Order management system for production. Open Library - open library of educational information
Logistics proclaims the priority of the consumer over all other subjects of the logistics system. A consumer order is a kind of signal that triggers various logistics functions. For this reason, the speed and quality of information provided by the order management system influence the overall costs and efficiency level of the entire logistics process. Thus, slow and error-prone communications can lead to the loss of some consumers or to inflated costs for transportation, inventory and warehousing. For this reason, fulfillment of consumer orders must be carried out in ASAP mode ("as soon as possible").
Order management in an organization begins with receiving and processing orders from consumers of material resources or finished products. This uses an integrated approach to order management. It involves making optimal decisions on purchases and inventories of material resources, production, warehousing and distribution of finished products based on accurate forecasting of consumer demand. This is possible subject to the organization’s high readiness to supply ordered goods, high quality delivery service, as well as the functioning of the logistics information system and basic logistics systems (MRP II, DRP II).
The main task of order management at an enterprise is to reduce the time of the logistics cycle of orders in order to improve the quality of customer service, reduce the level of inventory and overall logistics costs. The logistics order cycle in general includes:
1) time to formulate the order and complete it in the prescribed manner.
2) time for delivery or transfer of the order to the supplier.
3) order fulfillment time (waiting time for placing an order for execution, order fulfillment time, downtime, range of services).
4) delivery time of manufactured products to the customer.
5) time to prepare products for consumption.
The maximum duration of the order fulfillment cycle is determined by the time that the consumer is willing to wait from the moment the order is placed until the receipt of the goods (hours, days). Actual order fulfillment time may exceed this time. In this case, a “order execution time gap” occurs. The goal of the logistics service is to reduce this gap. To do this, you should either reduce the order execution time from the supplier, or increase the consumer order cycle by receiving an earlier application. It should be noted that the stage of optimizing the logistics cycle of orders is extremely important for the organization’s activities, since the results obtained guarantee it a competitive advantage. It is important to note that in order to reduce the duration of the order cycle, it is extremely important to improve the planning of the drug or supply chain using electronic data processing EDI and the use of logistics information systems such as ERP.
The logistics cycle of order management is a set of procedures for processing and fulfilling an order (Fig. 4).
Rice. 4. Logistics cycle of order management
Orders are received by the organization from consumers of material resources or finished products by mail, telephone, telegraph, e-mail, fax and courier. Οʜᴎ can be verbal and documented. The purchase order must contain all the information necessary for the supplier: order number, contact persons of both parties, change number, manufacturer designation, customer designation, total received since the first delivery, confirmation of last arrival and contract number. This form allows you to significantly reduce the time and costs of telephone conversations regarding confirmation of order acceptance.
After preliminary processing, orders are transmitted via telecommunication networks to the company’s information and computing center, in which a special program receives the order and automatically issues confirmation of its acceptance for execution. Specific production or sales divisions of the enterprise act as the source of fulfillment of the purchase order. Order fulfillment plans are developed for certain sources. The initial indicators for planning are specifications for the production of finished products, refined production indicators accurate to within a week, or inventory replenishment plans. This allows us to produce and deliver goods on time in accordance with customer production plans. In the process of order monitoring, procedures for the execution and delivery of ordered products to consumers are implemented. Οʜᴎ are accompanied by continuous monitoring of the timing, volume and quality of supplies. The order management cycle ends with a report on order completion.
Impeccable order execution is achieved through the use of SKALA information and computer technology. The SAP R/3 information system, developed in Germany, allows for more flexible accounting of the movement of materials and cash than SCALA. It allows you to carry out daily planning of materials with automatic registration of a purchase order and sending it electronically to the supplier, and also allows you to make the order system more flexible to changes in the customer’s program.
The "PS: Furniture Factory Management" system includes a specialized module "Warehouse Management (WMS)", which provides:
- separate accounting circuit ("order scheme")
- address warehouse
- products in several packages; partial acceptance/shipment
- serial accounting - creation of "containers" (palletizing) with ShK
- loading control and inventory using ShK and TSD
The task of managing warehouses is one of the basic tasks for any manufacturing company.
