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 unintentional secondary parts received as a result of the manufacturing process of the main product. By-products cannot be handled in DOP structures.
Co-Products: Co-products are intentional secondary parts received as a result of the manufacturing process of the main product. Co-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.
Cores: Cores are worn-out parts intended to serve as the base material in circular processes such as remanufacturing, where they are broken down into disassembly components. Cores are not supported in DOP structures.

When a DOP order is created, the system automatically retrieves the structure and routing revisions that are valid on the presumed start date of the DOP order, unless these details are manually selected or copied. The presumed start date is calculated by subtracting a presumed lead time of the DOP order from the due date of the DOP order.

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.