ERP ORA Concepts

8/6/2019 ERP ORA Concepts

1/42

Enterprise ResourcePlanning

An Overview


2/42

Agenda

Appreciating ERPWhat is ERP ?

Why is it important ?

Oracle and ERP

Oracle Applications - Functional

Overview


3/42


4/42

What is ERP ?

MRP was all about accounting forwhat happened in the past while ERPis all about tying people together to

co-ordinate the future.

In a nutshell ERP is MRP-II tying upall the links in the supply chain.


5/42

Functions covered by typicalERP software packages

SALES FINANCE OPERATIONSEstimation & Quotation General Ledger Bill of Resources

Product Configurator Accounts Payable Inventory Management

Sales Order Management Accounts Receivable Purchasing

Invoicing Fixed Assets Shopfloor ControlSales Analysis Costing Project Management

Contract Accounting Repetitive / JIT

Financial Analysis Maintenance Mgmt.

PLANNING HRD SYSTEM ADMIN.Forecasting Human Resource Mgmt Installation

Distribution Resource Planning Training Upgradation

Sales & Operations Planning Recruitment/Appraisals Parameterisation

Master Production Scheduling Payroll Security/Authorisation

Material Requirement Planning Backup / Recover

Capacity Requirement Planning


6/42

Other Features of ERP Systems

Electronic Commerce

CAD

Data Collection Devices /MES

Imaging Systems

EIS / PC-based tools

SPC / SQC

WarehouseMgmt Systems Internet / Intranet

Multi - Currency Universal Tax Structures Localisation

Multi - Lingual Multi - Company Multi - Location Document Approval Transaction History

Workflow

INTERFACES GENERALFEATURES


7/42

Agenda



Business benefits of ERP

Implementing ERP

Oracle and ERP

Oracle Applications - FunctionalOverview


8/42

History of the ManufacturingIndustry

Work done byspecialists - potters,blacksmiths, etc.

Home & Family wasthe centre of activity

Managing / Co-ordinating work wasnot difficult

Factories to producegoods.

People were broughtto the factories

Concepts of shifts &standardisation

Managing becameimportant

EARLY ORGANISATIONS INDUSTRIAL REVOLUTION

( 1800s )


9/42

History of the ManufacturingIndustry contd.

Standards & DivisionofLabour

Demand of goodsgreater than supply

Mass production

Supervision becameimportant

Customers demandflexibility

ComplexOrganisations

Time-basedcompetition

Need to co-ordinateactivities rigorously

SCIENTIFIC MANAGEMENT TODAYS ENVIRONMENT

( early 1900s - F.W.TAYLOR )


10/42

One Thing is very certain intodays business world ,

and that is UNCERTAINTYTOM PETERS


11/42

Examples ofCo-ordination

The customer selectscloth and givesmeasurements at

Bond Street, London

The suit is stitched ata low cost country likeIndia or Korea

Delivered in 5 days tothe customer

Customer selectsoptions in showroom

Right items arrive atthe right time on ass-embly line of manf.

Car shipped out in 3-4days

Componentinventoriesreplenished every2/4/8 hours (av. 120inventory turns)

DESIGNER SUIT MAKER TYPICAL CAR MANUFACTURER


12/42

Business Reality is ...

Continuous change is key to yoursurvival in the future competitiveworld.

Leaders initiate change. Others,who want to survive, are forced tofollow ...


13/42

Domestic Global Operations

Standard ProductsM

ass CustomizationWork Orders Flow Production

Vertical Integration Outsourcing

Disparate Virtual Corporations

Disconnected Networked

Forecast Driven Customer Driven

Transformation to BestPractices


14/42

Challenges in Todaysenvironment

Complexity - number of products, Rawmaterials, intermediates, processes etc

Size ofO

rganisation - people, sites etcDemanding Customers - buyers market

Competition - local and Global

Rapid rate of change in technology andproducts

Departmental & Hierarchical structures


15/42

The Fact is ...

