MTTN20 Supply Chain Information Systems

Transcription

1 MTTN20 Supply Chain Information Systems Lecture 1b: Evolution of and control systems ERP system implementation /Jan Olhager Agenda A historical perspective Olhager, IJPR 2013, Evolution of and control systems ERP system implementation Olhager and Selldin, EJOR 2003, Enterprise resource survey of Swedish manufacturing firms Impact of the customer order decoupling point Olhager, CiI 2013, The role of the customer order decoupling point in production and supply chain management 1

2 Evolution of level and focus Planning level Supply chain Shop floor control Sales and operations Master production scheduling Material requirements Time Evolution of concepts Planning level Supply chain SCP, CPFR, VMI, CRM, e-business Sales and operations Master production scheduling Material requirements MRP, CRP, BOM JIT, OPT/TOC, ATP, MRPII Lean, Agile, ERP Shop floor control EOQ, ROP, Gantt chart Time 2

3 Evolution of improvement focus Planning level Supply chain Sales and operations Master production scheduling Material requirements Shop floor control Optimise, given existing conditions Improve internal conditions Integrate with customers and suppliers Time ERP System Enterprise Resource Planning ERP Coined by Gartner Group 1990 Breakthrough as concept at the 1997 APICS conference Broaden the perspective to the entire enterprise ERP II Coined by Gartner Group 2000 Extended functionality Open architecture Data can be shared between actors (SC) Component and webbased system 3

4 ERP system functionality Purchasing Order entry Materials management Production Financial accounting Distribution/Logistics Financial control Asset management Personnel/Human resources Quality management Maintenance R&D management Implementation of ERP systems in Sweden Survey Responses from 173 Swedish manufacturing firms Major reasons for ERP implementation Replace legacy systems Simplify and standardize systems Gain strategic advantage 4

5 Implementation time Total implementeringstid 40 Percent of companies Procent av företagen < Months Antal månader > 48 Implementation cost Kostnadsfördelning Project group Other Övrigt Proj. Grupp 12% 1% 12% Mjukvara Software 24% 24% Education 14% Utbildning 14% Consultants 30% Konsulter 30% Hårdvara 19% Hardware 19% 5

6 Implementation strategy Implementeringsstrategier Site by site 19% Infasn. ftg.enh. 19% Big bang 41% Big-bang 41% Infasning av moduler 17% Module by module 17% Mini bigbang 23% Mini-big bang 23% Extent of implementation and modification of software Purchasing Inköp Materialplanering Order entry Ordermottagning Produktionsplanering Redovisning Distribution/logistik Financial Ekonomisk control styrning Anläggningsredovisning Personaladministration Kvalitetskontroll Maintenance Underhåll FoU /produktutveckling Materials management Production Financial accounting Distribution/Logistics Asset management Personnel/Human resources Quality management R&D management Percentage Andel of företag companies [%] (%) Kundanpassat CustomizedEj kundanpassat Standard 6

7 Effects Largest improvements Information response time Availability of information Interaction across the enterprise Integration of business operations/processes Least improvements Information technology costs Personnel management Cash management Inventory levels Future applications Tying your customers Koppling av kunder to your till ERP-systemet Datalager (Data warehouse) E-business e-business or e-commerce eller e-commerce enabled Tying Koppling your suppliers av leverantörer to your till ERP-systemet Supply Supply chain chain-system Customer relation management system CRM Advanced & scheduling system APS Business intelligence Business capabilities intelligence Andel av företagen [%] Percent of companies Implemented Implementerat or implementing eller under implementering Planned for Planerat future för snar framtid Considering Funderingar finns No plans Inga planer 7

8 Comparison with South Korea and USA Sweden South Korea USA Firm size (<500) 63% 72% 33% Cost (<$5M) 94% 93% 42% Duration (<18m) 75% 74% 58% Strategy BigB 63% 72% 58% module/site 37% 28% 42% Exp. life (<5yrs) 25% 48% 15% Most freq. mod. Purchasing Order entry Materials mgt Production plan. Financial acc. Materials mgt Purchasing Production plan. Financial acc. Order entry Financial acc. Materials mgt Production plan. Order entry Purchasing Customization >90% >90% >90% Perf improv. Information response time Interaction across the enterprise Order mgt / order cycle Financial close cycle Information response time Interaction across the enterprise Financial close cycle Order mgt / order cycle Information response time Interaction across the enterprise Order mgt / order cycle Financial close cycle IT & SCM Map Strategic Tactical Operational Supplier Production Distribution Customer (Chopra & Meindl, 2001 ) 8

