GBI Chapter 6 – The Production Process Terms

Flashcards for GBI Chapter 6 focusing on the production process.

Make-to-order (MTO)

A production strategy where production of finished goods and semi-finished goods is triggered by a sales order; also called sales-order-based production.

Bill of materials (BOM)

Identifies the components necessary to produce a material; can include both raw materials and semi-finished materials.

Item category

Identifies the type of material included in the bill of material. Common item categories in a BOM are stock item, non-stock item, variable-size item, text item, document item, class item and intra material.

Work center

A location in a plant where valued-added work, such as drilling, assembly, and painting, needed to produce a material is carried out.

Task list

A list of operations that are required to accomplish a task.

Operations

A value-added activity needed to produce a material – such drilling or painting.

Product routing

A list of operations or tasks needed to produce a material, as well as the sequence in which those operations must be completed.

Component assignment

A technique that assigns components in a BOM either to routing or to a specific operation within the routing.

Production capacity

A measure of how many units of a material a plant can produce within a given time frame.

Production resource tools (PRT)

Moveable resources that are shared among different work centers - examples consists of calibration or measurement instruments, jigs, and fixtures, and documents such as engineering drawings.

Planned order

A document representing a formal request for production that indicates what materials are needed, how many units are needed, and when they are needed.

Production order

A document created when production is authorized; represents an actual commitment to produce a specific quantity of materials by a certain date.

Goods issue

Occurs when materials are removed from storage, reducing inventory; typically generated when shipping, using for internal consumption, or designating for sampling/scrap.

Backflushing

A technique that automatically records the goods issue when the production order is confirmed.

Confirmation

The recording of the completion of an operation that indicates how much work was completed, where it was completed (work center), and who completed it.

Goods receipt

Records the receipt of material into storage, resulting in an increase in inventory quantity.

Work-in-process (WIP)

Materials currently being used in production and must be properly accounted for in the general ledger.

Stock /requirement list

A reporting tool in material planning that displays all of the activities that can potentially impact material inventory, as well as additional information relevant to planning.

Closed (CLSD)

 After a production order has been completed and settled, it is set to a status of closed

Technically complete (TECO)

A production order is set to a technically complete (TECO) status when it is no longer necessary or possible to continue with the production.

Completion

The final step in the production process, order completion, can be viewed from both a logistics perspective (technically complete) and an accounting perspective (closed).