O'Brien MIS, 6th Ed. - PowerPoint PPT Presentation

About This Presentation
Title:

O'Brien MIS, 6th Ed.

Description:

Informatics in Logistics Management Lecture 5. Enterprise Resource Planning Systems Lecturer: Prof. Anatoly Sachenko ... – PowerPoint PPT presentation

Number of Views:178
Avg rating:3.0/5.0
Slides: 48
Provided by: Lann167
Category:
Tags: 6th | mis | brien | control

less

Transcript and Presenter's Notes

Title: O'Brien MIS, 6th Ed.


1
Informatics in Logistics Management
Lecturer Prof. Anatoly Sachenko
2
Lecture Overview
  • Main Definitions and Approaches
  • MRP Concept
  • CIM and CALS
  • Enterprise Resource Planning
  • KANBAN System
  • Optimized Production Technology
  • Lean Production Concept

3
Main Definitions and Approaches
  • Logistics, for a long time, was confined to the
    execution of tasks such as
  • transport, storage, handling, conditioning,
  • have moved upstairs over the last twenty years
    and now represents a strategic function.
  • Logistics strategic feasibility
  • Industrial
  • Purchasing
  • Commercial

4
Main Definitions and Approaches
  • De facto, no current corporate strategy must be
    undertaken without having consulted Logistics
  • whether upstream with industrial strategies or
    purchasing strategies
  • Whether downstream with distribution strategies
    which are now, under the impulsion of the OMC,
    one a global scale.
  • These new strategies indeed require logistics at
    a more complex level in terms of customer
    techniques and transport.

5
Main Definitions and Approaches
  • Logistics in constant rebuilding

Upstream logistics rebuilding downstream logistics rebuilding
Production unit specialization Production delocalization Postponement cross docking worldwide OEM localization Reduction of products life cycle Promotions Cross docking E-commerce et  last mile  Global trading Logistics Marketing
6
Main Definitions and Approaches
  • Consumption and production are more and more
    geographically separated (delocalization)
  • Regions are specialized in the commodities they
    can produce more efficiently (specialization)
  • Logistics activities provide the bridge between
    production and market locations
  • Permanent changing business logistics practices
    due to
  • Growing internationalization and globalization
  • Shifting toward more service-oriented economies
  • Computer software available to assist in solving
    practical-size problems

7
Manufacturing Resource Planning Definition and
Goal
  • Manufacturing Resource Planning (MRP II) is
    defined by APICS (American Production and
    Inventory Control Society) as a method for the
    effective planning of all resources of a
    manufacturing company
  • It is a total company management concept for
    using human resources more productively
  • The goal of MRPII is to provide consistent data
    to all players in the manufacturing process as
    the product moves through the production line
  • This is not exclusively a SW function, but a
    marriage of people skills, dedication to data
    base accuracy, and computer resources

8
Manufacturing Resource Planning 16 Group
Functions
  • Sales and Operation Planning
  • Demand Management
  • Master Productiol1 Scheduling
  • Material Requirement Planning and ?ill of
    Materials
  • Inventory Transaction Subsystem
  • Scheduled Receipts Subsystem
  • Shop Flow Control
  • Capacity Requirement Planning
  • Input/output control
  • Purchasing
  • Distribution Resource Planning
  • Tooling P1anning and Control
  • Financial Planning
  • Simulation
  • Performance Measurement

9
Manufacturing Resource Planning Traits
  • MRP II systems have been implemented in most
    manufacturing industries
  • Some industries need specialized functions e.g.
    lot traceability in regulated manufacturing such
    as pharmaceutics or food
  • Other industries can afford to disregard
    facilities required by others
  • Capacity planning is the key to success in this
    as in many industries, and
  • it is in those that MRP II is less appropriate.

10
MRP and MRPII History Comparison
  • MRPII systems begin with MRP, Material
    Requirements Planning the end of 1960s
  • Manufacturing Resource Planning (MRPII) the end
    of 70s-begin of 80s and MRP are both
    incremental info integration business process
    strategies
  • that are implemented using HW and modular SW
    applications linked to a central database that
    stores and delivers business data and information
  • MRP is dealing primarily with manufacturing
    materials purchasing,
  • while MRPII is concerned with the coordination of
    the entire manufacturing production, including
    materials, finance, and human relations

11
MRP and MRPII
  • MRP allows for the input of sales forecasts from
    sales and marketing
  • MRP and MRPII systems draw on a Master Production
    Schedule, the break down of specific plans for
    each product on a line
  • An MRPII output is a final labor and machine
    schedule
  • Data about the cost of production, machine time,
    labor time and materials used, as well as final
    production numbers, is provided from the MRPII
    system to accounting and finance

