Logistic chain

The logistic chain refers to the primary process involved in production planning control. This step is split up into three sub-steps: ‘define the operations’, ‘identify GFC items and production phases’, and

‘establish the production units’.

Define the operations

The operations at Vanderlande are defined in section 2.4.1, and are in short sales engineering to create a conceptual designed system, engineering to define a detailed system, SCCE to to determine the workload, planning to attach a planning to a project, SCCE to divide orders among factories and subcontractors, manufacturing and assembly to order materials and to produce the actual system, and distribution to ship the system to site.

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The redesign adds one activity to SCCE: the procurement of items with a standard lead-time longer than four weeks (Figure 17). Meanwhile, the engineering department can conduct its activities. The factories can still order the material with a lead-time equal to or shorter than four weeks, and place an order request at the suppliers of items with a lead-time longer than four weeks, to make the supplier aware of the location to which their material should be sent to.

Figure 17, Procurement activity

Identify the Goods Flow Control items and production phases

It is the task of GFC to coordinate activities while keeping both the economic and production system objectives in mind (Bertrand et al., 2015). Next to GFC, there is Production Unit Control (PUC), and this control level is involved in the coordination of a specific Production Unit (PU). A PU is a grouping of resource capacities that can perform activities independently and is capable of making reliable commitments (Bertrand and Muntslag, 1993). According to Bertrand and Muntslag (1993) there are five production phases related to GFC items: ‘the conceptual product design’, ‘detailed conceptual product design’, ‘completion of detailed product specifications’, ‘manufacturing of components and assemblies’, and ‘assembly of the finished product’. Per phase, the activities and the application to the logistic chain of Vanderlande are defined. The phases and activities of Vanderlande are illustrated in Figure 18.

Figure 18, Goods Flow Control and production phases

1. Conceptual product design

The first phase involves the development of a global conceptual product design (Bertrand and Muntslag, 1993). This is the sales engineering phase at Vanderlande. The price quotation, delivery date of a project, and conceptual design are agreed upon, but there is still a lot of uncertainty at sub-component level and within the processes. The information available about product characteristics from signed contracts should be reported at GFC level, where this information can be added to the SPO Future demand.

2. Detailed conceptual product design

After a tender is accepted, the second phase is initiated. A detailed view of the design is created and uncertainties about the product and processes are eliminated (Bertand and Muntslag, 1993). This phase is the engineering phase at Vanderlande, in which the detailed design is engineered. By the end of this phase, most uncertainty about the product is eliminated.

3. Completion of detailed product specifications

In the third phase, the engineering drawings and the BOM are developed. Detailed information about the components and assemblies is established and the uncertainty about the products or processes is

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reduced to zero (Bertrand and Muntslag, 1993). The drawings are developed by engineering, but all other activities are executed by engineering manufacturing and production planning, which are part of manufacturing. The activities include defining the routing, creating WKs and WOs and attaching a BOM.

When engineering manufacturing and production planning are finished, all uncertainty about the product and process of production is eliminated.

4. Manufacturing of components and assemblies

The fourth phase concerns manufacturing of sub-components. It is important that manufacturing reports updated information to GFC, allowing them to coordinate the manufacturing and assembly activities. Bertrand and Muntslag (1993) state that this phase starts with the preparation of production documentation and ordering of materials. This is in line with the current control structure at Vanderlande, as material is ordered after all uncertainty about product specifications and routing is eliminated. However, in the redesign, items with a lead-time longer than four weeks are already ordered centrally. After material is received, manufacturing activities can take place.

5. Assembly of the finished product

The final phases consists of assembling the various assemblies and sub-components. The planning activities for this phase precede the physical assembly process (Bertrand and Muntslag, 1993). At Vanderlande, the planning for phase 4 and 5 is combined and preceded before the start of physical production. After the assembly activities are finished, the sub-components are transported to the EDC.

Establish the production units

Now that the production phases are identified, the production units can be established. Bertrand and Muntslag (1993) defined four generic production units required for the five phases:

 PU1: Conceptual Design;

 PU2: Product Engineering;

 PU3: Component Manufacturing;

 PU4: Assembly.

The first two phases can be processed within a single production unit, as the nature of the required capabilities is similar (Bertrand and Muntslag, 1993). However, within Vanderlande, an acceptance function is located between the two phases, the phases contain many activities, and the difference between the knowledge required for the phases is substantial. Therefore the two phases are processed within two production units. Nevertheless, close cooperation between the two PUs is imperative.

The second generic PU involves engineering manufacturing and production planning activities. The factories are geographically dispersed. Therefore, four different PUs are required for this phase. The third and fourth generic PU are merged into one PU, as Component Manufacturing and Assembly involve activities that can cross in time. Due to the geographical dispersion, there are four different PUs required to define the production locations. Consequently the single PU is divided into four PUs that illustrate the factories. The PUs and departments that are involved in the activities are illustrated in Table 7.

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Table 7, Production Units at Vanderlande Production Unit Bertrand and Muntslag (1993) Vanderlande

1A Conceptual design sales Engineering

1B Conceptual design engineering

2A Product Engineering VIM, engineering manufacturing and

production planning

2B Product Engineering VIS, engineering manufacturing and

production planning

2C Product Engineering VIA, engineering manufacturing and

production planning

2D Product Engineering Subcontractor, engineering manufacturing

and production planning 3A and 4A Component Manufacturing and Assembly VIM, manufacturing 3B and 4B Component Manufacturing and Assembly VIS, manufacturing 3C and 4C Component Manufacturing and Assembly VIA, manufacturing

3D and 4D Component Manufacturing and Assembly Subcontractor, manufacturing