INDEPENDENT STUDY DEVELOPMENT OF COMPUTERIZED PRODUCTION PLANNING LABORATORY USING OPEN SOURCE ERP SOFTWARE PATTHARIT SONGSAK

Transcription

1 INDEPENDENT STUDY DEVELOPMENT OF COMPUTERIZED PRODUCTION PLANNING LABORATORY USING OPEN SOURCE ERP SOFTWARE PATTHARIT SONGSAK An Independent Study submitted in Partial Fulfillment of the requirements For the Degree of Master of Engineering (Engineering Management) International Graduate Program, Kasetsart University 2010

2 Pattharit Songsak 2010: Development of Computerized Production Planning Laboratory Using Open Source ERP Software. Master of Engineering (Engineering Management), Major Field: Engineering Management, International Graduate Program in Industrial Engineering. Independent Study Advisor: Pornthep Anussornnitisarn, Ph.D. 157 pages. Most of ERP implementations occur among large companies who have enough financial resource to develop and implement such as expensive software like ERP software. Therefore, one of objectives in this research is to identify open source ERP softwares which their functions are similar to commercial ERP package. In addition to ERP implementation failure, the computerized MRP planning process is different than the theoretical one. So this research develops MRP manual of Open ERP (The open source ERP software) to demonstrate the relationship of theoretical MRP to the computerized one. So the manual is developed for student from undergraduate student in course such as Production Planning and Control: PPC. / / Student s signature Independent Study Advisor s signature

3 ACKNOWLEDGEMENTS I would like to grateful thank and deeply indebted to Dr.Pornthep Anussornnitisarn my independent study advisor for advice, encouragement and valuable suggestion for completely writing of independent study. I would sincerely like to thank Dr.Wisut Supitaki my co-advisor for his valuable comments and suggestion. Finally, I am especially appreciated my father and mother for their continuing encouragements during the study in this program. Pattharit Songsak November 2010

4 i TABLE OF CONTENTS Page TABLE OF CONTENTS i LIST OF TABLES ii LIST OF FIGURES vi INTRODUCTION 1 OBJECTIVES 3 LITERATURE REVIEW 4 MATERIALS AND METHODS 17 Materials 17 Methods 17 RESULTS 19 CONCLUSION AND RECOMMENDATION 110 Conclusion 110 Recommendation 111 LITERATURE CITED 112 APPENDIX 116

5 ii LIST OF TABLES Table Page 1 Evaluation of five open source ERPs 27 2 Evaluation of three open source ERPs 34 3 Comparing features between SAP and Open ERP 36 4 Summary data of APICS Material Requirement Planning and Open ERP features 39 5 Usage Quantity of products 41 6 Price sell and cost of products 41 7 List of ABC Corporation s partners 41 8 Product s lead time 42 9 Product s safety stock Six weeks sales orders of ABC Corporation s 20 customers The MRP time-phased record of product F Amount and due date s sales order of product F1 at week 45 to week 50 before adjusting production plan Capacity of F1 Assembly in hours Capacity of F1 Assembly in pieces Amount and due date s sales order of product A1 at week 45 to week 50 after adjusting production plan Capacity of F1 Assembly in hours Capacity of F1 Assembly in pieces The new MRP time-phased record of product F The MRP time-phased record of product F1 with over time Amount and due date s sales order of product F1 at week 46 to week 51 before adjusting production plan The MRP time-phased record of product F1 at week 46 to week 51 54

6 iii LIST OF TABLES (Continued) Table Page 22 Amount and due date s sales order of product F1 at week 46 to week 51 after adjusting production plan The MRP time-phased record of product F1 after adjusting production plan Capacity of F1 Assembly in hours before adjust production plan Capacity of F1 Assembly in hours after adjust production plan The MRP time-phased record of product F1 with over time Product A s capacity Product B s capacity Part A s capacity Part Comm 1 s capacity Part Comm 2 s capacity List of product s lead time Initial Inventory of products and materials Minimum Stock Rules of products and materials List of XYZ Company s partners List of Products and materials price Sales orders Of Product A in week 45 until week Sales orders Of Product B in week 45 until week The MRP time-phased record of product A and B at week 45 to week Amount and due date s sales order of product A at week 45 to week 48 before adjusting production plan Amount and due date s sales order of product B at week 45 to week 48 before adjusting production plan Product A s WC_ASM capacity in hours before adjusting production plan 71

7 iv LIST OF TABLES (Continued) Table Page 43 Product A s WC_ASM capacity in pieces before adjusting production plan Product B s WC_ASM capacity in hours before adjusting production plan Product B s WC_ASM capacity in pieces before adjusting production plan Part A s WC_A capacity in hours before adjusting production plan Part A s WC_A capacity in pieces before adjusting production plan Part Comm 1 s WC_COMM capacity in hours before adjusting production plan Part Comm 1 s WC_COMM capacity in pieces before adjusting production plan Part Comm 2 s WC_COMM capacity in hours before adjusting production plan Part Comm 2 s WC_COMM capacity in pieces before adjusting production plan Amount and due date s sales order of product A at week 45 to week 48 after adjusting production plan Amount and due date s sales order of product B at week 45 to week 48 after adjusting production plan Product A s WC_ASM capacity in hours Product A s WC_ASM capacity in pieces Product B s WC_ASM capacity in hours Product B s WC_ASM capacity in pieces Part A s WC_A capacity in hours Part A s WC_A capacity in pieces Part Comm 1 s WC_COMM capacity in hours Part Comm 1 s WC_COMM capacity in pieces 77

