MOD 1 PART B CH 5 & 6

Enterprise Resource Planning (ERP)

Framework for organizing, defining, and standardizing the business processes necessary to effectively plan and control an organization so the organization can use its internal knowledge to seek external advantage.

Data cleansing

Sifting through a database to find and fix mistakes such as misspelling, missing information, and false data.

Different types of RFID Tags

Simple and cheap tags are used to record an EPC, while more sophisticated tags are used as a mobile database. Active tag - a radio frequency identification tag that broadcasts information and contains its own power source. Such tags can transit data to a reader at long ranges and are the most expensive type of tag. They are often used to tag containers or pallets Passive Tag - a RFID tag which does not send out data and is not self powered. The radio frequency temporarily powers the tag. Passive tags can transmit data at short range and are cheap if purchased in bulk. Readers must typically be installed at gateway entry and exit points, on equipment such as a forklift or be handheld. Semipassive tag - an RFID tag that sends out data, is self powered, and widens its range by harnessing power from the reader.

Capable to Promise (CTP)

The process of committing orders against available capacity as well as inventory. - this process may involve multiple manufacturing or distribution sites. - CTP is used to determine when a new or unscheduled customer order can be delivered

Available to Promise (ATP)

The uncommitted portion of a company's inventory and planned production maintained in the master schedule to support customer-order promising.

Data Capture and Storage

Data can be static or dynamic. Static data can include plant locations, warehouses or SKUs, or part numbers; dynamic data includes forecasts, current deliveries, and direct materials/ direct labor costs.

Data analytics

Data collection - deciding how much data to collect and how they will be analyzed Technology usage - separating insights from useless data and presenting the insights in a way that is instantly understandable Leverage results - incorporating insights into the decision making process

Value Added Network (VAN)

A network, often supporting EDI, providing services additional to those provided by common carriers.

web services

a common internet or intranet framework that enables the movement of data from one application to another, without the requirement for a direct connection between two supply chains applications and without regard to the underlying operating system for those applications. - web services are portions of software applications or interface devices that are built to be interchangeable "building blocks" that can all work together so that organizations can upgrade or change one aspect of the software without needing to replace or reprogram all of the other parts of the software - saves time and money by cutting development time, especially for integration

Legacy system

a computer application program that is old and interfaces poorly with other application but is too expensive to replace. Often runs on antiquated hardware.

Service-oriented architecture (SOA)

An approach to systems development based on building complete systems through assembling software components, each of which model generic business functions. - results of using SOA are a dramatic increase in application development time because many portions of an application can be reused. - can handle elaborate tasks

Maintain data accuracy by

1. instituting role based access policies, procedures, and software limits for adding deleting, and modifying information 2. investing in data maintenance/continuous improvement process training for current and future users.

Data capture methods

Automatic identification system (AIS) - a system that can use various means, including bar code scanning and radio frequencies, to sense and load data in a computer. Devices used for AIS are sometimes called automatic identification and data capture (AIDC). These devices identify items and track the movement of goods across the supply chain. - faster information visibility and increased transaction accuracy and processing speed. - unlike having a serial number an AIDC device can communicate the object's presence. AIDC devices have two key features : 1. automatic classification 2. automatic identification. Classification process applies the objects class to some of the numbers in an identifier, reducing the complexity of the numbering process and increasing identification speed. - Bc the internet allows access to information from anywhere, AIDC devices can classify and identify themselves on a network. - only a unique identifier is required and the product data for AIS can be stored on the internet - Global identification requires that the identifiers for objects be unique so the internet will yield only one match per item.

Transportation Management Systems (TMS)

A computer application system designed to manage transportation operations. These systems typically offer modules focused on specific functions, such as intermodel transportation, import/export management, fleet service management, and load planning and optimization.

Business process management

also known as process oriented middleware. A business strategy that stresses technology, innovation, and flexibility to align an organization's objectives and activities with customer needs POM manages entire conversations rather than individual data. It requires businesses to focus on processes and has therefore had a side benefit of process simplification.

TMS

automates the planning and operations involved in moving goods between any points in the supply chain, including shipper and mode selection, optimizing routes and loads, and fleet maintenance - integral part of SC because of the impact of e-commerce businesses and consumers are finding it cost effective to have smaller, more frequent orders.

