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FLEXO Magazine : February 2008
34 FLEXO FEBRUARY 2008 www.flexography.org O e o t e co cepts o ea a u actu gs t e d st ct o between "cost-added" versus "value-added." The reason being is that "cost added" is a cost incurred that the customer would not necessarily want to pay for, such as the administration cost for processing a sales order. This is important information to know, especially when a company is looking to drive down costs and run more efficiently. As mentioned above, the cost of processing can be greatly re- duced when utilizing an ERP solution. However, a company can take advantage of further reductions with Web-based modules that enable customers to place or change sales orders and re- leases through a Web portal. These modules also allow customers to view inventory levels and existing sales orders as well as obtain the status of the sales order. This integral functionality greatly reduces the cost added elements and provides ultimate value to the customer. Identifying future demand is critical in a Lean Manufacturing environment. Most users do not have direct lines of communica- tion from the customer order to production. Quantity and mix and variability of demand are what determine the capacity of the Lean line and the amount of resources required to produce that demand. Traditionally, the printing and packaging industry has been a "jobbing" environment, where each job is unique. Below is an example job flow: A sales order is created in the ERP system. 1. The system calculates the demand and suggests 2. production. The planner converts the suggestion to a production order. 3. The system notifies the buyer of the demand for raw 4. materials. The system notifies the scheduler of the demand for time. 5. Raw materials are purchased or reserved from available free 6. inventory. Tasks are scheduled. 7. Finished goods are manufactured. 8. Finished goods are shipped to satisfy the sales order. 9. However, for organizations that operate with a percentage of repeat business, ERP systems can offer the functionality to incor- porate sales order forecasts that are able to impact the planning, purchasing and scheduling modules, as illustrated in the sample flow below: Sales forecasts are created in the ERP system. 1. The system calculates demand based on the sales forecast, 2. existing inventory levels and existing production orders and suggests an action. This action could be to disregard the suggestion or convert 3. to a production order The production order can be created as "Tentative" or 4. r reservation of time in schedul- without committing fully). uyer of the demand for raw heduler of the demand for time. p ed or reserved from available free inventory for live jobs. Tasks are scheduled. 8. Finished goods are manufactured for live jobs. 9. A sales order release is created. 10. Finished goods are shipped to satisfy the sales order 11. release. In the ERP application, sales orders and releases can be cre- ated in the traditional manner, i.e. entered by customer service representatives or automatically, via EDI transactions or a cus- tomer-facing, self-service Web-based module. Additionally, sales forecasts can be created electronically, pulled in from external systems, with minimum inventory levels, re-order points and de- mand held against each finished goods item. SUPPLY & DEMAND The creation of a production order helps to satisfy demand--- this includes generating information for all raw materials re- quired, including substrates, ink and packaging supplies as well as a complete production route with quantities and times for each of the tasks involved. The raw material demand is then communi- cated immediately to the buyers, material controllers and sched- uler. This is significant information; especially in a rush order or critical situation, so everyone is aware and can react in the quick- est most efficient manner. Also, resources can be used as needed, saving time, money and unnecessary waste. Some ERP systems offer a solution that can identify future de- mand, while keeping the lines of communication open from cus- tomer orders to production for a traditional jobbing environment, or one that utilizes sales forecasts as the basis for its demand. Because sales forecasts are subject to change, as new or amended sales forecasts are created in the software, the calculation will first remove any tentative production orders before suggesting revised action. LINE DESIGN The most common area in which users have not had sufficient tools to enable Lean Manufacturing is line design. That's because most users manage this process through spreadsheets or word- processing documents that are disconnected from the primary business system. This can lead to costly errors, as well as wasted time and resources. Data is entered into the ERP system once and flows through to each area in the production cycle. An estimating feature is integrated with the sales order and planning modules of some high-end ERP systems, again mini- mizing redundant entry of data. An estimating module can also be offered that specializes in the market sectors of folding car- TECHNOLOGIES & TECHNIQUES