SCM Implementation Methodology & Best docx

Jul. 14, 2006
Presented by Rachel Hsieh

Supply Chain Management (SCM)
Implementation Methodology & Best
2006 Trainers` Training
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
Order &
Order &
Production
Production
Planning
Planning
Allocation
Allocation
Planning
Planning
Forecasting
Forecasting
Netting

Netting
Master
Master
Planning
Planning
Demand
Demand
Forecasting &
Forecasting &
Collaboration
Collaboration
Order Entry
Order Entry
Order
Order
Promising
Promising
Demand
Planning
Demand
Demand
Planning
Planning
Supply
Planning
Supply
Supply
Planning
Planning
Demand

Fulfillment
Demand
Demand
Fulfillment
Fulfillment
New Orders,
Promise Information
Forecast
Supply Allocation
Central Planning
Supply
Plan
Frozen Plan
Supply Plan/
Allocations
Latest Available to Promise
Schedule Ship Date
Netted
Forecast
Local Planning
Order Quoting
2006 Trainers` Training
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
reorder
point
• Dependent
demand
concept
•BOM
explosions
•Netting
• Fixed lead times
• Planned orders/
Purchase req.
• Order launch
Demand Inventory
Item
Master

BOM
Explosion/
Netting
Planned
Orders
Purchase
Req.
Copyright ©1997 i2 Technologies
Open
Order
2006 Trainers` Training
Manufacturing Resource Planning
(MRP II) Order Launch
• Builds on data of “little MRP”
• Adds business strategy
integration
• Adds rough cut capacity check
• Adds resource capacity check
• Adds shop floor feedback
• Iterative process
Copyright ©1997 i2 Technologies
Master Planning
Rough Cut
Capacity
MRP
Capacity
Requirements Planning
Shop Floor Control
Business
Planning

Production
Planning
2006 Trainers` Training
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
Master Planning
Rough Cut
Capacity
MRP
Capacity
Requirements Planning
Shop Floor Control
Business
Planning
Production
Planning

Copyright ©1997 i2 Technologies
• 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
1
2
3
4
1
2
3
4
2006 Trainers` Training
Demand/Supply in ERP
Forecast
Management
MDS
MPS
MRP
Sales Orders
Procurement Plan
Execution
Work Order

Execution
Shipping
MDS Relief
CRP
RCCP
2006 Trainers` Training
Theory Of Constraints
• Postulated by Dr. Eliyahu Goldratt in
1970’s
• Described in the novel “The Goal”
• TOC is an different approach to the
continuous improvement process
• TOC has application to all industries
where there is a flow of information and/or
materials.
2006 Trainers` Training
TOC Fundamental Concepts
• Optimization of sub-system components does
not equal optimization of the total system.
• Standard accounting practices diverts attention
away from the real problems.
• A new set of operational performance
measurements is required.
• The goal of any company is to make money.
• A constraint is anything that limits you from
achieving the goal or desired result.
2006 Trainers` Training
TOC Improvement Process
•Step 1 IDENTIFY the system’s constraints
•Step 2 EXPLOIT the system constraint (I.e.

squeeze the most possible from the limits of the
current process)
•Step 3 SUBORDINATE everything else to Step
2 (I.e. try to synchronize flow, or do anything
else
•Step 4 ELEVATE the system constraint
• Step 5 If the constraint is BROKEN, go back to
step 1.
2006 Trainers` Training
Advanced Planning Systems (APS)
APS
MRP
CRP
Detailed Scheduling
•Concurrent Planning
•Constraint-Based Planning
•Daily Planning
•Bi-direction Propagation
•Decision Support Ability
2006 Trainers` Training
Why Is MRP Not Enough?
• Demand Cannot Be Sorted by Our Prefer Sequence.
The Demands Can Only Be Planned by Their
Requirement Time.
• Some MRP Systems Don’t Consider about Order
Status
• Lacking Simulation Functions
• Not Considering about Capacity and Transfer Batch
for Every Workstation
2006 Trainers` Training

The Advantagea of APS
APS Characteristic
Business Results
̇ Account for material and capacity
constraints
̇ The time to calculate is shorter
than MRP
̇ Simulation function
̇ Quick response to the variety of
supply/demand
̇ Reduce planning cycle time
̇ Get more SCM information
̇ Strength SCM process
̇ Reduce inventory
2006 Trainers` Training
Adexa’s Unified Environment
ERP Users
U
D
S
Unified Data Server
Local Unified Data Server
Database
Supply Chain Planning
Engine (
SCP
SCP
)
ERP (or legacy)
API

