, the item structure shows if the Mode of procurement in item master data is set to Produce, which is represented by the yellow icon, or Buy which is represented by the blue icon. In the item structure, you can also get more information about the bill of materials, defined as sublevels. This is especially helpful for multi-level products. For example, in machinery industry Breakdown scenarios Now that we have defined the procurement type, we can specify how the item s bill of materials and/or routing is broken down (exploded). There are several options available depending on the mode of procurement defined previously. Mode of Procurement Buy: When Mode of procurement is set to Buy, the Breakdown field has two available options to choose from: 3

5 None Breakdown Used when the item is a general purchase item, which normally, has no bill of materials attached to it. Therefore, this item will be considered as purchase item. In work orders for finished goods with mode of procurement set to buy, beas will consider all BOM positions as purchase items and would suggest to create a purchase order, in case there is not enough on stock of that item. Provision parts Are items that are included in the purchase item. Example: If you buy an engine from a supplier, and it always comes with a can of motor oil and a gallon of coolant. In this situation, you still need to keep track of how many cans of motor oil and gallons of coolant you have on inventory. The option Provision parts is used to define this type of items. This option allows to insert additional items in the bill of materials list so at the moment of doing goods receipt for the purchase order, beas will also suggest and do the goods receipt for the existing provision parts. Mode of Procurement Produce: When Mode of procurement is set to Produce, the Breakdown field has different available options to choose from. These options define the replenishment strategy of the item. Order this option is used to specify where the production requirement (demand) comes from. In this case, the item is produced based on an order. For example, sales orders. When setting sub-assemblies as order, the system will automatically: Create the work order with positions for the finished good and the sub-assemblies. When an item is set as Order breakdown (as seen on the left side of the image), beas will create a work order for (the demand for is generated from a Sales Order) with position #10. As the sub-assemblies are also set to order breakdown, beas will also create work order positions 20 and 30 to produce the sub-assemblies (as seen on the right side of the image). Item master data structure- order Work Order Structure Order Pos.10 Order Sales order to work order Pos.20 Pos.30 4

6 The MRP will not calculate any quantity balance. When we create a sales order for with order sub-assemblies, the MRP will calculate the inventory balance for each of the items. On the right side, you can see the MRP Order Recommendation results. It is important to know that in this scenario, the balance of sub-assemblies from this work order, that are order ( & C in the example) will not be considered in the total inventory balance. The reason is, MRP logic already knows that the items produced ( & C) will be consumed in order to produce, even if item B or C are low on inventory. Therefore, the MRP will display a balance of zero for order sub-assemblies although there is an outflow of inventory. Create sales order for for 20 units Order MRP Calculation This will be produced together with Order Item Warehouse Outflow Inflow Balance (20) (20) IMPORTANT: Setting up a Sales item as order means that the item will be produced on demand. The order concept is based on the make to order definition. It is a pull strategy where the purpose is only to produce what you have confirmed to be sold, and thereby avoid creating inventory. IMPORTANT: If the assembly and BOM items are the same item, there will be no further breakdown of the BOM item. This applies to the concept of process manufacturing. For example, there is a 1 gallon bottle of liquid (BOM item) that has to be re-bottled into 1 liter bottles (assembly item). Therefore, those 2 bottles are the same item. In this scenario, beas will breakdown the assembly, but when it goes to each position in the BOM, it will not breakdown again. Storage : this option is used to specify where the production requirement (demand) comes from. In this case, the item is produced once it reaches low level of inventory according to actual work orders and forecasts. The system will not automatically create the work order positions. However, when working with storage sub-assemblies, it is possible to create work order positions automatically. 5

7 MASTER DATA SETUP: To do so, there are additional breakdown settings per bill of materials positions. This setting has no effect when the work order is created by the calculation functionality. The possible settings are: No No work order positions will be created for the sub-assembly Always Works exactly like order sub-assembly Only shortage Creates work order positions only if there is not enough inventory When item A is set to Order and the sub-assemblies are set to Storage, the result can vary. When a work order for item A is created, beas will include a position with item B without breaking down its bill of materials and the rest of item A s bill of materials (as seen on the top right side of the image above). Therefore, it is necessary to create a separate work order for or with the possibility of summarizing quantities based on ideal lot size (as seen on the lower right side of the image above). Item master data structure- order Work Order 1 Storage Storage MRP Work Order 2 Pos.10 Pos.10 6

8 Running the MRP will calculate the inventory balance. The balance can be either positive or negative. Beas allows the creation of work orders directly on the MRP order recommendation report. More information, please refer to MRP tutorial. On the left side of the image, there is with storage sub-assemblies ( & C). Based on a sales order, beas calculates a balance of -20 and suggests to produce. In this case, MRP calculates the inventory balance for the storage sub-assemblies, as seen in and C. MRP logic knows that the work order positions for those sub-assemblies will not be created in the same work order as item A. Create sales order for for 20 units Storage MRP Calculation Will be produced in separate work order! Storage Item Warehouse Outflow Inflow Balance IMPORTANT: Setting up a Sales item as storage means that the item will be produced to inventory. The storage concept is based on the make to stock definition. It is a push strategy where the purpose is to produce for stock based on demand forecasts and inventory levels. Basically, it is to create inventory. IMPORTANT: If the breakdown field of an item is switched from "Storage " to "Order ", the MRP calculation would give incorrect results, the links to the requirements (peggings) from existing work order are missing. Phantom assembly group Option used for items set as phantom item. By selecting this choice, the MRP will break down the structure of the phantom item according to its bill of materials and routing. For example, in process manufacturing, this option is used for recipes management. This item is created to include the ingredients but it will never be produced as an inventory item. Only the ingredients inside the phantom item are necessary to produce at different stages from the recipe. TIP: A phantom item is a sublevel in the bill of materials that does not actually exist in inventory. It is used to simplify the bill of materials. Although the phantom item appears in the bill of materials, the components that comprise it appear in the work order. Only the bill of materials from produced items can have a phantom item. 7

9 Set Item Option used to define that an item, with bill of materials, will not be broken down into work orders but is taken into account when creating sales orders. This is a special SAP setting. Template Same as Set Item. No breakdown Option used to define that the bill of materials from this item will not be considered in the breakdown (explosion). 3. CONFIGURATION WIZARD In this section contains configuration wizards for different scenarios to help you setup the appropriate parameters. Configuration Wizard: The MRP will only consider calculating a quantity balance for an order produced item if the Reservation Deactivate field in unchecked in the configuration wizard. If the Reservation Deactivate field is checked, no balance can be calculated since the inventory available is not linked to a demand (in this case if the inventory available is not linked to a sales order) because beas always calculates order. PATH: Production > Reservation > Reservation Deactivate 8