The implementation of a warehouse management system allows you to increase the efficiency of the company as a whole, increase the speed and accuracy of operations, and minimize losses associated with the “human factor”.
The furniture industry is characterized by high dynamics of warehouse operations and the difficulty of identifying products that, when packed in boxes, are no different in appearance. One product may consist of several packages. In some cases, one package may include parts from different products of the same order. All this creates conditions for errors that lead to direct and indirect (reputational) costs. If there is a wide geography of sales, the cost of an error increases many times over.
The "PS: Furniture Factory Management 3.0 ERP" system, in addition to the "standard" warehouse accounting functions, supports a number of "advanced" ones that allow you to take warehouse management to a new qualitative level. Let's take a closer look at them.
"Order scheme": separate warehouse accounting
T.N. The “order scheme” involves separate, additional to the main, accounting of balances in warehouses by storekeepers. Let's call him extended warehouse accounting (ASC).
If there is a DCS, a change in the main balances does not lead to an automatic change in the “warehouse” balances. The latter change only IN THE FACT of goods movement and only after the storekeepers prepare special documents - “commodity orders”. Thus, storekeepers can be full-fledged financially responsible persons, and the remains of the warehouse are always up to date.
The fact that both accounting - basic and extended - are maintained in a single information base provides transparent control of discrepancies between the two levels of accounting.
In addition, advanced warehouse accounting provides the following capabilities:
Barcoding
Barcoding technology can significantly speed up the process of identifying item items, as well as reduce the number of errors.
Purchased items - at the time of receipt, and produced ones - upon release/packaging, are marked with barcodes. In addition, for purchased items - goods and materials, barcodes already available on their packaging can be used.
A barcode can contain not only information about the product and version, but also the batch (series) number, packaging identifier (number), etc.
The use of barcode equipment - barcode scanners or data collection terminals (DCTs) allows you to automate warehouse operations of acceptance, movement, order completion (assembly), and shipment. There are 2 possible approaches:
- filling out a document in the information system using barcoding data
- control of the completeness/correctness of the execution of a particular operation relative to the “plan” (acceptance order, shipment order, shipping invoice).
"Address" warehouse
An “addressed” warehouse involves dividing it into an arbitrary number of storage zones (locations), up to the construction of a three-dimensional structure of cells “rack / row / cell”. We will call such storage locations “cells”.
Cells can be specialized - intended for a specific type of inventory or universal.
There are two approaches to storing inventory items at an address warehouse. The first involves choosing a storage location for incoming inventory items by the information system. To do this, the system must accurately describe the characteristics of cells and packaging of goods and materials (primarily dimensional), as well as the logic of filling the cells. In the second, simpler case, the cell selection is made by the storekeeper, noting the location of a particular inventory item in the system.
In any case, if shipment is necessary, the system can provide the warehouseman with up-to-date information about the cells where the required goods and materials are located.
To perform any operation, be it warehousing, removal or optimization (moving between cells within a warehouse), barcoding technology is effectively used. Not only inventory items, but also cells can have bar code markings. Particularly useful for “addressed” warehouses are data collection terminals with screens that allow you to clearly see the list of inventory items and cells - both those to be “processed” and those already “processed”.
Serial accounting
Along with taking into account inventory items by design options, in some cases there is a need to account by series. Series can be either production batches or serial numbers of specific product copies.
Serial accounting of materials is used for fabrics and other materials where there may be differences in shades between series (batches) of the same color. A series of products/semi-finished products can also guarantee uniformity of shade and, in addition, have a link to the performer - an employee or team. The latter will be useful in case of quality issues.
Packaging
Furniture products are often packaged in several packages. At the same time, at the level of basic accounting it is convenient to deal with a single item item. At the warehouse level, it is necessary to work with packages, placing them in various cells, controlling the loading of packages.
