Masaryk University Faculty of Economics and Administration, Department of Corporate Economy Ing.J.Skorkovský,CSc.

Masaryk University

Faculty of Economics and Administration,Department of Corporate EconomyIng.J.Skorkovský,CSc.

* Tasks, problems andreal South African project

*Your main task (not organised set of

processes)

Input check Put-away Cross-docking Transfer

to Production

Consumption registration

Production Output

registrationInventory value

calculation Output check

Delivery

Load-despatch

Production Planning

Sales Order Component replenishment

Purchase Order

Invoicing Payment Finished goods to Inventory

Picking from Inventory

Reporting Statistics

*Your main task (organised set of

processes)

Input check

Put-away

Cross-docking

Transfer to

Production Consumption

registration

Production Output

registration

Inventory valuecalculation

Output checkShipment

Load-despatch

Production Planning

Sales Order Component replenishment

Purchase Order

Invoicing

Payment from Customer

Finished goods to Inventory

Picking from Inventory

Reporting Statistics

Inventory valuecalculation

Inventory valuecalculation

Payment toVendor

*Your main task (possible problems,

bottlenecks,..)

Input check

Put-away

Cross-docking

Transfer to

Production Consumption

registration

Production Output

registration

Inventory valuecalculation

Output checkShipment

Load-despatch

Production Planning

Sales Order Component replenishment

Purchase Order

Invoicing

Payment from Customer

Finished goods to Inventory

Picking from Inventory

Reporting Statistics

Inventory valuecalculation

Inventory valuecalculation

Payment toVendor

*Your main task Search - HOW ??? Measure impacts –HOW ??? and Destroy – HOW ??? And improve - HOW ???

CAUSE->EFFECT RELATIONS

*Methods (not sorted so far )

* Theory of Constraints

* Critical Chain (DBR)

* Ishikawa Fishbone Diagram (Total Quality Management)

* Pareto Analysis , ABC, EOQ, Six Sigma and Ishikawa

* OLAP (On-Line Analytic Processing)

* Kepner –Tregoe methodology

* MaxMax and MaxMin (Hurwitz)

* SWOT, BOSTON and Gartner Magic matrices

* ERP Statistics and Reporting

* Little´s law

* Yield Management

* Linear programming

* Balanced Scorecard

* Production algorithms (MRP,MRP-II, JIT,APS)

* And many, many more…..

* BS and OM

Finances – how should we look to our shareholders ?

Customers – how should we look to our customer ?

Processes – at which business processes must we excel ?

Learning and Growing – how will we sustain our ability to change and improve ?

Project managemen

tTheory of constraints Production

Critical chain Drum –buffer-rope

MRP-MRP-II,JIT,APS

Linear programmi

ng

Cutting, blending

Total quality

management

Pareto, ishikawa

Product postitioning

Little´s law

Boston

Matrix

Gartner QM

Workflow

CONWIP Logistics

EOQ, ABC

Decisionmaking

Kepner-Tregoe

Hurviwtz

Business Intelligence

Yield management

Prospect theory

BS and OM – slide from Balanced Scorecard show (will be presented again in BS context)

* Simplified diagram of ERP usage

ERP Transaction = Entries

DB ERPPartners

Reports Forms

Information

Information(trends)

Knowledge of methods for process management and used metricsDecision

Enterprise

Key knowledgeKey decision

*Basic problem I. (one of many)

We havea huge data

quantity

..and at the same time a minimum information which could be used for decision making !!!!

To solve it we should use finite capacity scheduling (APS)- will be presented later

Op1

Op2

Op3T1

T2

T1+T2=X

Opt=Min(X)

Op1

Op2

Op3T1 = 0

T2 = 0

*Basic problem II. (we need reliable data )

*Basic problem III.

Will be explained in Little´s law presentation

*Basic problem IV.

