1 The big picture first
These are the two systems that take charge of the factory's work.
2 take order
Decide what to make and what to make it with.
Sales orderSales OrderA promise made by the customer to ask for what, how much, and by when.
ItemItemEach and every item handled by the factory. Both products and parts are items.
BOMBill of MaterialsA list of what and how many items go into making one product.
Due dateDue DateThe day on which we promised to exchange goods.
3 Buy and put in materials
We buy what we don’t have enough, count it, and put it in the warehouse.
InventoryInventoryHow many items are in the warehouse right now?
Purchase orderPOAn order that asks a supplier to send something, how much, and by when.- SupplierSupplierA company that sells materials.
- Goods ReceiptReceivingCounting the arrived goods, placing them in the warehouse, and recording them in the system.
LOT numberLot NumberA number assigned to a batch that comes in or is created at one time.
4 makes
Instruct the shop floor and write down as much as you make.
5 decide the order
If orders overlap, we decide what to make first.
6 Calculate and obtain materials
Gather the materials you need throughout your plan and be prepared in case supplies falter.
- Material Requirements PlanningMRPCalculating how many materials are needed and by when to make it as planned.
- RequirementRequirementQuantity of materials needed to make it as planned.
Purchase RequisitionPRTelling the purchasing manager, “How many of these should I buy, and by when?”- SCMSupply Chain ManagementManaging the entire flow of materials from supplier to factory to customer.
- Safety StockSafety StockQuantity always reserved in case supply is late or orders suddenly increase.
7 inspect
I see it when I come in, when I make it, and when I leave it.
- Incoming inspectionIncoming InspectionInspection performed when materials arrive. Only those who pass will be considered.
Inspection specificationInspection SpecificationCriteria that determine what to look for and how to pass.- SampleSampleA part that is selected and inspected instead of the whole.
In-process inspectionIn-Process InspectionInspection during production.- Outgoing inspectionOutgoing InspectionFinal inspection before exporting to the customer.
Defect rateDefect RateThe proportion of defects among products made.- Nonconforming ProductNonconforming ProductItems that do not meet established standards.
8 export
Send finished products to customers.
9 set the record
Make sure the numbers on the screen are the same as the real thing.
10 Decide on steps and order
As the factory grows, part after part and work after work appear.
- Semi-finished GoodsSemi-finished GoodsIt is not a finished product, but an intermediate product made directly in a factory.
- Multi-level BOMMulti-level BOMA multi-level BOM with parts underneath parts.
- BOM ExplosionBOM ExplosionExpanding the BOM to the bottom level to calculate what is needed and how much is needed.
- RoutingRoutingThe sequence of processes an item goes through.
- OperationOperationA step in the process of making a product.
- Work CenterWork CenterA place or facility where a process takes place.
- Cycle TimeCycle TimeHow long does it take to process one.
- SubcontractingSubcontractingSending our materials to another company for processing and then receiving them back.
11 Write down the quantity accurately
Decide what to count and how to write it down.
12 Connected to equipment
The equipment takes the counted number, records the time it stopped, and sees if the number can be trusted.
- PLCProgrammable Logic ControllerA small control computer that moves equipment and reads signals from sensors.
Equipment IntegrationEquipment IntegrationThis involves sending the quantity or status of equipment to the system without a person inputting it.- AvailabilityAvailabilityThe percentage of time actually spent on equipment out of the hours scheduled to be worked.
- DowntimeDowntimeThe equipment stops running when it should be running.
- Equipment InspectionEquipment InspectionBefore starting work, check whether the equipment is running properly according to the specified items.
- ShiftShiftDivide the day into several groups and work alternately.
- Work DateWork DateThe factory date on which production output is to be attributed.
- Daily Production ReportDaily Production ReportA report that organizes the daily quantity, defects, and stopping time by group.
- Data ValidationData ValidationChecking whether the numbers coming in are reliable.
- NULLNULLIndicates that there is no value. It is different from 0.
13 Running the Factory
We decide who can do what, what is set aside at each factory, and what is exchanged with headquarters.
- AuthorizationAuthorizationWhat screens each person can see and what they can do is determined.
- Common CodeCommon CodeA pre-determined selection list that can be used together on multiple screens.
- ConfigurationConfigurationDetermining an operation by turning it on or off or changing a value without modifying the program.
- CustomizationCustomizationFixing or creating a new program when an existing function does not work.
OrganizationOrganizationA unit that divides work and records, such as a company, factory, or warehouse.- Plant-level Master DataPlant-level Master DataStandard information registered separately for each factory.
- Registration orderStandard information registration orderIt's time to enter standard information. If you don't have the previous one, you can't add the latter one.
- InterfaceInterfaceThe two systems exchange and connect certain contents in a certain format.
- Master DataMaster DataBasic information shared in many places, such as items and business partners.
- ISA-95IEC 62264An international standard that organizes how work is divided and what is exchanged between the entire company's system and the factory's system.
14 Look at money and numbers
Let's convert the same record into amounts and percentages.
- Unit PriceUnit PriceOne value.
- Sales RevenueSales RevenueMoney earned by selling goods.
- Purchase AmountPurchase AmountMoney spent on purchasing materials.
- Inventory ValueInventory ValueThe value of goods in the warehouse converted into money.
- Material CostMaterial CostThe cost of materials used to make a product.
- KPIKey Performance IndicatorA few numbers you set to see if things are going well.
- On-Time DeliveryOn-Time DeliveryPercentage of orders shipped on the promised date.
- YieldYieldThe proportion of good products among those made.
- Control ChartControl ChartA picture where the values are drawn every day and the usual width is drawn with a line to see if it has changed from usual.
- Control LimitControl LimitThe range where the value usually stays.
- Specification LimitSpecification LimitThe width that separates pass and fail.
15 Handle the problem to the end
It takes back what has gone out and prevents it from happening again.
16 follow the number
When a problem arises, we find out where it came from and where it has gone.
- LOT trackingTraceabilityFinding out which material became which product and where it went by following the bundle number.
- Backward traceBackward TraceTraceability from product to material.
- Forward traceForward TraceTraceability from material to product.
- Recall scopeRecall ScopeTo what extent are products containing the problematic material?
17 Close book inventory
Adjust what came in and went out for each period and close it.
- Stock ledgerStock LedgerBook inventory is organized by adding up what came in and what went out for each item during the period.
- Opening inventoryOpening StockThe quantity that was present at the start of the period.
- Period closingClosingClosing the record of a period.
- Misc. receipts/issuesMiscellaneous Receipt/IssueThe act of adding or removing inventory for reasons other than ordering, production, or shipment.
- Inventory adjustmentStock AdjustmentCorrecting the numbers in book inventory to match the actual items counted.