8 v LIST OF TABLES (Continued) Table Page 62 Part Comm 2 s WC_COMM capacity in hours Part Comm 2 s WC_COMM capacity in pieces The new MRP time-phased record of product A and B The MRP time-phased record of product A and B with over time Amount and due date s sales order of product A at week 46 to week 49 before adjusting production plan Amount and due date s sales order of product B at week 46 to week 49 before adjusting production plan The MRP time-phased record of product A and B at week 45 to week 49 before adjusting production plan Amount and due date s sales order of product A at week 46 to week 49 after adjusting production plan Amount and due date s sales order of product B at week 46 to week 49 after adjusting production plan The MRP time-phased record of product A and B after adjusting Production plan Product A s WC_ASM capacity in hours Product B s WC_ASM capacity in hours Part A s WC_A capacity in hours Part Comm 1 s WC_COMM capacity in hours Part Comm 2 s WC_COMM capacity in hours The MRP time-phased record of product A and B with over time 104

9 vi LIST OF FIGURES Figure Page 1 Evolution of ERP systems 11 2 The Scope Of ERP Applications 13 3 Master Production Scheduling in the Manufacturing planning and control (MPC) System 15 4 MRP Inputs and Outputs 16 5 OpenERP logo 19 6 OFBiz logo 20 7 xtuple logo 21 8 Compiere Logo 22 9 Openbravo Logo Open ERP login window Open ERP window OFBiz login window OFBiz window xtuple login window xtuple window The comparison flow chart of APICS MRP and Open ERP s features Bill of Material of F Product A Structure Product B Structure 59

10 1 DEVELOPMENT OF COMPUTERIZED PRODUCTION PLANNING LABORATORY USING OPEN SOURCE ERP SOFTWARE INTRODUCTION Nowadays, each of the enterprises has high competition so enterprise needs to develop its potentiality and supply chain for competing. In addition, Enterprise struggles reducing production cost and making valuable production. Therefore, Enterprise applies various tools to increase efficiency enterprise administration. Computer system and information technologic are importance tools to administer on enterprise. One of popular tools used to efficiency mange resource of enterprise is Enterprise Resource Planning: ERP system. Enterprise Resource Planning: ERP system is an integrated software solution that spans the range of business processes that enables companies to gain a holistic view of the business enterprise. It promises one database, one application, and a unified interface across the entire enterprise (Bingi et al., 1999). ERP system touches many aspects of an enterprise s internal and external operations. Potential benefits of ERP system is include drastic declines in inventory, breakthrough reductions in working capital, abundant information about customer wants and needs, along with the ability to view and manage the extended enterprise of suppliers, alliances and customers as an integrated whole (Chen, 2001). Although, ERP system has many advantages to enterprise but commercial ERP software is extremely expensive to implement on enterprise (Rittammanart et al., 2008). Furthermore, Enterprise cannot integrate and criticize ERP concept framework because of ERP software license. Enterprise also cannot implement and maintain ERP package by itself due to enterprise relies on ERP package vendor.

11 2 Moreover, many enterprises fail implement ERP system. The reasons why enterprise fails implement ERP system are firstly, the traditional management concept with hierarchical management, could lead the top management support to an autocratic control (Salimi, 2009; Motwani et al., 2005). Secondly, change management is focus on how to deal with users resistance. So many problems in the ERP implementation arise from users resistance (Sumner, 1999). Finally, project management is one of the most important reasons in an ERP implementation failure. Since enterprises implementing or considering implementing an ERP system that attempts to integrate internal functions with planning and execution activities of both customers and vendors are at risk if they do not understand basic project management fundamentals (Ehie and Madsen, 2005). These causes can occur because enterprise can not apply computerized Material Requirements Planning: MRP knowledge due to teaching problem in MRP and ERP in university. The first reason for this is that commercial ERP software has high cost such as SAP, Microsoft Dynamics and Oracle. Academies or universities cannot effort to buy commercial ERP software as education tool. Because commercial ERP software has high cost to buy as a tool for teaching university student. In fact, some of universities can effort to buy commercial ERP software. However, university teaches only one module of commercial ERP software which is accounting module instead of teaching significant module of ERP system. At last, students cannot use ERP software for understanding ERP system. When students graduate degree work at enterprise where implement ERP system. Students do not have ability to apply ERP system at his/her enterprise. Finally, Inventively ERP system, ERP theory or ERP knowledge is ERP system core but it fail as module or it is not the most implement. Because enterprise not adequacy knowledge to use computerized MRP. Consequently, the objective this study is developing tool for students and people to understand in ERP system. This tool is open source ERP software. The reason this study selects open source ERP software are first, there is no cost of purchase open source ERP software. There are costs of open source ERP software s train and support. So the total coat of open source ERP software is much less than

12 3 commercial ERP software total cost. Finally, open source ERP software can study, edit and distribute source code. OBJECTIVES The main objectives of this paper are: 1. Identify open source ERP software in order to be able to closely compare with commercial ERP software on features and functions. 2. Develop computerized MRP laboratory by using open source ERP software. 3. Develop a laboratory instruction manual. SCOPES This research focuses on 1. Studying the material requirement planning (MRP) in APICS framework. 2. Assumption ERP s features compare to computerized MRP.