How do ERP systems get created?

by vendors interviewing thousands of firms and design the system to cover the top 80% of requested functionality. Costs tend to rise quickly is software is selected below the 80% threshold, partly due to increased need to customize the software.

EPC (Electronic Product Code)

codes that are used with RFID tags to carry information on the product that will support warranty programs. -EPC has the same manufacturer/SKU information as UPC bar code, plus a unique serial number and a link to interactive transaction data.

Profitable to Promise

combines CTP with a profitability analysis to determine how profitable a particular order would be after all costs are considered.

Configuration VS Customization

for a software purchaser, configuration is adjusting system parameters from a process view without reprogramming the software's code. - typically a necessary step that results in entry field and lists being populated with the organization's cost center, translation codes, customer codes, and so on. - flexible and cost effective but has limitations Customization - reprogramming the software's code or adding on to the software's code to get the application to do what it was not originally designed to do.

advantages of "best of breed" vendors

have come up with industry specific, highly tailored and cutting edge solutions - faster to market with innovative functions and services - targeted industry expertise - niche market applications - may have more expertise in a specific functional area such as warehousing, while an ERP vendor may have little expertise in this area and their modules functionality may reflect on this shortening.

Benefits of WMS

implementing a quality WMS can significantly improve productivity and reduce the frequency of errors or fraud in comparison to traditional methods - offers competitive advantage (faster cycle times through cross docking or automated checking replacing manual checking) - satisfies retail requirements such as by adding automatic identification technologies - improves accuracy by automating put away and pick location verification - supports high transaction processing capacity for global verification - satisfies complex international handling needs - increases distribution efficiency (coordinating pallet sizes and bulk discounts...80 items per pallet = 80 item order for discount) - reduced safety stock - optimizes use of space - provides for system design, selection, training, and change management that can mitigate risk.

Use of upgrades, new releases of ERP, or new modules

implementing or purchasing a new release can have significant costs and must be justified through proof of a positive ROI with measurable results indications of a worthwhile upgrade include: - better open architecture than the current system - better business information or meta data (data about data) ex: knowing in-stock inventory but also lead time for new stock, stock locations, and capable to promise - faster learning curve and user friendly abilities to speed acceptance. - full integration with currently disjointed systems - increasing cost of maintaining old versions upgrades take longer when the system infrastructure is heterogeneous and multiple duplication of effort is required for each different system.

Point of sale information

information about customers collected at the time of sale

Big Data

massive amount of both unstructured and multi-structured data that is hard to process using traditional database and software techniques. - big data comes from different sources - web, sales, customer contact, social media, mobile data and so on. -collecting, storing, and processing massive amounts of data for the purpose of converting it into useful information.

Electronic Data Interchange EDT

the paperless (electronic) exchange of trading documents, such as POs, Shipment authorizations, advanced shipment notices and invoices, using standardized document formats

Data mining

the process of studying data to search for previously unknown relationships. this knowledge is then applied to achieving specific business goals. input data to a DSS for supply chain management might include: - static and semi-static data such as customer order history, locations of suppliers, warehouses, and retailers; weight volume, holding cost, and shelf life of products - dynamic data (POS data and sales forecasts; current capacity and transportation costs to distribution center; retailer inventory levels, delivery status, and product sales forecasts. - DSS queries such as sales by customer, segment, or SKU.

Point of Sale System (POS)

the relief of inventory and computation of sales data at the time and place of sale, generally through the use of bar coding or magnetic media and equipment

Radio Frequency Identification (RFID)

uses electronic tags and labels to identify objects wirelessly over short distances

ERP vs best of breed systems

ways to construct ERP system 1. all modules can be purchased as a package from one vendor 2. some modules can be purchased from one vendor with other modules added 3. "best of breed" modules can be bought from multiple vendors

ERP transactional modules

where all user interactions with the system occur, such as placing orders, moving inventory, billing customers, or paying suppliers. decision makers use the ERP planning module to set corporate strategy (includes research and development, funding & required returns, product line decisions, and marketing strategies. sales and ops planning is a key tool that works to synchronize supply with demand, allowing strategic plans to be regularly adapted to current circumstances - feeds into master production scheduling, material reqs planning, BOM, scheduling, capacity and other planning methods