New problems require newsolutions.

If you continue to do what youhavebeen doing - you will continue to getwhat youhave been getting ...

1 1 3 !


16/42

Some Common BusinessProblems

Material Shortages

High Inventory

Poor qualityPoor Customer Service

Poor Productivity

Poor Cash management

CONFUSION !!


17/42

Some root causes for theseproblems

Incorrect information on the material requirements Lack of visibility into stock on hand Inability to identify substitute materials

Delayed reporting of obsolete material, lost material etc. Inability to trackand control purchases Unable to control vendor shipments Improper inspection instructions

No audittrail of incoming material inspection Inability to determine shelf life and expired material Inability to optimise lot/batch sizes


18/42

Some root causes for theseproblems contd.

Bill OfMaterials, not structured and properly maintained

Delays in implementing Engineering change orders

No provision to maintain aMaster Production Schedule

Inability to schedule operations

Notable to maintain shop floor routings and alternates

No established work centres and check points for quality

Delay in translating customer order into production order


19/42

Some root causes for theseproblems contd.

Missed shipments Inability to provide customers with timely and accurate

informationon order status

Inability to implement ATP Inability to manage payment cycles No information on cash requirements Inability to prevent duplicate payments to vendors Incorrect pricing of customer orders Loss in transaction maintenance Duplication of data entry Lack ofan integrated information system


20/42

Why is this happening ?

What is to be manufactured ?

What resources are needed tomanufacture ?

What resources are currently availableand hence ?

What is the balance that is required ?


21/42

When do you need ERP ?

When you have co-ordination problems

Customer service is of concern

Non-uniform daily schedules

Lead times are more than a day Lot size is greater than 1

You want to re-engineeryou organisation andgain control ofyour business

ERP is the vision

of the Champion !!


22/42

ERP is a tool to ..

Address the confusion element of cost

Orchestrate all business activities by topdown planning

Improve Customer service

Reduce time spent by material in waiting

Provide basis for performancemeasurement

Gain control over business, and accurateinformation


23/42

What is ERP ?

Resource availability check at each step:material, capacity, finance, manpower, suppliers,information, & time

What-if simulation capability at each step

Provide Plan vs Actual comparisions

Uses computers to : Break down the business plan to various levels of detail

Simulate resource loads

Communicate & co-ordinate results and operatinginformation


24/42

The Business Planning/ControlCycle

BUSINESS PLANNING

SALES & OPS PLANNING

MASTER PROD SCHED.

MATL. REQ. PLANNING

DEMAND MANAGEMENT RESOURCE PLANNING

ROUGH-CUT CAP. PLNG.

CAPACITY REQ. PLNG.

