The first decision in setting up production management is how the organizational structure will be modeled within the system. This structure determines where inventory will be stored, where costs will be collected, the scope of planning, and how responsibilities will be distributed. This is the most difficult decision to change later.
8.1 Production facility organization
Building blocks
Company and finance unit: The framework for accounting and legal reporting.
Facility: The place where production takes place; it has its own stock, schedule, and planning parameters. It is the basic scope for cost and planning calculations.
Warehousing and storage: Physical or logical storage points within the facility: raw materials, line-side, semi-finished products, quarantine, finished products.
Production area: The section within the facility; encompasses one or more work centers.
Work center: The smallest resource unit that carries capacity, cost, and scheduling.
Cost center: The accounting unit where expenses are collected and transferred to business centers.
Design principles
The number of facilities should be determined by planning and cost needs rather than physical location.
The same material may be valued at different costs in different facilities; this should be a conscious choice.
Stock locations should reflect physical reality; any intermediate stock not present in the system will be returned as a discrepancy in the inventory count.
The definition of a business center should be neither too broad nor too fine: a broad definition renders scheduling pointless, while an overly fine definition multiplies the data collection burden.
Common installation errors
One facility, multiple factories: Two physically separate factories defined as a single facility. Result: inventory and capacity become intertwined, making it impossible to distinguish what each factory produces.
An overly granular workstation: Each workstation is a separate workstation, but there's no data collection infrastructure. The result: hundreds of source definitions, none of which provide reliable data.
Failure to stock work-in-process: Intermediate products are defined as phantoms, even though they are actually waiting in stock. Result: work-in-process stock is not visible in the system, and inventory counts do not match.
The cost center not aligning with the business center: Result: the allocation of overheads to the product does not reflect reality.
8.2 Production management organization and roles
Role
Responsibility
The main screen in the system
Production manager
Facility performance, capacity utilization, cost, and improvement.
Facility panel, scorecard, loss analysis
Planning manager
Master plan, materials and capacity plan, schedule
Planning chart, schedule screen, needs lists
Shift supervisor
Work distribution within shifts, intervention, personnel management.
Shift panel, work order list, stop records
Operator
Execution and reporting of the operation
Terminal screen, work order instruction, notification screen.
Production engineer
Product tree, route, standard times and process improvement
Product tree and route maintenance screens, change orders.
Quality Manager
Control plans, release, nonconformity and corrective action.
Material preparation, line feeding, finished product delivery.
Material picking lists, stock movements
The production-specific aspect of authorization.
In production, authorization is not only a security issue but also a data quality issue. It must be clear who can modify the bill of materials, who can update standard lead times, who can correct scrap quantities, and who can close work orders retrospectively.
When these authorizations are scattered, the data in the system gradually becomes "someone fixes it" and loses its reliability. Recording each fix along with its justification preserves this trust.