The Importance of Manufacturing Orders and Challenges in Production Management Systems

Manufacturing orders play a crucial role in breaking down production plans based on order information to the shop floor. Entering actual results against manufacturing orders is the biggest challenge in operating a production management system and serves as a major criterion for determining the success of system implementation.

Memories from the Bali Era

Previously, when I was involved in furniture manufacturing and export work in Bali, I issued purchase orders to the Bali office of a company with a furniture manufacturing factory in Jepara, Central Java, based on regular orders from our valued customers and custom orders for restaurant and cafe openings and renovations.

Due to make-to-order production, there were frequent progress checks and new quotation requests, requiring responses to delivery date inquiries. The progress status indicates the ratio of production results to orders, but the initial process of furniture manufacturing involves an oven process to dry the wood, which is batch processed with a certain lot size by the manufacturing side.

Among Indonesians, people from Central Java are particularly easygoing, and even when ordering cabinets with the same delivery date, they may forcibly include wood for unplaced orders of Batavia chairs for the next month, based on their discretion to consolidate items.

Furthermore, material arrangements for wood are made at the convenience of the manufacturing side, and there may be insufficient teak wood secured for immediate delivery orders, while mahogany wood for orders with later delivery dates is secured. As a result, one day, you may suddenly receive a notification that the quotation amount has increased due to a rise in teak wood prices.

The rise in wood prices pressures the quotation amount, but since it is the only factory that produces very high-quality furniture at reasonable prices, we cannot speak strongly. In this flow, if the Bali office of the furniture company had issued manufacturing orders linked to orders, considering items and delivery dates for the oven process on the manufacturing side, the manufacturing side would have arranged materials based on the manufacturing orders, and appropriate lot consolidation would have been conducted in the oven process.

The subsequent processes would automatically proceed in a flow, making it easier for me to respond to progress inquiries for customer orders. Since purchase orders are only indirect instructions from the manufacturing side's perspective, they tend to decide material preparation and oven consolidation at their discretion, just as they would manufacture at the shop floor's discretion without manufacturing orders broken down from production plans.

I think this is a drawback of information flowing directly from the sales side to the shop floor without going through the production management department, but in hindsight, it was a good experience. This is a familiar example where I experienced the importance of manufacturing orders firsthand, but if production is not conducted based on plans derived from orders, orders and manufacturing do not connect. Without this, it adversely affects the factory's primary mission of "shipping high-quality products without delivery delays."

Linking Production Plans and Production Results

After receiving order information, seamlessly operating the flow of translating it into production plans or manufacturing orders and entering production results in the system is the biggest challenge in implementing a production management system. In real operations, it is often run without awareness from production plans to production results, but when systematizing, it is necessary to involve manufacturing orders, which are the entity of the production plan class, and enter results into the manufacturing orders.

Even if a production management system is already implemented in the factory, MRP is often unused, requiring manual registration of manufacturing orders for each process from unplanned manufacturing orders.

This method is easy to understand as an operation, but without a mechanism to easily issue orders, it is labor-intensive, and for the production management department, manually issuing orders for each process in the system is cumbersome, and entering results against manufacturing orders is a burden for the shop floor.

Here, both parties' intentions align, and it becomes quicker for the production management department to directly enter results into the system as unplanned production results while looking at daily reports from the shop floor.

Basically, manufacturing is conducted based on plans created by the production management department in Excel, and daily or shift-based reports are submitted. If the monthly order quantity is stable, there may not be significant issues with shipments. However, in high-mix low-volume production where order quantities are unstable, the risk of delivery delays increases.

These are the reasons why I feel "production plans are not being emphasized enough," and why I want to emphasize the importance of manufacturing orders in breaking down production plans based on order information to the shop floor.

Frequently Asked Questions | Challenges of Manufacturing Orders and Production Management

Based on the content of this article, I will briefly organize frequently asked questions.

Why are manufacturing orders important?

Manufacturing orders are important for breaking down production plans based on order information to the shop floor. Without them, orders and manufacturing do not connect, increasing the risk of delivery delays and quality deterioration.

What is the biggest challenge in operating a production management system?

The biggest challenge in operating a production management system is entering results against manufacturing orders. This serves as a major criterion for determining the success of system implementation.

What are the issues with real production management system operations?

In real operations, the flow from production plans to production results is not systematized, and there is a lot of manual work using Excel. This results in the burden of registering unplanned manufacturing orders and entering results, causing a discrepancy between the shop floor and the production management department.