Transcript Supply Chain Dynamics - Game Theory Lab, CSA

ERP/SCM INTEGRATION
N. R. Srinivasa Raghavan
Assistant Professor
Department of Management Studies
IISc
[email protected]
10th August 2001
N. R. S. Raghavan, [email protected]
The E-Quations
E-SRM =
E-SCM + E-ERP + E-CRM +
E-SEM + E-LOGISTICS + E-PDM
E-SCM = E-PROCUREMENT +
E-MANUFACTURING +
E-DISTRIBUTION
10th August 2001
E-PLANNING
N. R. S. Raghavan, [email protected]
Information Systems in SCM
*Stgc
Strategic
Alliance
Planing
formulation
*Devp of
Core Competence
*VRP& Schg
Decision OPT
*Invy.Control
*NPD
Analysis Tools
*SCN Design
*FMS
*Virtual/Vertical Integration
*Fin. Mgmt.
*Cust.Serv. Mmt.
Mgmt
*Cost/Asset Mgmt.
* Productivity Mmt.
Control
*Vendor Mgmt.
*Quality Mmt.
ERP *ODP
* Shipping
* CRM
*Inventory Assignment
* Pricing + Inventory
*Payrolls etc.
10th August 2001
N. R. S. Raghavan, [email protected]
Integration @ what levels?
Transaction level
Management control level
Decision analysis level
Strategic planning level
10th August 2001
N. R. S. Raghavan, [email protected]
Need for Integration: Strategic
motivation
Excess
Inventory
I
Revenue
R
O
A
Expenses
Assets
Unnecessary
Prod./Purchase
Late
Deliveries
Poor usage
of capacities
Premium
transportation
costs
Premium
purchase
costs
Infeasible
Plan
Late Resynchronisation
Demand plan &
PDN plan not
synchronizer.
Prod.plan &
Purchase plan not
synchronizer.
PDN.plan &
Capacity plan not
synchronizer.
Qualityissues
costs
Quality
10th August 2001
N. R. S. Raghavan, [email protected]
Need for Integration: Operational
motivation
Customers
Sudden 20% raise in
retail demand
B/D of logistics
operations
Distribution Centers
M/C 2010 is down.
Will be up again in 3 days
Factory
Lockout forces
prodn. to be shut
Supplier
10th August 2001
N. R. S. Raghavan, [email protected]
Solutions due to ERP are myopic
An ERP System would react by:*Adapting the schedule of machine 2010 and
reschedule other manufacturing orders.
* Send orders through EDI to the distribution centre
*Arrange for alternate fleet to route finished goods.
Impact on total supply chain is ignored
10th August 2001
N. R. S. Raghavan, [email protected]
S/W Modules covering the SCP
SOURCE
Long
term
10th August 2001
DISTRIBUTE
SALES
STRATEGIC NETWORK PLANNING
Medium
term
Short
term
MAKE
MASTER PLANNING
Prodn.Planning
Dristbn.Planning
Scheduling
Transport Planning
MRP
Demand
Planning
Demand
&ATP
N. R. S. Raghavan, [email protected]
Global SCN Formulation
• Maximize Sum of the global after tax discounted
yearly profits ($,Rs,etc)
• S.t., for every planning period:
 Supplier's capacity
 Production capacity at plants and DC's
 Transportation capacity of channels
 Customer demand constraints, BOM
 Minimum profit for SBU's on a country basis
• Solution: MILP: Use ILOG/CPLEX/NEOS etc.
10th August 2001
N. R. S. Raghavan, [email protected]
Global SCN Formulation: Data
requirements
• Average capacities available at various entities (at
any granularity desired: eg. Machine-ShopfloorFactory)
• Availability and utilization of logistics fleet
• Estimates/Forecasts of customer demand by
region, product etc
• Average per unit costs incurred for various
resources
• BOM
All obtainable from OLTP systems
10th August 2001
N. R. S. Raghavan, [email protected]
ATP Computations
* Provide promised dates for customers
- influences leadtime + on time delivery
* Generate fast & reliable order promises (esp. in Ebusiness environment)
* Helps in retaining customers & increasing market share
* Complexity increases as :
# of parts increase; PLC decr.; #of customers
increase;flexible pricing policies;demand gets
uncertain.
Should be based on status of ALL SCN facilities
10th August 2001
N. R. S. Raghavan, [email protected]
Scheduling
* Generate detailed prodn./procurement/tptn schedules for all
facilities over a rlatively short interval of time.
* Specify start & end time of various activities
* Identify bottlenecks & provide efficient means of prompt
delivery of customer desired products & right place & time
objectives
* makespan.