(Black ->White, Setup time=60 minut)(White->Black, Setup time = 20 minut)

Black

Black

White

White

*Basic problem V-I.(availability

of components)

Op1

Op2

Op3

20 pcs A7 and 20 pcsA8A0

A1 A2

A3

A4 A5

10 pcs A4 adn 10 pcs A5(will be delivered in T1+X time )

T1

T0Lead time A6

A6

A7 A8Op1

Op2

Op3

X= slack

T1

T1+X

*Basic problem V-II. (availability

of components )

APS result ->18.8.->23.8. a 27.8.->10.9

*Basic problem VI-I. (over

budget)

*Basic problem VI-II. (over

budget)

*Basic problem VI-III. (over

budget)

*Wholesale-paper-warehouse management-ERP

* 100 000 Tones per Year

*Carbonless papers

*Cast coated papers and Board

*Coated papers

*House brands

*Office papers

* 5000 locations in HQ and 40 000 M2 warehousing space

* 50000 customers

* 90 vehicles

* FEC trading (Forward Exchange Contracts)

*Hundreds of employees

*Heterogeneous IT system with every day synchronization of data in HQ and subsidiaries

*High volume-low margin type of business

Basic business specification

Products

*One database only (MS SQL)

*Modern IT technology ensuring :*Fast access to data providing on-line information any

time

*Easy upgrades

*Mobile technologies (BAR code readers,..)

*Quick response to business partner requirements

*Multidimensional analytic tool->reporting to support decision making process

*Efficient warehousing (inbound and outbound operations)

*On-line reporting (warehouse status, accounting, cost control,…..)

Basic requirement

* Isolated Data Islands

21

Management

Marketing

Accounting

Customers

BanksReplenishment

planning - Vendors

Sales Representatives

Customer

Orders

Production Island

Accounting Island

Marketing& SalesIslands

QualityManagement

Island

Island of Deliveries

Inventory -warehousingQuality Management

* Management Marketing

Accounting

CustomersCredit limits,

rebates, consignment stock

Shareholders

Planning

Internal Sales

(paper shop)

Customer

support

One CompanyDatabase

One Solution One Database All Microsoft

Sales Representatives

Purchase-Vendors

FEC, transport,..

Reporting

Warehouse

(pickers and pullers)

Communications limits (band width, stable connection…)

*Receipt bins (area where lorries are unloaded)

*Put-away to bins (racks) based on zones definition

*Capacities of the bins (racks) – (weight, size)

*Cross docking (from inbound are directly to outbound area)

*Transfer between location (HQ and subsidiaries)

*Picking slips (from rack to shipment area)

*Shipments area (bins, cages)

*Transport planning

*Credit limits and overdue payment check

*Invoices, Credit memos,….

*Claim management

Efficient warehousing –(only a few examples)

*Warehousing

*Warehousing

* Design (S=Sheets, R=Reels, G=Graphics, C=Cutting, G=Guillotine) – only for home study !!

B0 receiving bin

EST WEST bins in – shipment area (cages)

G zone

S zone R zone

G1

G2

C zone 6

5

4

3

2

1

Broken Bulkrack

2 (

3)

pale

ttes

in e

ach

bin

Adjustment bin

= palette

*Project management

*Budget <->Quote and contract

*Planning of resources and task control

*Planning tools – see following slides

*Reporting (time-capacity usage, costs,…)

*Change management

*Project Risks

*Consignment stock

* CPM,PERT,CCPM – will be mentioned later

*Resource Planner tool

*Resource Planner tool

*Resource Planner tool

Customer

*Consignment stock (benefits)

CustomerWholesaler

Wholesaler

Partial invoice after 1 month (one palette)

Partial invoice after 2 months(one palette)

Final invoice after 3 months

Requests

Transfer

Remainingstock

= palette

*Forward Exchange Contract (home study only)

A special type of foreign currency transaction. Forward contracts are agreements between two parties to exchange two designated currencies at a specific time in the future. These contracts always take place on a date after the date that the spot contract settles, and are used to protect the buyer from fluctuations in currency prices.

Opened from Purchase order (MS Dynamics NAV 2013)

*Staff training

*Study materials

*Key users – roles, processes

*Training :planning

*Examination

*Change management

*Project Management I.

*Budget (financial and resource capacities)

*Data transfers (old sysetm- >new system)

*Setup of the ERP system (MS Dynamics NAV)

*Tests

*Evaluation od customized solution

*Change management

*Sharp start

*Closing project –evaluation

Formulate problem

Define goalCreate model

Experiments

Evaluate model

Formulate cognition

Model application

Verification of validity

Real system

Use knowledge

Gain knowledge

Steps in the model based problems solving process

* Source : Nyhuis,Wiendahl, Fundamentals of Production Logistics

*Implementation

*Data transfer

*Setup of the system

*Role Tailored Clients- profiles, Approvals

*Tests

*Evaluation

*Change management

*Sharp start (Namibia and SA)

*Closing project

*Next stages