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Enterprise ResourceEnterprise ResourcePlanning andPlanning and
Application ApplicationLesson 1Lesson 1
By David Pun,By David Pun, MPA, MEC, MBA, BSc, ACEA, ATIHK MPA, MEC, MBA, BSc, ACEA, ATIHK
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(c) copyright 2005 By David Pun, MPA, MEC, MBA, BSc, ACEA, ATIHK 2
INTEGRATED INFORMATION INTEGRATED INFORMATION
SYSTEMSYSTEM Sharing data effectively and efficientlySharing data effectively and efficiently
between and wit hin functional areas leads tobetween and wit hin functional areas leads to
more efficient business processes.more efficient business processes.
Information systems can be designed so t hat Information systems can be designed so t hat accurate and timely data are shared betweenaccurate and timely data are shared between
functional ares.functional ares.
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(c) copyright 2005 By David Pun, MPA, MEC, MBA, BSc, ACEA, ATIHK 3
BUSINESS PROCESSESBUSINESS PROCESSES
A collection of activities t hat takes one or A collection of activities t hat takes one ormore kinds of input and creates an output more kinds of input and creates an output
t hat is of value to t he customer.t hat is of value to t he customer.
Inputs OutputsProcess
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(c) copyright 2005 By David Pun, MPA, MEC, MBA, BSc, ACEA, ATIHK 4
THREE MODES OF THREE MODES OF
PRODUCTIONPRODUCTION
Primary Industries (Extraction)Primary Industries (Extraction)
Secondary Industries (Construction andSecondary Industries (Construction andManufacturing)Manufacturing)
Refinement, Conversion, Fabrication and AssemblyRefinement, Conversion, Fabrication and Assembly
Tertiary Industries (Services)Tertiary Industries (Services)
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(c) copyright 2005 By David Pun, MPA, MEC, MBA, BSc, ACEA, ATIHK 5
CL ASSIFIC ATION OF CL ASSIFIC ATION OF B ASIC INDUSTRIESB ASIC INDUSTRIES
Basic
Industries
Production
Industries
Services
Industries
Process
Industries
Project
Industries
Discrete-Item
Manuf acturingIndustries
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(c) copyright 2005 By David Pun, MPA, MEC, MBA, BSc, ACEA, ATIHK 6
PRODUCTION INDUSTRIESPRODUCTION INDUSTRIES
Process Industries (FlowProcess Industries (Flow--production orproduction orContinuousContinuous--Process)Process)
Adds value by mixing, separating, forming, and/or Adds value by mixing, separating, forming, and/orperforming c hemical reactions.performing c hemical reactions.
May be done in eit her batc h or continuous modeMay be done in eit her batc h or continuous mode
DiscreteDiscrete--Item Manufacturing IndustriesItem Manufacturing Industries C haracterized by discrete, countable products andC haracterized by discrete, countable products and
component partscomponent parts
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(c) copyright 2005 By David Pun, MPA, MEC, MBA, BSc, ACEA, ATIHK 7
PROJECT INDUSTRIESPROJECT INDUSTRIES
An endeavor wit h a specific objective to be An endeavor wit h a specific objective to be
met wit hin t he prescribed time and cost met wit hin t he prescribed time and cost limitations and t hat has been assigned forlimitations and t hat has been assigned fordefinition or executiondefinition or execution ( APICS Dictionary)( APICS Dictionary)..