SCEM Active Visbility

- Monitor events such as demand, shipments, orders, production, fulfillment, and inventory and distribute the information throughout the supply chain - Measure events against key performance indicators to improve forecasts and decision making - Notify decision makers when exceptions occur, such as shortage, so they can make alternate plans in time to avoid costly consequences - Simulate real or projected exceptions to gauge their impact and recommend solutions - Help Control events by providing timely and simple methods for reversing previous system choices when an exception indicates that a change could prevent a problem or be less costly.

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- because RFIDs generate vast amounts of information, the data must be brought to a usable state prior to sending them to ERP or analytical systems - RFID's value comes in when process discipline cannot be advanced with other technologies and human interaction has reached the limit of its efficiency. - the costs associated with RFID can be difficult to estimate because they include not just individual RFID tag costs but also infrastructure changes and capacity increases for filtering storage processing and analysis.

POS allows organizations to:

- capture data on product SKU, price, promotion, and inventory - replace a push system with a demand pull system based on actual customer orders and improve sales forecasting - deduct inventory from the books immediately at the time of sale - immediately forward accounting information to finance - collect information about individual customer purchasing habits - reduce bullwhip effect if the data are shared immediately throughout the supply chain - reduce data errors by collecting data at the source rather than later entry - update POS systems at reduced cost, simplifying returns, coupons, special orders, layaways..etc.

Data acquisition and communication tools help to

- collect information - provide timely access to data - controlling access to relevant data - reduce visibility gaps - improves planning effectiveness - ensuring and maintaining data

SCEM Benefits

- faster response times to changes in supply and/or demand - ability to receive exception notifications on portable devices - earlier marketing and sales demand reaction (less waiting for systems analysts) - improved order accuracy, tacking, and cycle time - less management time devoted to shipping and receiving - reduced inventories and safety stocks across the supply chain - greater labor efficiency and productivity - better forecasting and business planning for a flexible response to demand - reduced total supply chain costs - enriched collaboration by allowing it to occur in a decentralized way - increased customer responsiveness and decreased product returns - improved real-time communications with ad hoc partners

POM

- gives multiple systems a common communication method - accommodates multiple protocols and messaging standards - integrates commercial software and legacy systems using standard tools -attaches easily to existing middleware (and their integral systems) - adds flexibility to the interactions between modules and systems - records transactions centrally in a data warehouse, providing visibility - does not require new code for each new system , unlike data oriented middleware - firewalls between partners - customized processes for each partner - internal integration preceding external links - integration with automatic identification technologies DISADVANTAGES OF POM - may not be as simple to integrate with existing systems as advertised and different pOM n the same supply chain may be complex to integrate

EDI standards

- internationally agreed upon protocols for transmitting data between sending and receiving companies. - extranet - common method of connecting systems that do not run the same applications or ERP systems - a type of middleware called content level middleware. content level middleware specifies a shared format for standard forms and each of the data fields. - web-based EDI handles messages at a fraction of the setup cost.

Most important data for analysis includes:

- purchase orders for raw material cost and spend analysis - orders for demand analysis, customer profitability, and customer service - inventory data for working capital, customer service costs, and obsolete or excess inventories - shipment data for network optimization, transportation spend analysis, carrier performance analysis, and transportation rate negotiations. - customer and supplier master files

WMS Functions continued.

- receiving : automatically matches and routes POs with advanced shipment notifications (ASNs) and blind or traditional receipts; notifies staff of incoming ASN and upgrades backorders or rush orders - Storage location management and optimization - creates put away algorithms and determines location by type, size, volatility, and velocity. - cross-docking - allows for opportunistic or planned truck to truck transfers, including timed merging of items for a customer's orders - inventory control - performs cycle counting and creates audits to track the time, person, and place of movements, inventory levels, and lead times - quality control - tracks items by batch or by lot, notifies management of quality issues, places rejects on hold, and ensures quality compliance - order selection and task management - forms a pick pan by picking type, allocates items for specific orders, and shows order status - automated replenishment - security - returns - manages reverse logistics

Benefit of automated identification

- reduced errors and lead times - productivity increase - optimized storage density - better response times - more accurate shipping and inventory leading to less shrinkage.

