Capgemini-324788733-Manufacturing-Domain-Overview

1. For internal use only Manufacturing Domain Overview

2. Manufacturing  Manufacturing is a process which involves tools and labor to produce goods for use or sale. The term may refer to a range of human activity, from handicraft to high tech, but is most commonly applied to industrial production, in which raw materials are transformed into finished goods on a large scale. Such finished goods may be used for manufacturing other, more complex products, such as aircraft, household appliances or automobiles, or sold to wholesalers, who in turn sell them to retailers, who then sell them to end users – the "consumers". | Sector, Alliance, Offering Insert "Title, Author, Date" 2 © 2010 Capgemini - Internal use only. All rights reserved.

3. Overview  A product must fully meet design requirements and specifications.  A product must be manufactured by the most economical methods in order to minimize costs.  Quality must be built into the product at each stage, from design to assembly, rather than relying on quality testing after the product is made.  In a highly competitive environment, production methods must be sufficiently flexible so as to respond to changing market demands, types of products, production rates, production quantities, and on-time delivery to the customer.  New developments in materials, production methods, and computer integration of both technological and managerial activities in a manufacturing organization must constantly be evaluated with a view to their timely and economic implementation.  Manufacturing activities must be viewed as a large system, each part of which is interrelated to others. Such systems can be modeled in order to study the effect of factors such as changes in market demands, product design, material and various other costs, and production methods on product quality and cost.  The manufacturing organization must constantly strive for higher productivity, defined as the optimum use of all its resources: materials, machines, energy, capital, labour and technology. Output per employee per hour in all phases must be maximized. | Sector, Alliance, Offering Insert "Title, Author, Date" 3 © 2010 Capgemini - Internal use only. All rights reserved.

4. History  In its earliest form, manufacturing was usually carried out by a single skilled artisan with assistants.  Before the Industrial Revolution, most manufacturing occurred in rural areas.  Various Manufacturing Systems • Guild System • Tropicana System • English System Of Manufacturing • American System Of Manufacturing • Soviet Collectivism In Manufacturing • Mass Production • Just In Time Manufacturing • Lean Manufacturing • Agile Manufacturing • Rapid Manufacturing | Sector, Alliance, Offering Insert "Title, Author, Date" 4 © 2010 Capgemini - Internal use only. All rights reserved.

5. Manufacturing Process After engineer has designed a product and made sketches, The manufacturer then gets the approved part prints. While new parts are being made, the current parts are also produced When all the parts are perfected pre production pilot is done to see if the new part fits with the current parts If it fails the inspection then the a new batch of updated parts are produced The current parts are ordered and received in the preproduction pilot as well The manufacturer then identifies the new parts to be made. Next, The initial sample inspection is done. Since the part is new they must then identify new tools they need to make the part. The Manufacturer then does an inspection of the pilot unit After the tools arrive, small volumes of parts with the new tools are produced Next, The manufacturer has to establish capital needed to buy the tools This also goes through the necessary iterations Once they have the product they want; The product gets approved Once they have requested the needed money they must attain the capital spending approvals Order is placed for the tools. The manufacturer can then start “MASS PRODUCTION” | Sector, Alliance, Offering Insert "Title, Author, Date" 5 © 2010 Capgemini - Internal use only. All rights reserved.

6. Manufacturing Methodologies  Job Production • Job manufacture typically involves producing a one-off product for a specific customer. A construction contract for building a factory or home is a good example.  Batch Production • Batch production typically involves production runs and manufacture of components. A batch of components is produced in one production run and then the equipment is prepared for another batch.  Continuous Production • Industries like petroleum refining and steelmaking use continuous processes that run uninterrupted. There is a high degree of automation and production capacities tend to be huge. | Sector, Alliance, Offering Insert "Title, Author, Date" 6 © 2010 Capgemini - Internal use only. All rights reserved.

7. Manufacturing Methodologies  Quick Response Manufacturing (QRM) • QRM is focused on making the time period between a customer’s request for a product and the final delivery of that product as brief as possible.  Cellular Manufacturing • This concept separates the factory floor into different sections (cells). Machines are placed in a certain order so that materials flow naturally toward the completion of a product.  Single Minute Exchange of Die (SMED) • Manufacturers are always looking to reduce wasted time, even between projects. SMED focuses on changing the factory process from working on an old product to a new product as quickly as possible. | Sector, Alliance, Offering Insert "Title, Author, Date" 7 © 2010 Capgemini - Internal use only. All rights reserved.

