Appendix C
Manufacturing Information Systems
Manufacturing Information
Manufacturing Information
System
System
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
subsystems
The Computer as Part
The Computer as Part
of the Physical System
of the Physical System
Focuses on computer-controlled machines Focuses on computer-controlled machines
in the production area
in the production area
– CAD (computer-aided engineering)CAD (computer-aided engineering) – Design databaseDesign database
The Computer As an
The Computer As an
Information System
Information 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 operations
production operations
Goes by many other namesGoes by many other names
Reorder Point (ROP)
Reorder Point (ROP)
Systems
Systems
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
Reorder Point With No Safety Stock
Reorder Point With No Safety Stock
and With a Safety Stock
and With a Safety Stock
Reorder point
Lead time Time
Balance on hand
Balance
Material Requirements
Material Requirements
Planning (MRP)
Planning (MRP)
Looks to the future and identifies the Looks to the future and identifies the
materials needed
materials 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.
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.
Customer order file Sales forecast file Finished-goods inventory file Produc-tion capacity file Bill of material file Planned order schedule Raw materials inventory file 1.Production scheduling system
2. Material requirements
planning system 3. Capacity requirements planning Purchasing system Order release report 4.Order release system Order release report Shop floor control system Performance reports Planning reports Exception reports Changes to planned orders
An MRP System
An MRP System
Master
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 management
systems that affect materials management – Organizational systemsOrganizational systems
Material requirements
planning
Executive information
system
Order entry
Accounts payable Accounts
receivable General
ledger
An MRP II System
An MRP II System
Other functional
information systems
Purchasing
MRP-II Benefits
MRP-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
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
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 batch
to batch
Kanban pulls material as opposed to MRP Kanban pulls material as opposed to MRP
push
Manufacturing Information
Manufacturing Information
System
System
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 products
D A T A B A S E Accounting information system Industrial engineering system Manufacturing intelligence Production subsystem Inventory subsystem Quality subsystem Cost Internal sources Environmental sources Input Input subsystems subsystems Output Output subsystems subsystems Users
Data Information
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)
Terminal Terminal Receiving area Receiving area Raw-materials Raw-materials storeroom storeroom Receiving Receiving inspection inspection
Shop floor area Shop floor area
Finished-goods Finished-goods storeroom storeroom 1 2
3 4 5
6 7 8 9 10 11 Location of Location of
Data Collection Terminals
Industrial Engineering
Industrial Engineering
Subsystem
Subsystem
The industrial engineer (IE)The industrial engineer (IE)
Studies physical and conceptual systemsStudies physical and conceptual systems
Manufacturing Intelligence
Manufacturing Intelligence
Subsystem
Subsystem
Can be viewed in terms of environmental Can be viewed in terms of environmental
contacts
contacts
Labor unions (personnel flow)Labor unions (personnel flow)
– Formal and informal systemsFormal and informal systems – Personnel informationPersonnel information
– Union contract complianceUnion contract compliance
Labor Unions •Suppliers •Employment agencies •College & universities •Trade schools Government Global community Competitors Industrial relations department Strategic level management Human resources department Employees Manufacturing management Personnel Personnel requests requests Applicant Applicant datadata Union contract Union contract performance performance Formal flow Formal flow
Flow of Labor Information
Units replaced or repaired because of defective parts, supplier spare Units rejected upon receipt, units rejected during production,
reasons for rejection, and so on
Customer Quality
control input Supplier
input
Financial strength, quality control emphasis, past quality and delivery performance, and so on
Supplier
file
Production Subsystem
Production Subsystem
Used to:Used to:
1. Build production facilities
1. Build production facilities
2. Operate production facilities
2. Operate production facilities
Production schedule determines when the Production schedule determines when the
production steps are performed
production steps are performed
Job Flow Through the Plant
Job Flow Through the Plant
Raw materials inventory Plastic top Plastic cylinder Step 1 Step 5 Step 6 Step 7 Step 8 Step 2
Step 3 Step 4
Step 9 Attach spring Attach spring Install bulb Install bulb Install reflector Install reflector
Install red lens Install red lens
Install clear lens Install clear lens Attach switch
Attach switch
Inventory Subsystem
Inventory Subsystem
Importance of determining the inventory Importance of determining the inventory
level
level
Maintenance cost (carrying costs)Maintenance cost (carrying costs)
Purchasing costsPurchasing costs
Economic Order Quantity (EOQ)Economic Order Quantity (EOQ)
---Safety stock
Average inventory level
Average inventory level
---A. Order quantity of 20; average level is 15.
0 5 15 25 13 21 B al an ce o n h an d an ce o n h an d Time
The Effect of Order Quantity on Average The Effect of Order Quantity on Average
Quality Subsystem
Quality Subsystem
Deming’s fourteen points; maintained that it is Deming’s fourteen points; maintained that it is
not workers but management that determines
not workers but management that determines
quality
quality
Total quality management (TQM)Total quality management (TQM)
Elements of TQMElements of TQM
– Zero defectsZero defects
Cost Subsystem
Cost Subsystem
Periodic reportsPeriodic reports
Required ingredientsRequired ingredients
1. Standards
1. Standards
2. Information
Subsystem
Subsystem
User Inventory Quality Production Cost
User Inventory Quality Production Cost
Vice president of manufacturing Vice president of manufacturing Other executives
Other executives
Plant Superintendent Plant Superintendent
Manager of planning and control Manager of planning and control
Manager of Engineering Manager of Engineering
Manager of quality control Manager of quality control
Director of purchasing Director of purchasing
How Managers Use the
How Managers Use the
Manufacturing Information System
Manufacturing Information System
X X X X X X X X X
X XX
X
X XX
X
X
X
X
X
X XX
X
X
X
X XX
X
Summary
Summary
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 automation