Single product Single product
Working for mont hs or even yearsWorking for mont hs or even years
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(c) copyright 2005 By David Pun, MPA, MEC, MBA, BSc, ACEA, ATIHK 8
SERVICES AND OTHERSERVICES AND OTHER
Do not produce goodsDo not produce goods
Provide certain servicesProvide certain services
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(c) copyright 2005 By David Pun, MPA, MEC, MBA, BSc, ACEA, ATIHK 9
CL ASSSIFIC ATION OF CL ASSSIFIC ATION OF
PRODUCTION INDUSTRIESPRODUCTION INDUSTRIES
ResourcesBasic
Producer Converter Fabricator
Consumer
Goods
Raw
Material
Industrial
Product
Consumer
Items
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(c) copyright 2005 By David Pun, MPA, MEC, MBA, BSc, ACEA, ATIHK 10
CL ASSIFIC ATION OF CL ASSIFIC ATION OF
PRODUCTION (Volume)PRODUCTION (Volume)
Job ShopJob Shop
Batc h or Intermittent ProductionBatc h or Intermittent Production
Mass Production (Flow or Repetitive)Mass Production (Flow or Repetitive)
Cellular ProductionCellular Production
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(c) copyright 2005 By David Pun, MPA, MEC, MBA, BSc, ACEA, ATIHK 11
JOB SHOP PRODUCTIONJOB SHOP PRODUCTION
Low volumeLow volume
EngineeredEngineered--toto--order and/or madeorder and/or made--toto--orderorder
Manufacturing process is intrinsically variableManufacturing process is intrinsically variable
and cannot be optimized once and for alland cannot be optimized once and for all
Functional or process layout Functional or process layout
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(c) copyright 2005 By David Pun, MPA, MEC, MBA, BSc, ACEA, ATIHK 12
INTERMITTENT PRODUCTION INTERMITTENT PRODUCTION
(Job(Job--lot or Batch)lot or Batch)
A form of manufacturing in whic h t he jobs A form of manufacturing in whic h t he jobs
pass t hrough t he functional departments inpass t hrough t he functional departments inlots, and eac h lot may have different routinglots, and eac h lot may have different routing( APICS Dictionary)( APICS Dictionary)..
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(c) copyright 2005 By David Pun, MPA, MEC, MBA, BSc, ACEA, ATIHK 13
MASS PRODUCTION MASS PRODUCTION
(Flow or Repetitive)(Flow or Repetitive)
Flow productionFlow production
NonNon--discrete products using a continuous processdiscrete products using a continuous process
Repetitive productionRepetitive production
Assemblies using a continuous process Assemblies using a continuous process
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(c) copyright 2005 By David Pun, MPA, MEC, MBA, BSc, ACEA, ATIHK 14
CELLUL AR PRODUCTIONCELLUL AR PRODUCTION
A family of parts t hat have similar processing A family of parts t hat have similar processing
requirements.requirements.
Including equipments and human skillsIncluding equipments and human skills
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(c) copyright 2005 By David Pun, MPA, MEC, MBA, BSc, ACEA, ATIHK 15
MANUF ACTURINGMANUF ACTURING
EN VIRONMENTSEN VIRONMENTS
Make to Stock (MTS)Make to Stock (MTS)
Assemble to Order ( ATO) Assemble to Order ( ATO)
Make to Order (MTO)Make to Order (MTO)
Engineer to Order (ETO)Engineer to Order (ETO)
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(c) copyright 2005 By David Pun, MPA, MEC, MBA, BSc, ACEA, ATIHK 16
MAKE TO STOCK (MTS)MAKE TO STOCK (MTS)
Immediate delivery of goodsImmediate delivery of goods
Based on a predicable demand patternBased on a predicable demand pattern
Customer orders cannot be identified in t heCustomer orders cannot be identified in t heproduction processproduction process
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(c) copyright 2005 By David Pun, MPA, MEC, MBA, BSc, ACEA, ATIHK 17
MAKE TO STOCK (MTS)MAKE TO STOCK (MTS)
DesignDesign ProcureProcure Assemble AssembleStock asStock asInventoryInventory
Pack and shipPack and ship
Customer
Order
Total Production Required = Total Forecast + Back Order
+ Ending Inventory ± Opening Inventory
CustomerCustomer
Lead TimeLead Time
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(c) copyright 2005 By David Pun, MPA, MEC, MBA, BSc, ACEA, ATIHK 18
ASSEMBLE TO ORDER (AT0) ASSEMBLE TO ORDER (AT0)
