IT systems in production management

The development of information systems enabled in the 1960s the creation of MRP standard. IT systems was thus tightly integrated with organization, management, production and logistics system.

In the second half of the 70s and early 80s Closed Loop MRP standard was developed, which of an even higher extent depended on appropriate solutions in organization of production. Introduced in the 1980s MRP II standard is huge step in development. It enables planning and control not only in production but also in sales and marketing activities. It is also integrated with financial and HR management..

Features

MRP II framework developed by the APICS (American Production and Inventory Control Society) lists the following key assumptions:

• planning of sales and production in different timeframes, including rolling planning. Developing of production schedule while maintaining minimum inventory. Introducing Just in time management and acceptance of orders, supervise their implementation and operations, including in particular support for logistics and EDI (Electronic Document Interchange)
• inspection of material flows, including delivery and quality control,
• inventory management and production in progress management, in order to minimize the cost (cost management),
• financial management through efficient monitoring and reporting of unit production costs.

Types

The next generation of information systems, which are available on the market today are marked with the following names:

• MRP Systems,
• Closed Loop MRP system,
• MRP II system,
• ERP Systems

Examples of IT systems in production management

• Computer Aided Design (CAD) is a computer-based design tool used to create detailed, three-dimensional designs of products, components, and systems. CAD systems are used by engineers and designers in a wide variety of industries, from aerospace and automotive to consumer electronics and medical devices. CAD systems allow for the creation of complex designs that would be impossible to create manually.
• Computer Aided Manufacturing (CAM) is a set of software tools used to automate the production process. CAM systems are used to design and control the manufacturing process, from planning and scheduling to machine programming and toolpath generation. CAM systems are used in a variety of industries, including automotive, aerospace, and medical device manufacturing.
• Manufacturing Execution Systems (MES) are software systems that provide real-time monitoring and control of the production process. MES systems provide visibility into the production process, enabling the tracking of the status of each product as it moves through the production process. MES systems are used in a variety of industries to ensure that the production process is running efficiently and that products meet quality standards.
• Enterprise Resource Planning (ERP) systems are software systems used to manage the entire business process. ERP systems integrate all aspects of the business, from finance and accounting to production and inventory management. ERP systems provide visibility into the entire business process, enabling companies to make more informed decisions and improve the efficiency of the production process.

Advantages of IT systems in production management

The advantages of IT systems in production management are:

• Improved data accuracy and availability: By utilizing IT systems in production management, businesses can gain access to accurate, up-to-date data that can be used to improve decision-making, optimize operations and maximize profitability.
• Increased efficiency: IT systems can help to streamline the production process, resulting in improved efficiency and cost savings.
• Improved customer service: IT systems can provide customers with real-time visibility into the production process, enabling them to track progress and make informed decisions.
• Improved inventory management: By utilizing IT systems, businesses can better manage their inventory and ensure that stock levels are maintained at optimal levels.
• Improved quality control: By utilizing IT systems, businesses can better monitor and control the quality of their products and services, resulting in improved customer satisfaction.
• Enhanced decision-making: IT systems can provide businesses with the insight they need to make informed decisions and optimize operations.
• Reduced human error: By automating processes, businesses can reduce the risk of human error and improve the accuracy of their data.

Limitations of IT systems in production management

The introduction of IT systems in production management has created various limitations that must be taken into account. These limitations include:

• Cost: The initial cost of implementing an integrated IT system can be substantial, making it difficult for smaller organizations to take advantage of the technology. Additionally, the cost of maintenance and repairs can be high, and the resources required to keep the system running can be extensive.
• Complexity: IT systems are often complex, with a variety of interconnected components and processes. This can make it difficult for organizations to understand how the system works and how to troubleshoot any issues.
• Security: The introduction of IT systems can create a number of security risks. As the systems become increasingly interconnected, the potential for data breaches and other security incidents increases.
• Flexibility: IT systems are often inflexible and difficult to customize. This can make it difficult for organizations to quickly adapt to changing business needs.
• Vendor Lock-in: Organizations may become dependent on a particular vendor for their IT systems, which can be difficult and expensive to switch from.

Other approaches related to IT systems in production management

In addition to the development of MRP systems in the 1960s, other approaches related to the use of IT systems in production management emerged. These approaches include:

• Just-in-time (JIT) production system, which utilizes IT systems to tightly integrate operations with suppliers and customers. This system aims to reduce inventory costs, improve delivery times, and increase production efficiency.
• Computer-integrated manufacturing (CIM), which uses IT systems to allow for automated control of machines, processes, and materials. CIM enables manufacturers to reduce production costs, improve product quality, and increase production speed.
• Enterprise resource planning (ERP) systems, which utilize IT systems to integrate data from multiple business processes, such as purchasing, production, inventory, and accounting. ERP systems allow for better planning and control of resources, as well as improved decision-making.

In summary, the development of IT systems in the 1960s enabled the creation of MRP systems, as well as several other approaches to production management such as JIT, CIM, and ERP systems. These systems have allowed for greater efficiency and cost savings in production processes, as well as improved resource planning and decision-making.

IT systems in production management — recommended articles

SCM system — Enterprise resource planning — Computer integrated manufacturing — Smart factory — Integrated supply chain — Integrated management system — Production logistics subsystem — Enterprise information system — Inventory system

References

• Reitman, J., & Burke, T. J. (1968). Production Management Information System. Systems Science and Cybernetics, IEEE Transactions on, 4(4), 424-432.

Author: Krzysztof Wozniak