Manufacturing Software Explained: How manufacturing software works
While manufacturing software often seems very complicated, what the software does is quite simple. One can track the work that manufacturing software does backwards from the point a customer places an order:
Step 1: manufacturing software schedules production
Manufacturing software typically steps in to help at the point a customer places an order for one of the items a firm makes. After the customer order enters the system, manufacturing software says, in effect, "okay, here's an item that needs to be manufactured. When can I next schedule it?" The manufacturing software looks at the current production schedule, places the new order in the queue, and then schedules the manufacturing.
Step 2: manufacturing software tracks manufacturing components
Manufacturing software tracks the components that go into the manufacture of a item. These lists of components, called "bills of materials," identify the items needed to manufacture some product the manufacturing firm makes. While bill of material functionality may seem simple and obvious, manufacturing software actually delivers huge benefits to firms through this simple record-keeping trick. A good bill of materials means the firm always knows what is needed to make its products. The bill of materials also lets the manufacturing firm's cost accountants better track manufacturing costs. Finally, the bill of materials provides a way for the manufacturing firm's engineers or designers to update people about changes in components.
Step 3: manufacturing software tracks inventory
Manufacturing software also typically tracks in detail and on a realtime basis the inventory items that an manufacturing firm uses to make its products. The manufacturing software knows when inventory comes into a factory, for example. And it knows that as component items are made, some inventory counts go down (counts of raw materials or components) and that some inventory counts go up (counts of assembled items and finished goods). The manufacturing software of course also "knows" when finished goods inventory items leave the factory or warehouse to fill customer orders.
Step 4: manufacturing software places orders for manufacturing inputs
Manufacturing software also orders the items needed to make the products ordered. And this capability, often referred to as materials resource planning or MRP, is one of the big benefits of manufacturing software. When a customer places an order for some item, the manufacturing software can look at the bill of material for the item to see what's needed to make the item. Next, the manufacturing software can look at its inventory information to verify that everything needed for manufacturing is available. If some item isn't available, the manufacturing software can produce and deliver purchase orders to acquire the needed items.
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