Enterprise Resource Planning I - RWTH Aachen · PDF fileProduction Management II (Prof. Schuh)...
Transcript of Enterprise Resource Planning I - RWTH Aachen · PDF fileProduction Management II (Prof. Schuh)...
Production Management II (Prof. Schuh)
Enterprise Resource Planning I
WZL©
Assistant:Dipl.-Ing. T. Hö[email protected] Aditec 208Phone: 0241 / 80-27391
Production Management II- Lecture 3 -
Enterprise Resource Planning I
Slide 1
L3 Page I
Lecture 3
• Overview of the tasks of ERP systems in production planning and control• Knowledge of the historical development of IT-systems for production planning
and control• Classification of the scopes of duties of ERP systems within the operational
process • Distinction of the different task focuses of ERP systems when used in different
company types
Production Management II (Prof. Schuh)
Enterprise Resource Planning I
WZL©
L1 IT in Production ManagementL2 Customer Relations ManagementL3 Enterprise Resource Planning IL4 Enterprise Resource Planning IIL5 Enterprise Resource Planning IIIL6 Supply Chain Management IL7 Supply Chain Management IIL8 Product Lifecycle Management IL9 Product Lifecycle Management IIL10 Product Lifecycle Management IIIL11 Digital Production site planning and simulationL12 Methodology for system selection
Quality ManagementTechnical InvestmentPlanning
Cost Management in Workshops
Production Management II
Production Management I Manufacture andAssembly Compatible Construction
Production Site Planning
Innovation Managementwith Dr. Wiedeking
• Basics• Methods and auxiliary means/devices• Process & construction organization
• Construction task in small group• Construction examples• Construction regulations
• Workshop facility planning• Storage & transportation planning• Human resources planning
• Integrated management task/job• Product and product program planning• Organization and staff conduct/behavior
• Cost accounting• Investment appraisal & evaluation• Balances
• Quality assurance systems• Quality planning• Product liability
• Workshop facility planning• Technology planning• Cost accounting
Lecture Landscape of the Department of Production Engineering (SS 2004)
Slide 2
L3 Page II
Lecture 3
Production Management II (Prof. Schuh)
Enterprise Resource Planning I
Table of contents of lecture 3:
1. Short summary of lecture L3 page 1
2. Survey of ERP-systems L3 page 2
3. Exercise E3 page 1
3.1 Task 1: Making a throughput time diagram E3 page 3
3.2 Task 2: Determination of the order range E3 page 9
3.3 Task 3: Evaluation of the planning quality of PPC E3 page 10
4. System presentation E3 page 12
5. Sample solutions E3 page 13
5.1 Sample solution of task 1 E3 page 14
5.2 Sample solution of task 2 E3 page 16
5.3 Sample solution of task 3 E3 page 17
L3 Page III
Lecture 3
Production Management II (Prof. Schuh)
Enterprise Resource Planning I
References Lecture 3:
Eversheim; Schuh Betriebshütte – Produktion und Management. Springer-Verlag. Berlin, Heidelberg, New York. ISBN 3-540-59360-8. 1996
Infor business solutions AG infor:MES – Manufacturing Execution System. Produktinformationsschrift, Friedrichsthal 2003
Infor business solutions AG infor:COM – ProduktbeschreibungProduktinformationsschrift, Friedrichsthal 2003
Nyhuis Supply Chain Monitoring mit FAST/log –Logistikcontrolling. GTT Hannover. Produktinformationsschrift. 2003
Scheer Der computergesteuerte Industriebetrieb, Springer, Berlin/Heidelberg, 1990
L3 Page IV
Lecture 3
Production Management II (Prof. Schuh)
Enterprise Resource Planning I
Short summary of lecture 3:
ERP-systems (ERP = Enterprise Resource Planning) are among other things used to support production planning and control (PPC).
In the course of the development of IT-systems the functionality has been extended from a mere quantity planning to a companywide information integration.
The system presentation with the ERP-system „infor:COM“ provides an insight into the classic tasks of PPC, that are typically performed.
The exercise on the creation of a throughput time diagram shows how these can be used in order to identify planning correlations quickly and draw conclusions from sources of failure.