8. Manufacturing Methodologies  Just In Time (JIT) • The concept of JIT basically suggests that any inventory is waste. JIT manufacturers buy just enough supplies to keep the process moving and schedule them to arrive at the factory “just in time” for them to be used in production.  Kanban • When supplies are running low, factories can have an automatic request for new supplies sent to their suppliers. These alerts have traditionally been called Kanban, and they are now often computerized.  Just In Sequence (JIS) • This is the most extreme example of JIT. Supplies arrive at the factory at the exact moment they are needed within the manufacturing sequence, which means production may come to a standstill if the supplies are just a few minutes late. | Sector, Alliance, Offering Insert "Title, Author, Date" 8 © 2010 Capgemini - Internal use only. All rights reserved.

9. Quality  Quality Control • Quality can be improved by inspecting all produced items and rejecting those which do not pass the quality criteria. However, this can be a costly exercise. Inspections and rejections both cost money. Statistical quality control can reduce the cost of inspection. Improving the quality of production processes and training operators in quality-controlled operations can reduce rejections.  Lean Manufacturing • Lean is a production process that seeks to eliminate anything in the process that does not produce customer value. If a customer is not willing to pay for a particular feature, that feature is eliminated if possible. If the customer can be satisfied with less expensive components, existing high cost components are replaced. | Sector, Alliance, Offering Insert "Title, Author, Date" 9 © 2010 Capgemini - Internal use only. All rights reserved.

10. Quality  TPM • Under TPM - Total Productive Maintenance - the production operators attend to most of the routine maintenance of the machines. TPM is a proactive measure aimed at reducing equipment deterioration and the need for dedicated maintenance. It can lead to lower machine downtimes, i.e. times when machines are needed but not available as they are under maintenance.  Six Sigma • Six Sigma is a management strategy that results in high quality and lower costs. The emphasis is on identifying the factors that lead to defects and improving processes to eliminate these factors. For example, reasons for defects might be traced to quality of raw materials, and the specifications of the latter might be changed to minimize the defects. Methods like Statistical Quality Control will also be in place. | Sector, Alliance, Offering Insert "Title, Author, Date" 10 © 2010 Capgemini - Internal use only. All rights reserved.

11. Six Sigma  Define, Measure, Analyze, Improve, Control (DMAIC) • This Six Sigma methodology is focused on improving the basic manufacturing processes that are already in motion.  Define, Measure, Analyze, Design, Verify (DMADV) • This alternative methodology is a more anticipatory approach. Based on an analysis of customer demand, manufacturers plan ahead and try to design ways to avoid defects in the first place.  Critical to Quality (CTQ) and Quality Function Deployment (QFD) • These two concepts try to pinpoint the elements of a product that are most important to customers and translate those needs into a manufacturing strategy that focuses on getting the critical elements exactly right. | Sector, Alliance, Offering Insert "Title, Author, Date" 11 © 2010 Capgemini - Internal use only. All rights reserved.

12. Six Sigma  Suppliers, Inputs, Process, Outputs, Customers (SIPOC) • SIPOC is a diagrammatic tool that allows manufacturers to trace the life cycle of their products from supplier to customer and identify problem areas.  Taguchi Loss Function • If a manufacturer designs a production plan that will maximize profit and efficiency, any sudden changes or variations from that plan pose a problem. The Taguchi Loss Function suggests that production quality decreases as variation increases. | Sector, Alliance, Offering Insert "Title, Author, Date" 12 © 2010 Capgemini - Internal use only. All rights reserved.

13. Accelerate Production  Machine Flexibility • This concept refers to the capacity of a factory’s machines to adapt. Can they be changed to manufacture different products? Will they allow for the slight variations in design that customization requires?  Routing Flexibility • This concept is focused on the adaptability of the manufacturing process as a whole. Does the factory have multiple machines that can complete the same task? Can they be paired with various other machines to make customized products? | Sector, Alliance, Offering Insert "Title, Author, Date" 13 © 2010 Capgemini - Internal use only. All rights reserved.

