Abstract:
A method of production with accuracy aims at resolving the problem of not being able to distinguish actual demands of materials from forecast demands of materials by the material management system in the manufacturing industry. The material requirements planning server manages and controls all orders of inventory stocks to separately manage actual demands and forecast demands to achieve the objects of decreasing materials in the facility, reducing the risk of purchasing materials by enterprises, and increasing profit margins of enterprises.

Description:
BACKGROUND OF THE INVENTION  
         [0001]    1. Field of the Invention  
           [0002]    The invention relates to a method of managing material requirements, and particularly a method that is capable of controlling and managing forecast orders and production orders on a material requirement system in the manufacturing industry to achieve production with accuracy.  
           [0003]    2. Related Art  
           [0004]    With most enterprises and product manufacturers there are many ways to increase profit margins, and managing costs is one of the ways. Moreover, management of material costs among cost categories is a matter of interest to enterprises. To satisfy required product quantities of clients or end users, those enterprises and product manufacturers have to prepare sufficient materials for maintaining normal processes of production. The inability to maintain sufficient stock inventory would suspend the operation of production lines, so that finished goods from productions can not be delivered on time. This may cause the loss of potential commercial opportunities, cause an imbalance between supply and demand (disequilibrium), or reduce, even lose, market shares to those enterprises and product manufacturers. On the other hand, overstocking would cause a hoard of cash funds, difficulties in circulating capital, an increase in management of costs, and the loss of margin profits from invisible risks of changeable product markets to those enterprises and product manufacturers.  
           [0005]    Daily faced problems to the manufacturing industry include: what parts or components need to be purchased, how to plan production schedules after purchasing material items, how to arrange delivery of finished goods from production, how to manage excess/surplus stock, etc. For example, forecast orders and production orders are not the same thing, and even a production order could possibly change without notice. Therefore, loss due to a stock-out or excess/surplus stock results from mistaken list making and incorrect materials preparation. Nevertheless, the current material requirement system still has the following drawbacks: (forecast orders and production orders are simultaneously sent to the system, however, the system can not distinguish forecast orders from production orders when forecast orders are more than production orders, finished goods produced by facilities, though, can meet requirements of production orders, it would cause a glut in the stock house/inventory center, due to misestimated forecast orders.  
           [0006]    On the contrary, a large quantity of production orders from clients may be unsatisfying if existing inventory is insufficient to meet customer requirements, and may even cause the loss of a breach. Therefore, overstocking or understocking would, more or less, cause inconvenience of manufacturers and further increase costs.  
           [0007]    Hence, a method of managing material requirements in the manufacturing industry has become a heavily focused subject.  
         SUMMARY OF THE INVENTION  
         [0008]    In view of the foregoing, the invention aims at resolving the preceding disadvantages to provide a method for accurate production. The primary objects of the invention is to aim at controlling and managing all material orders through the material requirements planning server to separately deliver production orders and forecast orders for the material requirements planning server to process. During the processing, the material requirements planning server utilizes storage media to store processed information, generates statuses of production and material shortage of the day, and forecast statuses of upcoming productions and upcoming stock-outs to decision makers for reference. The object of the invention is to effectively achieve a balance between forecast orders and production orders, reduce the risk of purchasing materials by enterprises, and decrease a glut in inventory to heighten profit margins.  
           [0009]    The disclosed accurate productions method according to the invention at least consists of: delivering a production order of the day to the material requirements planning server for calculations, generating an actual purchase order through the material requirements planning server, calculating the difference of the production order and requirement of a forecast order to generate a forecasted purchase order, then calculating the production and the shortage of the day at the enterprise end, and forecasting the upcoming production and upcoming shortage status.  
           [0010]    The foregoing, as well as additional objects, features and advantages of the invention will be more readily apparent from the following detailed description, which proceeds with reference to the accompanying drawings. Specific structures and functional details disclosed hereunder are not to be interpreted as limiting, but merely as a basis for the claims and as a representative basis for teaching one skilled in the art to variously employ the invention. 
       
    
    
     BRIEF DESCRIPTION OF THE DRAWINGS  
       [0011]    [0011]FIG. 1 is a schematic representation of presently known processes.  
         [0012]    [0012]FIG. 2- a  is a schematic representation of the operation of the invention.  
         [0013]    [0013]FIG. 2- b  is a schematic representation of the operation of the invention.  
         [0014]    [0014]FIG. 2- c  is a schematic representation of the operation of the invention.  
         [0015]    [0015]FIG. 3 is a flowchart representation of the accurate production method according to the invention. 
     