13 4 LITERATURE REVIEW 1. Importance of enterprise resource planning system ERP is now considered to be the price of entry for running a business, and at least at present, for being connected to other enterprises in a network economy to create business to business electronic commerce (Boykin, 2001). With ERP system benefits, ERP system is attracting increasing attention from both academic and industrial communities. Recently, ERP system has been expanded beyond manufacturing and introduced to the finance, health care, hotel chains, insurance, retail and telecommunications sectors. The research literature on ERP system has exponentially grown in recent years. Shehab et al., (2004) reviews of the research literature ( ) concerning ERP systems is presented. The literature is further classified and the major outcomes of each study are addressed and analyzed. Following a comprehensive review of the literature, proposals for future research are formulated to identify topics where fruitful opportunities exist. In this paper summary, ERP system has been observed that from the year 2000 till date an increasing number of papers about ERP packages has been published. ERP software still requires many resources and efforts to integrate all of the major business functions in the initiating firm. Small to medium sized enterprises (SMEs) are now exposed to the forces of global competition. From this point of view, it is crucial that SMEs continuously improve their competitiveness to assert themselves in the market. Therefore, SMEs are moving towards ERP packages. There is a need to provide micro ERPs, i.e. near ERP capabilities built into a product and sold at an affordable price, including implementation. Future trends in ERP, including developments such as Web-based procurement applications and outsourcing of ERP applications. ERP software still requires many resources and efforts to integrate all of the major business functions in the initiating firm. Some of the topics will be on the impact of ERP on organizational alignment, organizational learning, infrastructure, mass customization, competitive advantage and organizational structure. A customer relation management (CRM) module should be included in the ERP packages. Since most ERP vendors are moving towards Internet Web-based applications to fulfill the e-commerce era, the

14 5 development of security issues needs to be addressed. Furthermore, small enterprises are facing significant challenges to become suppliers of bigger customers due to the excessive costs associated with accessing a vast market of potential customers. It is essential for small businesses to adopt an ERP system to maintain control of their operations and to compete globally. Malhotra and Temponi (2009) identified archived literature, ERP importance to small enterprise and key decisions necessary in selecting and implementing an ERP system for small enterprise. This paper interviewed six small businesses to recommend best practices for the critical decisions: 1. project team structure, 2. implementation strategy, 3.database conversion strategy, 4. transition technique, 5.risk management strategy and 6.change management strategy. The paper result is these best practices greatly enhanced the success of an ERP implementation for small businesses. Further, this paper also recommends studying the impact of ERP systems on the small business participation in supply chain management. Recently, service organizations have invested considerable resources in the implementation of Enterprise Resource Planning (ERP) systems, even using solutions initially targeted for manufacturing companies. 2. Implementation failure of enterprise resource planning system Although ERP system has certain advantages such as low operating cost and improving customer service, enterprise fails to implement ERP system. According to Salimi, (2009), studies on ERP implementation processes in a Chinese enterprise. This enterprise implemented the second generation of ERP system supplied by SAP R3 to supersede its earlier own custom-designed first generation ERP system. This paper selected five Key Critical Success Factors (KCSFs) of; top management support, business process re-engineering (BPR), change management, project management, and company context for analysis of second generation ERP SAP R3 implementation at Chinese enterprise. This paper found that Chinese enterprise failed to customize SAP R3 to its business processes. There were variety of reasons for this failure with amongst others, users resistance, company culture, complex business

15 6 processes, error in input to database, lack of understanding of business processes by SAP consultants and understanding of SAP functions by key users. Ehie and Madsen, (2005) reports the results of an empirical research on the critical issues affecting successful ERP implementation. This paper method based on a review of the literature and with extensive personal interviews with ERP consultants that culminated to the development of the five stages of ERP implementation, a questionnaire was developed that identified items that are critical to successful implementation of ERP. This paper concludes that successful enterprise resource planning system implementation depends on effective project management principles. Enterprises implementing or considering implementing an ERP system or any system that attempts to integrate internal functions with planning and execution activities of both customers and vendors are at risk if they do not understand basic project management fundamentals. However, ERP system has often been found to be complex and risky to implement in business enterprises. Aloini et al., (2007) collected and analyzed a number of key articles discussing and analyzing ERP implementation. The different approaches taken in the literature were compared from a risk management point of view to highlight the key risk factors and their impact on project success. Literature was further classified in order to address and analyze each risk factor and its relevance during the stages of the ERP project life cycle. This paper found that the most researched risk factors were: inadequate ERP selection, ineffective strategic thinking and planning, ineffective project management techniques, bad managerial conduction, and inadequate change management. In this, the selection process and strategic organization fitting is marginally linked to the technological dimension, while the other factors are more related to managerial aspects. Finally the top 10 risk factors were analyzed in order to provide a scheme showing their positioning in the ERP life cycle. 3. Open Source ERP Software Due to commercial ERP software is expensive project for enterprise and implementing can be a difficult, enterprise implements ERP system by using open

