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Enterprise Business Processes and Applications ( IS 6006 )
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Transcript of Enterprise Business Processes and Applications ( IS 6006 )
Enterprise Business Processes and Applications
(IS 6006)
Masters in Business Information Systems
4th Nov 2008
Fergal CartonBusiness Information Systems
Last week• MRP principles
– BOM crystallises connection between supply and demand– Build process takes account of space, yield, time, cost, labour, equipment …– Outsource or not for sub-components, influence on BOM– Lead time for customer and commit time for production– MRP reduces buffer stocks
• Look up examples of Bills of Materials• What is so difficult about connecting supply and demand?
– Why can’t actual demand be forecasted?– Dell, Aer Lingus, Glaxo SmithKline– Fiat car design : 18 months because of sub-contracting parts
• Work orders / process orders allow inventory to be consumed– Mirror image of the sales order– Drives customer demand through to batches in the production process
• Additional Reading– Look at paper titles for relevance to this course (eg. Supply Chain)– We focus on reality of using integrated systems and issues arising
This week
• BOM example iPhone
• Process orders / work orders
• ERP modules (Sales, Finance, Logistics, Procurement, Manufacturing)
• ERP is single instance
• Production planning: assignment practice
What is a Bill of Materials?
• Links demand and supply• Sales require a customer oriented
language to describe functionality– See example for iPhone
• Manufacturing need a supplier oriented language to describe Bill of Materials
Model names (sales)Model Year-Month Scrolling device Capacity VeriPod touch (8 GB or 16 GB) 2007-09 multi-touch display 8 GB or 16 GB 1.1.1
iPod classic (80 GB or 160 GB) 2007-09 Click Wheel 80 GB or 160 GB 1.0.2
iPod nano (3rd generation) 2007-09 Click Wheel 4 GB or 8 GB 1.0.2
iPod shuffle (2nd generation) (1 GB) 2006-09 n/a 1 GB 1.0.3
iPod (5th generation late 2006) (30 GB or 80 GB) 2006-09 Click Wheel 30 GB or 80 GB 1.2.1
iPod nano (Second Generation) (2 GB, 4 GB, or 8 GB) 2006-09 Click Wheel 2 GB, 4 GB, or 8 GB 1.1.3
iPod nano (1 GB) 2006-02 Click Wheel 1 GB 1.3.1
iPod (5th generation) 2005-10 Click Wheel 60 GB 1.2.1
iPod (5th generation ) 2005-10 Click Wheel 30 GB 1.2.1
iPod nano (4 GB) 2005-09 Click Wheel 4 GB 1.3.1
iPod nano (2 GB) 2005-09 Click Wheel 2 GB 1.3.1
iPod with color display (60 GB) 2005-06 Click Wheel 60 GB 1.2.1
iPod with color display (20 GB) 2005-06 Click Wheel 20 GB 1.2.1
iPod photo (30 GB) 2005-02 Click Wheel 30 GB 1.2.1
iPod mini (4 GB Second Generation) 2005-02 Click Wheel 4 GB 1.4.1
iPod mini (6 GB Second Generation) 2005-02 Click Wheel 6 GB 1.4.1
iPod shuffle (512 MB) 2005-01 n/a 512 MB 1.1.5
iPod shuffle (1 GB) 2005-01 n/a 1 GB 1.1.5
iPod photo (40 GB) 2004-10 Click Wheel 40 GB 1.2.1
iPod photo (60 GB) 2004-10 Click Wheel 60 GB 1.2.1
iPod (20 GB Click Wheel) 2004-07 Click Wheel 20 GB 3.1.1
iPod (40 GB Click Wheel) 2004-07 Click Wheel 40 GB 3.1.1
iPod mini 2004-01 Click Wheel 4 GB 1.4.1
Model Model # Model # Model #10GB M8709LL/A M8737LL/A M8740LL//A
10GB M8976LL/A
15GB M8946LL/A M9460LL/A
1GB Black MA352
1GB White MA350
1st Generation iPod mini Models M9160LL/A M9436LL/A M9435LL/A
20GB M8738LL/A M8741LL/A
20GB MA079LL/A
20GB M9244LL/A
20GB M9282LL/A M9282CH/A M9282FE/A
2GB Black MA099
2GB Silver MA477
2GB White MA004
2nd Generation iPod mini Models M9801LL/A M9803LL/A M9805LL/A
30GB M9829LL/A
30GB M8948LL/A
30GB Black MA146LL/A
30GB U2 iPod MA452LL/A
30GB White MA002LL/A MA002B/A
40GB M9585LL/A
40GB M9245LL/A
40GB M9268LL/A M9268CH/A M9268KH/A
Model numbers (manufacturing)
Other BOM examples?
