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Chapter 14 – ERP

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Chapter 14 ERP ERP (enterprise resource planning) is the latest development in the MRP philosohpy plans and controls various components of the ... – PowerPoint PPT presentation

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Title: Chapter 14 – ERP


1
Chapter 14 ERP
  • ERP (enterprise resource planning) is the
    latest development in the MRP philosohpy
  • plans and controls various components of the
    operation materials, finance, purchasing, and
    other resources
  • integrates decisions and databases from all
    parts of the organisation
  • utilises SAP or similar company wide software
  • MRP1 (materials requirement planning)
  • determines quantity of materials
  • specifies product types
  • establishes their timing
  • uses forecast of sales orders and current stock
    holdings to calculate materials requirement

Page 1 of 6
2
14 ERP
  • MRP 2 (manufacturing resource planning)
  • ties the basic MRP system to the companys
    financial system and other core and supporting
    processes

Page 2 of 6
3
14 ERP
  • demand management is the management of
    customer orders and sales forecasts
  • MPS contains the volume and timing of the end
    products to be made, and compares this figure to
    the already available quantity in
    finished-goods inventory
  • BOM is a computer record of all ingredients that
    go into each item, and how many of them are
    required
  • a product structure indicates which parts go
    into the other and identifies levels of assembly
    (level 0, level 1..)

Page 3 of 6
4
14 ERP
  • there are different shapes of products
    structure
  • A structure limited product range to customer
  • T structure small number of raw materials,
    wide range of customised products
  • V structure similar to T but with less
    standardisation
  • X structure small number of standard modules
    customised selection of features, giving wide
    range of products

Page 4 of 6
5
14 ERP
  • inventory records enable the checking of all
    levels of assemblies for the available quantities
    and comparing to actual requirements
  • there are 3 types of file on inventory records
  • item master file part number for clear
    identification
  • transaction file receipts into stock, issues
    and balance
  • location file point where inventory is kept
  • mistakes can occur in inventory recording, so
    frequent checking is performed

Page 5 of 6
6
14 ERP
  • MRP netting process
  • compares MPS to the single-level BOMs
  • determines number of sub-assemblies and parts
    required
  • continues down to the next level
  • generates work orders for the net requirement

Page 6 of 6
7
Chapter 15 Lean Operations and
JIT
  • lean operations aims to meet demand
    instantaneously, with perfect quality and no
    waste
  • it is opposed to traditional systems of long,
    interrupted production (with large buffer
    inventories)
  • exposes the system to problems and initiates
    resolution
  • it sacrifices capacity utilisation (no buffers)
  • increases dependence of processes on each other,
    through removal of WIP
  • empowers shop-floor staff - the organisation is
    dependent on their actions
  • dependency is formalised by the internal
    customer concept

Page 1 of 7
8
15 Lean Operations and JIT

Page 2 of 7
9
15 Lean Operations and JIT
  • Lean philosophy tries to
  • eliminate waste, which is defined as any
    activity that does not add value
  • over-production
  • waiting time
  • transport
  • process
  • inventory
  • motion
  • defective goods

Page 3 of 7
10
15 Lean Operations and JIT
  • involve everyone and encourages
  • team-based problem solving
  • job enrichment
  • job rotation
  • multi-skilling
  • set ideals, which although might not be
    possible to achieve, it can be gotten close to
    through continuous improvement - kaizen

Page 4 of 7
11
15 Lean Operations and JIT
  • basic working practices of lean production
    include
  • discipline
  • flexibility
  • equality
  • autonomy
  • personnel development
  • quality of working life
  • creativity

Page 5 of 7
12
15 Lean Operations and JIT
  • other lean techniques include
  • design improvements to reduce product cost
  • acquisitioning smaller machines rather than one
    large machine, to achieve flexibility
  • improving layout to promote smooth flow of
    materials and people
  • using TPM (total productive maintenance) to
    reduce variability in processes and unplanned
    breakdowns
  • reducing set-up times by converting work done
    while machine is stopped (internal work) to work
    that is done when machine is in operation
    (external work)
  • ensuring visibility of problems, quality
    projects by displaying them for better
    understanding

Page 6 of 7
13
15 Lean Operations and JIT
  • JIT planning and control is based on the
    principle of a pull system as opposed to MRP
    method
  • uses kanban (the Japanese word for card,
    signal)
  • move kanban
  • material moved from inventory at signal, to
    another destination
  • production kanban
  • start producing part at kanban
  • vendor kanban
  • supplier sends parts at kanban
  • uses heijunka (the Japanese word for leveling)
  • leveling of the overall production schedule to
    even out mix and volume over time
  • eg. instead of making 500 parts in one batch to
    cover need of 3 months, level scheduling
    requires one part per hour

Page 7 of 7
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