14. Accelerate Production  Computer-aided Design (CAD) and Computer-aided Manufacturing (CAM) • Computers allow customers to customize products, and they also allow manufacturers to create those products with agreeable costs. If a factory has machine and routing flexibility, they can use CAD to design production processes and CAM to guide parts through those processes with robots and computer-controlled machines (CCM).  Computer-integrated Manufacturing (CIM) • Maybe the most important element of flexible manufacturing, CIM creates a network of computers that observe and operate the manufacturing process. With CIM, computers can monitor every step of production for defects and change the actions of a machine almost immediately, contributing to flexibility. | Sector, Alliance, Offering Insert "Title, Author, Date" 14 © 2010 Capgemini - Internal use only. All rights reserved.

15. Which are functional areas supporting Manufacturing? 1. Know your “Item” 2. Concept of “Business Partner” 3. Purchase (Purchase to Pay) 4. Sales (Order To Cash) 5. Manufacturing & Shop Floor Control (Plan to Produce) 6. Enterprise Planning 7. Warehousing (Receive to Retrieve/Despatch to Deliver) | Sector, Alliance, Offering

16. PURCHASE 1. Purchase Orders 2. Purchase Contracts 3. Purchase Requisitions 4. Purchase Request for Quotations 5. Vendor Ratings | Sector, Alliance, Offering

17. Purchase Order  P.O is a legal document that authorizes suppliers to supply goods/items Order Types include:  Standard Orders (Normal P.O) Collect Orders Cost Orders Cost and Collect Return Orders Return and Collect Consignment Orders | Sector, Alliance, Offering 17

18. Purchase Contracts A contract is an agreement for a specified period of time, that establishes business Partner, total quantities, prices, discounts agreed upon for an item or group of items | Sector, Alliance, Offering 18

19. Purchase Requisitions  Purchase Requisitions provide the ability to submit requests (to buy goods or services) for approval prior to actual purchase  Once a Requisition receives approval from the appropriate personnel, it can be converted into a “Purchase Quotation” or “Purchase Order” Purchase Requisition Process 1) The Requestor completes the header, lines etc 2) Submits the requisition 3) Manager/Supervisor then executes the approval process 4) Conversion of the requisition to a quotation or a purchase order | Sector, Alliance, Offering 19

20. Purchase Requests for Quotations The Requests for Quotations (RFQ) functionality allows you to send out inquiries to suppliers regarding the procurement of goods The statuses in the RFQ procedure can be … Created (RFQ created and ready to be printed) Printed Modified (In case RFQ is modified, it is reprinted and resent) Returned (Suppliers return the quotation in response) Processed | Sector, Alliance, Offering 20

21. Vendor Rating When your company conducts business and purchases goods and materials from multiple suppliers, you can use Vendor Ratings to help make decisions regarding whom to buy from. Vendor Ratings track and record predefined criteria to rate suppliers and keep track of supplier performance, aiding in the selection process. | Sector, Alliance, Offering Insert "Title, Author, Date" 21 © 2010 Capgemini - Internal use only. All rights reserved.

22. SALES 1. Sales Orders & Order Types 2. Sales Invoicing 3. Commissions, Discounts and Rebates 4. Sales Contracts | Sector, Alliance, Offering

23. Sales Orders & Order Types  Consignment Sales order • Consignment sales orders are used specifically to conduct sales transactions for consignment inventory items • One can only sell consignment inventory using an order type specifically designated as a consignment order. Collect Orders • Collect Orders are also thought of as “Over-the-Counter” or “Cash Sales” • These orders are typically used in circumstances where customers pay for and receive goods immediately, such as at a parts counter in an automotive dealership. • This is immediate sale, which reduces inventory and has payment received at the time of sale, known as a Collect Order Cost Order • Many organizations bill for things like freight, administrative costs, or handling fees on their customer sales orders. These may also represent repair or maintenance hours that must be billed to the customer. Return Order • Another situation that arises in sales order processing, is the handling of returned goods. Retro-billed • Retro billing is when you re-invoice previously shipped items using a price based on a new contract negotiation • Retro billing can also be performed on an individual sales order that is not related to a contract. • A retro billing sales order has an item quantity of zero and an order amount that indicates the price difference. Rush Order • Every company deals with rush requests from customers. These requests usually require special terms of payment and delivery. Back Order • When a shortage of inventory occurs, back orders can be created to allow for additional shipments at a later date. Once these additional shipments are confirmed, another delivery request will be generated for the back order.       | Sector, Alliance, Offering Insert "Title, Author, Date" 23 © 2010 Capgemini - Internal use only. All rights reserved.

