ERP Functions: Production 2

Last week we moved to execution part of the industry, i.e. Production. We discussed about the definition of Production and then the information that the production departments are getting from Planning and Design departments.

This week we shall look into how the production is measured? What are the parameters involved in measuring productivity? What are the issues involved in production and how to record them in a system and track down for analysis and prevention?

Planning department provides the Production plan for execution. Based on that plan, Stores will issue materials (raw materials) to the production department. The production processes on the raw materials get started. The subsequent production processes follows one after another as per the routing card. Now we already know that in routing card the descriptions of process are mentioned. It also contains the machines that can perform the process and time required for the machine to complete the processes. This is called as Cycle Time In actual production due to various reasons machine may not produce as per the cycle time defined for it. The comparison of Theoretical Cycle time and Actual Cycle is called as Performance of Production.

The products produced may not be 100% matching with specification of the standard required product. In such cases the product is said to be "Not Ok" and considered as rejection. This verification is primarily done by production process owners, but finally approved by Quality department. This rejected product can be reworked in order to make it OK product, otherwise it is scrapped. The comparison of OK Qty produced with Total Quantity produced is called as Quality of Production.

Thirdly there is one more parameter which effects the production is the available time for production. Many industries run continuously 24 hrs a day in 3 shifts. So the maximum available time for production in any industry for a day is 24 hrs. But the workers are to be given minimum of 30 mins break in each shift for having food as per labor law and also humanity. So in 24 hrs 1.5 hrs is to be deducted to get the total available time for production.i.e. 22.5 hrs. Running the production for 22.5 Hrs is ideal for any production department. But there are various disturbances which can cause stoppage of production. Major among them are
1. Lack of Materials, Tools & Fixtures
2. Machine Break down. (Due to power, repair etc)
3. Lack of Manpower
4. Quality Inspection of sample productions
Many other small reasons will consume the time from 22.5 hours. So actual available time will be less than ideal. The comparison between Actual Available tile and Total Available time is called Availability of Production.

Combining all these we will get overall efficiency of the production. There is one term for this measurement called as
O.E.E = Overall Equipment Efficiency = Performance X Quality X Availability.
The O.E.E provides the measure of production performance of the industry.

Next week we shall see go in detail about issues involved in these parameters and how the data collection will help managers to reduce issues and increase efficiency of production.

Keep watching space.