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Operations Management

🔵 A) Manufacturing Setup & Master Data

1️⃣ Manufacturing Setup
2️⃣ Production Posting Setup
3️⃣ Production BOM (Bill of Materials)
4️⃣ BOM Versions
5️⃣ Routing
6️⃣ Routing Versions
7️⃣ Work Centers
8️⃣ Machine Centers
9️⃣ Capacity Setup
🔟 Calendar Setup (Work Center Calendar)
1️⃣1️⃣ Scrap % Setup
1️⃣2️⃣ Waste Setup
1️⃣3️⃣ Flushing Methods
1️⃣4️⃣ Subcontracting Setup
1️⃣5️⃣ Standard Cost Worksheet


🟢 B) Production Planning

1️⃣6️⃣ Reordering Policies
1️⃣7️⃣ Safety Stock (Manufacturing Item)
1️⃣8️⃣ Lead Time Calculation
1️⃣9️⃣ Planning Worksheet
2️⃣0️⃣ MRP (Material Requirement Planning)
2️⃣1️⃣ MPS (Master Production Schedule)
2️⃣2️⃣ Demand from Sales Orders
2️⃣3️⃣ Forecast Integration
2️⃣4️⃣ Firm Planned Production Orders
2️⃣5️⃣ Released Production Orders
2️⃣6️⃣ Order Promising (ATP/CTP)


🟡 C) Production Orders

2️⃣7️⃣ Planned Production Order
2️⃣8️⃣ Firm Planned Production Order
2️⃣9️⃣ Released Production Order
3️⃣0️⃣ Finished Production Order
3️⃣1️⃣ Production Order Statistics
3️⃣2️⃣ Production Order Routing Lines
3️⃣3️⃣ Production Order Component Lines


🟣 D) Production Execution

3️⃣4️⃣ Consumption Journal
3️⃣5️⃣ Output Journal
3️⃣6️⃣ Production Journal (Combined)
3️⃣7️⃣ Capacity Ledger Entries
3️⃣8️⃣ Item Ledger Entries
3️⃣9️⃣ Value Entries
4️⃣0️⃣ Automatic Consumption (Backward Flushing)
4️⃣1️⃣ Manual Consumption
4️⃣2️⃣ Subcontracting Posting


🟠 E) Costing & Variance

4️⃣3️⃣ Work In Process (WIP – Manufacturing)
4️⃣4️⃣ Standard Cost
4️⃣5️⃣ Variance Calculation

  • Material Variance

  • Capacity Variance

  • Subcontracting Variance
    4️⃣6️⃣ Adjust Cost – Production Entries
    4️⃣7️⃣ Production Order Closing


🔴 F) Capacity & Scheduling

4️⃣8️⃣ Finite Loading
4️⃣9️⃣ Infinite Loading
5️⃣0️⃣ Rough Cut Capacity Planning
5️⃣1️⃣ Work Center Load
5️⃣2️⃣ Machine Center Load
5️⃣3️⃣ Scheduling Direction (Forward/Backward)


⚫ G) Assembly (Light Manufacturing)

5️⃣4️⃣ Assembly BOM
5️⃣5️⃣ Assembly Order
5️⃣6️⃣ Assemble-to-Stock
5️⃣7️⃣ Assemble-to-Order
5️⃣8️⃣ Assembly Cost Posting
5️⃣9️⃣ Assembly Output

✅ SIMPLE EXPLANATION


🔵 A) Manufacturing Setup

This is foundation.

• Production BOM → List of raw materials
• Routing → Steps to produce item
• Work Center → Department
• Machine Center → Specific machine
• Flushing Method → When material is consumed

Example:
Backward Flushing → Auto consumption after output.


🟢 B) Production Planning

System checks:

• Sales demand
• Inventory
• Safety stock
• Lead time

Planning Worksheet suggests:
Create Production Order.

MRP calculates:
What to produce
How much to produce
When to produce


🟡 C) Production Order Lifecycle

Status Flow:

Planned

Firm Planned

Released

Finished

Released = Ready for execution
Finished = Closed & cost finalized


🟣 D) Production Execution

During production:

• Raw material consumed
• Capacity used
• Finished goods produced

Entries created:

Dr WIP
Cr Inventory (Raw Material)

After output:

Dr Inventory (Finished Goods)
Cr WIP


🟠 E) Costing & Variance

If Standard Cost is used:

System compares:
Expected Cost vs Actual Cost

Difference = Variance

Types:
Material variance
Capacity variance
Subcontracting variance

Very important for costing accuracy.


🔴 F) Capacity & Scheduling

Finite Loading → Checks machine availability
Infinite Loading → Ignores capacity

Forward Scheduling → From today
Backward Scheduling → From due date

Used for realistic production planning.


⚫ G) Assembly

Used for simple production.

No routing complexity.

Example:
Assemble Laptop Kit.

Assembly Order:
Consumes components
Produces finished item

Simpler than full manufacturing module.


🔥 COMPLETE OPERATIONS FLOW

Sales Demand

Planning Worksheet

Production Order

Consume Material

Post Output

Adjust Cost

Close Order

Analyze Variance


🎯 Important for MB-800

Focus on:

• BOM vs Routing difference
• Production Order status flow
• Flushing methods
• WIP posting
• Standard cost & variance
• Finite vs Infinite loading

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