16 7 source ERP software. Johansson and Sudzina (2008) build up the knowledge about reasons for small and mid-sized enterprises (SMEs) to adopt open source enterprise resource planning (ERP) systems. The paper presents and analyses findings in articles about proprietary ERPs and open source ERPs. In addition, a limited investigation of the distribution channel SourceForge for open source is made. The paper finds the cost perspective seems to receive a high attention regarding adoption of open source ERPs. This can be questioned and the main conclusion is that costs seem to have a secondary role in adoption or non adoption of open source ERPs. This paper concludes that there seems to be several other factors than cost involved in the decision-making process when organizations decide on adoption of open source ERPs. By focusing less on cost an interesting framework for suitable questions for investigation of why SMEs decide to adopt or not to adopt open source ERPs could be achieved. Open Source ERP Systems represent an area which is increasingly gaining acceptance due to many reasons. Herzog (2006) describes open source ERP systems are often targeted to enterprises whose requirements are not covered by standard software. Similar circumstances apply to organizations that need continuous adaption of the software to changing processes and needs. In this paper, the suitability of current open source ERP systems for enterprises will be examined which are SQL Ledger, LX office, OpenERP (TinyERP), GNUe, ERP5, Opentaps(OFBiz) and Compiere. It provides sufficient information for a small or medium enterprise to choose a flexible and adaptable open source ERP system. Starting from the question which opportunities a company has to support its processes with IT, the advantages of flexible systems are elaborated. Besides the focus on flexibility, open source specific criteria for support, continuity and maturity are worked out. Then selected open source ERP projects are reviewed and classified according to these criteria. The results of this paper are a criteria catalog and a classification of selected open source ERP systems. This paper shows system properties are pointed out: SQL Ledger has accounting focus and is proved internationally. It is best used out-of-the-box or as accounting module in an integrated solution. The SQL Ledger fork LX Office should only be evaluated for the German speaking market. GNU Enterprise is not production ready and missing any

17 8 reference customers. Tiny ERP is evolving fast, provides more ERP functionality than SQL Ledger and can be customized with add-on modules. ERP5 and Opentaps (OFBiz) have very flexible architectures. ERP5 is following a purely object oriented approach, whereas Opentaps/OFBiz is more relational database centric. Compiere, the current market leader, is a mature system, providing many customization possibilities. Stoilov and Stoilova (2008) presents brief introduction to ERP (Enterprise Resource Planning) software systems. An analysis of the general functions of the Enterprise Resource Planning (ERP) systems is performed. Historical development of ERP is given. Analysis and comparisons of three open source ERP systems (Compiere, Open ERP and OFBiz) are provided. This paper show the most functional open source ERP is Compiere and it supports functionalities for Relationship Management, Enterprise Management and Services, Business management activities. Open ERP has many advantages as extensibility and flexibility. Due to its modularity it can be easily adapted to different needs. OFBiz is a mature product, but it is appropriate for e-commerce applications as online stores. Its functionallity covers a bit more processes than OpenERP. 4. ERP laboratory Enterprise necessary trains using ERP system on simulation situation. Because enterprise can clearly understands ERP system. Consequentially, enterprise can implement and operate ERP system effectively. Therefore, the growth in ERP implementations had a resultant impact on the demand for ERP skills. Many universities recognized this demand and the potential of using ERP Systems software as a teaching tool, and endeavored to incorporate ERP systems into their curriculum. Hawking et al., (2004) discusses the evolution of ERP systems and university curriculum. This paper identifies how one university is addressing this problem and how this approach can be adopted and expanded by other universities. This paper concludes universities who have worked very hard to develop ERP curriculum are now faced with the dilemma of evolving their curriculum to reflect the evolution of ERP systems and industry requirements. The evolution of ERP systems from an

18 9 operational to a more strategic focus requires a different skill set to support this transition. The visiting lecturer delivery method could be further extended whereby a directory of specialist academics could be established by SAP and distributed to alliance members. These academics could be provided with additional support from SAP to assist them to further develop their curriculum with the goal of making it portable to other universities. Universities and ERP vendors need to develop strategies on how to best address the new skills deficit. For this to occur there needs to be more collaboration than exists at present. According to Koh et al., (2009), a training model including an extensive training period and often utilizing external consultants is a necessary train in order to implement and operate ERP systems effectively. This paper has been conducted in this research on a UK-based SME-specific ERP systems vendor, which maintain that their SME-specific ERP systems can be implemented and operated effectively with only five days of formal training and no additional consultancy. This paper evaluates the validity of this claim, and investigates the basis for the training model employed by the case company is, or is not, sufficient for users to successfully implement and operate SME-specific ERP systems. This paper concludes that it is possible to avoid high level of investment in training and consultancy for SME-specific ERP systems implementation in SMEs, and yet achieving a successful SME-specific ERP systems implementation and operation. The results have suggested that SME-specific ERP systems can be implemented and operated effectively with a limited investment in formal training and no additional consultancy. The findings indicate that the success of the case company s training model is based on three key underlying reasons, namely the system design, the previous experience of users with ERP systems and the support tools offered by vendor. In 2010, Noudoostbeni et al. focuses on various aspects of the ERP utilized in Small and Medium Enterprises (SMEs) in Malaysia in three phases. The success and the failure factors of ERP in SMEs were identified in the first phase. A comparison between different ERP training methods was carried out in the second phase. Based on the findings in the first two phases, a new training method was developed in the

