Operational excellence : ERP
Inhoudsopgave
1 What is ERP? .................................................................................................................................... 3
1.1 Department structure .............................................................................................................. 3
1.1.1 Practical problems ........................................................................................................... 7
1.1.2 Solution? .......................................................................................................................... 7
1.2 How everyone works / needs the system ................................................................................ 8
1.2.1 Some implications … ........................................................................................................ 8
1.3 Different software suppliers .................................................................................................... 9
1.3.1 Why SAP? ......................................................................................................................... 9
2 Sales & Operations planning .......................................................................................................... 10
2.1 Phase 1 : forecasting .............................................................................................................. 10
2.2 Phase 2 : demand planning .................................................................................................... 11
2.3 Phase 3 : supply planning....................................................................................................... 12
2.3.1 Do we have enough raw materials? ............................................................................... 12
2.3.2 Do we have enough machine capacity? ......................................................................... 12
2.3.3 Do we have enough people capacity? ........................................................................... 13
2.3.4 After supply planning : meetings ................................................................................... 13
3 Production planning process ......................................................................................................... 14
3.1 Steering done by sales & operational planning...................................................................... 14
3.2 Forecast consumption ........................................................................................................... 14
3.3 Netting ................................................................................................................................... 15
3.4 Master production schedule .................................................................................................. 16
3.4.1 Goal forecast becoming reality ...................................................................................... 17
3.5 Independent versus dependent demand............................................................................... 17
3.6 Production planning............................................................................................................... 17
3.7 Netting explained & replenishing the stock at SKU level ....................................................... 17
3.7.1 Netting explained ........................................................................................................... 17
3.7.2 Replenishing the stock ................................................................................................... 18
3.7.3 Replenishment ............................................................................................................... 18
3.8 From SKU level to raw material level : MRP ........................................................................... 18
3.9 MRP : BOM explosion ............................................................................................................ 19
3.10 Create PO or PO!.................................................................................................................... 19
4 Sales process .................................................................................................................................. 19
The process ........................................................................................................................................ 19
, 4.1 The pre-sales activities = selection process ........................................................................... 19
4.2 Transaction process ............................................................................................................... 21
4.2.1 OCT process in MTO (make-to-order) and MTS (make-to-stock) environment ............. 22
4.2.2 Planning strategy ........................................................................................................... 23
4.2.3 When to start picking / transport .................................................................................. 23
4.2.4 Order to cash : EDI ......................................................................................................... 23
4.2.5 Warning : in MTO? ......................................................................................................... 24
4.3 Check availability ................................................................................................................... 24
4.4 Goods leave the warehouse .................................................................................................. 25
4.4.1 Characteristics of processes – three sub-processes – 3-way-match .............................. 27
4.5 Payment ................................................................................................................................. 27
Master Data ....................................................................................................................................... 27
Definition ....................................................................................................................................... 27
4.1 Master data in sales ............................................................................................................... 28
In SAP ................................................................................................................................................. 31
5 Purchase process ........................................................................................................................... 36
5.1 The process ............................................................................................................................ 36
5.1.1 Purchase process ........................................................................................................... 36
5.2 Master data ........................................................................................................................... 46
5.3 In SAP ..................................................................................................................................... 48
6 Production process ........................................................................................................................ 49
6.1 Production process ................................................................................................................ 49
6.1.1 Release production order .............................................................................................. 49
6.1.2 Preparation .................................................................................................................... 50
6.1.3 Stage and setup ............................................................................................................. 51
6.1.4 Produce.......................................................................................................................... 51
6.1.5 Complete ....................................................................................................................... 52
6.2 Master Data ........................................................................................................................... 54
6.3 In SAP ..................................................................................................................................... 57
2
,1 What is ERP?