Interface
ERP
Users
ERP
Users
Demand Planning
Demand Planning (
DP
DP)
Global Strategic
Global Strategic
Planning
Planning
(
(
GSP
GSP
)
)
Strategic
Planner
Factory
Planning
Engine
Supply
Chain
Planner
Decision
Analysis
User

GRA
GRA
Server
Web
Access
ATP Users
Marketing
Planner
Web Access
SC Agents (purchasing, etc.)
Also connection to
existing order entry
front end
PP
PP
Factory
Planning
Engine
Factory Planners
Factory
Planning
Engine
UDS = Adexa Unified Data Server
2006 Trainers` Training
Active
Data
Warehouse
(Using Common
Data Model)
DP

Customers, Products,
Forecasts, Orders, Shipment,
Backlog Info
FNE
Customers, Products,
Confirmed Orders
Forecast
MP
Supply Chain Data
WIP, fixed wafer start
plan, Order Backlog
Netted
Forecast
DF
ATP/CTP
Customer Allocation,
Order Status
FP
FP
FP
FP
Work Orders
Exceptional
Work Orders
Sales Order
Info
DB
Order
Inquiry
Order

Promise
ERP/
Legacy
i2
i2
’
’
s Process Flow
s Process Flow
Promis
SiView
Customers, Products,
Backend resources
2006 Trainers` Training
The Practice of Multi-Sites
Production Planning
2006 Trainers` Training
SCM Planning Cycle
2006 Trainers` Training
Adapter
Adapter
Adapter
Transformer
Transformer
Transformer
In FCST
In FCST
In FCST
Out of FCST
Out of FCST

Out of FCST
Solution Architecture
P
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D
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P
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P
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M
O

S
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M
O

S
c
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ERP
ERP
APS
APS
ATP
ATP
E
E
-
-

Procurement
Procurement
Planning Server
Planning Server
Procure Req.
Procure Req.
PO EDC
PO EDC
PO Commit
PO Commit
Adapter
Adapter
Adapter
Scheduling Server
Scheduling Server
Quote<
Quote<


>
>
Commit
Commit
Customer
Customer
Quote
Quote
ATP
ATP
FCST Net

FCST Net
FCST Net
2006 Trainers` Training
Data Accuracy
• Like MRPII/ERP
transaction
systems, Factory
Planner requires
highly accurate
data.
• Accurate Bill of
Materials
• Accurate Inventory
Balances
2006 Trainers` Training
Rhythm Planning Cycle
Modify
Plan
Execution
Systems
Execution
Systems
Execution
Systems
1
Rhythm
ASCII
Data Files
Spec
Files

Rhythm
Memory-
Resident
Data
Generate
Plan
Modify
Plan
2
3
4
5
6
7
SERVER CLIENT
DOWNLOAD DATA
Download data from
execution system to ASCII
files on periodic basis
1
SERVER STARTUP
Pull data from ASCII files to
memory-resident using
spec file mapping
Generate material-constrained,
infinite capacity plan(ICP)
2
3
RUN CLIENT
Generate client/user-specific

screen using .ad files
4
CLOSE LOOP
Upload ASCII files to
execution system
7
SAVE PLAN
Safe modified plan to
Rhythm ASCII database
(actual or simulation)
6
MODIFY PLAN
Modify plan using Rhythm
tools, updating memory-
resident data
5
Copyright ©1997 i2 Technologies
2006 Trainers` Training
Summary—Typical Rhythm
Planning Cycle
Save
Plan
Detailed
Scheduling
Auto
Capacity
Capacity
Planning
Material
Planning

Data
Cleanup
Execution
Systems
Rhythm
Data Files
Run Rhythm
Server &
Client
Rhythm
What-If
Data Files
Approval
Process
1
2
3 4 5
6
7
8
9 10
11
12
13
Download data
Run Rhythm (cron job)
1
2
Clean Data—
Engineering

3
Plan Material—Material
Planning
4
Plan Capacity
Manually— Production
Scheduling
Update Material
5
6
Plan Capacity
Automatically
Review late orders—
Expedite, or Notify
Sales of delayed
demand order
7
8
Generate
Advanced Schedule
9
Save Plan to Simulation Database
Management Approval
Save Plan to Production
Close Loop
10
11
12
13
Copyright ©1997 i2 Technologies