• ?
Work order / Process order
• ?
Production planning• Planning approaches (build to plan)
– Top down quarterly plan drives both Production (units) and Sales (€) targets
– Takes into account sales forecast, historical performance and market expectations
– Production plan must then be broken down into units, configurations, geograpahies
– Local production planners then turn this into:• an MRP plan to drive purchasing
• and a Master production schedule to drive manufacturing
Manufacturing modes and lead times
• Difference between process and discrete manufacturing
– Process manufacturing consumes inventory at a steady rate, but yield of finished goods may vary
– Discrete manufacturing consumes a predefined amount of inventory per article of finished goods
• Lead times:
– key to replenishment policy: what’s my buffer stock?
– Fiat Idea : re-uses previous model components to reduce cost & lead time
ERP is often single instance
• Single point of data entry (PO’s, SO’s, …)
• Inventory control
• Opportunity to re-design processes
• Single technical platform (support)
• Common language, common pool of data
Sales Shipping Collect cashProduction
Customer information (ship-to, bill-to, install-at, …)
Finance
Value
Real-Time
DecisionSupport
Costing
HumanResource
Mgmt
AssetMgmt
AccountsReceivable
AccountsPayable
GeneralLedger
Sales
Real-Time
DecisionSupport
Sale
CustomerDemand
Mgmt
Specification/Configuration
Mgmt
SalesForceMgmt
ClientInformation
Systems
Price &Promotion
Mgmt
Sales\OrderEntry
Engineering
Specification
Real-Time
DecisionSupport
ReleaseMgmt
TestMgmt
RevisionMgmt
ProductDevelopment
ProcessDefinition
ProductDefinition
Procurement
Purchase
Real-Time
DecisionSupport
VendorPerformance
Mgmt
FinancialInterfaces
ProductPerformance
Mgmt
ReceivingMgmt
PurchaseOrderMgmt
Quote/Contract
Mgmt
Manufacturing
Product
Real-Time
DecisionSupport
QualityMgmt
MaintenanceMgmt
ProcessMonitoring& Control
ProductionMgmt
ResourceMgmt
Planning &Scheduling
Real-Time
DecisionSupport
Customer
Logistics
Fulfillment
Real-Time
DecisionSupport
TransportationMgmt
WarehouseMgmt
TradeMgmt
InventoryMgmt
DistributionPlanning
NetworkInfrastructure
Vendors Customers
Process Monitoring & Control• Not covered in “core” ERP functionality
Resource Management• Capacity requirements based on standards;
machine time, labor time, etc.• Rough cut capacity planning
Maintenance Management• Ability to integrate maintenance work orders
and inventory in system• Robust integration with fixed assets• Good tracking of maintenance costs
Planning & Scheduling• Basic APICS standard planning (MS, RCCP,
MRP, SFC) - requirements netted against on-hand inventories, lead times, etc.