24. Sales Invoicing  Collective and Net Invoices  Non-Collective and Net Invoices  Collective and Gross Invoices  Non-Collective and Gross Invoices | Sector, Alliance, Offering Insert "Title, Author, Date" 24 © 2010 Capgemini - Internal use only. All rights reserved.

25. Commissions & Rebates Commissions - ??? Discounts - ??? Rebates - ??? “Reduction, Refund or Return on what has already been paid” Depending on the transaction type used, a rebate invoice consist of - A sales invoice with a negative amount. A credit note. | Sector, Alliance, Offering 25

26. Sales Contracts In the Sales Contracts, the information entered is mainly related to the Sold-to Business Partner, Quantity, Price and sales/delivery schedules for the contract | Sector, Alliance, Offering 26

27. Manufacturing & Enterprise Planning 1. Supply Chain Modeling 1. Mind your BOM 2. Supply Chain Optimization 2. Routings 3. Aggregation Planning 3. Serialized Items Vs Lots 4. Channels (Customer Focus) 4. Backflushing 5. Subcontracting 6. Enterprise Planning | Sector, Alliance, Offering

28. Bill of Material (BOM) Bill of Material is a listing of all components and relevant data (sub-assemblies and raw materials) that comprise a manufactured item. The BOM establishes the parent-child relationship between a manufactured item and its components. | Sector, Alliance, Offering 28

29. Single Level BOM | Sector, Alliance, Offering 29

30. Multi Level BOM CHAIR.XX PURCHASED FRAME.XX FRAME SEAT.XX SEAT QTY 1 BACK.XX BACK QTY 1 QTY 2 FAB.0004 FABRIC QTY 0.5 FAB.0001 FOAM QTY 1 RAW.OOO2 STEEL TUBE QTY 2.0 FIX.OOO1 ADHESIVE QTY 0.1 FIX.OOO3 BOLTS RAW.OOO2 STEEL TUBE FAB.0004 FABRIC QTY 0.8 FAB.0001 FOAM QTY 1 RAW.OOO2 STEEL TUBE QTY 3.0 FIX.OOO1 ADHESIVE QTY 0.2 | Sector, Alliance, Offering 30

31. Routings 1. Determine how to build the main item 2. Define the required operations required to build the main item. 3. Define which work centers and which machines are involved with the manufacturing of the end item. 4. Indicate the time required to complete each operation. | Sector, Alliance, Offering 31

32. Routing Components of an Operation Work Centers Machines Tasks Operation | Sector, Alliance, Offering 32

33. Routing Operations  Operation Number  Step size Operation 10 Operation 20 Operation 50 Operation 60 Operation 30 Operation 40 | Sector, Alliance, Offering 33

34. Serialized items concept  A serialized item is a physical occurrence of a standard item that is given a unique lifetime serial number  Enables you to track the individual item throughout its lifetime ….for example, through the design, production, testing, installation, and maintenance phases | Sector, Alliance, Offering 34

35. Subcontract Production Orders Subcontracting is the use of outside business partners to complete specific operations or services for your production process that you may not be able to cover from a capacity standpoint or are not capable of executing in house. Two types of subcontracting can be performed … — Unplanned Subcontracting: Operations of a production order are subcontracted in the Subcontract Operations session. The subcontracting costs are part of the estimated and/or actual production order costs. — Planned subcontracting: Work centers of the Subcontract Work Center type are attached to the item routing and include a Subcontracting Rate and task. The expected subcontracting costs are part of the standard cost price. | Sector, Alliance, Offering 35

36. Shop Floor Control Order Grouping Create EP order group Create EP order group Grouped planned orders Grouped planned orders Confirm/ transfer per order group Confirm/ transfer per order group Create SFC order group Create SFC order group Grouped SFC orders Grouped SFC orders Execute activities by order group (related to SFC Execute activities by order group (related to SFC procedure) procedure) Warehouse Outbound Warehouse Outbound and Picking and Picking | Sector, Alliance, Offering