9 ERP system coverage Strategic Tactical Operational Potential ERP ERP Potential ERP Supplier Production Distribution Customer (Chopra & Meindl, 2001 ) System applications Strategic Tactical APS SCP WMS Demand Operational Purch. VMI MES Transport execution CRM Supplier Production Distribution Customer (Chopra & Meindl, 2001 ) 9

10 Supply chain matrix procurement production distribution sales long-term materials program supplier selection cooperations plant location production system physical distribution structure product program strategic sales mid-term personnel MRP contacts master scheduling capacity distribution mid-term sales short-term personnel ordering materials lot sizing machine scheduling shop floor control warehouse replenishment transport short-term sales (Stadtler & Kilger (Eds), 2000) Example: Rhythm / i2 Technologies procurement production distribution sales long-term Supply Chain Strategist mid-term short-term Supply Chain Planner Factory Planner Optimal Scheduler Transportation - modeler - optimizer - manager Demand Planner Demand Fulfillment (Stadtler & Kilger (Eds), 2000) 10

11 Example: Active Supply Chain / J.D. Edwards procurement production distribution sales long-term Enterprise Planning mid-term Production & Distribution Planning (P&DP) Demand Planning short-term Production Scheduling P&DP Vehicle Loading P&DP (Stadtler & Kilger (Eds), 2000) Case example: Integration of SAP + JDE + Manugistics procurement production distribution sales long-term 18 months JDE Enterprise Planning mid-term 26 weeks short-term 4 weeks SAP R/3 JDE Enterprise Planning JDE Production Scheduling Process SAP R/3 Manugistics DP/EE (Stadtler & Kilger (Eds), 2000) 11

12 Linkages between levels and systems along a supply chain Supplier S&OP Forecast, Long-term contract Focal firm S&OP Forecast, Long-term contract Customer S&OP MPS Rate MPS Rate MPS MRP Order MRP Order MRP SFC Call-off SFC Call-off SFC Material flow Material flow (S&OP: Sales and Operations Planning; MPS: Master Production Scheduling; MRP: Material Requirements Planning; SFC: Shop Floor Control) Customer order decoupling point (CODP) 12

13 Case: Telecom equipment Circuit board Kanban CODP Surface mounting Kanban Components A Microwave unit Test B Filter ass y Test C Packaging Modules Multi chip module (MCM) Mechanics, cover, etc. Auxiliary equipment Kanban Filter Rate-based Time-phased Linking systems to market requirements Market requirements: Product type Standard Custom Product range Narrow Wide Individual product volume per period High Low Planning and control system: Sales and operations Level Mix Chase Master scheduling MTS ATO MTO Material Consistency Ratebased Timephased Production activity control JIT-type MRP-type 13

14 Around the CODP CODP Level Make-to-stock Rate-based JIT/Lean-type Chase Make-to-order Time-phased MRP-type Planning approaches around the CODP Attributes MTS and pre-codp operations MTO and post-codp operations Physical efficiency, based on lean Market responsiveness, based on Strategic network principles agile principles Master Demand Demand fulfilment Distribution Production scheduling Purchasing Make-to-stock, replenishment of CODP inventory position Forecasting of items in the CODP inventory ATP, based on stock availability The CODP is the most important inventory of the entire supply chain Rate-based approaches, e.g. Kanban Rate-based approaches, e.g. Kanban Make-to-order, delivery of customer orders with respect to capacity Customer order management, product customization ATP, based on lead time agreement, material and capacity availability No inventory, all activities are driven by actual customer demand Time-phased approaches, e.g. MRP, with respect to capacity Time-phased approaches, e.g. MRP 14

15 Supply Chain Planning Matrix around the CODP procurement production distribution sales procurement production distribution sales Strategic Network Planning for MTS Operations CODP Strategic Network Planning for MTO Operations Master Planning of MTS Items Demand Planning for MTS Items Master Planning of MTO Items Demand Planning for MTO Items Purchasing Planning for MTS Items Production Scheduling for MTS Items Distribution Planning for MTS Items MTS Demand Fulfilment and ATP Purchasing Planning for MTO Items Production Scheduling for MTO Items Distribution Planning for MTO Items MTO Demand Fulfilment and ATP Make-to-stock Make-to-order 15