Dynamic Order Processing (DOP)
Dynamic order processing (DOP) which is also commonly referred to as make to
order (MTO) production, is a production approach where manufacturing starts only
after a customer's orders are received. Manufacturing after receiving a
customer's orders means to start a pull-type supply chain operation because
manufacturing is performed when demand is confirmed, i.e., being pulled by
demand. This approach is considered to be good for highly configured products,
e.g. automobiles, computer servers, or for products where holding inventories is
very expensive, e.g., trains. There are also other production approaches such
as:
- Build to order (BTO) and Assemble to order (ATO) - Assembly starts
according to demand
- Configure to order (CTO) - A production type which supports the option
to select a base product and configure all the variable parameters
associated with that product
- Engineer to order (ETO) - Construction by general contractors and plant
construction by engineering companies are categorized as ETO.
Pull-type production, which is used by MTO, BTO, ATO, CTO and ETO, is a
business model in the assembly industry where the quantity to produce per
product specification is one or only a few. The opposite business model is to
manufacture products for stock i.e., Make to stock (MTS), which is push-type
production.
IFS/Dynamic Order Processing
IFS/Dynamic order processing supports the following pull-type production: MTO,
BTO, ATO, CTO and ETO. Dynamic order processing (DOP) enables the possibility to
create a multi-level structure for planning, purchasing, and manufacturing with
control of time, cost, and pegging. DOP supports pegging to any level in the
structure. Below that level, MRP manages the remaining parts. In most
make-to-order situations, the challenge is to confirm a delivery date that is
both material and capacity checked. This must be done inside the order booking
process. Once the order is confirmed, the handling is very similar to normal
make-to-stock planning.
Customer Order Connection
There are several ways a DOP header may be connected to a customer order
line.
- A single DOP header may be connected to a single customer order line.
- A single customer order line may be connected to multiple DOP headers.
- A single DOP header may be connected to multiple customer order lines.
These relationships cause different actions to occur when a date and/or
quantity change occurs to a DOP header.
A single DOP header connected to a single customer order line:
- A date or quantity change made to the DOP header may be automatically
applied to the sales quantity and/or planned shipping date of the customer
order line. When the customer order line is in the Picked,
Partially Delivered or Delivered status, a message appears but
the update still occurs. Optionally, an order change confirmation may be
sent.
- If the sales quantity or planned shipping date is not updated
automatically, an alarm is created for the mismatch between the DOP header
and the pegged customer order line. No alarms are created for a DOP header
with the Created status.
- An alarm is always generated for the date and/or quantity mismatch
between the DOP header and its top DOP order. If the date and/or quantity
mismatch ours due to updates from the DOP header then is it possible to
replicate this change to the top DOP order. The alarm that will be generated
due to the existing date and/or quantity mismatch in the DOP structure can
be adjusted by performing propagation.
A single customer order line connected to multiple DOP headers:
- A date or quantity change made to the DOP header may be automatically
applied to the sales quantity and/or planned shipping date of the customer
order line. When the customer order line is in the Picked,
Partially Delivered or Delivered status, a message appears but
the update still occurs. Optionally, an order change confirmation may be
sent.
- If the sales quantity or planned shipping date is not updated
automatically, an alarm is created for the mismatch between the DOP header
and the customer order line.
- An alarm is generated for a date and/or quantity mismatch between the
DOP header and its top DOP order. If the date and/or quantity mismatch ours
due to updates from the DOP header then is it possible to replicate this
change to the top DOP order. The alarm that will be generated due to the
existing date and/or quantity mismatch in the DOP structure can be adjusted
by performing propagation.
- Alarms are generated for a date and/or quantity mismatch between the
customer order line and the other DOP headers pegged to it.
A single DOP header connected to multiple customer order lines:
There is no option available to update the customer order lines
automatically.
- An alarm is generated for a date mismatch between the DOP header and one
of its customer order lines. The alarm is generated for the customer order
line with the latest planned shipping date. If there are multiple customer
order lines with the same planned shipping date, the alarm is generated for
the customer order line with the highest order number. If there are multiple
customer order lines on the same order with the same planned shipping date,
the alarm is generated for the highest customer order line number.