    
     DETAILED DESCRIPTION OF THE INVENTION  
       [0016]    This invention proposes a method for accurate productions. In particular, the method, based on the advocacy of the up-to-date Business Process Re-Engineer (BPR), mainly aims at improving effective utilization and management of enterprise resources, re-engineering working processes of managing orders of material requirements, to decrease the risk of inventory and reduce operation costs of the organization.  
         [0017]    Before describing the invention, FIG. 1, which is a schematic representation of the presently known technology, is introduced hereunder.  
         [0018]    In the past, the Enterprise Resource Planning (ERP) server  50  predicted forecast orders  10  at a fixed time interval, received production orders  20  from the client ends, delivered both the forecast orders  10  and production orders  20  to the material requirements planning server  100 , and placed a purchase order  30 . The relationships between a forecast order  10 , a production order  20  and a purchase order  30  were described on the order form  150 , on which the quantity of the purchase order  30  was equal to the sum of the forecast order  10  and the production order  20 . The advantage of this method was that manufacturers did not need to worry that materials in inventory might not satisfy orders from clients. However, the purchased quantities usually far exceeded what a manufacturer needed to overstock in the facility  80 .  
         [0019]    The feasibility and practicality of the invention will be elaborated by means of an embodiment depicted in the following. FIGS.  2 - a,    2 - b,    2 - c  are schematic representations of the operation of the invention. Details are provided hereunder.  
         [0020]    First of all, just as with the known technology, the Enterprise Resource Planning (ERP) server  50  receives a forecast order  10  and a production order  20 , then delivers the production order  20  to the material requirements planning server  100  for processing. The material requirements planning server  100  compares the quantity of that production order  20  with materials in inventory of a facility  80 . When the quantity of inventory in the facility  80  exceeds that of the production order  20 , surplus stock  130  is generated. When materials in inventory of the facility  80  are less than the quantity of the production order  20 , a shortage  120  is generated. An actual purchase order  32 , which relates to required materials of the shortage  120 , is then generated through the material requirements planning server  100  and stored on the storage media  110  with a marker to avoid being re-calculated when the production order  20  is processed the next time. Subsequently, with reference to FIG. 2- b,  the Enterprise Resource Planning (ERP) server  50  delivers the forecast order  10 , together with the production order  20 , to the material requirements planning server  100 , which calls that actual purchase order  32  from the storage media  110  where the actual purchase order  32  had been previously saved. The material requirements planning server  100  then generates a forecasted purchase order  34 , which is the difference in quantity of the forecast order  10  and the surplus material  130 . The operation generates the following numbers, which are defined on the order forms  160  and  170  hereunder.  
         [0021]    1. a surplus/excess demand: the difference of a forecast order  10  deducted from a production order  20 .  
         [0022]    2. a shortage (stock-out): the negative quantity of inventory stock deducted from a production order  20 .  
         [0023]    3. a surplus stock: the positive quantity of inventory stock deducted from a production order  20 .  
         [0024]    4. an actual purchase order: the quantity of a shortage (stock-out).  
         [0025]    5. a forecasted purchase order: the quantity of a forecast order  10  deducted from a surplus stock.  
         [0026]    6. an actual production quantity: a quantity is either equal to the inventory stock where there is a shortage, or to a production order  20  where there is a surplus stock.  
         [0027]    7. a shortage of the day: is the quantity of a stock-out.  
         [0028]    8. a forecasted demand: a quantity is either equal to a forecast order  10  when a surplus/excess demand is within a reasonable range, or to an average number, which is calculated from received production orders  10  over a specified future time period and is called by the material requirements planning sever  100  when a surplus/excess demand is over a reasonable range. (A specified future time period relates to a time that is set by the material requirements planning sever  100  for proceeding integration of orders upon requests of various client ends.)  
         [0029]    9. a forecasted shortage: is the sum of an actual purchase order and a forecasted purchase order.  
         [0030]    [0030]FIG. 3, a flowchart representation of the accurate production method according to the invention. It is described in detail hereunder.  
         [0031]    First, a production order  20  of the day is delivered to the material requirements planning sever  100  for calculation (step  200 ), which is a method based on the contrast between a production order  20  and inventory stock in the facility  80  to generate quantities of a surplus stock and of a shortage. The aforementioned is not retold herein. Subsequently, the material requirements planning sever  100  generates an actual purchase order  32  (step  210 ), which is the amount of the shortage and is stored on a storage media  110  with a marker to avoid being calculated again when the production order  20  is processed the next time. The material requirements planning sever  100  then generates the difference between the production order  20  and the forecast order  10 , as well as a forecasted purchase order (step  220 ), which is the difference between a forecast order  10  and a surplus stock  130 . The material requirements planning sever  100  calculates a production quantity and a shortage of the day (step  230 ), which both add up to the amount of the production order  20 , and forecasts the production quantity and the shortage in the future (step  240 ). The production quantity in the future is the average calculated from received production orders at a predetermined interval through the material requirements planning sever  100 . The predetermined interval herein relates to a time, which is set by the material requirements planning sever  100  for proceeding integration of orders upon requests of various clients; whereas the shortage in the future is the amount of an actual purchase order  32  and a forecasted purchase order  34 .  
         [0032]    The respective meanings of the aforementioned forecast order  10  and production order  20  are: a forecast order  10  is generated through the material requirements planning sever  100  based on procurement records provided by a client end to forecast the replenishment of quantities and categories of required materials at a predetermined interval at the enterprise end; whereas a production order  20  relates to a build order placed by a client end at a predetermined interval.  
         [0033]    The aforementioned facility  80  is to distinguish production demands according to various product prototypes/modules, and to implement received build orders at the enterprise end.  
         [0034]    The invention in the form of a method for managing material requirements is disclosed herein. These and other variations, which will be understood by those skilled in the art, are within the intended scope of the invention as claimed below. As previously stated, detailed embodiments of the invention are disclosed herein; however, it is to be understood that the disclosed embodiments are merely exemplary of the invention that may be embodied in various forms.