The same position may have several packing schemes, especially during transition periods. Serial and standard products usually have a fixed set of packaging. At the same time, custom-made products can have a completely arbitrary set of packaging. In some cases, one package may include parts from different products of the same order (for example, glass from all cabinets of the order).
There may be situations when part of the product packaging is shipped to the client (for example, packaging with body parts without fronts). It is useful to reflect and track such facts in the information system.
"Containers". Order picking
One of the most important warehouse tasks is order completion for shipment. In a fully automated version, the system displays to the storekeeper on the TSD screen a list of required packages and cells from which they should be picked up. As the work progresses (removal and scanning), the list of items decreases.
Many packages assembled for a particular order can be combined in the information system into a “container”, which is physically equipped with a corresponding label with a barcode. Large orders can be assembled on several pallets, i.e. consist of several "containers". The system stores information about the composition of containers. When reading the barcode of a pallet, for example, when loading a machine, the system understands which set of packages of which goods and materials is loaded under which order.
Features of implementation
Although initially seemingly simple, the task of building an effective warehouse management system, as we see, has many aspects and options. However, its solution will provide a tangible economic effect, bringing the work of one of the company’s key functions to a new qualitative level.
The key to success in our case is the use of a powerful specialized software product, as well as rich experience in solving this problem in its various variations. The specialized warehouse management module, which is part of the software product "PS: Furniture Factory Management ERP", if properly implemented, can solve ALL the issues listed in this article.
Order support
For custom production, order support at all stages of the order life cycle becomes critical for order fulfillment. The number of documents during custom production increases significantly (letters, contracts, design documentation, invoices and payments, invoices, acceptance certificates, invoices, etc.), and the complexity of generating these documents also increases. Effective organization of custom production is possible only with well-structured documentation, organization of clear and coordinated work between departments, and ensuring transparency of ongoing processes in production.
- Customer base, their classification and history of cooperation.
- Correspondence database, storage of scanned copies of documents (photos).
- Support for multi-stage and cumulative contracts.
- Storage and work with annexes to contracts.
- Flexible description of the terms and content of the contract.
- Tracking the execution of the contract (by stages).
- Tracking payment for the contract (by stages).
- Calculation of the contract value using various “calculators”.
- Preparing a package of documents for printing
Technological preparation
Most incoming orders contain new product ranges. Each new product requires complete technological development, which includes entering the structure of the product, creating a list of works in the order of their execution for each product of the structure, setting time standards for completing each work, creating a list of materials required for production and their consumption rates - which is very long and painstaking work. SMART ensures high efficiency of technological preparation, significantly reducing the time and labor intensity of the work performed.
- Support for complex product structures with large nesting;
- For printed circuit boards - formation and storage of the package structure, support for DPP, MPP, GZPP;
- Development of technological processes and saving them in the system as templates;
- Storing the entire production history of the product;
- Technology download manager (possible to download from standard technologies and previously manufactured outfits, download from similar products with the possibility of further correction);
- Automatic selection of manufacturing technology based on the Technology Configurator;
- Installation technology generator based on parameters entered from design documentation;
- Automated standardization of galvanic coating of products based on the workpiece material, coating composition and product dimensions;
- Possibility of standardization with different levels of detail - by work, by transition;
- Automated calculation of standard hours for work based on equipment, tools, number of passes, etc.
- Automated selection of workpiece sizes for manufacturing and optimization of the location of products on it, taking into account the size of the gaps;
- Taking into account the yield coefficient when calculating the number of workpieces to be launched;
- Taking into account the stage of production (pre-production, production) and the type of calculation (per product, per workpiece, per batch, etc.) when calculating standard hours;
- Printing the manufacturing route for each product;
Manufacturing cost calculation and pricing
SMART fully automates the calculation of the cost of manufacturing products. To quickly obtain the cost of an order, special algorithms have been developed that allow you to calculate the cost of an order without technological preparation with an accuracy of up to 95%.
