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Enterprise Systems Optimization Introduction EGN 5623 Enterprise Systems Optimization (Professional MSEM) Fall, 2012. Course Objective. Supply chain management (SCM) concepts, modeling, configuration, integration, data transfer, and supply network planning and optimization.

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Enterprise Systems OptimizationIntroductionEGN 5623 Enterprise Systems Optimization(Professional MSEM) Fall, 2012


Course objective
Course Objective

Supply chain management (SCM) concepts, modeling, configuration, integration, data transfer, and supply network planning and optimization.

With a focus on SAP implementation


Scm scope

  • Single facility SCM

    • Increased planning capabilities for a single facility

      • Finite-capacity scheduling

  • Multiple facility SCM

    • Integrated planning for the entire supply chain network

      • Multiple plants and distribution centers

      • Multiple vendors

      • Multiple customers

      • Multiple transportation options

  • SCM Scope


    Erp operations related to scm

    • Related ERP Modules

      • Materials Management (MM) and Production Planning (PP) modules

        • Sales and Operations Planning (SOP)

        • Forecasting

        • Master Scheduling

        • Material Requirements Planning (MRP)

        • Capacity Requirements Planning (CRP)

        • Order release and receipt

    ERP Operations related to SCM


    Erp scm basics sap view

    • SAP ERP:

      • Holds master data for materials, plants, customers, vendors, purchasing information records

      • Holds transactional data (e.g., sales orders, planned orders)

      • Is where plans get executed

    • SAP SCM:

      • Is where “advanced planning” happens

      • Imports master and transactional data from ERP

      • Sends plans back to ERP for execution

    ERP

    SCM

    Core Interface (CIF)

    ERP & SCM Basics (SAP View)


    Scm exercises plan with gbi v 1 0

    • Review Master data

    • APO Demand planning

    • Planning in SCM

      • Supply Network Planning (SNP) Heuristics

      • Deployment and Transport Load Builder (TLB)

      • Capable to Match (CTM)

    SCM Exercises Plan with GBI v 1.0


    Modules related to ecc and scm

    Modules related to ECC and SCM




    Introduction to SCM and SAP APO Theories & ConceptsEGN 5623 Enterprise Systems Optimization(Professional MSEM)Fall, 2012



    Intro to supply chain

    • Materials

      • Any commodities used directly or indirectly in producing a product or service.

        • Raw materials, component parts, assemblies, finished goods, and supplies

    • Supply chain

      • Flow of materials through various organizations from the raw material supplier to the finished goods consumer.

    Intro to Supply Chain


    Supply chain management

    • Definition

      • All management functions related to the flow of materials from the company’s direct suppliers to its direct customers.

    • Functions included:

      • purchasing, traffic, production control, inventory control, warehousing, and shipping.

    • Two alternative names:

      • Materials management

      • Logistics management

    Supply Chain Management


    Supply chains definition

    • Supply Chain

      • A supply chain is the network of organizations, people, technology, activities, information and resources involved in the production of a product or a service

      • Includes suppliers, manufacturers, transporters, warehouses, retailers and customers

    • Production System

      • A manufacturing subsystem that includes all functions required to design, produce, distribute, and service a manufactured product.

    • A Supply Chain consists of one or many production systems that work together in the fulfillment of a customer order

    • Best viewed as a network

    Supply Chains Definition


    Supply chain for steel in an automobile door

    MINING

    COMPANY

    Mines iron ore

    STEEL

    MILL

    Forms steel ingot

    STEEL

    COMPANY

    Forms sheet metal

    Iron

    ore

    Steel

    ingots

    Sheet

    metal

    AUTOMOTIVE

    SUPPLIER

    Makes door

    AUTOMOBILE

    MANUFACTURER

    Makes automobile

    CAR

    DEALERSHIP

    Does preparation

    Car

    Car

    door

    Prepared

    car

    FINAL

    CONSUMER

    Drives automobile

    Supply Chain for Steel in an Automobile Door


    Supply chain management in a manufacturing plant

    Receiving

    and

    Inspection

    Raw

    Materials,

    Parts, and

    In-process

    Ware-

    Housing

    Production

    Finished

    Goods

    Ware-

    housing

    Inspection,

    Packaging,

    And

    Shipping

    Customers

    Suppliers

    Materials Management

    Warehousing and

    Inventory Control

    Shipping

    and Traffic

    Purchasing

    Production

    Control

    Supply Chain Managementin a Manufacturing Plant

    Physical materials flow

    Information flow


    Logistics

    • Logistics usually refers to management of:

      • the movement of materials within the factory

      • the shipment of incoming materials from suppliers

      • the shipment of outgoing products to customers

    Logistics


    Movement of materials within factories

    The typical locations from/to which material is moved:

    Incoming

    Vehicles

    Receiving

    Dock

    Quality

    Control

    Warehouse

    Work

    Center

    Other Work

    Centers

    Packaging

    Finished

    Goods

    Shipping

    Shipping

    Dock

    Outgoing

    Vehicles

    Movement of Materials within Factories


    Shipments To and From Factories

    • Distribution Resource Planning

      • Distribution resource planning extends DRP so that the key resources of warehouse space, workers, cash, and vehicles are provided in the correct quantities at the correct times.