37. ERP  Simplistic Definition ERP - Enterprise Resource Planning. Detailed Definition “a business strategy and set of industry-domain-specific applications that build customer and shareholder communities value network system by enabling and optimizing enterprise and inter- enterprise collaborative operational and financial processes” (Integrating various stakeholders through collaborative approach to optimize resource utilization) | Sector, Alliance, Offering 37

38. Key Characteristics  Many companies with ERP use e-commerce Seamless integration of all the information flowing through a company – financial and accounting, human resource information, manufacturing, supply chain information, and customer information.  Packages Enterprise systems are not developed in-house Mapping organizational requirements to the processes selection of the vendor and Making informed choices about the parameter setting. Organizations that purchase enterprise systems enter into long-term relationships with vendors for updating and maintenance. (Organizations no longer control their own destiny).  Best Practices ERP vendors talk to many different businesses and determine the best and most efficient way of accounting for various transactions and managing different processes. The result is claimed to be “industry best practices”.  Some Assembly Required Most companies have great difficulty integrating their enterprise software with a package of hardware, operating systems, database management systems software, and telecommunications suited to their specific needs.  Evolving Enterprise Systems are changing rapidly Architecturally: Mainframe, Client/Server, Web- enabled, Object-oriented, Componentization Functionally: front-office (i.e. sales management), supply chain (advanced planning and scheduling), data warehousing, etc. | Sector, Alliance, Offering Insert "Title, Author, Date" 38 © 2010 Capgemini - Internal use only. All rights reserved.

39. ERP Workflow (SAP) | Sector, Alliance, Offering Insert "Title, Author, Date" 39 © 2010 Capgemini - Internal use only. All rights reserved.

40. PP Workflow | Sector, Alliance, Offering Insert "Title, Author, Date" 40 © 2010 Capgemini - Internal use only. All rights reserved.

41. MM Workflow | Sector, Alliance, Offering Insert "Title, Author, Date" 41 © 2010 Capgemini - Internal use only. All rights reserved.

42. Warehousing 1. Concept of a Warehouse 2. Warehouse Order Procedures 3. Cycle Counting 4. Adjustment Of Inventory 5. ABC & SLOW Moving Analysis 6. Inventory Valuation 7. Cross Docking 8. Package Definitions | Sector, Alliance, Offering

43. Warehouse RAW MATERIALS Loading Dock L-1 (Perishables) (Storage Condition – Refrigerated ) BONDED Z-1 TOXICS L-2 (Inflammables) Un-Loading Dock Z-2 Z-3 | Sector, Alliance, Offering

44. Warehouse Orders and Procedures  Inventory transactions are processed using warehouse orders  Warehouse orders originate from orders in other modules  Warehouse orders can require different handling procedures, depending on the order origin | Sector, Alliance, Offering 44

45. Cycle Counting Orders  Cycle Counts are intended to check the registered inventory with the actual inventory at a designated moment in time.  The Cycle Counting module enables companies to perform physical inventory checks based on an item stock point These counts can be performed on a periodic basis or can be manually forced for individual items as the need arises. | Sector, Alliance, Offering 45

46. Warehouse Adjustment Orders An Adjustment order is a manually entered order used to increase or decrease the system inventory level. | Sector, Alliance, Offering 46

47. ABC and Slow-Moving Analysis Analyzing inventory is useful for deciding how to track items, place items in a warehouse, or make decisions regarding the inventory levels of items. Slow-Moving Analysis, or ABC Analysis methods to accomplish this | Sector, Alliance, Offering 47

48. Inventory Valuation Inventory is valued either at cost or market value Inventory value can change with time therefore, the age of inventory is also taken into account The cost value of inventory is usually computed on the FIFO, LIFO, or a standard cost basis to establish the cost of goods sold. | Sector, Alliance, Offering 48

49. Cross-Docking Cross-docking is the process by which inbound goods are immediately taken from the receipt location to a staging location for issue, without intermediate storage. For example, cross docking may be used to fulfill an existing sales order for which no inventory is available. | Sector, Alliance, Offering 49

50. Package Definitions Package definitions are product-packaging descriptions used for the storage or movement of items containing multiple levels of storage containers. A package definition specifies how items must be packed. The rules established determine the quantity and configuration in which the item is moved and stored. | Sector, Alliance, Offering 50