ERP Emulator to Conduct (MOSIMTEC)€¢ Economic Order Quantity • Dynamic Lot-Sizing • Silver-Medal Heuristic • Least-Unit-Cost Heuristic • … 𝑓𝑥=? Inventory Control

AnyLogic Conference

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ERP Emulator to Conduct

Supply Chain Diagnostics

Agenda

Who is MOSIMTEC

What is ERP?

What is MRP & MRPII?

Shortcomings of ERP

Shortcomings of Planning & Assessing

Significance of ERP Emulator

Architecture & Constructs

Application

Other Use Cases

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Headquarters in Washington, D.C.

Focus on modeling, simulation & data management

Provide data analytics and visualization, consulting, advisory services, software sales, support & training

Extensive experience in multiple industries

Industry partner of Virginia Modeling, Analysis and Simulation Center (VMASC)

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Helping industry to make informed decisions by applying Modeling and Simulation Technology

What is ERP?

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Human Resource

Financial Resource

Business Intelligence

Manufacturing

Maintenance

Project Management

Logistics

Inventory

E-commerce

CRM

Sales & Marketing

Customer Supply Chain

Admin, Finance,

AccountingProduction

*Layout derived from ERP prezi by Rania Hamdy

ERP

Input Output

What is MRP & MRPII?

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Customer Orders

Sales Forecast

BoM

Master Production Schedule

Material Requirements

Planning

Purchase Orders

Material Plan

Work Orders

Reports

• Economic Order Quantity• Dynamic Lot-Sizing• Silver-Medal Heuristic• Least-Unit-Cost Heuristic• …

𝑓 𝑥 = ?

Inventory Control

ERP & MRP Shortcomings

Assumption of unlimited capacity of resources

Non-stochastic

Fixed Lead-time

Fixed Routing – alternative routings during unplanned events

Overall inflexible because it is designed as for transactional bookkeeping purposes, not dynamic planning

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How ERP is Used for Planning

Master Planning

Integrated Planning

Detailed Planning

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• Silo’d preparation• Different goals• Level of detail

Shortcomings of ERP Planning

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Variability

1. Product lines2. Unstable process3. Changes in learnings

100

Buffer1

200 180

Constraint

200 180

Buffer2WC1 WC2 WC4 WC5

150

Buffer1

200 180

Constraint

80 180

Buffer2WC1 WC2 WC3 WC5

Simulation as an ERP Emulator

* The “Digital Twin” identified as one of Gartner’s Top 10 Strategic Technologies for 2017

Better decisions.

What-if scenarios.

Systems view.

Risk mitigation tool.

Counter-intuitive effects.

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Information is Money

Order Algorithms

Location1

Emulation Architecture

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Hot Tender Planned Order

Production Order

Purchase Order

Tender WinApproval

All Material Available

Make or

BuySales Order

Design Complete

All Production Orders

CompleteProduction OrderProduction Order

Purchase OrderPurchase Order

Quotation Order Entry Engineering Logistics Production Planning

Location2

Sales Order

Location3

Sales OrderSales

OrderSales OrderSales

OrderSales Order

Planning Algorithms

Production Algorithms

But only if it’s “Fit for Purpose”

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Customer Specific Application

Rebalancing of the production locations

Service Level Agreements validation

Testing staffing levels

Learning curves and productivity levels

MRP reorder algorithms

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Entire Supply ChainProduction SystemManufacturing LineEquipment

OR?AND?WHY?

ERP/MRP Emulator Constructs

Processing Times

Supplier Lead Times Buffer Sizes

Equipment Downtime

Safety Stock Logic

Routing Logic

Safety Lead Time

Product Types

Quality Settings

Lot Sizing Quantity

Lot Sizing Rules

Demand

Conveyor Speeds

Carrying Costs

Transport Costs

NPV

Throughput

Capacity

Utilization Costs

Revenue

Net Income

ROI

IRR

Inputs

Statistics Financials Investment

(Derivatives)

Parameters Logic Data

Outputs

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Why AnyLogic?Instantiate Locations Instantiate Parts & BoM

Instantiate Production

User Defined Interface

Instantiate Statistics

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Select OptimizationOr Heuristic

Use Case Possibilities

Strategic Planning & Analysis (2 to 5 years) Capacity PlanningRisk MitigationBusiness Continuity Planning

Tactical (6 to 24 months)Demand fluctuationsSupplier Material shortagesDepartmental Alignment – “Getting all to communicate and have better understanding of decisions”

Operational (1 to 12 weeks)Resource planning: personnel, equipment, vehiclesFinished Products Delivered Late (FPDL)Daily production planning covering 2 to 5 weeks of activity

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S&OP / IBP

Possibilities of Industry 4.0

Simulation Software ERP Software

Fixed Data- Work Centers- Routing Data- Setup Times- Process Times- Fixed Capacities

Dynamic Data- Shift Schedules- Preventive Maintenance- Labor Capacity

Lead Time

Moon, Y., Phatak, D.(2005) Enhancing ERP system’s functionality with discrete event simulation, Industrial Management & Data Systems, 105(9), 1206-1224

Parameters

Framework for Determining Production Lead Time

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