Produce and stock standard component Produce and stock standard component
Assemble t he finished goods according to t he Assemble t he finished goods according to t hecomponent selected by t he customercomponent selected by t he customer
Modular designModular design Independent units whic h integrate as a wholeIndependent units whic h integrate as a whole
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(c) copyright 2005 By David Pun, MPA, MEC, MBA, BSc, ACEA, ATIHK 19
ASSEMBLE TO ORDER (AT0) ASSEMBLE TO ORDER (AT0)
Product familyProduct family
Generic Bill of MaterialGeneric Bill of Material
Forecast t he basic product Forecast t he basic product
Apply historic faction of demand to t he option Apply historic faction of demand to t he optionfeaturesfeatures
Slightly overSlightly over--plannedplanned
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(c) copyright 2005 By David Pun, MPA, MEC, MBA, BSc, ACEA, ATIHK 20
ASSEMBLE TO ORDER (AT0) ASSEMBLE TO ORDER (AT0)
Master Production Schedule (MPS) for standMaster Production Schedule (MPS) for stand
componentscomponents Based on forecast Based on forecast
Final Assembly Scheduling (F AS) for finishedFinal Assembly Scheduling (F AS) for finishedgoodsgoods
Based on customer orderBased on customer order
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(c) copyright 2005 By David Pun, MPA, MEC, MBA, BSc, ACEA, ATIHK 21
ASSEMBLE TO STOCK (ATO ) ASSEMBLE TO STOCK (ATO )
DesignDesign ProcureProcure Assemble Assemble
StockStockstandardstandard
componentscomponentsas inventoryas inventory
FinalFinalassembleassemble
Pack and shipPack and ship
Customer Order
Decoupling Point (CODP)
Total Production Required
= Sales plan for each components + Planned reduction in backlog of the
components + Planned increase in the components inventory
<<------ Customer Lead TimeCustomer Lead Time ------>>
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(c) copyright 2005 By David Pun, MPA, MEC, MBA, BSc, ACEA, ATIHK 22
CUSTOMER ORDERCUSTOMER ORDER
DECOUPLING POINTDECOUPLING POINT
From forecast driven to backlog drivenFrom forecast driven to backlog driven
Push to pullPush to pull
Point of interface of requirement planning toPoint of interface of requirement planning toproject planningproject planning
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(c) copyright 2005 By David Pun, MPA, MEC, MBA, BSc, ACEA, ATIHK 23
MAKE TO ORDER (MTO)MAKE TO ORDER (MTO)
Product start after order is received from customerProduct start after order is received from customer
Produced to customer specificationsProduced to customer specifications
Customer is willing to wait Customer is willing to wait Product is expensive to make and storeProduct is expensive to make and store
Options of product Options of product
Invest in capacityInvest in capacity Capacity requirement plan (CRP)Capacity requirement plan (CRP)
Shop floor control (SFC)Shop floor control (SFC)
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(c) copyright 2005 By David Pun, MPA, MEC, MBA, BSc, ACEA, ATIHK 24
MAKE TO ORDER (MTO)MAKE TO ORDER (MTO)
DesignDesign
StockStockstandardstandardparts asparts as
inventoryinventory
ProcureProcure Assemble AssembleFinalFinal
Assemble AssemblePack and shipPack and ship
Customer Order
Decoupling Point (CODP)
<<---------------------------------------------- Customer Lead TimeCustomer Lead Time ------------------------------------>>
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(c) copyright 2005 By David Pun, MPA, MEC, MBA, BSc, ACEA, ATIHK 25
ENGINEER TO ORDER (ETO)ENGINEER TO ORDER (ETO)
Customers specifications uniqueCustomers specifications unique
Ot her characteristics common to MTOOt her characteristics common to MTO
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(c) copyright 2005 By David Pun, MPA, MEC, MBA, BSc, ACEA, ATIHK 26
ENGINEER TO ORDER (ETO)ENGINEER TO ORDER (ETO)
DesignDesign ProcureProcure Assemble Assemble Final AssembleFinal Assemble Pack and shipPack and ship
<<-------------------------------------------------------- Customer Lead TimeCustomer Lead Time -------------------------------------------------->>
Customer Order
Decoupling Point (CODP)