L3 Page 1
Lecture 3
Production Management II (Prof. Schuh)
Enterprise Resource Planning I
WZL©
CRM
Classification of the Lecture Episode ERP into the Context
SCM
PLM
Custo-mers
Suppliers
Products
ResourcesER
P
Company
Slide 3
L3 Page 2
Lecture 3
Production Management II (Prof. Schuh)
Enterprise Resource Planning I
WZL©
Enterprise Resource Planning for Production Planning and Control
ERP is a holistic, process-oriented software solution, which performs the task of production planning and control. ERP makes the required information available to all related divisions of the company.
Characteristic features:• Has consequences for various divisions of a company, such as production,
distribution, logistics, staff, and administration.• Many default basic functions• Provides a basis for further management software tools
Production Planning and Control (PPC)
Enterprise Resource Planning (ERP)
Production Planning pre-plans the workflow during the creation of a product for a certain time considering certain general conditions and realizing predetermined objectives.
Production Control tries to realize the planning as completely as possible in spite of unavoidable changes concerning the order quantity and the order date as well as disturbances by machine failure or loss of manpower, delays in delivery, and scrap.
(source: Eversheim, 1996; BH 14.5)
Slide 22
ERP systems support the classic tasks of production planning and control. They are supported by an integrated data base.This makes it possible for the management to use a consistent data base with consistent rules for companywide evaluation. This avoids single divisions of the company doubting the correctness of data.Furthermore, ERP systems support companywide standardisation of production processes with the help of consistent evaluation standards.Moreover, the use of a consistent IT system increases productivity and saves time.
L3 Page 3
Lecture 3
Production Management II (Prof. Schuh)
Enterprise Resource Planning I
WZL©
PPC: Allocation of the Production in a Simplified Company
Development
Sale
Material flow
Information flow
PurchaseProduct creation
Logistics
Administration & Staff
Suppliers
Manufacturing Assembly Customer
Slide 5
Distribution
The Product creation as center of the value-added chain can be seen in the company‘s heart. Further supporting areas are the sale and administration and staff.
L3 Page 4
Lecture 3
Production Management II (Prof. Schuh)
Enterprise Resource Planning I
WZL©
Task Structure of PPC: PPC/ERP-Model from Aachen
Cross-sectional tasksCore tasks
Production program planning
Production requirements planning
Procurement planning and
control
Data management
In-plant production planning and
control
Ord
er c
oord
inat
ion
PPC
-Con
trol
ling
Stor
age
(source: Eversheim)
Slide 6
L3 Page 5
Lecture 3
Production Management II (Prof. Schuh)
Enterprise Resource Planning I
WZL©
Task Structuring of PPC/ERP (1)
Sales planningStock planningPrimary requirement planningResource rough planning (order anonymous)Gross secondary requirement determinationNet secondary requirement determinationClassification of type of procurementThroughput time scheduling Capacity requirement determinationCapacity coordination
Lot size calculationDetailed schedulingDetailed resource planningPlanning of order successionAvailability monitoringOrder releaseOrder controlResource control
source: Luczak, Eversheim, 1997
Slide 7
Order accountOrder entry/evaluationSelection of supplierOrder releaseOrder control
Core tasks
Production program planning
Production requirements planning
Procurement planning and control
In-plant production planning and control
L3 Page 6
Lecture 3
Production Management II (Prof. Schuh)
Enterprise Resource Planning I
WZL©
Task structuring of Production Planning and Control PPC/ERP (2)
Order processingOrder reviewOrder rough planningResource rough planning (customer specific)Order ManagementStock logistics managementStock controlStorage location managementBatch managementStock inspectionStock takingInformation editingInformation evaluationConfigurationWorkpiece managementParts list managementWork plan managementResource managementPlanning data managementOrder managementCustomer managementSupplier management
Order coordination
Storage
Sectional tasks
Data management
source: Luczak, Eversheim, 1997
PPC Controlling
Slide 8
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Lecture 3
Production Management II (Prof. Schuh)
Enterprise Resource Planning I
WZL©
Quantity planning
MR
P
Time-phased production plan for final products
primary requirements (manufactures)
gross dependent requirementsExplosion of bill of materials
net dependent requirementsstocks
The initial MRP concept, i.e. the determination of quantity and material requirements, was developed in the fifties and represents the change from a consumption-oriented to a demand-oriented dispatching of material.
source:Scheer1990
Slide 9
MRP: Material Requirement Planning
Tasks of MRP are the determination of material requirements, procurement, storage and allocation of raw materials, parts and components which are needed for the production-line. Starting point for MRP is a time-phased production plan for final products.Based on this plan, MRP determines lot sizes for all intermediate products with the help of explosion of bill of materials and forward calculation of order dates in such a way that a feasible overall plan is generated. All materials needed are supplied in the required quantities early enough to guarantee in-time production of final products.MRP only considers material quantity requirements; therefore, it does not guarantee that sufficient production capacities are available at each point of time to execute all orders planned.