12
Manufacturing Resource Planning Frame
13
Manufacturing Resource Planning Algorithm
14
Manufacturing Resource Planning Algorithm
15
Manufacturing Resource Planning Algorithm
16
Manufacturing Resource Planning Algorithm
17
Manufacturing Resource Planning -Benefit
  • MRP II systems can provide
  • Better control of inventories
  • Improved scheduling
  • Productive relationships with suppliers
  • For Design / Engineering
  • Improved design control
  • Better quality and quality control
  • For Financial and Costing
  • Reduced working capital for inventory
  • Improved cash flow through quicker deliveries
  • Accurate inventory records

18
Manufacturing Resource Planning Criticism
  • Some authors argue that MRP and MRP II are
    actually sets of heuristics
  • Better production plans could be obtained by
    optimization over more powerful mathematical SW
    models, usually integer programming models
  • While they acknowledge that the use of
    heuristics, like those prescribed by MRP and MRP
    II,
  • were necessary in the past due to lack of
    computational power to solve complex optimization
    models,
  • this is no longer true

19
CIM
  • Computer Integrated Manufacturing CIM appeared
    in the beginning of 1980s
  • CIM is the manufacturing approach of using
    computers to control the entire production
    process
  • This integration allows individual processes to
    exchange info with each other and initiate
    actions
  • Through the integration of computers,
    manufacturing can be faster and less error-prone,
    although the main advantage is the ability to
    create automated manufacturing processes
  • Typically CIM relies on closed-loop control
    processes, based on real-time input from sensors
  • It is also known as flexible design and
    manufacturing

20
CALS
  • CALS - Continuous Acquisition and Life-cycle
    Support is a DOD initiative for electronically
    capturing military documentation and linking
    related info
  • The initiative has developed a number of
    standards for the exchange of e-data with
    commercial suppliers
  • It was often referred to as simply "CALS which
    have been adopted by several other allied nations
  • CALS includes standards for electronic data
    interchange, electronic technical documentation,
    and guidelines for process improvement
  • CALS was known formerly as Computer-aided
    Acquisition and Logistic Support

21
Enterprise Resource Planning - Definitions
  • Enterprise Resource Planning (ERP) is an
    integrated computer-based system used to manage
    internal and external resources, including
    tangible assets, financial resources, materials,
    and human resources
  • Its purpose is to facilitate the flow of
    information between all business processes and
    functions inside the organization and provide
    its optimization in sense of time and resources
  • Built on a centralized database and normally
    utilizing a common computing platform, ERP
    systems consolidate all business operations into
    a uniform and enterprise-wide system environment
  • An ERP system can either reside on a centralized
    server or be distributed across modular HW SW
    units that provide "services" and communicate on
    a local area network

22
Enterprise Resource Planning Evolution
  • The initialize ERP was first employed by research
    and analysis firm Gartner Group in 1990 as an
    extension of MRP (Material Requirements
    Planning-later Manufacturing Resource Planning
    and CIM (Computer Integrated Manufacturing)
  • While not supplanting these terms, it has come to
    represent a larger whole
  • It came into use as makers of MRP software
    started to develop software applications beyond
    the manufacturing arena
  • ERP systems now attempt to cover all core
    functions of an enterprise, regardless of the
    organization's business or charter
  • These systems can now be found in
    non-manufacturing businesses,
  • non-profit organizations and governments

23
Enterprise Management System within ERP Concept
Processes
  • Supply Chain Management-SCM
  • Advanced Planning and Scheduling - APS
  • Sale Force Automation SFA
  • Stand Alone Configuration Engine SACE
  • Finite Resource Planning EFP
  • OLAP Technologies
  • E-Commerce
  • Product Data Management - PDM
  • Decision Support System
  • Main Task-to provide an optimization of those
    processes above

24
ERP System - Software Package
  • To be considered an ERP system, a software
    package should have the following traits
  • Should be integrated and operate in real time
    with no periodic batch updates.
  • All applications should access one database to
    prevent redundant data and multiple data
    definitions.
  • All modules should have the same look and feel.
  • Users should be able to access any information
    in the system without needing integration work on
    the part of the IS department.

