Production is a complex multi-level module and has some concepts which need to be explained and cleared. Ginesys has a multi-level BoM with a great many combination of processes, routes, sub-assembly items and alternate plans. Here is the explanation for some of the concepts involved in Ginesys Production module.
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Please note that this article is a work in progress, with newer concepts added and existing ones modified as dictated by domain or technical requirements. |
General Concepts in Production
Types of Manufacturing Processes
Made to Order
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When manufacturing is done on the basis of orders received from customers and no stock is maintained by the manufacturer then the process is known as Made to Order. It may be used by manufacturers who -
- Either do not have space or infrastructure to stock products.
- Or produce and sell customized products.
Made to Stock
When manufacturing is done to keep a ready stock knowing that orders will come from customers, then the process is known as Made to Stock. It may be used by manufacturers who -
- Have space or infrastructure to stock products.
- And produce and sell non-customized every day products.
Made to Assemble
When manufacturing is done to keep a ready stock knowing that orders will come from customers but may need to be customized, then the process is known as Made to Assemble. It may be used by manufacturers who -
- Have space or infrastructure to stock products.
- And produce and sell customized products.
Types of Material
Raw Materials
Raw materials are basic materials or substances used in the primary production or manufacturing of finished products, energy, or intermediate materials which are feedstock for future finished products. They are often called Commodities and bought and sold on commodities exchanges globally. These have both Inventory and Finance impacts.
For example - In garment manufacturing; fabric is one of the raw materials.
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There are two subcategories of raw materials, which are: Direct materials - These are materials incorporated into the final product. For example, the wood used to manufacture a cabinet. Indirect materials - These are materials not incorporated into the final product, but which are consumed during the production process. For example, the lubricant, oils, rags, light bulbs, and so forth consumed in a typical manufacturing facility. |
Semi - Finished Goods
Semi-finished goods or Intermediate goods are products, such as partly finished items, used as inputs in the production of other goods including final goods. A company may make and then use intermediate goods, or make and then sell, or buy and then use them. They may also be called Producer Goods and have both Inventory and Finance impact. They are also called Work-In-Progress (WIP) Material. It is unavoidable inventory which will be created in almost any manufacturing business. On a balance sheet, work-in-progress is considered to be an asset because money has been spent towards a completed product but because the product has not been completed, however, WIP is valued lower.
For example - In garment manufacturing; in a set of garments each different piece may be considered as a semi-finished goods.
Finished Goods
Finished goods are goods that have been completed through the manufacturing process, or purchased in a completed form, but which have not yet been sold to customers. Goods that have been purchased in completed form are known as merchandise. These have both Inventory and Finance impacts.
For example - In garment manufacturing; a finished, packed and labelled product, ready to grace the racks of a shop, is a finished goods.
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Types of Item
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Assembly Item
Assembly Items are component or end items comprising of a number of parts or sub-assemblies put together as an inventory item. These may sometimes be disassembled without destruction. An assembly item at one point may be treated as a sub-assembly item at another point.
For example - In garment manufacturing, a kurta or a shirt or a skirt or a trouser etc. are assembly items.
Sub Assembly Item
Sub Assemblies are parts to be put together as a unit, in the making of a larger assembly or a final or higher item. A sub assembly in one case, may be an assembly at another. These items have inventory impact but have no Finance impact.
For example - In garment manufacturing, in case of a shirt - the cuffs, the collar, the pocket, the front , the back, the half-finished shirt are all sub assembly items.
Alternate Item
Items received in the Job Receive which are different from the items ordered through the Job Order. The alternate item must belong to the same article and route group.
For example - In garment manufacturing, suppose the Job Order has item A001 (red shirt) but while receiving through the Job Receipt its found that the jobber has produced the item T002 (red top) then it will be received as an alternate item provided A001 and T002 both belong to the same article and route group.
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Types of Raw materials Issue
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There are various methods of issuing raw materials in Ginesys -
Pull on Order
When raw materials are issued from Job Order and inventory out for it happens at once.
Pull on Completion
When raw materials are issued from Job Receipt but physically it is issued at the time of ordering. Alternate raw material issuing is possible in this case.
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When raw materials are issued from WIP Transaction and the job order is created much before.
Miscellaneous Concepts of Production as used in Ginesys
BOM (Bill Of Materials)
A bill of materials (a.k.a. product structure, may sometimes also be called BOM or associated list) is a list of the raw materials, sub-assemblies, intermediate assemblies, sub-components, parts, and the quantities of each needed to manufacture an end product. A BOM could be a channel between manufacturing partners or limited to a single production plant. A bill of materials could be connected to a production order which may process components in the bill of materials that are in stock and create requisitions for components that are not in stock.
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