- In general, the cost of manufacturing a product consists of the cost of work, the cost of materials, and the amount of overhead costs;
- For printed circuit boards, there are programmable “calculators” that calculate the cost of manufacturing based on a number of technological parameters;
- Possibility of setting up personal “calculators” for individual customers, at prices agreed upon with them;
- The ability to load work and materials from a work order, through a number of customizable algorithms, taking into account the type of acceptance, type of order, etc.;
- Possibility of adjusting prices to suit the customer;
- Possibility of various cost accounting schemes for expensive and rarely used materials;
- Automatic formation of price structure;
- Ability to view the history of the sales price of previously manufactured products;
- Automated formation of a preliminary price for the customer with an accuracy of up to 95% in a few minutes;
- Formation and printing of a commercial proposal to the customer for a different number of products;
- Formation of a package of documents for the military with a breakdown of works and materials;
PRODUCTION
SMART provides constant monitoring and production management. For complex technical products during production, the structure of the products and the order of manufacture of the component products are taken into account.
IN SMART A unique mechanism for managing defects and surplus in production has been implemented. The more complex the product or the higher the precision requirements, the more potential defects are possible, which is critical in custom production. The occurrence of defects leads to a shortage of the order, which must be eliminated by re-launching into production.
Launch into production
- When a new order is launched into production, the surplus in the warehouse is checked, if there is any, the quantity for production in the main order is reduced and an order for the surplus is created;
- Checking products already being manufactured against other orders. If there is a required product in production, and there is an expected surplus, then a business process is launched to wait for the surplus, and the quantity for production is reduced;
Dispatching
- Possibility of organizing workplaces for dispatching by work and by area;
- Possibility of using one computer for several sites;
- Automatic calculation of the daily work plan for sections. Print daily plan;
- Accounting for order fulfillment priorities;
- Using a barcode to quickly navigate to the work being performed on a product (order). Automatic filling of fields with calculated data;
- Entering information on the performance of the work. Possibility of making various notes on the work being performed;
- Separate execution of work - one work is performed by several performers, each completing their own number;
- Partial execution of work - the performer closes only the completed quantity, in this case only this quantity arrives at the next section;
- If a defect occurs, the number of manufactured products is automatically recalculated in subsequent operations. If the number of manufactured products is not enough, the workshop manager and technologist receive a task to restart production;
Monitoring the current state of production
- Many filters for selecting analyzed orders;
- Color coding of order/work statuses;
- Various order display modes: by control points, horizontal and vertical grouping of work;
- Quantitative analysis: in production, defective, surplus, put into warehouse;
- Contextual transition to related objects;
- Calculation of collected and completed work and volumes by workshop/employee;
Finished products warehouse
With custom production, the document flow in the finished product warehouse increases significantly - each order requires the formation of its own package of documents, tracking of payment and shipment, tracking the return of signed documents.
SMART ensures automation of filling in receipt and shipping documents of the warehouse, reduces to a minimum the likelihood of errors and the time spent on preparing documents. Monitoring the warehouse of finished products allows you to promptly inform customers about the readiness of their products. Accounting for surplus allows you to use them in future orders, which minimizes costs and production time for products. SMART automates warehouse accounting, write-off of materials for production, control of material consumption, provides the ability to replace missing material with its analogues, and provides timely reminders of minimum stock balances materials, reduces the complexity of entering information and minimizes the number of errors.
- Multi-warehouse accounting of materials;
- Accounting for materials at the weighted average price;
- Calculation of material balances for each warehouse;
- Taking into account minimum balances in warehouses;
- Work with requirements for the purchase of materials for a specific order;
- Logs of requirements for purchases and material reserves;
- Formation of orders to suppliers;
- Monitoring purchase requirements and generating orders to suppliers, taking into account minimum stock balances in warehouses;
- Write-off of materials for a specific order;
- Possibility of reserving consumables and writing them off at the end of the month in proportion to the volume of orders;
- Accounting for the movement of materials through the warehouse for a period;
- Monitoring of material consumption;
- Monitoring of customer-supplied raw materials;
- Import of customer-supplied raw materials from the invoice in form M-15;
- Formation of a document for the return of customer-supplied raw materials according to form M-15;
Production and economic analysis
- An open list of basic indicators, calculated using data in the system.