V3 Seite 8
Lecture 3
Production Management II (Prof. Schuh)
Enterprise Resource Planning I
WZL©
MRP I: Material Resource Planning I
order initiation and control
capacity scheduling
quantity planning
production program planning
time-phase production plan for final products
primary requirements (manufactures)
gross dependent requirements
net dependent requirementsstocks
periodic aggregationcalculation of order quantity
production and assembling lots
capacity schedulingavailable capacity
fine scheduling of production orders & sequencing
order initiation
production progress monitoringM
RP I
In the middle of the sixties, the MRP I concept was developed as an MRP add-on, which also included the production capacity in planning for the first time.
As all information about the exact production flow isn’t always available at the time of dispatching of orders, it is common practice to feed back the results of a planning step to an earlier planning step.
MR
Psource:Scheer1990
Slide 10
Explosion of bill of materials
L3 Page 9
Lecture 3
Production Management II (Prof. Schuh)
Enterprise Resource Planning I
WZL©
MRP II: Management Resource Planning II
quantity planning
MR
Porder initiation and control
In the eighties, the MRP II concept was finally developed, which also takes into consideration economic and strategic aspects of production planning.
The MRP II concept is still widely used because it is the basis for most current IT-systems in this field.
capacity scheduling
production program planning
time-phased production plan for final products
primary requirements (manufactures)
gross dependent requirements
net dependent requirementsstocks
periodic aggregationcalculation of order quantity
production and assembling lots
capacity schedulingavailable capacity
fine scheduling of production orders & sequencing
order initiation
production progress monitoring
sales planning
budgeting
MR
P I
MR
P II
source:Scheer1990
Slide 11
Explosion of bill of materials
MRP II is a technique for the planning of all resources within a manufacturing company. It integrates monetary budgeting, market-oriented production program planning, capacity and material requirements planning as well as production control, production data acquisition (PDA) and machine data acquisition (MDA). Planning is performed sequentially with a series of feedback loops. MRP II has evolved from MRP. We speak of MRP II if the results of MRP planning activities are fed back and used for the planning of the production program.MRP II denotes a higher level of integration of planning, the results of which are used for further steps of corporate planning. MRP II is suitable for well predictable production processes with continuous order entries. [source: Competence Site / Gabler Wirtschaftslexikon]
L3 Page 10
Lecture 3
Production Management II (Prof. Schuh)
Enterprise Resource Planning I
WZL©
Learning from MRP II:
„The maximisation of the resources utilisation results in the maximisation of profit.“
ERP / ERP II:
integrated information supply and control, monitoring and coordination of all processes and activities within the company
MR
PII
• Manufacturing control• PDA/MDA/PTA• Dispatching• Distribution• Purchasing• Logistics
• Financial accounting• Asset accounting• Cost calculation• Human resource mgmt.• Controlling/MIS• Project management• Document management
• e-Procurement• Supply Chain Management
(SCM)• Customer Relationship
Management (CRM)
ER
P
ER
P II
PDA: production data acquisitionPTA: process time acquisitionMDA: machine data acquisition
(source: Infor business solutions AG)
Slide 12
Enlargement of Scope from ERP to ERP II
L3 Page 11
Lecture 3
Differences between ERP and ERP II:The task of the traditional ERP is the internal optimisation of a company. ERP II systems, in contrast, optimise the whole value-added chain by collaboration with all business partners.Traditional ERP systems focus on production and logistics. ERP II systems are used by companies of all sectors and fields, including service companies, governments and heavy industry.In contrast to ERP systems, which were only used inside single companies, ERP II systems link all trading partners and thus work across the borders of single companies.While old ERP systems were designed monolithically and self-sufficiently, ERP II systems are internet based and open for integration with other systems. Their modular design allows users to choose program modules suitable for their needs.
