ERP Systems for Manufacturing Supply Chains-Applications, Configuration, and Performance

242 Pages·2019·23.434 MB·\242

by  Odd Jøran Sagegg (Author), Erlend Alfnes (Author)

ERP Systems for
Manufacturing
Supply Chains

ERP Systems
for Manufacturing
Supply Chains
Applications, Configuration,
and  Performance
By Odd Jøran Sagegg and Erlend Alfnes
CRC Press
Taylor & Francis Group
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Contents
Preface ...........................................................................................................xi
Acknowledgments ...................................................................................... xiii
About the Authors ........................................................................................xv
1 Introduction ...........................................................................................1
Learning Objectives .....................................................................................1
1.1 What the Book Is All About ..............................................................1
1.1.1 About Manufacturing Supply Chains ...................................2
1.2 How Tis Book Is Organized ............................................................4
1.3 About Terminology Used in ERP Software .......................................5
1.4 About the Case Descriptions .............................................................9
1.5 Key Terms .......................................................................................10
1.6 Chapter Summary ...........................................................................10
2 Te Basics of ERP Systems for Manufacturing Supply Chains ............11
Learning Objectives ...................................................................................11
2.1 Te ERP Solution ............................................................................11
2.2 ERP Data ........................................................................................17
2.3 ERP Modules ..................................................................................18
2.4 ERP Systems for Manufacturing Supply Chains .............................21
2.4.1 Te Rise of Applications of ERP Systems in
Manufacturing Supply Chains ............................................21
2.4.2 Core ERP Modules for Manufacturing
Supply Chains .....................................................................23
2.4.3 Business Processes Supported by an ERP-System
for Manufacturing Supply Chain ........................................27
2.5 Basic Functionality and Features in an ERP System
for Manufacturing Supply Chain ....................................................28
2.5.1 Security Setup .....................................................................28
2.5.2 Language Management .......................................................29
2.5.3 Personalization of User Interfaces........................................30
2.5.4 Number Sequences .............................................................32
v
vi ◾ Contents
2.5.5 Enterprise Breakdown .........................................................33
2.5.6 Master Data Management ..................................................35
2.5.7 External and Internal Documents .......................................36
2.5.8 Reporting Tools ..................................................................38
2.6 Financial Accounting in an ERP System for Manufacturing
Supply Chain ...................................................................................39
2.7 Additional Business Software Applications ..................................... 42
2.8 Key Terms ...................................................................................... 46
2.9 Chapter Summary .......................................................................... 46
3 Inventory Management ........................................................................47
Learning Objectives ...................................................................................47
3.1 Te Inventory Management Module ...............................................47
3.2 Key Data in the Inventory Management Module ............................48
3.3 Basic Features and Functionality .....................................................54
3.3.1 Item Numbering .................................................................54
3.3.2 Product Descriptions and Other Identifcations ..................57
3.3.3 Variant and Confguration Management ............................58
3.3.4 Units of Measure .................................................................59
3.3.5 Inventory On-hand .............................................................59
3.3.6 Item Tracking .....................................................................60
3.3.7 Reservation .........................................................................62
3.3.8 Inventory Valuation ............................................................63
3.4 Key Inventory Management Processes ............................................ 66
3.4.1 Inventory Receipts and Issues ............................................. 66
3.4.2 Inventory Counting ........................................................... 66
3.4.3 Inventory Transfers .............................................................69
3.4.4 Te Transfer Order Process .................................................70
3.5 Other Inventory Management Functionality ...................................71
3.5.1 Warehouse Management Module .......................................72
3.5.2 Shipment and Transportation .............................................72
3.5.3 Quality Management ..........................................................74
3.6 Key Terms .......................................................................................74
3.7 Chapter Summary ...........................................................................75
4 Purchase Module ..................................................................................77
Learning Objectives .................................................................................. 77
4.1 Te Purchase Module ..................................................................... 77
4.2 Key Data in the Purchase Module .................................................. 77
4.3 Basic Functionality ..........................................................................82
4.3.1 Purchase Order Numbering ................................................82
4.3.2 Purchase Order Types .........................................................82
4.3.3 Purchase Order Statuses ......................................................85
Contents ◾ vii
4.3.4 Purchase Pricing and Agreements .......................................86
4.3.5 Delivery Time and Promising .............................................87
4.4 Te Purchase Order Process ............................................................88
4.5 Other Purchase Module Functionalities ..........................................91
4.5.1 Internal Purchase Requisitions ............................................91
4.5.2 Request for Quote (RFQ) ...................................................91
4.6 Key Terms .......................................................................................92
4.7 Chapter Summary ...........................................................................92
5 Sales Module ........................................................................................93
Learning Objectives ...................................................................................93
5.1 Te Sales Module ............................................................................93