- Possibility of hierarchical grouping of basic indicators.
- Construction of financial and economic reports based on basic indicators.
- Automatic creation of charts and graphs based on basic indicators.
- Deciphering each indicator to the level of primary documents.
Logistics proclaims the priority of the consumer over all other subjects of the supply chain. A consumer order is a kind of signal that triggers various logistics functions. Therefore, the speed and quality of information provided by the order management system influences the overall costs and level of efficiency of the entire logistics process. Orders are managed within the order cycle. From the consumer's perspective, the order cycle is the period of time from the moment the order is sent until the goods are received. From the position of the manufacturer/seller, the order cycle is the period of time from the moment the consumer’s order is received until the goods arrive for unloading. The structure of this cycle is shown in Fig. 3.1.
Order management begins with receiving and processing orders from consumers of material resources or finished products. Orders are received by the organization from consumers by mail, telephone, telegraph, e-mail, fax and courier. They can be verbal and documented. The purchase order must contain all the necessary information: order number, contact persons of both parties, change number, manufacturer designation, customer designation, total received since the first delivery, confirmation of last arrival and contract number. This form allows you to significantly reduce the time and costs of telephone conversations regarding confirmation of order acceptance.
Rice. 3.1. Logistics cycle of order management
After preliminary processing, orders are transmitted via telecommunication networks to the organization’s information and computing center, where a special program accepts the order and automatically issues confirmation of its acceptance for execution. Specific production or sales divisions of the enterprise act as the source of fulfillment of the purchase order.
Order fulfillment plans are developed for certain sources. The initial indicators for planning are specifications for the production of finished products, refined production indicators accurate to within a week, or inventory replenishment plans. This allows us to produce and deliver goods on time in accordance with customer production plans. In the process of order monitoring, procedures are carried out for the execution and delivery of ordered products to consumers. They are accompanied by continuous monitoring of delivery times, volumes and quality. The order management cycle ends with a report on order completion.
The main task of order management at an enterprise is to reduce the time of the logistics cycle of orders in order to improve the quality of customer service, reduce the level of inventory and overall logistics costs. The logistics order cycle includes:
1) time to place an order in the prescribed manner;
2) time for delivery or transfer of the order to the supplier;
3) order fulfillment time (waiting time for placing an order for execution, order fulfillment time, downtime, range of services);
4) delivery time of manufactured products to the customer;
5) time to prepare products for consumption.
The maximum duration of the order fulfillment cycle is determined by the time that the consumer is willing to wait from the moment the order is placed until the goods are received (hours, days). The actual order execution time may exceed this time. In this case, a “order execution time gap” occurs. The goal of the logistics service is to bridge this gap. To do this, you should either reduce the order execution time from the supplier, or increase the consumer order cycle by receiving an earlier application. This is possible with the introduction of technology EDI, TBL And DPP.
Optimizing the duration of the logistics cycle of orders is an extremely important function of the organization, since the results obtained guarantee it a competitive advantage.
Questions and tasks
1. Define the concept of “order cycle” from the perspective of the consumer and the supplier.
2. Describe the structure of the logistics cycle for order management.
3. Describe the processes for processing a consumer order.
4. What processes are included in the order fulfillment cycle?
5. What is the main task of order management in an enterprise?
6. Develop a block diagram of the order logistics cycle based on time spent.
The need to work “to order” for modern Russian enterprises is no longer questioned. The transition to a market economy and the need to sell products to the final consumer, the risk of overstocking with unnecessary or uncompetitive products, led to a change in priorities from work “to the warehouse” to work “to order”. Even enterprises that produce the same type of mass-market product have an internal customer, for example, in the person of the marketing department, which sets production volumes in accordance with fluctuations in the market. It is necessary to note the trend of recent years, when, in conditions of fierce competition, enterprises are trying to segment the market as much as possible and offer a unique product to a small group of consumers.