Production Management II (Prof. Schuh)
Enterprise Resource Planning I
WZL©
MES as Link between ERP and Process Level
Coordination level
Operational level
Process level
• Production control center• Transportation control• Tool administration
• Process control • Quality management• Production data acquisition
• Material administration• Cells order management• Cells order coordination• Tool administration cell
• Machine driver• Robot manager• Robot driver
ERP
Manufacturing Execution System (MES)
Infor business solutions AG
Slide 13
L3 Page 12
Lecture 3
ERP-systems primarily support the rough production planning and control. On deeper company levels more detailed tasks are to be performed, which belong mainly to the autonomous resource administration and control.
Production Management II (Prof. Schuh)
Enterprise Resource Planning I
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Enterprise Application Integration (EAI) Covers all Company Departments
Slide 14
Development
Sale
PurchaseProduct creation
Logistics
Administration & Staff
Suppliers
Manufacturing Assembly Customer
Distribution
Lecture 3
Production Management II (Prof. Schuh)
Enterprise Resource Planning I
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As a Part of EAI ERP Covers all Production Relevant Areas
Development
Sale
PurchaseProduct creation
Logistics
Administration & Staff
Suppliers
Manufacturing Assembly Customer
DistributionCAD etc. MRP
MRP I
MRP II
ERP
ERP II
MES
EAI
MRP I: Material Resource PlanningMRP: Material Requirement PlanningMES: Manufacturing Execution SystemCAD: Computer Aided Design
EAI: Enterprise Application IntegrationERP II: Enterprise Resource Planning IIERP: Enterprise Resource PlanningMRP II: Management Resource Planning
Slide 15
L3 Page 14
Lecture 3
On the top level Enterprise Application Integration-Systems (EAI) integrate all used subsystems. This covers in addition to IT-systems of the product creation those of the product development and many more.
Production Management II (Prof. Schuh)
Enterprise Resource Planning I
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SAP and infor:COM – Examples of Established ERP-Systems
R/3R/3Client / ServerClient / Server
ABAP/4ABAP/4
FIFIFinancialaccouting
COControlling
COControlling
TRTreasury
TRTreasury
PSProjekt-system
PSProjectsystem
WFWorkflow
WFWorkflow
ISIndustrysolutions
MMMaterials manage-
ment
HRHuman
resources management
SDSaleSDSale
PPPPProduction
planning
itManage-
ment
QMQualitymanage-
ment PMPeriodical
mainte-nance
Integratedtotal
Opensystems
Client / Server
CompanyData model
Multinationality
Comprehensivefunctionality
Industry neutrality
seesystem presentation
SAPSAP
Slide 16
solutions
architecture
SAP R/3 and infor:COM are two established ERP systems.According to the latest concepts, the open modular structure enables the selection as needed of all required components. infor:COM will be presented in more detail in the system presentation.
L3 Page 15
Lecture 3
Production Management II (Prof. Schuh)
Enterprise Resource Planning I
WZL©
Polylemma of Production
Slide 17
on time delivery
high utilization
Choice of the optimal operating point
Positioning area
low work in progress
low lead time
low costs per unit size
Work in Progress
Min
Min
Max
Max
0 WIPLT
min
WIPC
min
WIPPLA
N
WIPU
max
Costs
Lead Time
Utilization
On Time Delivery
U, LT, C, OTD
Min
L3 Page 16
The characteristic traits of production systems can be described clearly through several company characteristics. The production can be positioned on different „operating points“ according to the prioritization of the strategic targets of a company and its type of interaction with the customer.
Lecture 3
Production Management II (Prof. Schuh)
Enterprise Resource Planning I
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Logistictargets
… customer decoupling point
UtilizationStocks
Throughput timesAdherence to delivery dates
Before the … Behind the …
„Customer Decoupling Point“ – Influence on PPC and the ERP System
Program manufacturer
Variant manufacturer
Order-specificmanufacturer
Supp
lier
Cus
tom
er
Source: EversheimBH 14.4
Slide 18
Procurement Manufacturing Assembly Delivery
Program dependant
stocking point
Customer dependant
Customer Decoupling Point
L3 Page 17
The manufacturing of the products after the receipt of order shall be aimed at. In case this is impossible due to the product construction, the manufacturing times or the production structure, the products have to be prefabricated to a large extent. But this is not possible with products of a high number of variants or even less with customer specific solutions.