    Analyzing shipping decisions

    • The “Transportation Problem”

      • Problem involves shipping a product from several sources (ex. factories) with limited supply to several destinations (ex. warehouses) with demand to be satisfied

      • Per-unit cost of shipping from each source to each destination is specified

      • Optimal solution minimizes total shipping cost and specifies the quantity of product to be shipped from each source to each destination

    Analyzing Shipping Decisions


    Warehousing

    • Definition

      • Warehousing is the management of materials while they are in storage.

      • Viewed as distribution center (DC)

    • Warehousing activities:

      • Accounting

      • Ordering

      • Storing

      • Dispersing

    Warehousing


    Warehousing1

    • Record keeping within warehousing requires a stock record for each item that is carried in inventories.

    • The individual item is called a stock-keeping unit (SKU).

    • Stock records are running accounts that show:

      • On-hand balance

      • Receipts and expected receipts

      • Disbursements, promises, and allocations

    Warehousing







    Characteristics of the sc network

    • Each node may consist of a production system of its own

    • Links in the network represent a business relationship between two nodes

      • e.g. transportation of a product between two nodes

    • The number of levels in a supply chain varies and depends on the complexity of the product

    • Flows can skip levels by that:

      • Supplier ships direct to DC

      • Manufacturer ships directly to customer

    • The decoupling point is the shift occurs from make-to-stock to make-to-order

      • The decoupling point is not fixed to one level of the supply chain and is influenced by postponement strategies (e.g. Dell)

    Characteristics of the SC Network


    Characteristics of the sc network1

    • Multiple Products, each with possibly different Bills of Material and multiple configurations

    • Multiple Suppliers for raw materials, parts or subassemblies

    • Multiple Subcontractors

    • Multiple Plants possibly containing a wide variety of equipments

    • Multiple Warehouses

      • Distribution centers, local, regional and factory warehouses

    • Different means of Transportation (air, sea, rail, FTL, LTL) either leased, owned or contracted

    • Different information systems and communication channels

    • People with various skills at all levels of the organization

    Characteristics of the SC Network


    Example of costs and revenues in the supply chain

    • Costs Material and multiple configurations

      • Production and purchasing costs

      • Setup or changeover costs

      • Transportation and handling costs

      • Hiring and firing costs

      • Overtime costs

      • Inventory costs

      • Promotional and advertising costs

      • Renting and leasing costs

      • Subcontracting costs

      • Overhead

      • Capital investments and depreciation

      • Taxes and duties

    • Revenue

      • Customer is the only source of revenue

        • From sale of products, spare parts, materials or service

    Example of Costs and Revenues in the Supply Chain


    Example of constraints

    • Productivity constraints Material and multiple configurations

    • Equipment capacity constraints

    • Labour availability

    • Technological constraints

    • Inventory constraints

    • Purchasing, manufacturing and distribution lead times

    • Demand uncertainties and seasonalities

    • Service requirements

    • Budget

    • Regulations and other constraints

    Example of Constraints


    Categories and attributes of a supply chain
    Categories and Attributes of a Supply Chain Material and multiple configurations

    - Reproduced from Fleischmann B., Meyr H, Hierarchy and Advanced Planning Systems, Handbooks in OR and MS, Chapter 9, Elsevier, 2003, pp 457-523


    Types of production systems

    • Pure Inventory Systems Material and multiple configurations

      • Simplest form of logistic system

      • Only procurement activities with no production or complex distribution processes

      • Example: wholesale or retail operations where items are purchased

    • Continuous production Systems

      • Manufacturing of a few families of technologically related products in large quantities

      • Example: Assembly lines or fabrication lines

    • Intermittent production Systems

      • Batch production of many products which share several processing centers

    • Project based systems

      • Production of a unique complex product such as a ship or a bridge

    Types of Production Systems


    Production strategies

    • Make to Stock Material and multiple configurations

      • Production is based on forecasted amounts for stocked items

    • Make to Order

      • Production of a product is made for a customer order in the quantity specified by the order

    Production Strategies


    2 hierarchical planning

    • Hierarchical planning was first introduced by Robert Anthony in 1965* as a three level management framework that consists of:

      • Strategic or long-term planning

      • Tactical planning (or management control) for mid-term planning

      • Operational planning for short term planning

    • The results of one each level are considered as an inputs to the lower level planning

    • Effective implementation and control of the plans requires:

