In this activity the forecast is generated by the sales people for
the sub assemblies. The variation in the demand at the final
product is high and the sales person can forecast only at the
common subassembly with greater accuracy. SAP APO demand planning
component can be used to arrive at a forecast for the assemblies.
Receive sales order for final assembly
In this activity the sales order is received for the final assembly
from the customer.
Carry out material planning
The planner can do the material planning to generate the receipts
to meet the demand. This can be done in the material requirement
planning components of SAP R/3 or SAP APO. The system will generate
order proposals to meet the demand after executing the netting off
logics. The results of this activity are planned orders for
produced materials and purchase requisitions for purchased
materials.
Carry out scheduling activities
In this step orders that are generated in order to meet the demand
and that fall within the production horizon are considered for
production scheduling by the APO PPDS component. The system
considers a variety of constraints and can optimizes the production
schedule based on predefined parameters. The results of this step
are orders set in a sequence that is optimal to meet the desired
objectives. The DS planning board can also be used to carry out
other scheduling activities.
Finalize plan and release to production
In this activity the planning person would arrive at a final
production plan and then release it to the manufacturing
department. The planned orders are converted to production orders
and are then released for execution.
Pull based production planning
The planner carried out material planning to generate order
proposals to use the sub assemblies to manufacture the final
assembly. The system generates planned orders for the manufacture
of final assembly with sub assembly as the components. Based on the
Final assembly requirements the components are planned as a pull
system.
Finalize plan and release to production
In this step the manufacturing plan for the final assemblies is
finalised and the planned orders are handed over to the production
for execution.
Carry out availability check
In this activity the planner would carry out the ATP and give the
new promise date at which the material will be provided to the
customer.
Carry out manufacturing of assembly
In this step the released production orders for the assemblies are
considered and the assemblies are manufactured and kept in stock.
Lean manufacturing execution
In this step the manufacturing department carries out the
production of final assembly. In lean manufacturing environment the
planned orders are used to confirm production and the functionality
of Kanban replenishment / JIT calls / Back flush are used for
component consumption and replenishment. The sub assembly that was
manufactured and kept in stock earlier is used to reduce the total
manufacturing lead time.
This Business Scenario
Map demonstrates how enterprises work in assembled to order
scenarios. The enterprise has the knowledge to plan and manufacture
the intermediate assemblies but has to wait for a customer order to
come up with the final assembly. This process enables the
manufacturer to procure the raw materials and carry out the
manufacturing process till the assembly level. On the receipt of
the sales order the final assembly is carried out and material is
dispatched to the customer. This process helps the enterprise to
reduce the lead-time of servicing the sales order and also enables
them to have the flexibility to meet the exact customer
requirement.
Due to the increased
variability in the requirements of the customers the sales people
are unable to accurately forecast the requirements of finished
goods by various customers. On the other hand however if one waits
to get a customer order and then plan for the procurement of raw
materials and production activities it takes too long and the
customer might not be ready to wait that long.
One of the processes in
Supply Chain to deal with the above scenario is assemble to order.
The sales personnel forecast the customer demand at a level below
the finished goods at which they are more accurate. The procurement
of raw materials happens as per this sub assembly forecast and the
sub assemblies are manufactured and kept in stock. On the receipt
for the actual customer order the sub assembly is converted to a
finished assembly with actual customer specifications.
The primary benefit of
this process is flexibility in planning and production because it
is possible in this process to plan for all the components
requirements for individual customer requirements. Leading to the
tracking of the progress on the customer order. The quality tests
can be specific to the customer and the material stock is seen as
customer stock. There is a constant link between the sales order
and the production order.
The primary benefit of
this process is the ability to track the progress for the sales
order and the flexibility to offer to the customers the products to
meet their specific requirements. The benefit also lies in tracking
the costs incurred in the servicing of the sales order in the
manufacturing of the goods and the ability to arrive at a
profitability of the sales order.