*sum of lateness/tardiness
* sum of flow times
* sum of set up times
* max.lateness/tardiness
10th August 2001
N. R. S. Raghavan, [email protected]
Phases in Scheduling
1. Model building-ILP, queueing model, NLP
2. Extracting required data from ERP system- (set up time,cycle time
m/c breakdown data, resource requirements)
3. Generating scenarios (input cases)
4. Iterative creation/adjustment of schedules
5. Approve a scenario
6. Executing the schedule via ERP system.
10th August 2001
N. R. S. Raghavan, [email protected]
SCM Solutions: i2 RHYTHM
Source
Long term
Mid term
Short
term
Make
Deliver
SC Strategist
Demand
planner
SC Planner
Factory
planer
Optimal
scheduler
10th August 2001
Sales
Tptn.
-Modeler
-Optimizer
-Manager
Demand
fulfillment
N. R. S. Raghavan, [email protected]
SCM Solutions: J. D. Edward's
Source
Long term
Mid term
Make
Deliver
Sales
Enterprise Planning
Production and Distribution Planning
Demand
planner
P&DP
Short
term
10th August 2001
Production
Scheduling
Vehicle
Routing
P&DP
N. R. S. Raghavan, [email protected]
SCM Solutions: SAP's APO
Source
Make
Deliver
Sales
Long term
Mid term
Supply Network Planning
Short
term
Production
Planning and
Detailed
Scheduling
10th August 2001
Deployment
Demand
planning
Global
ATP
N. R. S. Raghavan, [email protected]
Integration Issues
SCM solutions need to be integrated in existing IT Systems
SCM
OLTP/ERP
D/W
SCM cannot replace ERP.On the contrary, they extend
planning tasks
10th August 2001
N. R. S. Raghavan, [email protected]
Integration with ERP
* ERP has transactional data
* SCM solution regularly has to talk to several ERP/OLTP
systems of various SC entities.
Two models required
A. Integration model-(what)
Defines - Which objects are exchanged (eg.BOM’s, routings,
inventory levels, Customer Order, PO, etc)
- Their origin
- Which planning tasks performed on which system.
10th August 2001
N. R. S. Raghavan, [email protected]
Integration with ERP (contd)
B.
Data exhange model (how)
Specifies how the flow of data & info between systems is
organized.
Most solutions provide a macro language to define these models
An SCM solution should:
* Match data items from ERP system & structure it
* Provide Import/Export formats (eg.ASCII format with fixed
field size or csv files)
10th August 2001
N. R. S. Raghavan, [email protected]
Data exchange model
Two types - Initial transfer
Incremental transfer
Master data
(Long term changes,
new facility, new
shifts, new suppliers,
etc.)
10th August 2001
Transactional data
(for implementation of
plans)
N. R. S. Raghavan, [email protected]
Data exchange model (contd.)
ERP
BOM,
Inv.levels,
routing,..
Master
data
Transactional
data
10th August 2001
SCM
Initial
tranfer
Incremental
tranfer
Incremental
tranfer
Model
building
Model
adjustment
Planning
data
N. R. S. Raghavan, [email protected]
Integration with D/W
ERP
Real time data
Transactional purposes
D/W
Historical snap shots
Decision support purposes
KDD/Data mining/OLAP
D/W are mainly used in demand planning:
Finding patterns in demand using stats
OLAP tools help in fast and powerful reporting on data
10th August 2001
N. R. S. Raghavan, [email protected]
Data warehouses and SCM
•
•
Collect data from various companies;
Ensure consistency of data from disparate transactional
systems
SCM
D/W
Historical
data
10th August 2001
OLAP tools
KDD
data mining
tools
Model
building
Time series
analysis
N. R. S. Raghavan, [email protected]
Classification of SCM integration techniches
Vendor
specific
technology
Standard
middleware
pdt
eg.CORBA
Internal
interfaces
eg.SAP
R/3, APO
Vendor specific
middleware
eg.i2
RhythmLink
Open only for pdts of vendor
10th August 2001
Open for other systems
N. R. S. Raghavan, [email protected]
SCM Solution Providers: A Glance
Dynasis
i2
logility
Manugistics JD Edwards Web Planner
Electronics
Automotive
Mech. Engg.
Metals
Pharma
Chemicals
Paper/Print
Oil and Gas
FMCG
Textiles
Food
Transportation
INDUSTRY FOCUS A/C TO VENDOR
INSTALLATIONS EXISTING A/C TO VENDOR
10th August 2001
N. R. S. Raghavan, [email protected]