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

1.2.5 Rough-Cut Business Objects

Intended learning outcomes: Identify reasons and principles for defining rough-cut business objects. Disclose the rough-cut product structure and the rough-cut process plan. Explain a way to derive a rough-cut resource requirement plan from a detailed resource requirement plan. Describe a way to establish the rough-cut process plan and the product load profile.



To estimate the requirements for goods and capacity quickly, planning cannot reach the detail of the precise number of screws or the minutest task. Sometimes only partial data are needed, because

  • Only relatively few purchased items, such as raw materials or semifinished goods, are expensive or difficult to procure (have very long procurement lead times).
  • For a great percentage of work centers, load is not critical, because for technical reasons, over­capacity is the rule (for example, replacement machines or special machines that are not available with low capacity).
  • Various processes are very short and do not affect the total load of a work center.

Furthermore, it can suffice to use item families or product families as the business object rather than individual items or products. In analogous fashion, the following rough-cut business objects may be defined:

Rough-cut product structure is the structured makeup of the product from its components, whereby both product and components may be an item or product family. For convergent product structure (see Section 4.4.2), the term rough-cut bill of material is also used. 

A rough-cut work center is composed of the total of work centers that do not have to be further differentiated by rough-cut planning & control.

A rough-cut operation is composed of the total of operations, not further differentiated by rough-cut planning & control.

A rough-cut routing sheet for a product (family) is the overall chain of operations, not broken down further by rough-cut planning & control.

The rough-cut production structure of a product (family) is the combination of its rough-cut product structure and the rough-cut routing sheets of the product or product family itself, as well as associated (rough-cut) assemblies and single parts.

The rough-cut process plan of a product is the rough-cut production structure plotted on the time axis.

One way to derive a rough-cut resource requirement plan from a detailed resource requirement plan involves three steps:

  1. Determine an item’s item family. Determine the item families to be included for the rough-cut product structure.
  2. Determine the work centers or rough-cut work centers to be included and assign the work centers to the rough-cut work center. Determine a time length for operation time under which a (rough-cut) operation can be omitted in a rough-cut structure. Instead, determine a percentage for the reduction of capacity that will be caused by these short operation times, and use this percentage to take these into account.
  3. Determine rough-cut product structure (rough-cut bill of material) and the rough-cut routing sheet for each product or product family, often by contraction of several structure levels into one.

Example: The following list contains measures that allow, departing from the detailed process plan in Figure 1.2.3.3, the formulation of the rough-cut process plan. The numbered steps refer to steps 1 and 2. Figure 1.2.5.1 shows the result.

  • 1a. Purchased components X, Y, and Z form a single item family Y’.
  • 1b. Component E is not included in the rough-cut structure.
  • 1c. Components G and B form the single item family B’.
  • 2a. Work center 6 is not included in the rough-cut structure.
  • 2b. Work centers 5 and 7 join to form a single rough-cut work center 7’.
  • 2c. All operations having an operation time of less than 0.1 hours are not included in the rough-cut structure.

Fig. 1.2.5.1        Rough-cut process plan for product P.

The rough-cut process plan must, of course, include (rough-cut) inter­operation times, which are no longer apparent once individual (rough-cut) operations have been excluded. Other­wise, lead-time calculation will be wrong. Every (rough-cut) component gains the correct lead-time offset in relation to the completion date of the product. Setup time and setup load are divided by a norm batch size and added to run time and run load. The lead-time offset then refers to that batch size.

A bill of resources is a listing of the required key resources (components and capacities) needed to manufacture one unit of a selected product or product family. 

A product load profile is a bill of resources where the resource requirements are defined by a lead-time offset.

In general, this is a matter of one-level rough-cut bills of material and/or routing sheets.

Example: Figure 1.2.5.2 shows two variants of a product load profile for the example in Figure 1.2.5.1. Notice the contraction to one structural level. To do this, lead-time offset must be calculated for each operation. The second variant additionally joins together all positions that load the same rough-cut resource within 10 units of time. This further reduces the complexity of the rough-cut business object.

Fig. 1.2.5.2        The product load profile: a one-level rough-cut bill of material and one-level rough-cut routing sheet.

In some cases, rough-cut business objects can be derived from detailed business objects in a direct fashion. Manual, synchronous modification of rough-cut and detailed business objects is difficult and expensive. Therefore, rough-cut business objects are often kept general enough that they will not be affected by changes in the detailed business object.




Course section 1.2: Subsections and their intended learning outcomes

  • 1.2 Business Objects

    Intended learning outcomes: Present business-partner, and order-related business objects in detail. Explain product-related, process-related, and resource-related business objects. Produce an overview on rough-cut business objects.

  • 1.2.1 Business-Partner, and Order-Related Business Objects

    Intended learning outcomes: Present in detail the order as a business object. Produce an overview on terms such as business partner, due date, order promising, order confirmation, order status. Differentiate between order positions for items (to be) delivered and labor (to be) performed.

  • 1.2.2 Product-Related Objects

    Intended learning outcomes: Produce an overview on business objects such as item, specializations thereof (particularly part and component), and item family. Explain the product structure and the bill of material. Differentiate between a convergent and a divergent product structure. Describe the concepts of product family, variant, option and commonality.

  • 1.2.3 Process-Related Business Objects

    Intended learning outcomes: Present in detail business objects such as operation, setup and run time. Explain the routing sheet, the critical path, interoperation time and the production lead time. Describe the product module, the production structure, and the cumulative lead time. Disclose the process plan. and the lead time offset.

  • 1.2.4 Resource-Related Business Objects

    Intended learning outcomes: Produce an overview on terms such as facilities, workstations, production equipment, work center, capacity, load, work-center load. Explain the load profile of a work center. Differentiate between standard load and actual load. Disclose capacity utilization and work center efficiency. Differentiate between rated capacity and theoretical capacity.

  • 1.2.5 Rough-Cut Business Objects

    Intended learning outcomes: Identify reasons and principles for defining rough-cut business objects. Disclose the rough-cut product structure and the rough-cut process plan. Explain a way to derive a rough-cut resource requirement plan from a detailed resource requirement plan. Describe a way to establish the rough-cut process plan and the product load profile.