Supply chain mangagement (SCM) implementation methodology & best

Supply Chain Mangagement (SCM) - Implementation Methodology & Best presented by Rachel Hsieh

Supply Chain Management (SCM) Implementation Methodology & Best Presented by Rachel Hsieh Rachel_hsieh2000@yahoo.com.tw Jul 14, 2006 Agenda • The Introduction of SCM Systems • The Practice of Multi-sites Production Planning • SCM Planning Cycle • SCM Planning Policies • The Points for Attention When SCM Projects Are Implemented 2006 Trainers` Training The Introduction of SCM Systems 2006 Trainers` Training SCM Workflow Demand Demand Demand Supply Supply Demand Planning Planning Fulfillment Planning Planning Fulfillment Demand Forecasting & Collaboration Forecast Supply Allocation Central Planning Master Planning Netted Forecast Forecasting Netting Allocation Planning Supply Plan/ Allocations Order Entry Latest Available to Promise Schedule Ship Date Local Planning Supply Plan Frozen Plan Order & Production Planning 2006 Trainers` Training Order Quoting New Orders, Promise Information Order Promising Introduction to Planning Systems • Manufacturing environments vary greatly • A planning methodology that works in one environment may fail in another • Inadequate analysis often results in inefficient planning • We will discuss various approaches to planning 2006 Trainers` Training Characteristics of Some Approaches • Material Requirements Planning • Manufacturing Resource Planning – (MRP II) / Order Launch Schemes • Constraint Based Management – Theory of Constraints – Synchronous Flow Management 2006 Trainers` Training Material Requirements Planning (MRP) • Improvement over Demand reorder point • BOM explosions • Netting • Fixed lead times • Planned orders/ Purchase req • Order launch BOM Dependent demand concept • Item Master Inventory 2006 Trainers` Training Copyright ©1997 i2 Technologies Explosion/ Netting Planned Orders Purchase Req Open Order Manufacturing Resource Planning (MRP II) Order Launch Business Planning • Builds on data of “little MRP” • Adds business strategy integration • Adds rough cut capacity check • Production Planning Master Planning Adds resource capacity check Rough Cut Capacity MRP • • Adds shop floor feedback Iterative process Capacity Requirements Planning Shop Floor Control 2006 Trainers` Training Copyright ©1997 i2 Technologies Manufacturing Resource Planning (MRP II) Order Launch Limitations • Batch processing • Uses planned lead times • Sequentially decomposes solution with long planning cycles • Lacks sensitivity to constraints – Capacity constraints are accommodated iteratively with material planning as a separate step – Requirements such as setups are improperly treated • Work is pushed through the shop, not pulled • Local optimization 2006 Trainers` Training MRP II Limitations for Planning Business Planning • Schedule doesn’t account for material and capacity constraints • Plan doesn’t incorporate material shortages • • Schedule doesn’t account for material and capacity constraints No optimization of bottlenecks 2006 Trainers` Training Copyright ©1997 i2 Technologies Production Planning Master Planning Rough Cut Capacity MRP Capacity Requirements Planning Shop Floor Control CAO - Resource Criticality Pull-Offload-Push - First Pass 1 2006 Trainers` Training 3 CAO - Resource Criticality Pull-Offload-Push - First Pass 1 3 End of bucket reached Repeat procedure from start of the bucket 2006 Trainers` Training CAO - Resource Criticality Pull-Offload-Push - Second Pass 1 2006 Trainers` Training 3 CAO - Resource Criticality Pull-Offload-Push - Second Pass 1 2006 Trainers` Training 3 CAO - Resource Criticality Pull-Offload-Push - Third Pass 1 3 ̶ Cannot pull any tasks due to MATERIAL CONSTRAINT ̶ OFFLOAD if alternate exists ̶ Push - Higher CAO Priority pushed first 2006 Trainers` Training Assignment • • • 2006 Trainers` Training Procurement Policy (1) • ’ • 2006 Trainers` Training Procurement Policy (2) ̇ ̇ ̇ 2006 Trainers` Training What Information can Suppliers get from E-Procurement • Planning – Forecast • Order – The details of procurement orders (Including of PO reschedule in, reschedule out, cancel) – The historical data • Shipment: – – – – • Shipping date, shipping location, the total output quantity of the PO The information about material receiving The information about material returning The information about late orders Accounting – The time to create an invoice and invoice number – Payment Time, Amount of Money , Account, Payment Term • Inventory – The current inventory reserved by some customer • Quality – OQC reports from suppliers 2006 Trainers` Training The Points for Attention When SCM Projects Are Implemented 2006 Trainers` Training SCM Implementation Overview Expand Scope and/or Refine Model Identify opportunities, Define how business value is achieved and Target KPIs Measure Value Delivered Business Release Activities Mobilize Design Solution Develop Solution Test Deploy, Monitor & Transition 5% SOA Acceptance 25% 35% 25% 10% Sign Contract Project Kick-off Solution QA Review Technical Model Review Project QA Review Assess Delivered Value End User Acceptance Average months 2006/7/8 2006 Trainers` Training (Including of System Integration) 63 SCM Project Management Proposal Presentation Project Startup Project Execution Risk Management Risk Management Scope Control Scope Control Management of client expectation Quality Management Management of Project Team 2006 Trainers` Training Project Completion Identify Project Risk High Risk Technology Risk Implementation Risk Economic Risk Emerging technologies High Risk projects Expected IS benefits difficult to achieve New but proven technologies Average risk projects Expected IS benefits likely to achieve Proven technologies Low risk projects Low Risk 2006 Trainers` Training Expected IS benefits almost certain to achieve Organization Risk Major realignment of organizationa l resources Minor realignment of organizationa l resources Compatible with existing organizationa l structure Regulatory Risk Expected Major government policy change Expected Minor government policy change Compatible with existing government policy Key Success Factors • Business Focused Implementation Strategy – Establish current baseline and target business value to be derived – Establish a clear relationship between requirements and business value • Client Commitment – Strong feeling of project ownership (Its OUR project ) – Executive Management support • Supply project with required resources • Enable changes in business policies, procedures, and measurements • Remove road blocks and broker rapid resolutions of issues – User driven with strong support from IT Function – Continuity / Stability of project team • Delivering Early and Often – Maintain a Sense of urgency -make decisions, take actions, and move on – Project momentum accelerates with production use – Rapid realization of a ROI speaks loudly and clearly to the project’s success 2006/7/8 66 2006 Trainers` Training Thank You! 2006 Trainers` Training ... SCM Workflow Demand Demand Demand Supply Supply Demand Planning Planning Fulfillment Planning Planning Fulfillment Demand Forecasting & Collaboration Forecast Supply Allocation Central Planning... Access GRA Server SC Agents (purchasing, etc.) ERP Users Supply Chain Planner Unified Data Server Database API Interface U D S ERP Users Supply Chain Planning UDS = Adexa Unified Data Server Web Access... Forecasting Netting Allocation Planning Supply Plan/ Allocations Order Entry Latest Available to Promise Schedule Ship Date Local Planning Supply Plan Frozen Plan Order & Production Planning 2006 Trainers`