TMS

- reduction of overall transportation costs by reducing deadheading, demurrage, and time spent waiting to load or unload. - capacity procurement reduces cost variability by anticipating demand and making better use of all internal and contractual variability by anticipating demand and making communications reduces billing errors and gives networks more time to strategically plan shipments.

Benefits of APS

- remove pressure from bottlenecks in systems. - optimizes and accelerates the use of available materials, labor, and plant capacity. - satisfies business objectives to create schedules for what should be produced, where and when production should occur, and the sequence of events that should occur. - creates holistic supply chain plans that incorporate long range aggregate planning and short-term detailed scheduling - makes tradeoffs between conflicting objectives as determined by the strategic priorities of the firm - ERP + APS makes the most of current ERP investments while opening up a new stage of supply chain development for a firm. - the APS system derives an optimal solution for the supply chain network and provides each ERP system with production requirement and optimal start dates for production runs. benefits of the APS system can only be achieved if input data are complete and accurate.

advantages of using a module from the ERP vendor

- simpler and better integration - leveraged ownership of enterprise data - shorter user training - fewer vendors to work with - included in existing support contract - lower total cost of ownership - vast development resources, including large development

SCEM software

- simulates, controls, and responds to unplanned events and exceptions to planned events. - it uses supply chain visibility to link the extended supply chain and track inventory movement. - can help reduce or eliminate customer service errors (late deliveries / incomplete orders) by inputting data into performance management systems so that the root causes of the errors can be seen and corrected. - allows users to set parameters based on business rules that trigger notification to the appropriate parties when events in the system occur or when exceptions to those events occur. - decision makers using SCEM are able to quickly develop and possibly automatically implement alternate plans - mitigates business risk, makes processes more harmonious, and enables collaboration - use of SCEM will help a supply chain reach the highest stage of development by enabling interactions between their functional systems such as ERP, advanced optimization, and trading exchanges - can trigger downstream activity.

TMS must be able to provide

- visibility: gives transportation managers, salespersons, customers, and shipping personnel access to timely information - centralized control over shipment planning: holistically optimized routes and shipping modes, freight costs, lead time, and customer service levels - integration between transportation planning and order fulfillment: increases cost control, customer service, and automation - execution control - automation: increases efficiency and reduces errors.

Impact of automated data capture on supply chain performance

-Improved customer service levels by reducing stockouts (esp with promotional or advertised items) - inventory data is more accurate , supply is matched more closely to demand, leadin to profits because fewer sales are lost and variability is reduced - enriched product information bc data is more easily available - accurate inventory reduces shrinkage from employee theft, lost inventory, or spoiled goods and enables functions such as vendor-managed inventory. - IMPROVES VISIBILITY AND QUALITY ASSURANCE

Data errors can come from

-each time data is manipulated - numeric transpositions, typos, and missing or incomplete data - older or not fully integrated databases with multiple versions of a record - redundant databases in the network or different tags for the same objects

ERP components

ERP database and shared master data - shared central database. ERP databases provide a single storage location for all types of data. This minimizes redundancy and enables the various modules to create, access, and modify the same data. They can contain the following: - customer files - produce-price files contain all data on the firm's products and services, including quality discounts, standard costs, and physical characteristics - supplier files lists all suppliers for the organization, allowing the organization to consolidate suppliers and find economies of scale - open order files contain all current or potential product orders from multiple channels, including special shipping or handling requests. - purchase order files are all open order to suppliers, including MRO (maintenance, repairs, operations) - Bill of material (BOM) files list product components and raw materials. - inventory files show, by location, all available raw materials, finished goods and forecasts of when WIP inventory will be available - Order and PO history files show past purchases and sales for forecasting and budgeting

Data capture challenges and possible solutions

Fast paced, hostile, or multi-lingual environments pose a challenge to accurate data capture.