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(c) copyright 2005 By David Pun, MPA, MEC, MBA, BSc, ACEA, ATIHK 27
MANUF ACTURINGMANUF ACTURING
EN VIRONMENTSEN VIRONMENTS
DeliveryEngineer to OrderETOOrder
Make to StockMTS
Order
Assemble to Order ATOOrder
Make to Order
MTOOrder
DesignDesign ProcureProcure Assemble AssembleFinalFinal
Assemble AssemblePack andPack and
shipship
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(c) copyright 2005 By David Pun, MPA, MEC, MBA, BSc, ACEA, ATIHK 28
MATERI AL REQUIREMENTSMATERI AL REQUIREMENTS
PL ANNING (MRP I)PL ANNING (MRP I)
The material requirements planning (MRP I) is aThe material requirements planning (MRP I) is a
computerized inventory control and productioncomputerized inventory control and productionplanning system. It is responsible for scheduling t heplanning system. It is responsible for scheduling t heproduction of all items beneat h t he end item level.production of all items beneat h t he end item level.It recommends t he release of work orders andIt recommends t he release of work orders andpurchase orders and issues scheduling notices whenpurchase orders and issues scheduling notices when
necessary.necessary.(Russell, Roberta S and Bernard W Taylor III,(Russell, Roberta S and Bernard W Taylor III, Operations Management: Focusing onOperations Management: Focusing on
Quality and CompetitivenessQuality and Competitiveness 22ndnd Ed., PrenticeEd., Prentice--Hall International, Inc, New Jersey,Hall International, Inc, New Jersey,1998)1998)
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(c) copyright 2005 By David Pun, MPA, MEC, MBA, BSc, ACEA, ATIHK 29
MATERI AL REQUIREMENTSMATERI AL REQUIREMENTS
PL ANNING (MRP I)PL ANNING (MRP I)
By Joseph Orlicky at 1961By Joseph Orlicky at 1961
Initially called bill of materials processingInitially called bill of materials processing(BOMP)(BOMP)
What do we need, and when do we need it? What do we need, and when do we need it?
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(c) copyright 2005 By David Pun, MPA, MEC, MBA, BSc, ACEA, ATIHK 30
OBJECTI VES OF MRP IOBJECTI VES OF MRP I
Determine requirements to support MPSDetermine requirements to support MPS
What to order; How much to order; When to order;What to order; How much to order; When to order;When to schedule deliveryWhen to schedule delivery
Maintaining t he Lowest Possible InventoryMaintaining t he Lowest Possible Inventory
Components should be delivery no earlier and noComponents should be delivery no earlier and nolater; zero safety stock and zero safety lead timelater; zero safety stock and zero safety lead time
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(c) copyright 2005 By David Pun, MPA, MEC, MBA, BSc, ACEA, ATIHK 31
OBJECTI VES OF MRP IOBJECTI VES OF MRP I
Scheduling t he ProductionScheduling t he Production
Including purchasing, manufacturing and deliveryIncluding purchasing, manufacturing and deliveryactivitiesactivities
Components requirement are dependent of t heComponents requirement are dependent of t herequirement of parent itemsrequirement of parent items
K eeping Schedules Valid and UpK eeping Schedules Valid and Up--toto--datedate
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(c) copyright 2005 By David Pun, MPA, MEC, MBA, BSc, ACEA, ATIHK 32
MATERI AL REQUIREMENTSMATERI AL REQUIREMENTS
PL ANNING (MRP I)PL ANNING (MRP I)
Bills of Material (BOM)Bills of Material (BOM)
BOM keep updated by Engineering ChangeBOM keep updated by Engineering ChangeNumbers (ECN)Numbers (ECN)
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(c) copyright 2005 By David Pun, MPA, MEC, MBA, BSc, ACEA, ATIHK 33
B ASIC MRPB ASIC MRP
MPS
MRP BOMInventoryInformation
Purchasingschedule
Assembly schedule
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(c) copyright 2005 By David Pun, MPA, MEC, MBA, BSc, ACEA, ATIHK 34
CLOSEDCLOSED--LOOP MRPLOOP MRP
MRP I is a dynamic priority setting techniqueMRP I is a dynamic priority setting techniquefor scheduling and executing shop floor andfor scheduling and executing shop floor and
vendor operations.vendor operations.
A feedback is need for updating, re A feedback is need for updating, re--planningplanningand improving t he schedule.and improving t he schedule.