25
Enterprise Resource Planning
  • Organizes and manages a companys business
    processes by sharing information across
    functional areas, and
  • Giving the company an integrated real-time view
    of its core processes, such as production, order
    processing, and inventory management
  • Connects with supply-chain and customer
    management applications

26
ERP System Functional Structure
27
ERP General Structure
Finance Accounting
Production Materials Management
Sales Marketing
ERP Data Repository
Human Resources
28
Enterprise Resource Planning - Implementation
  • Businesses have a wide scope of applications and
    processes throughout their functional units
  • Producing ERP software systems that are typically
    complex and usually impose significant changes on
    staff work practices
  • Implementing ERP software is typically too
    complex for "in-house" skill, so it is desirable
    and highly advised to hire outside consultants
    who are professionally trained to implement these
    systems
  • This is typically the most cost effective way
  • There are three types of services that may be
    employed for - Consulting, Customization, Support

29
Enterprise Resource Planning - Data Migration
  • Data migration is one of the most important
    activities in determining the success of an ERP
    implementation
  • The following are steps of a data migration
    strategy that can help with the success of an ERP
    implementation
  • Identifying the data to be migrated
  • Determining the timing of data migration
  • Generating the data templates
  • Freezing the tools for data migration
  • Deciding on migration related setups
  • Deciding on data archiving

30
Enterprise Resource Planning ERP Systems
Benefits
  • Centralize the data in one place
  • Eliminates the problem of synchronizing changes
    between multiple systems - consolidation of
    finance, marketing and sales, human resource, and
    manufacturing applications
  • Permits control of business processes that cross
    functional boundaries
  • Provides top-down view of the enterprise,
  • real time information is available to management
    anywhere, anytime to make proper decisions
  • Reduces the risk of loss of sensitive data by
    consolidating multiple permissions and security
    models into a single structure
  • Shorten production lead-time and delivery time
  • Facilitating business learning, empowering, and
    building common visions

31
Enterprise Resource Planning - Disadvantages
  • Customization of the ERP software is limited
  • Re-engineering of business processes to fit the
    "industry standard" prescribed by the ERP system
    may lead to a loss of competitive advantage.
  • ERP systems can be very expensive
  • ERPs are often seen as too rigid and too
    difficult to adapt to the specific workflow and
    business process of some companies.
  • Many of the integrated links need high accuracy
    in other applications to work effectively.
  • Once a system is established, switching costs
    are very high for any one of the partners.
  • Resistance in sharing sensitive internal
    information between departments can reduce the
    effectiveness of the software.

32
ERP - in Market
  • ERP Systems
  • SAP (BPS, CRM, ERP, APS etc)
  • Oracle (CRM, ERP, DBMS, SCM etc)
  • Microsoft Dynamics (Nav ? Ax)
  • IFS Application
  • JD Edwards Enterprise One
  • BAAN
  • Epicor/Scala

33
KANBAN System - Definition
  • Kanban (or kamban in Hepburn Romanization -kanji
    ??, katakana ????, meaning "signboard" or
    "billboard") is a concept related to Lean and
    Just-in-Time (JIT) production
  • According to Taiichi Ohno, the man credited with
    developing JIT, kanban is one means through which
    JIT is achieved
  • Kanban is not an inventory control system
  • Rather, it is a scheduling system that tells you
    what to produce, when to produce it, and how much
    to produce

34
KANBAN and JIT - History
  • The term kanban describes an embellished wooden
    or metal sign often representing a trademark or
    seal
  • Kanban became an important part of the Japanese
    mercantile scene in the 17th century
  • In the late 1940s, Toyota began studying
    supermarkets with a view to applying store and
    shelf-stocking techniques to the factory floor
  • In 1950s the JIT-Just in time -is a production
    strategy that strives to improve a business
    return on investment by reducing in-process
    inventory and associated carrying costs
  • Just-in-time production method is also called the
    Toyota Production System
  • 1972-Kanban was firstly applied by corporation
    Toyota

35
KANBAN System Traits
  • An important determinant of the success of
    production scheduling based on "pushing" the
    demand is the quality of the demand forecast that
    can receive such "push"
  • Kanban, by contrast, is part of an approach of
    receiving the "pull" from the demand
  • Therefore, the supply or production is determined
    according to the actual demand of the customers
  • In contexts where supply time is lengthy and
    demand is difficult to forecast, the best one can
    do is to respond quickly to observed demand
  • This is exactly what a kanban system can help
    with It is used as a demand signal that
    immediately propagates through the supply chain

36
KANBAN System Toyotas Six Rules
  • Do not send defective products to the subsequent
    process
  • The subsequent process comes to withdraw only
    what is needed
  • Produce only the exact quantity withdrawn by the
    subsequent process
  • Equalize production
  • Kanban is a means to fine tuning
  • Stabilize and rationalize the process