Other types of AIDC devices

Smart cards - an embedded microchip with a unique identifier. smart cards are used to regulate physical and computer access and create an automatic time log, they can also be used for vehicle identification. Magnetic strips - used for credit and ID cards to automate number entry. Data on the magnetic stripe can be changed. Vision systems - use cameras and computers to interpret the images. These are relatively expensive and can distinguish changes at moderate speeds with great accuracy in a controlled environment.

Middleware

Software that interconnects incompatible applications software and databases from various trading partners into decision-support tools such as ERP.

Types of DSS

Strategic level DSS - can afford to be detailed and relatively slow bc the decisions are long term and need to be performed only periodically (often use the most extensive historical data available) Tactical decisions require a balance between speed and sophistication Operational DSS must be able to provide fast decisions and so are generally simpler models that use current data for short-term planning.

APS System Modules

These 4 modules take data rom the ERP system, provide planning and optimization, then provide the results back to the ERP system's master production schedule 1. demand management - takes data on actual orders, order history, customer data, seasonality, and scheduled marketing events and performs organizational or extended supply chain forecasting for production and transportation 2. resource management- coordinates the capacity and constraints of resources across the supply chain. (planning objectives, demand management output, system constraints, customer data) 3. requirements optimization - this module analyzes demand and resource management results and generates/evaluates multiple planning options. considers customer service and cost, recommending the optimum systemwide solution for procurement, manufacturing, transportation, and storage. 4. resource allocation- happens after planners review and release the optimized requirements, this module sends requirements to each ERP system's MPS.

TMS Functions

Transportation network design- a strategic phase that maps out the transportation network using tools and optimizers. Shipment planning - optimizes the transportation network using modeling and simulation. At the operational level, it optimizes daily transportation plans. Shipping planning includes carrier capacity planning, which matches capacity from a supply plan with demand from a demand forecast. Routing - must be able to deal with various transportation modes. Load Matching and Optimization- TMS provides better visibility to the resources available so that the system can find optimal locations from which to fill orders based on availability, inventory, and delivery costs. Freight rating - rate tariffs can be entered, and loads will be automatically rated by cost and reliability Manifesting - process of creating all required shipment documentation. TMS automates the process, printing shipping labels and pick slips Visibility tools - allow companies and their suppliers and customers to view inbound and outbound shipments, in-transit inventory levels, and exceptions to expected shipments. These tools help improve customer service

Model and data validation

When analyzing results, both the predictive model and the data used must be validated or tested against actual results 1. put historical data into the model and see if the results are as expected 2. if they are, run model again using current data...output is compared with expected results for reasonableness. 3. if tests run unexpected or inaccurate results, both the model and the data are explored to find errors, bugs, outlier exceptions, or incorrect unrealistic assumptions. if results differ by too much, the model and/or the data must be modified until the model accurately predicts actual results within an acceptable margin of error.

Warehouse Management System

a computer application system designed to manage and optimize workflows and the storage of goods within a warehouse. These systems often interface with automated data capture and enterprise resources planning systems. - takes output from ERP and order entry, then executes the daily operations of the warehouse or distribution center, performing tasks in an ordered sequence based on predefined parameters - to gain productivity, technology for automating and inventory movements should be thoroughly mapped in advance.

Decision support systems DSS

a computer system designed to assist managers in selecting and evaluating courses of action by providing a logical, usually quantitative, analysis of the relevant factors. DSS is a broad term for any software application used to help management make better decisions - DSS generates analytical models that are based on mathematical algorithms, simulations, or hybrids of the two. analytical models are simplified versions of a real situation, event, or transaction.

batch processing

a computer technique in which transactions are accumulated and processed together

Data Normalization

a database maintenance term used in the context of relational databases, which helps to minimize the duplication of information of safeguard the database against certain types of logical or structural data anomalies. - often used when merging data from one or more databases.

ERP software

a modularized suite of business applications that are seamlessly integrated to provide automated interactions and a common source of data. - built around a large database with shared data and include a number of transactional modules -common in large and mid-size companies - need vision and direction to be successful, ERP systems can provide the visibility and efficiency needed to see where the business is going and where it can be steered.