Lecture 3
Production Management II (Prof. Schuh)
Enterprise Resource Planning I
WZL©
Customer change influences during manufacture
Determination of the product/component requirement
Classification of the Relevant Characteristics to Describe Company Types
Initial characteristics
Productcharacteristics
Dispositioncharacteristics
Manufacturingcharacteristics
Type of order release
Product spectrum
Product structure
Release of the secondary requirement
Procurement type
Storage
Manufacturing type
Process type in the manufacture of components
Process type in assembly
Manufacturing structure
Source: Luczak, Eversheim, 1997
Slide 19
L3 Page 18
Lecture 3
Production Management II (Prof. Schuh)
Enterprise Resource Planning I
WZL©
Typology „Program Manufacturer"
Structure sizes program bound producing company
Type of order release
Production on order with individual orders
Productspectrum
Products after customer specification
Product structure
Multi-part products with complex structure
Determinationof the product/component requirement
According to requirement on
result level
Release of thesecondary requirement
Procurementtype
Storage
Manufacturing type
Process type in the manufacture
Process typein assembly
Manufacturing structure
Customer change influences during
manufacture
1
2
3
4
5
6
7
8
9
10
11
12
Production on order with blanket orders
Typed products with customer specific
variants
Customer anonymous precustomer order
related final production
Standard products with variants
Production on store
Standard productswithout variants
Multi-part products with simple structure Few-part products
Partly according to expectations, partly according to requirementson comp. level
According to expectations on components level
According to expectations on product
level
Usage orientated on product level
Order orientated partly order orientatedpartly period orientated Period orientated
largeexternal procurement
External procurement in a bigger scale
Little external procurement
No stocking of requirement
positions
Stocking of requirement positions
on lower structure levels
Stocking of requirement positions
on upper structure levelsStocking of products
Non-repetitive production
Unit and limited-lot production Series production Mass production
Workshop production Island production Batch production Continuous
production
Construction site assembly Group assembly Batch assembly Continuous flow
assembly
Manufacture with large depth
Manufacture with medium depth
Manufacture with minor depth
Many changing influences
Occasional changing influences Few changing influences Source: Eversheim
BH 14.67
Slide 20
L3 Page 19
Lecture 3
Production Management II (Prof. Schuh)
Enterprise Resource Planning I
WZL©
ERP Configuration “Program Manufacturer"
Production program planning
Resourcedisposition
Order inducementOrder control/supervision
Market
Customer
Push control
Finished goods store
Cus
tom
er a
nony
mou
spr
oduc
t dev
elop
men
t
Main control loop
Control loop
Product spectrum
Procurement Product creation
Sales forecast
Source: Eversheim
BH 14.69
Slide 21
L3 Page 20
Lecture 3
Production Management II (Prof. Schuh)
Enterprise Resource Planning I
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Program Manufacturer: Use of ERP Systems
Mainproduction targets
Planning focus
Control focus
• No planning of indirect areas• Permanent material availability• Minimal control effort in order to save expenses
• Fault repair• Control of efficiency and quality• Equipment availability (material, tools, devices)
• High and steady capacity utilization• Low costs
Source: EversheimBH 14.67
Slide 22
L3 Page 21
Lecture 3
Production Management II (Prof. Schuh)
Enterprise Resource Planning I
WZL©
Typology „Order-specific Manufacturer"
Structure sizes Order related producing company
Type of order release
Product spectrum
Product structure
Determination of the
product/component requirementRelease of the
secondary requirement
Procurement type
Storage
Manufacturing type
Process type in manufacture
Process type in assembly
Manufacturing structure
Customer change influences during
manufacture
1
2
3
4
5
6
7
8
9
10
11
12 Source: EversheimBH 14.63
Slide 23
Production on order with individual orders
Products after customer specification
Multi-part products with complex structure
According to requirement on
result level
Production on order with blanket orders
Typed products with customer specific
variants
Customer anonymous precustomer order
related final production
Standard products with variants
Production on store
Standard productswithout variants
Multi-part products with simple structure Few-part products
Partly according to expectations, partly according to requirementson comp. level
According to expectations on components level
According to expectations on product
level
Usage orientated on product level
Order orientated partly order orientatedpartly period orientated Period orientated