At Motovilikha Plants OJSC, the transition from a “sales plan” to accepting orders was the first step in improving the production management system. There are several reasons for this:
- Delays in the shipment of products to the buyer against the backdrop of overstocking of the finished product warehouse.
- Large volumes of work in progress due to the fact that the workshops starting the production of products are motivated to work at the “gross” volume of production.
- Without reference to the order, it is impossible to use Lean tools to optimize the production chain.
- The production schedule nomenclature could contain items for which sales were not planned during the planning period. At the end of the month, there were always disagreements between “production” and “sales” in assessing the implementation of plans.
- It is impossible to build a vertical production management system in a large holding company if the worker himself determines the production range without reference to placed orders.
Vision for an effective order receiving system.
Analyzing the problems of discrete scheduling and based on the successes of companies using a custom production management system, it was formed vision of an effective order receiving system.
First of all, the basis for the production of products (services) should be an order with a specific nomenclature, volume, deadline, and customer. With certain assumptions, an order can be considered a specification for a contract, however, due to the peculiarities of working with specifications, it was decided to create an independent information object. In particular, an order is better than a specification in that the product range is tied to the designer’s reference book, and not just to the trade name. Also, placing an order precedes the launch into production, while the specification is a shipping document and can be issued after the launch; moreover, making changes to the specification is a more complex procedure than adjusting the order.
Reception of orders complements the previous system of volume scheduling, which is used to determine the volume of resources in the production of products for the planning period. Reception and execution of orders does not stop during the period of approval of calendar plans. Schedules can be reduced by the number of positions to the desired level of consolidation by product type.
The order acceptance process must be continuous and centralized. This function was assigned to the newly created service in the Holding’s management company. The processing and approval time for the order is recorded in the regulations. The bonus system for specialists of this service was determined according to two competitive goals - to fulfill accepted orders and to maximize production capacity.
The order acceptance procedure itself was recorded in regulations, which also contains methodology for assessing order fulfillment- what is considered a completed order. The regulations also include an appendix with averaged data on production cycles of the main types of products for timely order placement.
IT support for the order receiving system
The Holding's IT service specialists developed an order database and an interface for system users.
Already during the implementation of the project, certain problems were identified and appropriate solutions were developed:
1. The workshop itself cannot determine the nomenclature for production that is not tied to the order. Accordingly, to minimize production downtime, it is necessary to develop a system for ensuring the receipt of orders for a period no less than the production cycle. Such a system was developed and was based on a monthly assessment of the “Sales” business process (commercial service) based on the volume of orders placed in comparison with the forecast for a period equal to the average product production cycle.
2. To guarantee order processing times, it is necessary to classify them as a minimum:
- for serial products, when development of design and technological documentation, as well as production preparation is not required;
- for “new products” when preparation for production is necessary.
(JSC Motovilikha Plants uses an additional type of order - “standard” products, when it is necessary to produce a product with deviations from the standard version, or with variable parameters. For standard products, as a rule, special software is used - a product configurator).
3. The lack of an MRP system and a complete base of normative and reference documentation in the information system required the development of expert tools for assessing production load when accepting each order.
It is worth noting that the order-by-order management system, although based on simple principles of queue processing, is, however, more difficult to understand and implement from the point of view of managers. Indeed, knowing in advance the range of products, having stable rhythmic production and provision of resources, it is much easier to organize efficient production than to do the same under conditions of uncertainty. It was necessary to change the approach to production management: planning, evaluation of order fulfillment, preparation for production and provision of resources are the routine activities of participants in the production process and are carried out as orders are received. Ideally, the planning system should become sliding without reference to a calendar period.
The introduction of an order-to-order system at Motovilikha Plants OJSC led to a decrease in inventories of both finished products and unfinished products by at least 20%. In addition, the next step in improving the planning system became possible - drawing up nomenclature shop plans ( MRPplan), calculated in relation to orders, taking into account launch advance cycles.