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Production and Supply Chain Management Information Systems
and on-time delivery. The evaluation scores for each vendor are updated automatically as
materials are received. The integrated information system allows Purchasing to make the
best decision on a vendor based on relevant, up-to-date information.
Once the Purchasing employee decides which vendor to use, the purchase order is
transmitted to the vendor. The SAP ERP system can print out a paper order that can be
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mailed to the vendor. More likely, however, the system will be configured to either fax the
order to the vendor, transmit it electronically through EDI (electronic data interchange),
or send it via email.

Detailed Scheduling
Finally, let’s examine the last portion of the production process, detailed scheduling. The
aggregate production plan for product groups developed in sales and operations planning is
disaggregated to individual products in finer time increments through the demand
management process. In detailed scheduling, a detailed plan of what is to be produced
needs to be developed, considering machine capacity and available labor. Detailed
scheduling is complex and will not be presented here in spreadsheet form, but we will
discuss the important concepts and issues.
A key decision in detailed production scheduling is determining how long the
production runs for each product should be. Longer production runs mean that fewer
machine setups are required, reducing production costs and increasing the effective
capacity of the equipment. On the other hand, shorter production runs can be used to
lower the inventory levels for finished products. Thus, the production run length requires
a balance between setup costs and holding costs to minimize total costs to the company.
Because the capacity of the Fitter production mixers is much greater than that of the
snack bar production line, scheduling mixer production is not an issue. Because the dough
must be mixed before the snack bar production line can start, employees who run the
mixers at Fitter begin working 30 minutes before the employees who run the production
line. During that time, four batches of dough can be mixed so they are ready when the
production line starts. With a bit of a head start and a detailed schedule for the production
line, it is a simple matter for the personnel operating the mixers to keep ahead of the
production line. Thus, the key step for Fitter is to develop a detailed production schedule
for the snack bar production line.
The manufacturing process that Fitter uses is known as repetitive manufacturing.
Repetitive manufacturing environments typically have production lines that are switched
from one product to another similar product. Most packaged consumer goods are produced
in repetitive manufacturing environments. In repetitive manufacturing, production lines
are scheduled for a period of time, rather than for a specific number of items, although it
is possible to estimate the number of items that will be produced over a period of time.
For Fitter, the production schedule for a week might be to produce NRG-A bars from
Monday morning until the end of day Wednesday, then change over to NRG-B bars for all
of Thursday until Friday at noon, when the production line will be switched back to
NRG-A bars. Given this schedule, it is possible to estimate the number of bars that will be
produced. Figure 4-22 shows the repetitive manufacturing planning screen in the SAP
ERP system.

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