Wednesday, October 26, 2011

The Cost and Benefit Of Shop Floor Control

Technically, shop floor control is a component of MRP II because it deals with the allocation of labor and other resources used in various production tasks. The theory is that by accurately controlling and analyzing the amount of planned and un-planned work done on any particular production order, you can derive a very accurate cost for everything you make and thus produce a financial statement that will bring tears to the eyes of any CPA.

We believe there is great benefit from implementing a shop floor control system, mainly because it provides am insight into you production activities that cannot be achieved otherwise: a line by line view of each task (or operation) and, ultimately, the ability to analyze how well your production workers met their efficiency (and profitability) targets.

Without a shop floor control system, you will know something is wrong because you won’t be making as much profit as you expected.

With a shop floor control system, you will know that the guy who does the welding in Operation 17 of some product they make reliably takes twice as long to complete his work as was projected, sending the estimated to actual variances for the job through the roof. Or, that on that big, potentially profitable job that was completed last week, an expensive component was broken and had to be replaced.

All this sounds great – and it is – except for one thing: in order to implement a useful shop floor control system, you must demand that:

  • Accurate routings (detailed operations and the estimated time/cost for each) are available and thoroughly documented.
  • There is a reliable system in place for recording the actual material, labor, and overhead used in each operation (read people with stop watches and clip-boards running around the shop, writing down numbers and entering them into the computer).
If your reaction to that idea is “Fat chance - it will never happen!” then, for all the good that shop floor control could do, cross it off your wish list.

The MISys Shop Floor Control module allows you to define all the Work Centers where various activities occur in your plant. It maintains a Production Calendar so it won't schedule any production activities when your plant will be dark. You tell MISys when each Work Center will be open for business, when it takes a lunch break, etc. Finally MISys allows you to specifiy the material, labor, and overhead associated with running the Work Center.

When Shop Floor Control is enabled for MISys Manufacturing, muli-level bills of material, expand with routing details -- a detailed record of the operations that must be performed in ordered to produce each assembly.

MISys Manufacturing has a robust system for recording the time your Production Department spends on each assembly step. By combining this information with what MISys knows about the cost of running each Work Center, the program can produce very detailed and accurate
production costs analysys.

Without a doubt, implementing a shop floor control system like that found in MISys Manufacturing has significant costs in terms of setup and tracking. But there is no finer way to know exactly what your production is costing your organization.


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