PURCHASING SHOPFLOOR CONTROL

PERFORMANCE MEASUREMENT

BUSINESS PROCESS IMPROVEMENT

FORECAST ORDERS


25/42

Supply Chain Management

SUPPLIERS CUSTOMERS

PLANTS CENTRAL

PLANTS

DISTRIBUTIONCENTERS

DISTRIBUTIONCENTERS


26/42

At the heart of the ERP :MRP II Systems

Planning

Manufacturing

Distribution

Financial


27/42

The Planning Modules

PRODUCT LINE

PLANNING

MASTER

SCHEDULE

PLANNING

MATERIAL

REQUIREMENTS

PLANNING

CAPACITY

REQUIREMENTS

PLANNING

RESOURCE

PLANNING

FORECASTING


28/42

The Manufacturing Modules

PRODUCT

STRUCTURES

ROUTINGS

FORMULA/

PROCESS

SHOP FLOOR

CONTROL

WORK ORDERS

REPETITIVE

REPETITIVE


29/42

The Distribution Modules

CONFIGURED

PRODUCTS

SALES

QUOTATIONS

SALES

ANALYSIS

CUSTOMER

SCHEDULES

SALES

ORDERSPURCHASING

SUPPLIER

SCHEDULES

INVENTORY

CONTROL

PHYSICAL

INVENTORY


30/42

The Financial Modules

INVENTORY

CONTROL

ACCOUNTS

RECEIVABLE

CASH

MANAGEMENT

ACCOUNTS

PAYABLE

COST

MANAGEMENT

GENERAL

LEDGER PAYROLL

MULTIPLE

CURRENCY


31/42

Typical System Overview

Invoice

Post

Sales

Shipments

Inventory

Adjustments

Standard Cost

Charges

Purchase

Receipts

Repetitive

Shop Floor

Control

Work

Orders

Accounts

Receivable

Accounts

Payable

GeneralLedger

Multi-Company

Consolidation


32/42

Agenda



Business benefits of ERP

Implementing ERP

Oracle and ERP

Oracle Applications - FunctionalOverview


33/42

Typical Business PerformanceMeasures

Market share performance

ROI performance

Sales Plan performance

Production Plan performanceMaster Schedule preformance

Purchasing performance

Manufacturing Schedule performance

Order Fill Rate performance

Order Due date performance


34/42

Typical Business PerformanceMeasures

DeliveryLead Time performance

Product Quality performance

Service performance

Inventory Turnover

Inventory Record Accuracy

Productivity performance

CapacityUtilisation performance


35/42

Tangible Benefits

Inventory Reduction 20% - 40% 16% - 30%

( matched sets, valid schedules )

Purchased Cost Reduction 2% - 10% 7% - 13%( more time for sourcing )

Mfg. Productivity Increase 10% - 30% 11% - 20%

( matched sets, red. followup, overtime )

Dist./Freight Expense Reduction 10% - 30% 5% - 16%

( from Better Planning )

Sales Increase 5% - 20% 15% - 26%

( from timely delivery & reduced returns )

Quantifiable Benefit WW Stat Indian Stat


36/42

Intangible Benefits

Increased Market share

Improved Customer satisfaction

Improved Vendor performance

Reduced obsolescence Increased flexibility

Reduced premium freight

Elimination of annual stock taking

Floor space reduction

Reduced quality costs


37/42

Intangible Benefits contd.

Improved Resource utilisation

Improved information accuracy

Improved Decision Making Capability

Better Cost Visibility Improved co-ordination between all departments

Reduced expediting

Improved morale

Power savings

Reduction in stationary and supplies


38/42

Why ERP Fails ?

ERP does not fail - people fail toimplement ERP successfully

Top Management does not grasp thebenefits and does not participate

Inadequate planning - lack ofvision

ABC Classification of success criteria :A : People 60 %

B : Business Processes & Data 30 %

C : Technology 10 %


39/42

Why ERP Projects fail

This is an I.T. department project

We dont have time

This technique is not suitable for usOur problems cannot be addressed

Our business is different

OurOrganisation is different

Our people are different

This is India


40/42

Implementation Methodology

ImplementationStrategy

OperationsAnalysis

SolutionDesign

BuildCustom

Documentation

Transition

Production

Implementation Strategy Document

Work Plan

Installed Software

Project Team Workshop

Prototype models

Application Setup Document

List of Policies & Procedures

List of Issues

System Test Plans

Procedure Content & Format

Document

Live System

Business requirements

DocumentFit Analysis

Proposed Flow

Conference Room Pilot

Test Results

Certified System

Production Environment

Cutover Plan

Enduser Training


41/42

Typical Project Schedules

Implementation

Strategy

OperationsAnalysis

Solution Design

Build

Transition

Production

PHASE M1 M2 M3 M4 M5 M6 M7 M8 M9 M10


42/42

Project Structure

Project Team Organization Chart

Functional Consultant

Technical Consultant

Project Manager Quality Manager

Consultant Project Director

Key Users

IS Staff

Project Manager

Client Project Director

Steering Committee

ERP ORA Concepts

Documents

Transcript of ERP ORA Concepts