19 10 third phase, so that ERP users may have a more effective ERP training system in the SMEs in Malaysia. The research method applied to the current research is case study in which the required data was collected from different SMEs in Malaysia. The data collection was mainly based on the surveys and interviews, and the results of the data analysis were used to improve a client-based training system. The results indicate that the application of this kind of system which is based on a combination of On-the-job training and Computer-based training system would considerably reduce the time and money spent on learning and training plans, while, at the same time, it would increase the user s proficiency and knowledge concerning in the ERP system. In 2006, Sager et al. tracks the marketability of the graduates from the College of Business at California State University Chico (CSUC), a leader in ERP education in the U.S., and compares the salaries obtained by students who graduated with and without extensive ERP skills. Our findings indicate that students graduating with an extensive ERP background have consistently obtained higher salaries than students without this background. This effect was somewhat more pronounced before the bursting of the E-commerce bubble, but remained in effect after the bubble burst. A curious finding from this study is that, for students having extensive ERP skills and both before and after the bursting of the bubble, those with lower GPA s actually received marginally higher salary offers than those with considerably better GPA s. This was not the case for students without extensive ERP skills. Our conclusion is that at CSU Chico there is significant market power which accrues to students graduating with extensive ERP skills. Hence, from a student employment or market power perspective, the ERP curriculum has been a success. 5. Enterprise Resource Planning Enterprise Resource planning: ERP is one of tool to apply various resources administration inside enterprise. ERP is going acceptation in all kind of enterprises such as consumer product field, retail field and car production field for implementing. More generally, ERP is a method for the effective planning and control of all resources needed to take, make, ship, and account for customer orders in

20 11 manufacturing, distribution, or service Company. An integrated ERP system manages the business processes required for each customer order and assesses the impact of executing that order or inventory and production (Sheikh, 2002). Beheshti (2006) descript that ERP has its roots in the manufacturing industry and is the successor to material requirements planning (MRP) and MRP II. ERP is the most recent in a number of manufacturing and financial information systems that have been developed, over the last several decades, to synchronize the information flow with the physical flow of goods. The first step was taken in the early 1960s when manufacturers began to use MRP software to organize information flow around the manufacturing processes. In the late 1970s the scope of MRP was expanded to include resources and MRP II software became available. The focus of MRP II is on internal operations and provides insight into the implications of the master production schedule and materials plan. Finally, since the 1990s, software developers created ERP/ERP II software, a fuller suite of applications capable of linking all internal processes as well as inter organizational processes such as supplier and customer relations management. Figure 1 illustrates the gradual evolution of the ERP with respect to time. Figure 1 Evolution of ERP systems Source: Kakouris and Polychronopoulos (2005)

21 12 ERP modules are integrated through a set of common definitions and a common database. When data such as an order from the customer becomes available at one point in the business, the impact of this information is immediately reflected in all other areas, such as accounting, production scheduling, purchasing, and logistics. Employees are able to view the order, locate the required items, decide on shipping details and review the customer s credit information on the same computer screen. ERP systems are based on a value chain view of the business where functional departments coordinate their work, focus on value-adding activities and eliminate redundancy. In order to implement an ERP system, a company may need to make changes to organizational structure, corporate culture, and business processes. ERP can be a valuable tool for managers to improve operational as well as financial performance of the firm. Long-term financial gains can be realized only when a company delivers increased customer value while simultaneously lowering the cost of delivering that value. According to Vollmann et al. (2005), Figure 2 depicts the scope of ERP applications. The diagram is meant to show how a comprehensive information system uses ERP as the core or backbone of the information system. ERP can provide many advantages in enterprise administration. ERP help in reducing planning/replanning time and thus makes the system more flexible enabling the company to produce the right product quickly and cost-effectively (Sheikh, 2002).

22 13 Figure 2 The Scope Of ERP Applications Source: Vollmann et al. (2005) According to Kakouris and Polychronopoulos (2005), ERP integrates key business and management functions and provides a view of the happenings in the company, in the areas of finance, human resources, manufacturing, supply chain, etc. An ERP software solution is valuable when it embodies the characteristics illustrated in figure 4. ERP software can be built up either by purchasing the whole pack age from a single vendor or by using pieces of software from different supplier(s). In the first category, the leader is the German company SAP AG with its R/3 soft ware, together with PeopleSoft Inc., Oracle Corp., Baan Co. NV and J.D. Ed wards & Co. In open source ERP software, the leader is Compiere also with Openbravo, Open ERP and OFBiz.

23 14 6. Master Production Scheduling According to Vollmann et al. (2005), the master production schedule (MPS) translates the sales and operations plan of the company into a plan for producing specific products in the future. Where the sales and operations plan provides an aggregate statement of the manufacturing output required to reach company objectives, the MPS is a statement of the specific products that make up that output. The MPS is the translation of the sales and operations plan into producible products with their quantities and timing determined. On a day-to-day basis, the MPS provides the information by which sales and manufacturing are coordinated. The MPS shows when products will be available in the future, thereby providing the basis for sales to promise delivery to customer. These promises will be valid as long as manufacturing executes the MPS according to plan. When conditions arise that create customer promise dates that are unacceptable from a marketing or manufacturing perspective, the MPS provides the basis for making the required trade-offs. At the operational level, the most basic concern is with the construction of the MPS record and updating it over time. The MPS record is developed to be compatible with the material requirements planning (MRP) system and to provide the information for coordinating with sales. Over time, as production is completed and products are used to meet customer requirements, the MPS record must be kept up to date. Doing this means implementing a periodic review and update cycle that we term rolling through time. Updating the record involves processing MPS transactions, maintain the MPS record, responding to exception conditions, and measuring MPS effectiveness on a routine basis. Performing these tasks effectively will keep manufacturing resources and output aligned with the sales and operations plan. Figure 3 presents a partial schematic for the overall manufacturing planning and control system showing the linkages to master production scheduling. The

24 15 detailed schedule produced by the MPS drives all the engine and, subsequently, the back-end system, as well as the rough-cut capacity planning activities. Resource planning Rough-cut capacity planning Sales and operations planning Master production scheduling (MPS) Detailed material planning (MRP) Demand management Front end Engine Enterprise resource planning system (ERP) Figure 3 Master Production Scheduling in the Manufacturing planning and control (MPC) System Source: Vollmann et al. (2005) 7. Material Requirements Planning According to Sheldon (2005), material planning is the process of taking the requirements handed off from the MPS and determining what if any components need to be ordered versus those already available. Availability is derived from data associated with on-hand stock, on-order quantities from procurement, and/or onorder/in-process manufactured item quantities (see figure 4).