37
KANBAN System Three-bin System
  • A simple example of the kanban system
    implementation might be a "three-bin system" for
    the supplied parts (where there is no in-house
    manufacturing)
  • one bin on the factory floor (demand point),
  • one bin in the factory store, and
  • one bin at the suppliers' store
  • The bins usually have a removable card that
    contains the product details and other relevant
    information the kanban card

38
KANBAN System
39
KANBAN E-kanban systems
  • Many manufacturers have implemented electronic
    kanban systems or E-Kanban systems
  • E-Kanban systems help to eliminate common
    problems such as manual entry errors and lost
    cards
  • E-Kanban systems can be integrated into
    ERPsystems
  • It allows for real-time demand signaling across
    the supply chain and improved visibility
  • There is implemented a TQM Total Quality
    Management
  • Data pulled from E-Kanban systems can be used to
    optimize inventory levels
  • Inventories cost per one produced car in 2000
  • Toyota-77, U.S. companies-about 500

40
Optimized Production Technology - Definitions
  • Optimized production technology (OPT) is a
    planning and scheduling software
  • It was developed by U.S. and Israel together, and
  • its known also as Israeli KANBAN
  • The OPT philosophy and SW aim to achieve the
    stated goal of manufacturing, which is to make
    money now and in the future
  • Some expert consider the OPT as a computerized
    Kanban
  • which prevents bottlenecks in a chain
    supply-manufacturing-sale, and
  • in contrast Kanban itself allows to delete the
    existing already bottlenecks
  • The philosophy of OPT was first expounded by Dr
    Eliyahu Goldratt in his book The Goal (1984)
  • Goldratt introduced three new measures that he
    claimed are needed to assist in decision-making
    at the operational level in a manufacturing
    company

41
OPT Technology - Three Measures
  • The three measures are in a form that can be used
    as a guide to operational decision-making
  • It is reasonable to ask a foreman to consider
    whether running overtime,
  • which will certainly increase operating expenses,
  • will also increase throughput
  • These three measures can be shown to have direct
    impacts on the traditional measures of business
    performance, namely, profit, return on
    investment, and cash flow
  • Ideal situation would therefore be to schedule a
    factory in such a way that throughput is
    increased while, simultaneously, operating
    expenses and inventory are reduced

42
OPT Technology - Data
  • Models in the OPT system have two major
    components dynamic and static data
  • The dynamic data include orders, inventories, and
    open purchase orders
  • The static data include the bill of materials,
    routings, and resource listings
  • All these data are usually to be found on the
    database of a manufacturing resources planning
    (MRPII) system
  • The OPT modeling language is flexible enough to
    permit quite complicated operations to be
    represented

43
Lean Production Concept
  • Lean manufacturing, lean enterprise, or lean
    production, often simply, "Lean," is a production
    practice that considers the expenditure of
    resources for any goal other than the creation of
    value for the end customer to be wasteful
  • Working from the perspective of the customer who
    consumes a product or service, "value" is defined
    as any action that a customer would be willing to
    pay for
  • Essentially, Lean is centered on preserving value
    with less work
  • Lean manufacturing is a management philosophy
    derived mostly from the Toyota - Toyota
    Production System (TPS) identified as "Lean" only
    in the 1990s

44
Lean Goals
  • Improve quality To stay competitive in today's
    marketplace, a company must understand its
    customers' wants and needs and design processes
    to meet their expectations and requirements
  • Eliminate waste Waste is any activity that
    consumes time, resources, or space but does not
    add any value to the product or service
  • Reduce time Reducing the time it takes to finish
    an activity from start to finish is one of the
    most effective ways to eliminate waste and lower
    costs
  • Reduce total costs To minimize cost, a company
    must produce only to customer demand
  • Overproduction increases a companys inventory
    costs because of storage needs.

45
Lean Strategy and Steps to Achieve Lean Systems
  • The strategic elements of Lean
  • Lean as a fixed state or goal (Being Lean)
  • Lean as a continuous change process (Becoming
    Lean)
  • Lean as a set of tools or methods (Doing
    Lean/Toolbox Lean)
  • Lean as a philosophy (Lean thinking)
  • The following steps to achieve lean systems
  • Design a simple manufacturing system
  • Recognize that there is always room for
    improvement
  • Continuously improve the lean manufacturing
    system design

46
Design a Simple Manufacturing System
  • A fundamental principle of lean manufacturing is
    demand-based flow manufacturing
  • In this type of production setting, inventory is
    only pulled through each production center when
    it is needed to meet a customer's order
  • The benefits of this goal include
  • decreased cycle time
  • less inventory
  • increased productivity
  • increased capital equipment utilization

47
Chronology of ERPs Concepts
Write a Comment
User Comments (0)
About PowerShow.com