Improving data accuracy

a primary method of ensuring data accuracy is to institute consistent collection and data entry policies - sharing POS and other transaction specific data across the supply chain - collecting and transferring data in real time where feasible - completing data entry at the time and place of the event

Supply Chain Event Management (SCEM)

a term associated with supply chain management software applications, where users have the ability to flag the occurrence of certain supply chain events to trigger some form of alert or action within another supply chain application. It can be deployed to monitor supply chain business processes such as planning, transportation, logistics, or procurement. SCEM can also be applied to supply chain business intelligence applications to alert users to any unplanned or unexpected event.

Data Oriented middleware

involves large system to system linkages hat require extensive customization. Each connection requires a great deal of configuration, as each shared data field must be mapped out. implementing data oriented middleware is a labor intensive process that will result in effect and fast communications, but the process may need to be repeated not only to add a new software system but also after upgrades another approach that is related to data oriented middleware is custom linkages custom linkages are developed from scratch rather than using middle software as a template. - less expensive

ERP system evolution to advanced systems

most ERP systems originated as material requirement planning (MRP) systems that grew over time to include manufacturing resource planning (MRP II) functions and then continued to add modules. ERP systems are continually evolving and adding new functionality such as CRM, SRM, SCEM, TMS, WMS. advanced systems may be part of the same ERP system, but often they exist within separate systems. with advanced versions of ERP systems, supply chain partners are able to - make better decisions by relying on data transformed into business knowledge - link management pa to supply chain performance through built-in performance measurement tools - adopt operational methods such as build to order, direct to customer, and lean manufacturing - connect one ERP system to others in the supply chain and use web-based, open, and component based systems to regularly adapt the business model - free up capacity to pursue new business opportunities - perform collaborative planning using cross industry and industry specific ERP systems

Data capture

once set up, data capture is primarily a tactical or operational problem , but the setup of methods, policies and procedures for capturing data is a strategic problem.

Active Visibility - SCEM

providing real-time data to internal users and external supply chain members by capturing data from each supply chain partner and dynamically updating distributed databases across the extended supply chain - customers are able to see dynamic order status through automated emails - therefore saving the company money! - for managers, this system may include global track and trace functions and may provide data not only on picking, packing, shipping, transit, and delivery but also quality reporting and performance data. - active visibility may also benefit other systems, such as TMS or WMS. - visibility provides SCEM the ability to measure and report on supply channel performance, including information on customer demand patterns, shipments, order location and lead time, and inventory levels by location. - for demand management, SCEM provides the ability to manage supplier stockouts or delays, helps buyers and sellers plan for seasonality and promotions and quickly update demand forecasts with the latest information - SCEM support supply planning management through dynamic inventory allocation and postponement. Sourcing can be shorted into multiple tiers at various levels of speed vs price. global shipments can be redirected at the port of entry rather than sorted at a central distribution center.

Advanced Planning and Scheduling Systems (APS)

techniques that deal with analysis and planning of logistics and manufacturing over the short, intermediate, and long-term time periods APS describes any computer program that uses advanced mathematical algorithms or logic to perform optimization or simulation on finite capacity scheduling, sourcing, capital planning, resource planning, forecasting, demand management and others.

WMS Functions

the WMS incorporates feedback to improve workflow by continuously simplifying and optimizing operations. It directs management attention to anticipated or existing problem areas in warehouse activity by continuously profiling performance and then creating exception reports for activity levels, productivity, warehouse order cycle time, storage density, and shipment/inventory accuracy

aggregation

the concept that pooling random variables reduces the relative variance of the resulting aggregated variable. - useful because massive amounts of data can be difficult to interpret when viewed at a granular level.

APS

the key use of APS is to help make sourcing and timing decisions when multiple facilities are available to provide the supply required to meet demand. APS applications use analytical tools (modeling, optimizing techniques, and simulations) usually includes user-friendly planning tools such as interactive scorecards, drag and drop functionality in its interfaces. - the strategic level: where high-level decisions and system design occurs. ex: logistics supply chain network design - the tactical level: where strategy is refined into discrete plans and optimization occurs. At this level, APS helps optimize production, distribution, and inventory across the supply chain - the operational level: where plans are refined to the most granular level and then executed. At the operational planning level, APS creates demand forecasts, demand plans, inventory plans, transportation plans, and optimized daily production schedules. while APS supports planning at each level, it does not execute the transactions itself.