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

17.2.1 Product, Product Structure, Components, and Operations

Intended learning outcomes: Present the concept of master data. Explain the production order as a collection of master data. Describe a simple product structure. Identify the intermediate product used simultaneously as a component in higher-level products.



Master data are created as the result of product and process design that is not associated with a specific customer order. A suitable customer, production, or procurement order can then be repeatedly derived from these master data if an order quantity and date are added to the product and process description.

This can be compared to a recipe in a cookbook since the recipe is developed on its own, that is, independently of the subsequent cooking processes. Such a recipe may be used repeatedly for preparing meals, and different order quantities (= number of people) may be applied. The cook book contains the following information:

  • The ingredients are shown in a list (recipe).
  • The sequence of individual working tasks is also given in the form of a list that describes how to arrive at the result; that is, the finished meal, starting from the ingredients.
  • The cooking utensils, such as knives, pans, and so forth, are mentioned in the description of the work. They are sometimes also summarized in a list.
  • The cooking device required, for example, stove, oven, sink, is mentioned in the description of the work.

The same concept can be applied to the description of the product and production process within a company, using generalized or specific terminology:

  • The result is a product or a parent item.
  • The ingredients become components and the recipe becomes a bill of material.
  • The work becomes operations and the sequence of operations becomes a routing sheet or process plan.
  • The cooking device and other cooking utensils become machinery and other production equipment.
  • The actual kitchen becomes a work center with one or more workstations at which the individual operations are carried out.

Figure 17.2.1.1 shows, by way of example, the composition of master data in the form of a production order of the ball bearing of Figure 16.2.1.1. It specifies an order quantity (a lot) of 100 units of measurement (in this case “piece”). No dates are specified, however. The only other information is certain characteristic data and positions. [note 1701]

Fig. 17.2.1.1       The production order as a collection of master data.

  • The ball bearing product (item ID 83569) is a potential item receipt and consists of the two components ring (item ID 83593, an in-house made semifini­shed good) and Uniflon (item ID 83607, a pur­chased raw material). The bill of material for the product thus has at least the two specified positions. These are potential item issues.
  • The ball bearing (item ID 83569) is produced by the two operations Cut Uniflon (position 250 at work center ID 907501, “Manual production”) and Press together (position 270 at work center ID 908301, “Special presses”). The routing sheet for the product thus has at least the two specified operations. These are the potential work order positions (or order operations).

Figure 17.2.1.2 shows the simple, single-level convergent product structure that occurs in the initial stages. See also Figures 17.1.2.1 and 1.2.2.2. All the resources needed to manufacture the product are listed as positions in the product structure. Such a position may thus be a component, an operation, or production equipment.

Fig. 17.2.1.2       A simple product structure.

According to Figure 1.2.2.1, a component may first be a raw material or a purchased part. In reality, a product often has hundreds, or even thousands, of such components. These are grouped into product modules or intermediate products (in-house parts [that is, parts produ­ced in-house], semifinished goods, or assemblies). This takes place for various reasons:

  • A module may be used in several different products. Under certain circumstances, it is sensible to produce or procure this inter­mediate product with a logistics characteristic different from that of the higher-level products.
  • A module may be either produced in-house or purchased and thus acts as a point of differentiation for logistics purposes.
  • A module corresponds to a design structure level or production structure level.

An intermediate product may itself be made up of different components and may also be used as a component of various higher-level products. Figure 17.2.1.3 formalizes this fact in two different hierarchies,[note 1702] which refer to the upper and lower levels of the multilevel bill of material. See also the two intermediate products in Figure 1.2.2.2.

The creation of intermediate products may be repeated in several levels. Intermediate products lead from the single-level product structure to a multilevel product structure. To illustrate this, the cookbooks of a professional cook will contain multilevel recipes, that is, semifinished goods as components of the menu that are prepared in advance or purchased.

Fig. 17.2.1.3       The intermediate product used simultaneously as a component in higher-level products.




Course section 17.2: Subsections and their intended learning outcomes

  • 17.2 The Master Data for Products and Processes

    Intended learning outcomes: Describe master data of products, product structure, components, and operations. Explain the data structure of item master, bill of material, and where-used list. Disclose the data structure of work center master data, the work center hierarchy, as well as for operation, routing sheet, production equipment, bill of production equipment, and bill of tools.

  • 17.2.1 Product, Product Structure, Components, and Operations

    Intended learning outcomes: Present the concept of master data. Explain the production order as a collection of master data. Describe a simple product structure. Identify the intermediate product used simultaneously as a component in higher-level products.

  • 17.2.2 Item Master Data

    Intended learning outcomes: Present the concept of the item master record. Describe the attributes of the technical information and the stockkeeping information of the item master record. Identify attributes of the item master record for information on costs and prices.

  • 17.2.3 Bill of Material, Bill-of-Material Position, Where-Used List, and Where-Used-List Position

    Intended learning outcomes: Present the concepts of the bill of material and of the bill-of-material position, the where-used list, and the where-used list position. Differentiate between the single-level bills of material, the multilevel bill of material, and the summarized bill of material. Differentiate between the single-level where-used list, the multilevel where-used list, and the summarized where-used list. Describe the bill-of-material position logistical object and its most important attributes.

  • 17.2.4 Work Center Master Data

    Intended learning outcomes: Present the work-center business object. Describe the attributes of the work-center master record relating to capacity, concerning costs, and for calculating the lead time.

  • 17.2.5 The Work Center Hierarchy

    Intended learning outcomes: Present the concepts of workstation and cost center. Explain the work center hierarchy.

  • 17.2.6 Operation and Routing Sheet

    Intended learning outcomes: Present the concepts of the operation business object in association with the routing sheet. Describe the most important attributes of the operation master object. Produce an overview on the work center where-used list.

  • 17.2.7 Production Equipment, Bill of Production Equipment, and Bill of Tools

    Intended learning outcomes: Present the concepts of bill of production equipment and bill-of-production-equipment position as well as production equipment where-used list. Produce an overview on collective tool, bill of tools, bill-of-tools position, and tool where-used list.

  • 17.2.8 Composition of the Basic Master Data Objects

    Intended learning outcomes: Explain the breakdown of the master data into individual classes and their associations using the example of the ball bearing. Describe the basic object classes for planning & control.