DOP Structure
When DOP is used in your production process, a DOP header is created as a
start, containing the basic information about the demand. You must then generate
the DOP structure of the DOP header in order to proceed.
A DOP structure is a logical hierarchy of orders that reflects the actual
product structure of the parent DOP part and the component DOP parts. There are
three ways you can create a DOP structure:
- Use an existing product structure.
- Use a previous DOP structure.
- Enter a new structure manually.
When you create a DOP structure, any intermediate steps like parts with
planning method K, Blow-Through, and P, Phantom parts, in the structure are
deleted.
Before any pegged orders are created for the DOP orders in the structure, the
DOP header is set to the Unreleased status. As long as the DOP structure
has this status, you can change it as much as you desire. When pegged orders are
created, the status changes to Released.
- By-Products: By-products are secondary parts
received as a result of the manufacturing process of the main product.
By-products cannot be handled in DOP structures.
- Disassembly Components: Disassembly Components are
parts disassembled from a product and received during the manufacturing
process of the main product. Disassembly components cannot be handled in
DOP structures.
- Expense parts: Expense parts are those parts where the quantity per assembly is equal to 0
(zero) as either the cost or the quantity is insignificant. Expense parts are
supported in DOP structures.
Supply Orders
- A DOP order demand can either be supplied by a shop order or a purchase
order. Pegged supply orders have flexible release features, from a single
order release to a multilevel all at once release.
- The requirements of individual orders in a DOP structure are used in
netting (i.e., locating unpegged inventory). Netting can be done
automatically or manually from supply order excess or inventory, enabling control
at the detailed level. If netting will take effect or not depends on the
settings for netting.
- It is possible to re-net or re-create pegged orders if the quantity or
structure pegging is changed.
- For MTO, BTO, ATO, CTO and ETO, the shop order functions as a supply
order, providing the finished product to the customer order.
- Supply orders generated for parts with a scrap factor will be created
with a quantity higher than the DOP order quantity to cover for the planned
scrap.
For more information, see the about description for
DOP Header/Order.
Project Connection
Before a DOP structure is created for a DOP header, it is possible to
connect the header to a project by connecting it to a specific project
activity. All DOP orders that are created for a project connected DOP header
are tagged with
the same project ID and activity sequence. However, not all these DOP orders
will necessarily be supplied from inventory and supplies connected to the
same project. This is decided based on the Create Pegged
and Std Planned Item settings for each DOP order:
- If Create Pegged set to Pegged
Orders: The DOP order is supplied from inventory and
supplies connected to the same project.
- Else if Create Pegged set to No
Pegged Orders and Std Planned
Item set to No: The
DOP order is supplied from inventory and supplies connected to the
same project.
- Else Create Pegged set to No
Pegged Orders and Std Planned
Item set to Yes: The
DOP order is supplied from inventory and supplies without any
project connection.
When DOP orders with Create Pegged set to Pegged
Orders are released, the system generates project connected shop orders or purchase
requisitions/orders dependent on the part type. These orders will be received
into the project inventory.
Alarm
- The progress of each DOP order is monitored.
- An alarm is displayed whenever an order cannot be delivered in time or
in the required quantity. Alarms of these types can be adjusted by using the
propagation functionality.
- An alarm is also displayed if a mismatch exists between the customer
requested configuration defined on the customer order line and the
configuration to be produced, the configuration defined for the DOP header.
For more information, see the about description for
DOP Alarms.
Propagate Changes
If you change the quantity or date needed on a DOP order, this information
can be propagated downwards or upwards through the whole structure. This
functionality is useful when the customer initiates quantity or date changes
related to the order in focus after that the DOP structure is created.
Cost Analysis
Several costing techniques are available: standard, order-unique, and actual.
Performance monitoring lets you analyze the cost progress for any given order in
a DOP structure.
For more information, see the about description for
DOP Costing.
Project Connection