      • An execution layer that captures the events as they occur

      • Feedback loops at all levels

    2. Hierarchical Planning

    * R.N. Anthony, Planning and Control Systems: A Framework for Analysis, Cambridge. Mass., 1965


    Hierarchical planning framework

    • Material programs in 1965* as a three level management framework that consists of:

    • Supplier selection

    • Cooperation

    • Plant location

    • Production systems- Subcontractors

    • Physical distribution structure- Transportation strategy

    • Product program- Strategic sales planning

    Long term

    • - Personnel training

    • - Contracts

    • - Material Requirements Planning

    • - Master production Scheduling

    • - Capacity planning

    • - Distribution planning

    • - Mid-term sales planning

    Mid term

    • - Personnel scheduling-- Material ordering

    • - lot-sizing- operations scheduling- shop floor control

    - Warehouse replenishment- Transportation planning

    • - Mid-term sales planning

    Hierarchical Planning Framework

    Short term

    EXECUTION

    Flow of goods

    Information

    Feedback


    Differentiating factors by planning levels
    Differentiating Factors by Planning Levels in 1965* as a three level management framework that consists of:


    Introduction to SCM in 1965* as a three level management framework that consists of:and SAP APO SAP Implementation EGN 5623 Enterprise Systems Optimization (Professional MSEM) Fall, 2012


    Sap business suite
    SAP Business Suite in 1965* as a three level management framework that consists of:

    SAP NetWeaver

    SAP PLM

    SAP ECC

    SAP

    SRM

    SAP CRM

    SAP SCM


    Planning with sap erp scm

    Basic Components of SAP SCM in 1965* as a three level management framework that consists of:

    SAPECCERP

    SAP SCM(includes SAP BW)

    Core Interface (CIF)

    • Demand Planning

    • Supply Network Planning and optimization

    • Production Planning with capacity considerations

    • ATP

    • CTP

    • Detailed Scheduling

    • Deployment

    • Transportation planning

    • Vehicle routing and scheduling

    • Mater data

      • Materials

      • Locations

      • Partner

      • Plants

      • Info records

    • Transactional data

      • Customer orders

      • Production orders

      • Purchasing orders

    • Execution

    Planning with SAP ERP & SCM


    Planning at supply chain level

    SAP in 1965* as a three level management framework that consists of:ECC 1

    Core Interface

    SAPSCM

    SAPECC 2

    - Planning may be done centrally

    SAPECC n

    Planning at Supply Chain Level

    - Each SAP ECC component covers one or more locations In the network


    Sap scm functionality
    SAP SCM Functionality in 1965* as a three level management framework that consists of:

    THEORY AND PRACTICE OF ADVANCED PLANNER AND OPTIMIZER IN SUPPLY CHAIN DOMAIN by Sam Bansal


    Sap scm modules
    SAP SCM Modules in 1965* as a three level management framework that consists of:

    THEORY AND PRACTICE OF ADVANCED PLANNER AND OPTIMIZER IN SUPPLY CHAIN DOMAIN by Sam Bansal


    Two planning scenarios for sap scm

    Alternative in 1965* as a three level management framework that consists of:Scenario

    Base Scenario

    Two planning Scenarios for SAP SCM


    Cost based optimization

    • Cost or price driven in 1965* as a three level management framework that consists of:

    • Mixed integer programming

    • Must define all sourcing, production, transportation, inventory costs and constraints

    Cost-Based Optimization


    Supply planning tasks and output for scm

    • Tasks in 1965* as a three level management framework that consists of:

      • Identify sources for finished products

      • Plan and consider safety levels in any location

      • Distribute production over plants

      • Choose production resources in plants

      • Explode bill of materials in plants

      • Identify sources for supply of raw materials and components

    • Outputs

      • Purchase requisitions

      • Stock transport purchase requisition

      • Planned production orders

    Supply Planning Tasks and Output for SCM


    Sap apo architecture
    SAP APO Architecture in 1965* as a three level management framework that consists of:


    Sap access through sapgui sapgui download

    The latest SAP GUI release posted on SAP @CSU, Chico web server http://worker.cob.csuchico.edu

    User = sap; Password = sapgui4me.

    This GUI works on Windows 7 systems, as well as Vista and Windows XP.

    SAP Access through SAPGUI SAPGUI Download




    Sap erp scm clients userid password

    SAP SCM server

    Client: 600

    Userid: fiu-101 to fiu-130

    Initial password: SAP4US

    SAP ERP/SCM Clients, Userid, Password


    Exercises
    Exercises: server

    Overview of SCM (APO) Master Data

    1) Location master data in APO

    2) Transportation lanes in APO

    3) Product master data in APO

    4) Resource master in APO

    5) Production Process Model in APO

    6) Quota Arrangement in APO

    7) External Procurement Relationships in APO


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