25 16 MPS requirements driven initially from the S&OP process Inventory Record File- On hand BOM Record file Material Planning Process Shop Floor Procuremen t Inventory Record File- On order Figure 4 MRP Inputs and Outputs Source: Sheldon (2005) The MPS requirements are the real drivers of material planning. The master schedule is massaged continuously to synchronize the supply side with customer demand. The material planning engine in the ERP software business system is the calculator that sorts out what to do with these MPS signals. In addition, MRP s managerial objective is to provide the right part at the right time to meet the schedules for completed products. To do this, MRP provides formal plans for each part number, whether raw material, component, or finished good. Accomplishing these plans without excess inventory, overtime, labor, or other resources is also important (Vollmann et al., 2005). An MRP system serves a central role in material planning and control. It translates the overall plans for production into the detailed individual steps necessary to accomplish those plans. It provides information for developing capacity plans, and it links to the systems that actually get the production accomplished (Vollmann et al., 2005).

26 17 METERIALS AND METHODS Materials Most of the literatures are downloaded from Kasetsart University campus internet service and referenced books are come from Kasetsart University Library. Personal computers are 1. Acer Aspire 4730Z, 2.0 GHz Intel Pentium, RAM 1GB, Harddrive 160 GB 2. Personal Computer, 2.2 GHz Intel Core 2 Duo, RAM 2 GB, Harddrive 500 GB with software as follows 1. Microsoft Windows XP as operating system 2. Open ERP for Windows All-In-One package as research tool 3. OFBiz automated installer as testing installation software 4. xtuple automated installer as testing installation software 5. Microsoft Visio 2007 for report writing 6. Microsoft Office Word 2007 for report writing Methods Research Plan This research plan provides the overviews of methods to be taken by this research. In order to develop computerized production planning laboratory using open source ERP software and a laboratory instruction manual, the appropriate methodologies are selected and applied to handle the research. There are three phases to accomplish this research as follows: 1. Select suitable open source ERP software for teaching laboratory development 1.1 Literature survey on popular open source ERP

27 Installation and testing 1.3 Compare selected open source ERP s features with MRP system in APICS framework 2. Develop laboratory instruction on selected open source ERP in order to do laboratory 3. Develop a laboratory instruction manual

28 19 RESULTS Results These results provide research plan results as follows: 1. Select suitable open source ERP software for teaching laboratory development 1.1 Literature survey on popular open source ERP In open source ERP software market, there are many available open source ERP softwares. Each of open source ERP softwares has different property, system requirement to install and cost of implement. However, how enterprise or university can chooses suitable open source ERP software for teaching and/or using. This research will find the answer by literature survey on popular open source ERP OpenERP Figure 5 OpenERP logo Source: (2010) Open ERP (formerly named Tiny ERP) is an impressive software system, being simple to use and yet providing great benefits in helping company manage company. Open ERP logo presents in pigure 5. Owner of the OpenERP solution is Belgium based Tiny sprl. It s easy to install under both Windows and Linux compared with other enterprise-scale systems, and offers unmatched functionality (Pinckaers and Gardiner, 2009). According to Open ERP wiki, the software is claimed to be a complete ERP and CRM system. XML-RPC interfaces are

29 20 available. It has separate client and server components. Open ERP has 4 editions which are Community, SMB Edition, Basic Edition and Corporate Edition. Community fee is free but the other edition not free to implement. The software is open source and is released under the GNU General Public License. Open ERP is known to be very complete and extremely modular, with 350 available modules. It is based on a strong MVC architecture, with a distributed server, flexible workflows, an object database, a dynamic GUI, an XML-RPC interface, and customizable reports OFBiz Figure 6 OFBiz logo Source: (2010) According to Rittammanart (2008), Apache Open For Business (OFBiz) is an open source enterprise automation system providing, among many other features, ERP functionality. The OFBiz logo is show on figure 6. The system attempts to provide reusable modules for common business functions and a variety of paths to develop custom business logic and connect with external systems. OFBiz has three layer architectures. The presentation layer is based on the Model-View-Controller pattern and makes extensive use of the Decorator pattern for reuse of design elements. OFBiz integrates with many presentation-tier technologies, including Tomcat or Jetty as the Web server, the Freemaker template engine, the JasperReports report engine, the JavaPOS point-of-sale device API, the XML User Interface (XUI) rich client platform, and the BeanShell Java scripting language. The business logic layer utilizes the Service Oriented Architecture pattern in which application developers organize the business logic as a set of reusable services. Services are implemented as scripts using an OFBiz-specific XML scripting language, Java via BeanShell, or other