Include capacity checking to generate a moreInclude capacity checking to generate a morefeasible schedulesfeasible schedules
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(c) copyright 2005 By David Pun, MPA, MEC, MBA, BSc, ACEA, ATIHK 35
CLOSEDCLOSED--LOOP MRPLOOP MRP
MRP
MPS
Production requirements
RCCP
CRP
Procure and Assemble
Input / Output Control
Y/N
Y/N
Amend
Amend
Amend
Y
N
Y N
Amend Capacities
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(c) copyright 2005 By David Pun, MPA, MEC, MBA, BSc, ACEA, ATIHK 36
MANUF ACTURING RESOURSEMANUF ACTURING RESOURSE
PL AN (MPR II)PL AN (MPR II)
Introduced by Oliver Wight at 1977.Introduced by Oliver Wight at 1977.
Includes financial planning and stimulateIncludes financial planning and stimulatecapabilities.capabilities.
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(c) copyright 2005 By David Pun, MPA, MEC, MBA, BSc, ACEA, ATIHK 37
MRP I & MRP IIMRP I & MRP II
MRP IMRP I
Basic material requirements calculationsBasic material requirements calculations
MRP IIMRP II
Boarder concept for t he integration of data,Boarder concept for t he integration of data,
computations and policies t hat extend materialscomputations and policies t hat extend materialsand capacity planning into comprehensiveand capacity planning into comprehensivemanufacturing resources and control.manufacturing resources and control.
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(c) copyright 2005 By David Pun, MPA, MEC, MBA, BSc, ACEA, ATIHK 38
MANUF ACTURING RESOURSEMANUF ACTURING RESOURSE
PL AN (MPR II)PL AN (MPR II) Resource Requirements Planning (RRP)Resource Requirements Planning (RRP)
Demand Management Demand Management
Product ConfiguratorProduct Configurator
Sales and Operations Planning (S&OP)Sales and Operations Planning (S&OP) MPS & F ASMPS & F AS
RoughRough--Cut Capacity Planning (RCCP)Cut Capacity Planning (RCCP)
Engineering Chang ControlEngineering Chang Control
Material Requirements Planning (MRP I)Material Requirements Planning (MRP I)
Capacity Requirements Planning (CRP)Capacity Requirements Planning (CRP)
Plant and Supplier SchedulingPlant and Supplier Scheduling
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(c) copyright 2005 By David Pun, MPA, MEC, MBA, BSc, ACEA, ATIHK 39
RESOURCE REQUIREMENTSRESOURCE REQUIREMENTS
PL ANNING (RRP)PL ANNING (RRP) Long term planning of t he production capacityLong term planning of t he production capacity
driven by high level business plan.driven by high level business plan.
Related to resources t hat take long periods of Related to resources t hat take long periods of time to acquire.time to acquire.
In short term, t hese are t he constraints of t heIn short term, t hese are t he constraints of t heproduction plan.production plan.
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(c) copyright 2005 By David Pun, MPA, MEC, MBA, BSc, ACEA, ATIHK 40
DEMAND MAN AGEMENTDEMAND MAN AGEMENT
Recognizing and managing all t he demands of Recognizing and managing all t he demands of
productsproducts Advertising & promotion Advertising & promotion
Forecasting of businessForecasting of business
Distribution Requirements PlanningDistribution Requirements Planning
Customer contact related activitiesCustomer contact related activities
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(c) copyright 2005 By David Pun, MPA, MEC, MBA, BSc, ACEA, ATIHK 41
SALES AND OPERATIONSSALES AND OPERATIONS
PL ANNING (S&OP)PL ANNING (S&OP)
A process t hat provides management t he A process t hat provides management t he
ability to strategically dire
ct its business toability to strategi
cally dire
ct its business toachieve competitive advantage on aachieve competitive advantage on a
continuous basis by integrating customercontinuous basis by integrating customer--focused marketing plans for new and existingfocused marketing plans for new and existing
products wit h t he management of supplyproducts wit h t he management of supplychainchain ( APICS Dictionary)( APICS Dictionary)
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(c) copyright 2005 By David Pun, MPA, MEC, MBA, BSc, ACEA, ATIHK 42
MPS & F ASMPS & F AS
Master Production Schedule, MPS, showsMaster Production Schedule, MPS, showswhich products should be produced, howwhich products should be produced, howmany and when.many and when.