• Multilevel master scheduling• Multiplant MRP and DRP• Basic shop floor control utilizing workorders,
backflush and repetitive options• Actual orders consume forecast
Product
QualityMgmt
MaintenanceMgmt
ProcessMonitoring &
ControlProduction
Mgmt
ResourceMgmt
Planning &Scheduling
Manufacturing - Core functionality
Production Management• Support for variety of production strategies;
kanban, etc. for JIT, production planning process
• Track WIP inventory• Record detailed costs• Integration to quality management
Quality Management.• Basic quality reporting and issue tracking
Product Performance Management• Good granularity of data• Basic quality and defect tracking
Receiving Management• Integrated receiving inspection and quality
tracking• Items non-nettable until approved• Receiving routings, matched with PO at
dock
Purchase Order Management• Orders automatically generated for items
through MRP, Min/Max, or manual requisitions
• Integrated receiving inspection and quality tracking
Vendor Performance Management• Good granularity of data and control over
receiving date• Basic vendor ratings/qualifications mgmt.• Basic quality and delivery tracking
Quote/Contract Management• Limited RFQ & quote tracking• Blanket orders• Basic contract management
Procurement - Core functionality
Purchase
VendorPerformance
Mgmt FinancialInterfaces
ProductPerformance
MgmtReceivingMgmt
PurchaseOrderMgmt
Quote/Contract
Mgmt
Financial Interfaces• Fully integrated w/AP for 2-way or 3-way
matching• Fully integrated with costing for variance
analysis• automatic voucher generation
Trade Management• Landed costs, multinational taxation and
currency
Network Infrastructure• Hierarchical system of branch/plants can
include suppliers and virtual warehouses
Logistics - Core functionality
Fulfillment
TransportationMgmt
NetworkInfrastructure
Distribution Planning• Distribution requirements planning with
multiple replenishment strategies and inventory stocking strategies
Warehouse Management• Basic inventory location tracking• RF capable• Limited advanced capabilities (pick/put
away strategies, cross-docking)
Inventory Management• Visibility across organization• Serial and lot control
Transportation Management.• Supports basic transportation processing,
shipping documents, and organization of shipments
InventoryMgmt
TradeMgmt
DistributionPlanning
WarehouseMgmt
Sales Force Management• Some support for configured quotes and
quote tracking• Automatic generation of orders from quotes
Price & Promotion Management• Multiple pricing methods (by item, family,
customer)• Basic promotions management (effectivity
dates, volume or value discounts)• Limited complex promotions and pricing
management
Customer Demand Management• Forecasts generated from sales history or other
algorithms
Sales - Core functionality
Sale
CustomerDemand
Mgmt
SalesForceMgmtClient
InformationSystems
Price &Promotion
Mgmt
Sales\OrderEntry
Specification / Configuration Management• Feature and option-based system with simple
if/then rule checking• Robust integration with fixed assets• Good tracking of maintenance costs
Client Information Systems• Customer hierarchies• Multiple ship-to, bill-to addresses and
contacts• Very limited customer information
Sales/Order Entry.• Order templates, blanket orders and
interbranch orders• UCC 128 compliance • Automatic credit check, order validity check
Specification/Configuration
Mgmt
http://www.sap.com/solutions/business-suite/crm/featuresfunctions/sales.epx
http://www.sap.com/solutions/manufacturing/featuresfunctions/
index.epx
Apple iPod manufacturing process
• Sales forecast• Build plan for quarter• Procurement schedule for raw materials• Starts plan by week (Master production
Schedule – MPS)• Work-in-progress / process control• Test, quality control and material purge• Adjust build plan / starts plan for actual demand• Deliver goods to finished goods area• Handover to distribution
iPhone Production planning– Read narrative– Draw a process map of the proudction
planning process– What are the strengths / weaknesses of
the process mapping exercise?
Strengths of process mapping
• Separates physical from virtual flows• Flexible• Intuitive• Fast• Facilitates sharing of ideas• Helps define roles and responsibilities• Highlights potential for automation
– Bottlenecks, delays, errors, redundancy, …
Weaknesses of process mapping
• Biased representation?– Difficult to meet all people involved– Dependent on accuracy of information given by participants– Holes in understanding -> poor process– Doesn’t take into account new processes– Interpreted differently– Consistency in analysis when using multiple analysts – Only maps repetitive processes?– What about manual work?
• Find right level of abstraction• Only theoretical?• Complexity / overcomplication
How will you use the process map?
• Spot problems
• Optimise process
• Tool to explain / educate
• Map alternatives
• Draw “how we would like the process to work”