largeexternal procurement
External procurement in a bigger scale
Little external procurement
No stocking of requirement
positions
Stocking of requirement positions
on lower structure levels
Stocking of requirement positions
on upper structure levelsStocking of products
Non-repetitive production
Unit and limited-lot production Series production Mass production
Workshop production Island production Batch production Continuous
production
Construction site assembly Group assembly Batch assembly Continuous flow
assembly
Manufacture with large depth
Manufacture with medium depth
Manufacture with minor depth
Many changing influences
Occasional changing influences Few changing influences
L3 Page 22
Lecture 3
Production Management II (Prof. Schuh)
Enterprise Resource Planning I
WZL©
Main control loop
Control loop
ERP Configuration „ Order-specific Manufacturer"
Customer order inducementand control
Determination of delivery dateResource planning
Resourcedisposition
Manufacture control(anticipated)
Customer specificproduct development
Customer
Prod
uct
Procurement Product creation
Supply confirmation
Source: EversheimBH 14.65
Slide 24
L3 Page 23
Lecture 3
Production Management II (Prof. Schuh)
Enterprise Resource Planning I
WZL©
„Order-specific Manufacturer“: Use of ERP Systems
Main production targets
Planning focus
Control focus
• Coordination of product development and product creation• Production start without exact specification of the product• Consideration of insecure order offers• Insecure capacity requirements and processing times
• Order inducement• Order control/supervision• Reaction on short-term plan deviations due to Customer’s
change preferences
• Adherence to delivery dates• Short throughput times• Readiness to provide information
Source: EversheimBH 14.64
Slide 25
L3 Page 24
Lecture 3
Production Management II (Prof. Schuh)
Enterprise Resource Planning I
WZL©
Typology „Variant Manufacturer"
Source: EversheimBH 14.80
Slide 26
Structure sizes Company producing variants
Type of order release
Product spectrum
Product structure
Determination of the
product/component requirementRelease of the
secondary requirement
Procurement type
Storage
Manufacturing type
Process type in manufacture
Process type in assembly
Manufacturing structure
Customer change influences during
manufacture
1
2
3
4
5
6
7
8
9
10
11
12
Production on order with individual orders
Products after customer specification
Multi-part products with complex structure
According to requirement on
result level
Production on order with blanket orders
Typed products with customer specific
variants
Customer anonymous precustomer order
related final production
Standard products with variants
Production on store
Standard productswithout variants
Multi-part products with simple structure Few-part products
Partly according to expectations, partly according to requirementson comp. level
According to expectations on components level
According to expectations on product
level
Usage orientated on product level
Order orientated partly order orientatedpartly period orientated Period orientated
largeexternal procurement
External procurement in a bigger scale
Little external procurement
No stocking of requirement
positions
Stocking of requirement positions
on lower structure levels
Stocking of requirement positions
on upper structure levelsStocking of products
Non-repetitive production
Unit and limited-lot production Series production Mass production
Workshop production Island production Batch production Continuous
production
Construction site assembly Group assembly Batch assembly Continuous flow
assembly
Manufacture with large depth
Manufacture with medium depth
Manufacture with minor depth
Many changing influences
Occasional changing influences Few changing influences
L3 Page 25
Lecture 3
Production Management II (Prof. Schuh)
Enterprise Resource Planning I
WZL©
M Montage
Main control loop
Control loop
Production program planning
Resourcedisposition
Order inducementOrder control/supervision
Order
Push control
Product
Customer
Sale
ERP Configuration „Variant Manufacturer"
Procurement Customer specificProduct creation
Sales forecastC
usto
mer
ano
nym
ous
prod
uct d
evel
opm
ent
Product spectrum
Source: EversheimBH 14.81
Slide 27
L3 Lecture 26
Lecture 3
Production Management II (Prof. Schuh)
Enterprise Resource Planning I
WZL©
„ Variant Manufacturer“: Use of ERP-Systems
Mainproduction targets
Planning focus
Control focus
• Program planning• Quantity planning• Optimal product succession/order regarding the production system
• Fault repair• Control of efficiency and quality
• High utilization• Low stocks• Readiness to provide information
Source: EversheimBH 14.79
Slide 28
L3 Page 27
Lecture 3
Production Management II (Prof. Schuh)
Enterprise Resource Planning I
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Lecture 3