Final Assemble Schedule, F AS, is a schedule of Final Assemble Schedule, F AS, is a schedule of
end products to be produced for customers.end products to be produced for customers.
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(c) copyright 2005 By David Pun, MPA, MEC, MBA, BSc, ACEA, ATIHK 43
ROUGHROUGH--CUT C APACIT YCUT C APACIT Y
PL ANNING (RCCP)PL ANNING (RCCP)
A reality check of t he S&OP. A reality check of t he S&OP.
Simple and quick to assess t he feasibility.Simple and quick to assess t he feasibility.
Critical resources; load profilesCritical resources; load profiles
CRP is overall or representative factors.CRP is overall or representative factors.
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(c) copyright 2005 By David Pun, MPA, MEC, MBA, BSc, ACEA, ATIHK 44
ENGINEERING CH ANGEENGINEERING CH ANGE
CONTROLCONTROL Products change and evolve from time to timeProducts change and evolve from time to time
to serve t he customers need.to serve t he customers need.
The changes will be communicated byThe changes will be communicated byEngineering Change Notes (ECN).Engineering Change Notes (ECN).
Control by:Control by: Dates; Serial Number; Lot Number; Bat ch Number;Dates; Serial Number; Lot Number; Bat ch Number;
Work OrderWork Order
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(c) copyright 2005 By David Pun, MPA, MEC, MBA, BSc, ACEA, ATIHK 45
C APACIT Y REQUIREMENTSC APACIT Y REQUIREMENTS
PL ANNING (CRP)PL ANNING (CRP)
Evaluate t he availabilities of t he resourcesEvaluate t he availabilities of t he resources(equipments and/or manpower) required(equipments and/or manpower) requireddetermined by t he MRP.determined by t he MRP.
It might be identical to t he RCCP. RCCPIt might be identical to t he RCCP. RCCP
based on MPS and CRP based on MPR, detailbased on MPS and CRP based on MPR, detailwork schedules of individual work centre.work schedules of individual work centre.
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(c) copyright 2005 By David Pun, MPA, MEC, MBA, BSc, ACEA, ATIHK 46
C APACIT Y REQUIREMENTSC APACIT Y REQUIREMENTS
PL ANNING (CRP)PL ANNING (CRP) Overloads and underloads are identified forOverloads and underloads are identified for
t he planners to resolve.t he planners to resolve.
Production Smoot hingProduction Smoot hing Redistribute loadRedistribute load
Increase capacityIncrease capacity
Reduce capacityReduce capacity Increase loadIncrease load
Decrease loadDecrease load
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(c) copyright 2005 By David Pun, MPA, MEC, MBA, BSc, ACEA, ATIHK 47
PL ANT AND SUPPLIERPL ANT AND SUPPLIER
SCHEDULINGSCHEDULING The schedules must be communicated to t heThe schedules must be communicated to t he
shop floor and supplies efficiently andshop floor and supplies efficiently and
effectively.effectively.
