Oracle WIP Scheduling,Lead times computation scenarios – Part 2

Purpose: How the wip scheduling calculates the start date and end dates, how lead time works are computed and rolled up.

This post is similar to my earlier post except the difference in this case resource is available for 8 hours while in earlier post, resource was available for 24 hours.

Do spare a minute to go through that in order to understand BOM structure that I have defined. After that, continue reading this post.

1.    Compute lead time for 212150-00

Mfg Lead time Resources are available 8 hours
212150-00 2/8 = .25 days

2.  Running compute lead times and then lead time rollup for 3067770-1212

Lead times Resources are available 8 hours  
Cumulative Manufacturing time 9 +1.125+ .25 = 10.375 Assuming that SUB assembly 212150-00 is not in on hand and also needs to be manufactured
Fixed lead time 72/8=9 Sum of lot based resource
Variable Lead time 9/8=1.125 Sum of item based resource
Total lead time ( Processing lead time ) 10.125 Fixed + Variable
Cumulative Total 10.375 Assuming that SUB assembly 212150-00 is not in on hand and also purchase components are also not present and needs to be ordered. Since we do not mentioned any lead time for purchase items, it will be counted as 0
Lead time calculations in Routing

4.    Routing of 306770-1212

In Routing, you see this columns as automatically updated

Total lead time = 10.125 *24 = 243 hours

Operation # Resource Department Operation Description Usage rate Resource Cost Multiply this by 100 to get %
10 Manpower APJ3600 MDM Assembly 2 45 per hr Item 0
20 Manpower APJ3600 Print assembly 2 45 per hr Item 2/243
30 Manpower APJ3600 final assembly 2 45 per hr Item 4/243
40 Manpower APJ3600 Burn 72 Non costed Lot 6/243
50 Manpower APJ3600 Packaging 3 45 per hr Item 222/243
Lead time calculations in Routing

5.   WIP Scheduling

 

Quantity Start date End date
1 6th March 20th march 9+1*1.125=10.125
2 6th March 21st march 9+2*1.125= 11.25

It is because of Job start date is 9th march, WIP assumes it will be released at the beginning of the day.

Oracle WIP Scheduling,Lead times computation scenarios – Part 1

Purpose: How the wip scheduling calculates the start date and end dates, how lead time works are computed and rolled up.

1.    BOM for 306770-1212

BOM Structure
BOM Structure in Oracle for Top finished good
BOM for SubAssembly

2.    Routing for 306770-1212

 

Operation # Resource Department Operation Description Usage rate Resource Cost Basis
10 Manpower APJ3600 MDM Assembly 2 45 per hr Item
20 Manpower APJ3600 Print assembly 2 45 per hr Item
30 Manpower APJ3600 final assembly 2 45 per hr Item
40 Manpower APJ3600 Burn 72 Non costed Lot
50 Manpower APJ3600 Packaging 3 45 per hr Item

Note: Resource that we want to count for lead time should be scheduled. Resource that consume same time irrespective of quantity should be selected with lot basis else with if it depend on quantity, should be select with item as basis.

Routing for Top assembly

3. Routing for 212150-00

Operation # Resource Department Operation Description Usage rate Resource Cost
10 Manpower PJ3600 MDM Assembly 2 45 per hr

4.    Compute lead time for 212150-00

Mfg Lead time Resources are available 24 hours
212150-00 2/24 = .083 days

5.Running compute lead times and then lead time rollup for 3067770-1212

Lead times Resources are available 24 hours  
Cumulative Manufacturing time 81/24 + .083 = 3.4583 Assuming that SUB assembly 212150-00 is not in on hand and also needs to be manufactured
Fixed lead time 72/24=3 Sum of lot based resource
Variable Lead time 9/24=.375 Sum of item based resource
Processing lead time-Total lead time 3.375 Fixed + Variable
Cumulative Total 3.45 Assuming that SUB assembly 212150-00 is not in on hand and also purchase components are also not present and needs to be ordered. Since we do not mentioned any lead time for purchase items, it will be counted as 0
Lead time calculations for Top assembly

6.Routing of 306770-1212

In Routing, you see this columns as automatically updated

Operation # Resource Department Operation Description Usage rate Resource Cost Multiply this by 100 to get %
10 Manpower APJ3600 MDM Assembly 2 45 per hr Item 0
20 Manpower APJ3600 Print assembly 2 45 per hr Item 2/81
30 Manpower APJ3600 final assembly 2 45 per hr Item 4/81
40 Manpower APJ3600 Burn 72 Non costed Lot 6/81
50 Manpower APJ3600 Packaging 3 45 per hr Item 78/81
Lead time calculations in Routing

7. WIP Scheduling

Job 15003

Quantity Start date End date
1 6th March 9th march 3+1*.375=3.375
2 6th March 9th march 3+2*.375= 3.75
4 6th Match 10th march 3+4*.375= 4.5

It is because of Job start date is 9th march, WIP assumes it will be released at the beginning of the day.

Releasing discrete job

Please continue to post 2 where I will be demonstrating similar scenarios with the assumption that resources are available for 8 hours in a day.

Procure to order and Drop shipment – Theory

Procure to order and Drop shipment – Theory

Whenever customers order products which we do not stock as well as manufacture, we place the order for those products, get them shipped to our end and then ship it to the customer. Consider the 2 business scenarios to appreciate the need of Back to back orders

Case 1: Suppose on a Christmas season, Refrigerator Manufacturer Company announces the order that with every refrigerator, mobile phone is free. In this case, company uses the b2b order for the mobile phone when the demand for the refrigerator comes and shipped them together.

Case 2: Company is acting as a wholesale distributor for some products.

In this case, material is shipped from our inventory and this inventory level is affected.

Common Business Terminology: Buyout items

Drop shipment

In drop shipment, billing and ordering takes places as usual. Customer places the order with us and we bill our customer for the order. Also, we place the order with supplier and supplier bills our organization for the order. However, shipment does not happen from our side. Our supplier directly ships the order to customer.

It is used when the customer and supplier locations are near to each other but in this case there is always a risk of direct association between your customer and supplier and thus eating your margin. Also, it is very commonly used by the flipkart, naptol and e bay etc. When we buy refrigerator from flipkar, for example, they ask supplier to drop shipment directly to us but bill flipkar only and flipkar bill us.

Please note that in this case inventory levels are not affected.

 

Count Point and AutoCharge operations in Routing

Count point off / Autocharge On – Always but not critical

This is used for those operations which we always perform but they are not critical. The purpose is to skip them during move transactions and decrease manual effort. Example can be cleaning the assembly after it is completed.

It is used for non-bottleneck operations, unimportant but mandatory operations. As this operation is auto charge on, so the cost will be taken care while cost rollup.

Count point off / Autocharge Off – Occasional

This is used for operations which are not mandatory but are required in special cases. It can include rework of assembly. Wip does not complete the operations and charge its resource to your job unless you explicitly record it in move transactions. Also, you need to charge the resources manually and the variance account will be hit.

Count point on / AutochargeOn–Critical

This is used for critical and mandatory operations and these operations will automatically defaulted as destination operation in Move transactions window.  As Autocharge is on, costs will be automatically charged to accounts.

Count point off/Autocharge On – Not permitted

It is because when operation is mandatory, how it is possible to charge the cost always.