= Enterprise Resource Planning
Example : buying a bike at a bike shop who produces bikes
1.1 Department structure
There are 3 main departments : (3 operational processes that can be split in 3 subprocesses)
1) Sales department
2) Purchase department
3) Production department
STEP 1 : ‘what do you want?’ -> sales department
→ Front office process (sales department) : this department is in direct contact with the
customer
→ Back office process (purchase & production department) : not in direct contact with the
customer
3
, STEP 2 : making a sales order (contract) -> sales department
→ Selection process : you can still walk away, you haven’t decided anything yet
→ Transaction process : you promised something, you can’t walk away anymore
STEP 3 : check the stock / availability
→ Check which department we are going to involve
2 options :
1) The bike is available in warehouse
4
Inhoudsopgave
1 What is ERP? .................................................................................................................................... 3
1.1 Department structure .............................................................................................................. 3
1.1.1 Practical problems ........................................................................................................... 7
1.1.2 Solution? .......................................................................................................................... 7
1.2 How everyone works / needs the system ................................................................................ 8
1.2.1 Some implications … ........................................................................................................ 8
1.3 Different software suppliers .................................................................................................... 9
1.3.1 Why SAP? ......................................................................................................................... 9
2 Sales & Operations planning .......................................................................................................... 10
2.1 Phase 1 : forecasting .............................................................................................................. 10
2.2 Phase 2 : demand planning .................................................................................................... 11
2.3 Phase 3 : supply planning....................................................................................................... 12
2.3.1 Do we have enough raw materials? ............................................................................... 12
2.3.2 Do we have enough machine capacity? ......................................................................... 12
2.3.3 Do we have enough people capacity? ........................................................................... 13
2.3.4 After supply planning : meetings ................................................................................... 13
3 Production planning process ......................................................................................................... 14
3.1 Steering done by sales & operational planning...................................................................... 14
3.2 Forecast consumption ........................................................................................................... 14
3.3 Netting ................................................................................................................................... 15
3.4 Master production schedule .................................................................................................. 16
3.4.1 Goal forecast becoming reality ...................................................................................... 17
3.5 Independent versus dependent demand............................................................................... 17
3.6 Production planning............................................................................................................... 17
3.7 Netting explained & replenishing the stock at SKU level ....................................................... 17
3.7.1 Netting explained ........................................................................................................... 17
3.7.2 Replenishing the stock ................................................................................................... 18
3.7.3 Replenishment ............................................................................................................... 18
3.8 From SKU level to raw material level : MRP ........................................................................... 18
3.9 MRP : BOM explosion ............................................................................................................ 19
3.10 Create PO or PO!.................................................................................................................... 19
4 Sales process .................................................................................................................................. 19
The process ........................................................................................................................................ 19
, 4.1 The pre-sales activities = selection process ........................................................................... 19
4.2 Transaction process ............................................................................................................... 21
4.2.1 OCT process in MTO (make-to-order) and MTS (make-to-stock) environment ............. 22
4.2.2 Planning strategy ........................................................................................................... 23
4.2.3 When to start picking / transport .................................................................................. 23
4.2.4 Order to cash : EDI ......................................................................................................... 23
4.2.5 Warning : in MTO? ......................................................................................................... 24
4.3 Check availability ................................................................................................................... 24
4.4 Goods leave the warehouse .................................................................................................. 25
4.4.1 Characteristics of processes – three sub-processes – 3-way-match .............................. 27
4.5 Payment ................................................................................................................................. 27
Master Data ....................................................................................................................................... 27
Definition ....................................................................................................................................... 27
4.1 Master data in sales ............................................................................................................... 28
In SAP ................................................................................................................................................. 31
5 Purchase process ........................................................................................................................... 36
5.1 The process ............................................................................................................................ 36
5.1.1 Purchase process ........................................................................................................... 36
5.2 Master data ........................................................................................................................... 46
5.3 In SAP ..................................................................................................................................... 48
6 Production process ........................................................................................................................ 49
6.1 Production process ................................................................................................................ 49
6.1.1 Release production order .............................................................................................. 49
6.1.2 Preparation .................................................................................................................... 50
6.1.3 Stage and setup ............................................................................................................. 51
6.1.4 Produce.......................................................................................................................... 51
6.1.5 Complete ....................................................................................................................... 52
6.2 Master Data ........................................................................................................................... 54
6.3 In SAP ..................................................................................................................................... 57
2
,1 What is ERP?
= Enterprise Resource Planning
Example : buying a bike at a bike shop who produces bikes
1.1 Department structure
There are 3 main departments : (3 operational processes that can be split in 3 subprocesses)
1) Sales department
2) Purchase department
3) Production department
STEP 1 : ‘what do you want?’ -> sales department
→ Front office process (sales department) : this department is in direct contact with the
customer
→ Back office process (purchase & production department) : not in direct contact with the
customer
3
, STEP 2 : making a sales order (contract) -> sales department
→ Selection process : you can still walk away, you haven’t decided anything yet
→ Transaction process : you promised something, you can’t walk away anymore
STEP 3 : check the stock / availability
→ Check which department we are going to involve
2 options :
1) The bike is available in warehouse
4
