Integral Logistics Management — Operations Management and Supply Chain Management Within and Across Companies

1.2.3b Production Structure, Product Module, Cumulative Lead Time, Process Plan, Lead-Time Offset: Process-Related Business Objects

Intended learning outcomes: Describe the production structure, the product module, and the cumulative lead time. Disclose the process plan. and the lead-time offset.

Continuation from previous subsection (1.2.3).

The production structure of a product is the combination of its product structure and the routing sheet for the product itself and for its assemblies and its single parts.

Through combining routing sheets with product structure in production structure, we gain a useful rationale for integration into a structure level, and thus for differentiating an intermediate product from a subsequent, higher structure level.

A production structure level is determined by the arguments shown in Figure

oThe last operation results in a product module, that is, a semifinished good that can be built into various further products as components.
oThe last operation results in a semifinished good that is to be stored.
oThe operations are required for a particular process technology.
oThe last operation results in an intermediate state that is seen as an object or entity, that is, as a self contained thing or object.

Fig.        Useful rationale for combining operations in a product structure level and thus for differentiating an intermediate product.

Within a production structure level, there is no storage. Components needed for this production structure level are drawn from storage or from the immediately preceding production structure level.

The purchasing lead time is the total time required to obtain a purchased item. Included here are order preparation and release time; the supplier lead time (that is, the amount of time that normally elapses between the time an order is received by a supplier and the time the order is shipped); transportation time; and receiving, inspection, and putting into storage (put away time) ([ASCM22]).

The cumulative lead time, or critical path lead time, is the longest planned length of time to accomplish the value-adding activity in question, with respect to the time to deliver to the customer, the lead time for all production structure levels, as well as the purchase lead times.

Depending on the context, lead time denotes either the cumulative lead time, the lead time required for one production structure level, or the purchasing lead time.

The process plan of a product is the total production structure on the time axis.

The process plan is a very complex business object that shows the cumulative lead time to manufacture a product. Figure serves as an example for a product P.

Fig.        Process plan for a product P (detailed structure).

The process plan corresponds, as does product structure, to the way that the workers view customer order processing (their scheme, or natural conception of the process).

Lead-time offset is the period of time of preponing a resource requirement (component or capacity) relative to the completion date of a product, based on the lead time for that product.

For each component, we can calculate the lead-time offset. To do this, the proportion of lead time must be calculated along the corresponding branch of the process structure. Throughout the total working process time, this time period is dependent on batch size.

Course section 1.2: Subsections and their intended learning outcomes