Hillary Raya, Ramon Rodriguez, Julius Malone & Nikhil Chandankhede Winter 2016 CSU East Bay Planning for Siemens Manufacturing: Working Through the MRP Process
Enterprise Planning and Control. Planning for Siemens Manufacturing
Feb 17, 2017
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Hillary Raya, Ramon Rodriguez, Julius Malone & Nikhil Chandankhede
Winter 2016CSU East Bay
Planning for Siemens Manufacturing:Working Through the MRP Process
PRODUCTSiemens Digital Factory• S7-400 CPUs Product Family of Central Processing Units Part of automation systems• Applications Power generation Water treatment plants Traffic flow automation Airport automation
FORECASTINGAssumptions1.Yearly forecasts do not follow
seasonal pattern2.Monthly forecasts do follow
seasonal pattern3.For 10-year period forecast is
not cyclic
ResultsLinear regression! Lowest MAD.Forecast of 902,600 units.
Methods Used1.Linear Regression2.Exponential Regression3.Moving 3-Year Average4.Moving 4-Year Average
NU
MBE
R O
F U
NIT
S IN
THO
USA
NDS
FORECASTINGActual data 2005-2014 to predict demand in 2016
22,801 orders87,129 orders
Q1
Added seasonality for actual orders per quarter
= 0.26 234,676 units
20,754 orders87,129 orders
Q2 = 0.24 216,624 units
19,858 orders87,129 orders
Q3 = 0.23 207,598 units
23,716 orders87,129 orders
Q4 = 0.27 243,702 units July - September
April - June
January - March
October - December
Recall: Aggregate operations planning main purpose is to specify optimal combination of production rate, workforce level and inventory on hand• Strategies used & why:
-Siemens mainly uses Level Strategy-Subcontracting considered
• Main assumptions: Maintenance cost at 15% of all expenses, % of resources allocated to production line, fixed number of machines, beginning inventory @ 25% of demand forecast• Given more time & access: more specific numbers, capacities effect
on aggregate planning, better understand how ERP software integrates with aggregate planning
AGGREGATE PLANNING
COST & NUMBERS MATRIX
AGGREGATE PLANNING SUMARY
MDS
MRP
ERP
What is Enterprise Resource Planning?
Uses of ERP software●Eliminates duplication of data●Information across departments●Productivity●Inventory management●Material cost●Human resource management●Boosting profit●Customer interaction●Customer service
Different ERP Vendors
●SAP●Oracle●Microsoft
Dynamics
SAP vs Oracle● Average Implementation duration
20 months● Average delays 2 months● Average implementation Cost of
$16.8 Million or 18.6% of the Revenue.
● ERP solution Benefit factor of 72.2%.
● Focuses more on research and design
● Focuses more on Customization as compared to quick development of application.
● Average Implementation duration 18.6 months
● Average delays 4 months● Average Implementation Cost of
$12.6 Million or 10.6% of the Revenue.
● ERP solution benefit factor of 58.0%.
● Focuses more on flexibility and ease to use
● Focuses more on Quick development of application and not on customization.
SUMMARYConsiderations• Lack of information more assumptions• No Capacity Requirements Planning (CRP)
OptimizeTime Speed Quality FlexibilityCost Efficiency
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