Executing t he factory plan by Shop FloorExecuting t he factory plan by Shop Floor
Control (SFC) system.Control (SFC) system. Factory Coordination (FC)Factory Coordination (FC)
Production Activity Control (P AC)Production Activity Control (P AC)
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(c) copyright 2005 By David Pun, MPA, MEC, MBA, BSc, ACEA, ATIHK 48
PL ANT AND SUPPLIERPL ANT AND SUPPLIER
SCHEDULINGSCHEDULING Supplier schedules monitor by a SupplierSupplier schedules monitor by a SupplierScheduling and Control (SSC) SystemScheduling and Control (SSC) System
Procurement, order and follow up activities areProcurement, order and follow up activities areseparateseparate
Blanket OrderBlanket Order
BuyerBuyer
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(c) copyright 2005 By David Pun, MPA, MEC, MBA, BSc, ACEA, ATIHK 49
MPR II ImplementationMPR II Implementation
ProblemsProblems Lack of top management commitment Lack of top management commitment
Lack of MRP II education for t he users of t he systemLack of MRP II education for t he users of t he system
Inaccurate dataInaccurate data Poorly managed MPSPoorly managed MPS
OverOver--sophistication/ Addition of fancy optionssophistication/ Addition of fancy options
Lack of user controlLack of user control
Time consuming implementation process delayedTime consuming implementation process delayedpaybackpayback
Behavioral problemsBehavioral problems
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(c) copyright 2005 By David Pun, MPA, MEC, MBA, BSc, ACEA, ATIHK 50
BENEFITS OF MRP IIBENEFITS OF MRP II
Excellent Planning CapabilitiesExcellent Planning Capabilities
Centralization and CoordinationCentralization and Coordination
Simulation CapabilitySimulation Capability
Standard Requirements for ManufacturingStandard Requirements for ManufacturingSystems ProvidedSystems Provided
Greater DisciplineGreater Discipline
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(c) copyright 2005 By David Pun, MPA, MEC, MBA, BSc, ACEA, ATIHK 51
BENEFITS OF MRP IIBENEFITS OF MRP II
Greater TransparencyGreater Transparency
Better Cash Flow PlanningBetter Cash Flow Planning
Increase Responsiveness to Customers NeedsIncrease Responsiveness to Customers Needs
Improved Communication wit h CustomersImproved Communication wit h Customers
Reduction in Cost of Money Investment andReduction in Cost of Money Investment andSpaceSpace
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Suppliers Procure Assemble Sales Customers
Material Flow
Fund Flow
Fund Outf low Information Flow Fund Inf low
Material Inf low Information Flow Material Outf low
ENTERPRISE RESOURCESENTERPRISE RESOURCES
PL AN (ERP)PL AN (ERP)
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ENTERPRISE RESOURCESENTERPRISE RESOURCES
PL AN (ERP)PL AN (ERP)
An accounting An accounting--oriented information system fororiented information system for
identifying and planning t he enterprisewideidentifying and planning t he enterprisewideresources needed to take, make, ship, andresources needed to take, make, ship, andaccount for customer ordersaccount for customer orders ( APICS Dictionary)( APICS Dictionary)..
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ENTERPRISE RESOURCESENTERPRISE RESOURCES
PL AN (ERP)PL AN (ERP)
Technical requirementsTechnical requirements
GUI; Relational database; 4GL and ComputerGUI; Relational database; 4GL and Computer Assisted Software Engineering (CASE) tools; Assisted Software Engineering (CASE) tools;Client/server architecture; Portable open system.Client/server architecture; Portable open system.
Derive competitive advantage in t heDerive competitive advantage in t heproduction, distribution, and financial areasproduction, distribution, and financial areas
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ENTERPRISE RESOURCESENTERPRISE RESOURCES
PL AN (ERP)PL AN (ERP) Include function of finance, distribution, andInclude function of finance, distribution, andhuman resource management human resource management
Handle global business needs of an integratedHandle global business needs of an integratedand networked enterpriseand networked enterprise
ERP is not confined wit hin t he corporation. It ERP is not confined wit hin t he corporation. It communicate wit h suppliers and customers.communicate wit h suppliers and customers.
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ENTERPRISE RESOURCESENTERPRISE RESOURCES
PL AN (ERP)PL AN (ERP)
Enabler of Enabler of
Quickly access internal information and toQuickly access internal information and tointegrate different functionsintegrate different functions
Achieve improved business performance Achieve improved business performance
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ERP IICollaboration Gartner
MRP
Integration of
Information
Material / Finance
MRP II
Internal
Supply /Manufacturing / Demand
Information
ERPSupply Chain
APICS(1965)
(1980)
(1990)
(2004)
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ReferenceReference
Term of ReferencesTerm of References
APICS APICS American Production and Inventory American Production and InventoryControl Society, provider of information andControl Society, provider of information andservices in production and inventory management services in production and inventory management
GartnerGartner Gartner Group Inc, provider of research Gartner Group Inc, provider of research and analysis on global ITand analysis on global IT