Information flow

Conversely to the material stream, the information flow moves upstream, starting from the customer sending the production commission up to the suppliers.

The process begins with the order creation by the customer, that is later transmitted to the endorsed manufacturer. After a processing phase, a new order is emitted, directed from the production plant up to the supplier, on which are reported the required quantity of material to be embedded in the assembly of the final product.

Information is not transmitted by fax or mail-attached PDF anymore: since the factory digitization of the last two decades, everything is managed through ERP systems, a digital way to manage all information related to production, as well as bookkeeping all financial flows related to production, for enhanced transparency in operations.

Information flow between customer and plant: orders are emitted on the daily basis by the customers on predefined portals, by means of call-offs. The planning of the orders is based on

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strategic planning, a tool used to foresee the production over a five-year time span, based on past production volumes, consumption forecast from customers and market trend. This is a crucial phase, in which the synergic work between Sales and Marketing is important to understand the market stimuli.

Data are the bricks on which the company can build its own strategy, especially when thinking about the replenishment of the raw material warehouse, with raw material amount scaled to the quantity of finite products ordered by the customer, and scheduling of the production program of assembly lines.

Nevertheless, it is also important to evaluate the way orders comes to the plant: the mode, considering that orders can be provided in many ways, but the most suitable one is the application of EDI/WebEDI protocols for the exchange digital data, by means of ERP platforms; the frequency of orders, considering that the orders can be submitted within different time horizon: daily, weekly, etc.; according to the product characteristics (volume of sales, phase of the product, etc.) it is possible to have different order submission.

The information flow between customer and plant corresponds to the operative planning phase of Production planning: it is performed on a weekly basis, according to a process starting from the customer order and ending with the production schedules (Figure 2.7).

Figure 2.7 Chart of the reception of customer calls off

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Each customer has an established day for the order invoice, consisting of the volumes for the current week and a forecast on the following weeks, that week by week will be updated;

usually the day for order invoicing is around the middle of the week: on that day, orders are directly updated on the systems, through EDI.

SCM Customer Logistics managers analyse the orders, identifying any possible variations in volumes. Once they have been authorized, orders are updated on the ERP system, by special transactions allowing to visualize the order characteristics and to perform changes by hand.

Data coming from orders are necessary to draw the basic necessities of production: by crossing those elements, a table reporting the orders by the customers, correlated by the part number information, in a defined time schedule.

These elements are than useful in the production planning because of the necessity of them for drafting the Allocation, a file useful to balance the workload among the assembly lines according to the customer’s request, obtaining as an output the work shift schedule.

After that customers’ orders are processed, it is possible to submit orders to the supplier.

On supplier side, Material Planning managers are in charge of deciding the quantity of raw material to be ordered to supplier, having been provided data about customer demand and production capacity by the Production Planning team.

Once the Production planning team has received the customer call offs, it manages them according to production needs on a specific ERP program used for production scheduling, that is based on analysis of the MRP (Material Requirement Planning) to turn the demand in feasible production (Figure 2.8).

Figure 2.8. Chart of information flow plant-supplier

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Every week on Friday the MRP is run, in order to provide to Material Planning the data about replenishment; then a request is submitted to suppliers by means of e-mails or EDI.

On the other hand, there is back flow from the supplier to the plant: when the product is ready and then shipped on the hauler, the supplier sends a ASN transmission to make aware that the shipment has be submitted and the load is on the road, allowing the plant to compute timing for the reception of the parts and track down with the freighter the position of the goods on tour. ASN can be send through EDI or e-mail/PDF.

After that the product has been manufacturer and ready to be shipped, the customer is provided of a ASN transmission, to be aware that the shipment has been submitted and the load is on the road to him (Figure 2.9), allowing the customer to compute timing for the reception of the parts and track down with the freighter the position of the goods on tour.

Figure 2.9. Communication chart plant-customer

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