Understand unified manufacturing
Different products and production topologies require the application of different order types. Supply Chain Management can apply the various order types in a mixed mode. In other words, all order types can occur during the end-to-end process of producing one finished product.
- Production order – This is the classic order type to produce a specific product or product variant in a given quantity on a specific date. Production orders are based on bills of materials (BOMs) and routes.
- Batch order – This order type is used for process industries and discrete processes where the manufacturing conversion is based on a formula, or where co-products and by-products can be end products, either in addition to or instead of the main product. Batch orders use formulas and routes.
- Kanban – Kanbans are used to signal repetitive lean manufacturing processes that are based on production flows, kanban rules, and BOMs.
- Project – A manufacturing project combines products and services with a given schedule and budget. The manufacturing part of a project can be delivered through either discrete or process manufacturing but not lean (kanban).
Combine discrete, process, and lean sourcing
In unified planning, you can model your supply chain based on the material flow. Supply Chain Management makes sure that the material flow follows your models, regardless of the supply policy that is selected (kanbans, production orders, purchase orders, batch orders, or transfer orders).
You can select your overall strategy for supplying a product, regardless of the product structure.
For example, you can have kanban control in the assembly, where materials are sourced for the assembly area by production orders, kanbans, transfers, batch orders, or any combination that is appropriate for the characteristics of your supply chain, but you can still have full visibility across supplies. This capability leads to optimized supply chain processes and enhanced visibility into your supply chain.
The granularity of the supply policies that are used in master scheduling depends on the storage dimensions that are enabled as coverage dimensions. To enable master scheduling to control the replenishment and supply of different types of locations (for example, by separating the production floor for different production units, or by separating different types of material and finished goods warehouses), we recommend that you enable Site and Warehouse as coverage dimensions.
If Warehouse is omitted as a coverage dimension and you use Advanced warehouse management in Supply Chain Management, all movements inside a warehouse are controlled by warehouse work, whereas all movements across warehouses can be controlled by withdrawal kanbans.
Unified manufacturing supply policies
Unified planning in Supply Chain Management controls how a product is supplied and, based on the supply, how derived requirements (consumption of items from a BOM) are issued. Based on the order type, the system automatically sources materials to match the requirements.
Supply policies can be defined at the product level or at any granularity that supports your requirements. You define the granularity of supply policies on the Default order settings page.
Supply policies can be controlled by product, item dimensions (configuration, color, and size), site, and warehouse. This setup is done on the Item coverage page. The default order type controls what order master planning generates.
Regardless of how the supply chain is modeled, Supply Chain Management supports your mix of supply policies. You can have production orders that are sourced from kanbans. Alternatively, you can have a batch order that requires a product that is supplied by transfers or by kanbans.
Supply Chain Management makes sure that the material flow follows the model. The warehouse for picking material is assigned dynamically at run time, after the supply policy has been defined.
Typically, kanbans are not created for future dates because a kanban has a short life cycle. To maintain full visibility into the supply chain, you can use the planning concept of a “planned kanban” to calculate derived requirements and help guarantee that the requirements are sourced based on the same logic that is used when the actual kanban is created.
The same logic is present for all other supply policy types. Therefore, long-term materials planning is based on the same logic that you expect to run with the actual orders after production and supply are approved.
Materials allocation cross-supply policy – Resource consumption on BOMs
When the Resource consumption field on a BOM line is selected, the warehouse is found from the resource that is used by the operation that is set up to consume the material. In this case, the picking warehouse is found through the route by locating the warehouse that is assigned to the production unit that the resource belongs to. Resource consumption enables a warehouse for picking materials to be selected dynamically, based on the supply policy (order type), and makes maintenance of base data easier.
Resource consumption requires that the warehouse from which materials are picked be assigned based on the way that the product is supplied. In other words, at run time, the system finds the resources that should be used for manufacturing. Based on those resources, the system then finds the picking warehouse.
For work that is independent of a supply policy, you don't have to change information on the BOM if the supply is changed. For ad-hoc changes, Supply Chain Management makes sure that materials are sourced from the right warehouse.
For full flexibility in unified manufacturing (mixed mode), we recommend that you use production type BOMs for all products. You can then use production orders, kanbans, transfer orders, or purchase orders to supply a product. For process manufacturing, you must use a production type of Formula, Co-product, By-product, or Planning item. Kanbans and production orders can't be used for these production types.