30 21 languages such as Python via the Bean Scripting Framework (BSF). Services can be easily exported as SOAP Web service or Java RMI endpoints. The persistence layer provides a database-independent entity persistence engine to the other layers using an XML specification of the database mapping and an API following the Table Data Gateway pattern xtuple Figure 7 xtuple logo Source: (2010) According Harris Wu (2008), xtuple is an Enterprise Software company. The company gains revenue by selling training and support for Postbooks implementations.the xtuple logo show in figure 7. The Postbooks project was managed on Sourceforge.net, an open source community with over 1.8 million registered users. xtuple also sells OpenMFG, a manufacturing-centric ERP solution built on the same open source code base, but has more functionality for larger companies needing more manufacturing capabilities. OpenMFG is commercially licensed under a community code model. In 2007, xtuple received a 5 star rating from the Channel Web Network and also became a finalist in the eweek Excellence award. The commercial OpenMFG community, openmfg.com, has over a dozen implementation partners and over a hundred licensed customers. The product support and development teams at xtuple communicate with users in both communities mainly through s and discussion forum threads, hundreds of them a day. Developers and the support team often find themselves spending hours search through archives, to find a past solution to a problem. xtuple re-launched xtuple.org in 2007 aiming to build a knowledge repository of communications among the xtuple software community, and to utilize social,

31 22 collaborative power through Web 2.0 concepts Compiere Figure 8 Compiere Logo Source: (2010) According to Compiere wiki, Compiere is an open source ERP and CRM business solution for the Small and Medium-sized Enterprise (SME) in distribution, retail, service and manufacturing. Compiere logo is show in figure 8. Compiere is distributed by Compiere, Inc. and through the Compiere Partner Network, a collection of trained and authorized business partners. The application and source code is provided on the basis of the GNU General Public License version 2; this comprises the Community Edition. Also available for a fee is a Professional Edition with more features, a commercial license, documentation and support contracts Openbravo Figure 9 Openbravo Logo Source: (2010) According to Openbravo wiki, Openbravo is a web-based, open source ERP business solution for small and medium a sized company that is released under the Openbravo Public License, based on the Mozilla Public License. Openbravo

32 23 was found on 2001 as Tecnicia. Later became to be Openbravo on Openbravo Logo present in figure 9. The model for the program was originally based on the Compiere ERP program that is also open source, released under the GNU General Public License version 2. The company is a member of the Open Solutions Alliance, a non-profit organization working for open-source standardization. The program is among the top ten most active projects of Sourceforge as of January Development decisions are made by Openbravo, S.L., located in Pamplona, Spain. To select three open source ERP softwares for installing and testing, this research develops criteria to evaluate and choose open source ERP software. The criterion that this research developed to choose open source ERP software consists of 13 criteria as below. 1. Bill of material, Inventory management and Master production schedule In order to study Material Requirements planning (MRP) system, this research must understand Bill of material, Inventory management and Master production schedule due to MRP system requires three basic inputs. So function of selected open source ERP software that this research desires is three basic inputs. 2. Finance The financial module is the core of many ERP software systems. It can gather financial data from various functional departments, and generates valuable financial reports such general ledger, accounts receivable and payable, bank reconciliation, financial reporting. 3. Sales Revenues from sales are live blood for commercial organizations. Sales module implements functions of order placement, order scheduling, shipping and invoicing. Sales module is closely integrated with organizations' ecommerce websites.

33 24 4. Purchasing Purchase module streamlines procurement of required raw materials. It automates the processes of identifying potential suppliers, negotiating price, awarding purchase order to the supplier, and billing processes. Purchase module is tightly integrated with the inventory control and production planning modules. 5. Production Production module optimizes the utilization of manufacturing capacity, parts, components and material resources using historical production data and sales forecasting. 6. Thai language support In order to Thai users more understand for using open source ERP software, open source ERP softwares should have Thai language support available. 7. Friendly interface The user interface should be designed according to the information needed for a task. A simple task shall not require navigating through many screens. It is part of customization to adapt the ERP system to processes. 8. OS independence Operation system independence can run the ERP system on various platforms such as Windows, Linux and so on. Open source ERP softwares must have this feature, if the users have different operating systems.

34 25 9. Database independence According to Herzog (2006), the database has high influence on the scalability of the system. Some prefer open source databases for open source ERP systems. There is a trade-off between database independence and database features, especially the object relational features used. High database independence also implies using a minimal common feature set provided by all supported databases. Some features lost through independence can be provided through the application or used application server. 10. Programming language According to Herzog (2006), the language can be a criterion to leverage available skills for low level customization. The programming languages of the selected ERP Systems are open source scripting languages (Python, Perl and Java). Python is known for its easily readable, concise syntax and its built-in refactoring capabilities. Perl is widely used, but requires more developer discipline to get a serviceable code. Java has strong industry support and many software engineering tools are available. Counting lines of code is a bad indicator for functionality for the following reasons: High-level scripting languages need fewer lines of code. Flexible meta data based design approaches also need fewer lines of code and meta data can be defined in the program code and/or externally. 11. Structure According to Herzog (2006), Important for most flexibility factors is the chosen architecture. The open source solutions have 2-tier or 3-tier architectures. The 2-tier or client- server architecture consists of a fat client containing GUI, and business logic, communicating directly with the database. In the case of a 3-tier architecture the client is just responsible for GUI and simple data validation. All the logic is capsuled in the application server. The database is responsible for storing persistent data. Usually in the case of 3-tier architecture the thin client is a web

35 26 browser, and the application server is a web application server. Some architectures leverage the functionality of a standard general purpose application server (J2EE application server for Java, Zope for Python), others use a proprietary server or a basic web server. Advanced architectures allow many different or nearly any client types to be run against the application server. These clients can be web based, terminal based as well as rich GUI based, running on a mobile device or a personal computer. This is possible due to a multi-layer design. The middle tier is further split horizontally into data, business logic and presentation layer. So only the presentation layer needs to be changed to support various client types. Additional flexibility is possible by vertically splitting the system into services which are connected with flexible workflows. For integration with external system these services can be published as web services. Workflow is the automation of a business process, during which information is passed along the system according to a set of rules. It can be specified in standardized XML Process Definition Language (XPDL). The research presents the evaluation results of five open source ERPs, considered as community edition (free edition) of five open source ERPs. The evaluation was done according to criteria, presented in table 1. The results of the evaluations were assessed by 1. Yes/No logic. 2. Score on 3, 2 and 1 which are 3 is good score 2 is average score and 1 is bad score. 3. Property of each open source ERPs. The resulting list is given in table 1.