5.2 Data in the Sales Module ................................................................93
5.3 Basic Functionality ..........................................................................97
5.3.1 Sales Order Number ...........................................................97
5.3.2 Sales Order Type .................................................................99
5.3.3 Sales Order Statuses ..........................................................100
5.3.4 Sales Price and Sales Price Agreements ..............................101
5.3.5 Order Promising ...............................................................103
5.4 Te Sales Order Process .................................................................104
5.5 Other Sales Module Functionalities...............................................109
5.5.1 Sales Quotations ...............................................................109
5.5.2 Return Management .........................................................110
5.5.3 Direct Delivery ................................................................. 111
5.6 Key Terms ..................................................................................... 111
5.7 Chapter Summary ......................................................................... 111
6 Production Module ............................................................................113
Learning Objectives .................................................................................113
6.1 Te Production Module .................................................................113
6.2 Data in the Production Module .....................................................113
6.3 Basic Functionality ........................................................................118
6.3.1 Single-level versus Multilevel BOM .................................. 118
6.3.2 Phantom Items ..................................................................120
6.3.3 Routing Options ...............................................................120
6.3.4 Production Planning .........................................................121
6.3.5 Shop Floor Activities .........................................................122
6.3.6 Production Cost Calculation.............................................125
6.4 Te Production Order Process .......................................................128
6.5 Other Production Module Functionality .......................................132
6.5.1 Subcontracting ..................................................................132
6.5.2 Back Flushing and Order-less Production .........................133
6.5.3 Defective Quantities, Scrap, and BI-products ...................134
viii ◾ Contents
6.5.4 Tooling .............................................................................134
6.5.5 Engineering Change .........................................................135
6.5.6 Other Production Modes and Industry Specifc
Functionalities ..................................................................135
6.6 Key Terms .....................................................................................136
6.7 Chapter Summary .........................................................................136
7 Master Planning Module ....................................................................137
Learning Objectives .................................................................................137
7.1 Te Master Planning Module ........................................................137
7.2 Data in the Master Planning Module ............................................138
7.3 Basic Functionality ........................................................................142
7.3.1 Master-Planning Run ........................................................142
7.3.2 Planning Methods ............................................................145
7.3.3 Time Fencing ....................................................................149
7.3.4 Other Planning Rules and Parameter ................................ 152
7.3.5 Forecasting ........................................................................ 153
7.3.6 Capacity Planning.............................................................156
7.3.7 Planning Alerts .................................................................158
7.3.8 Planning Overview ...........................................................158
7.4 Planning Processes .........................................................................160
7.4.1 Sales and Operations Planning .........................................161
7.4.2 Master Production Scheduling .........................................163
7.4.3 Material Requirement Planning ........................................166
7.5 Key Terms .....................................................................................168
7.6 Chapter Summary .........................................................................169
8 Using ERP Systems in a Manufacturing Facility ...............................171
Learning Objectives .................................................................................171
8.1 How an ERP-System Afects the Manufacturing
Supply Chain .................................................................................171
8.1.1 Te ERP-system’s Role in a Facility’s
Manufacturing Supply Chain ...........................................172
8.1.2 Te Setup of the Planning Method in Real-life
ERP Systems .....................................................................176
8.2 Efect of ERP Systems Planning Methods on Flow of a
Facility’s Manufacturing Supply Chain .........................................178
8.2.1 Te (Customer Order) Decoupling Point ..........................180
8.2.2 Te Relation Between the Replenishment Orders
and the Requiring Orders .................................................181
8.2.3 “Forecastability” ................................................................182
Contents ◾ ix
8.3 Setting the Correct Planning Method on Each
Item/Warehouse Combination in the Manufacturing
Supply Chain .................................................................................184
8.4 Confguring an ERP System for Diferent
Manufacturing Strategies ..............................................................190
8.5 Key Terms .....................................................................................193
8.6 Chapter Summary .........................................................................194
9 Using ERP Systems in Manufacturing Supply Chains .......................195
Learning Objectives .................................................................................195
9.1 Basic ERP Strategies for Manufacturing Supply Chains ................195
9.1.1 Why Choose a “Multiple-ERP” Strategy for
Supporting the Manufacturing Supply Chain ...................196
9.1.2 Why Choose a OneERP Strategy ......................................198
9.2 Key Factors When Choosing ERP Application
for Supporting a Manufacturing Supply Chain .............................201
9.3 Te ERP System’s Role in a Cross Facility
and/or Company Manufacturing Supply Chain ............................205
9.4 Setting up an ERP-Enabled Multicompany
Manufacturing Supply Chain ........................................................209
9.5 Confguring ERP for Increased Manufacturing Supply
Chain Performance ........................................................................212
9.6 Key Terms .....................................................................................214
9.7 Chapter Summary .........................................................................214
Index ...........................................................................................................217