36 27 Table 1 Evaluation of five open source ERPs Criteria OpenERP OFBiz Xtuple Compiere openbravo Bill of material Yes Yes Yes Yes Yes Inventory management Yes Yes Yes Yes Yes Master production Yes Yes No No No scheduling Accounting & Finance Yes Yes Yes Yes Yes Sales Yes Yes Yes Yes Yes Purchasing Yes Yes Yes Yes Yes Production Yes Yes Yes Easy customization Thai language Yes Yes No Yes Yes Friendly interface OS independence Database independence Programming language Structure Windows, Linux and Mac PostgreSQL Python Stand alone and Web based 1.2 Installation and testing. Windows, Linux and Mac MySQL, MaxDB, PostgreSQL Oracle,DB2 and Microsoft SQL Java, JavaScript Prolog Windows, Linux and Mac PostgreSQL open source Qt framework for C++ Windows, Linux and Mac Oracle, Advance Server, MS SQL, PostgreSQL Java, JavaScript, PL/SQL Windows, Linux PostgreSQL and Oracle Java, Javascript,SQL,PL/SQL,XML and XHTML Web based Client-server Web based Web based The research chooses three open source ERPs to install and test them. These three open source ERPs are Open ERP, OFBiz and xtuple. The reasons this research chooses these three open source ERPs is there is automated installer are available for Open ERP, OFBiz and Xtuple on Windows. The installer also run everything is handled for users which are installs and starts database program and installs open source ERPs. So it is easy for installation and uses not much system requirements. Also three open source ERPs available install on windows platform.

37 28 Users including students can use open source ERPs on windows. Because they are accustomed to using windows. as follows: The details of each open source ERPs in installation and testing are described Open ERP Open ERP has windows installer to automate installation. Windows installer consists of Standalone Server, Standalone Client and Client Internet Standalone. Open ERP s database is the PostgreSQL database server, which contains all of the databases, each of which contains all data and most elements of the Open ERP system configuration. Open ERP s windows installer installation is easy and time for installation use few minutes. After installation, go to web browser and log in When start Open ERP, it will appears Open ERP s login window (show in figure 10) to login for starting Open ERP. After login, it enters to Open ERP window (show in figure 11). The user interface of Open ERP is comfortable and well designed. Lots of charts and graphics types are available. Figure 10 Open ERP login window

38 29 Figure 11 Open ERP window OFBiz The research installed OFBiz on windows platform. Downloading OFBiz requires Subversion (SVN). So the study downloaded TortoiseSVN (for Windows users). TortoiseSVN is a graphical SVN client for Windows. It is neatly integrated with the ubiquitous and well-known Windows Explorer. OFBiz is written largely in Java, and the framework is entirely in Java. Code written in Java needs to be pre-parsed and pre-compiled before it can be executed. To install OFBiz, the research will need the Java Development Kit (JDK) 5.0. The research also need Eclipse which is an open-source project. It is an IDE (Integrated Development Environment) used by Java Developers all over the world. It is available free of charge for Windows, Linux, and Mac OS X and is the most commonly used Java Development Environment available. The research used Eclipse for installation OFBiz. After installed, OFBiz program appear OFBiz login window. This window shows in figure 12.

39 30 Although, installation of OFBiz is complex method but indeed the OFBiz framework not only facilitates the building of own custom software, but also comes packaged with many tools enterprise would expect from an ERP system. Users can continually develop on basic OFBiz framework for users requirement. The research found that OFBiz lacks of users want most on using ERP package because of the level of installing is complex and unfriendly user interface. OFBiz user interface is not easy to use. User interface present on figure 13. Figure 12 OFBiz login window

40 31 Figure 13 OFBiz window xtuple The research installed xtuple ERP by using windows automated installers of xtuple. xtuple provides automated installers for PostBooks on Windows, Mac, and Linux. The installers are perfect for users interested in demo-ing the product. The installer consist of PostrgreSQL installation and start, loading a demo PostBooks database and installation the PostBooks client. The research found that xtuple installation is easy and use few minutes because of xtuple automated installers. xtuple has nice user interface for using. xtuple user interface presents on figure 15. Before users use xtuple, the xtuple login window appears to login. xtuple login window show in figure 14. The xtuple disadvantage are free edition (PostBooks) s features and modules is fewer than fee edition (Standard and Manufacturing) and when users require module that not available on free edition, xtuple provides hard to add on module they require.

41 32 Figure 14 xtuple login window Figure 15 xtuple window To select the most suitable one, this research needs to develop criteria to evaluate and choose one of them to be tool of MRP laboratory. The criterion that this research developed to choose open source ERP software consists of 3 criteria as below.