Supply chain mangagement (SCM) implementation methodology & best

Supply Chain Management (SCM)
Implementation Methodology & Best

Presented by Rachel Hsieh

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

1

•

Schedule doesn’t account
for material and capacity
2 constraints

•

Plan doesn’t incorporate
material shortages

3

•

4
•

Schedule doesn’t account for
material and capacity
constraints
No optimization of
bottlenecks

2006 Trainers` Training
Copyright ©1997 i2 Technologies

Production
Planning

1

Master Planning

2

Rough Cut
Capacity

3

MRP

4

Capacity
Requirements Planning

Shop Floor Control


Demand/Supply in ERP
Forecast
Management
MPS

RCCP

MRP

MDS

CRP

Sales Orders

Procurement Plan
Execution
MDS Relief

2006 Trainers` Training

Work Order
Execution
Shipping


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
•Concurrent Planning
•Constraint-Based Planning
•Daily Planning

MRP

CRP

•Bi-direction Propagation
•Decision Support Ability

2006 Trainers` Training

Detailed Scheduling


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

̇ Quick response to the variety of
supply/demand

̇ The time to calculate is shorter
than MRP

̇ Reduce planning cycle time
̇ Get more SCM information

̇ Simulation function
̇ Strength SCM process
̇ Reduce inventory

2006 Trainers` Training


Adexa’s Unified Environment
Also connection to
existing order entry
front end

ATP Users

Web 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

Engine ( SCP )
Decision
Analysis
User

Local Unified Data Server

Factory
Planning
Engine

2006 Trainers` Training

Strategic
Planner

Global Strategic
Demand Planning (DP Planning (GSP)
DP)
GSP)

ERP
Users

ERP (or legacy)

Marketing
Planner

Factory
Planning
Engine

Factory
Planning

Engine

Factory Planners

PP


i2’s Process Flow
Customers, Products,
Forecasts, Orders, Shipment,
Backlog Info

DP

Forecast

Promis

SiView

Active
Data
Warehouse
(Using Common
Data Model)

Customers, Products,
Confirmed Orders

Supply Chain Data

WIP, fixed wafer start
plan, Order Backlog
Customer Allocation,
Order Status

FNE
Netted
Forecast
Work Orders

MP

Exceptional
Work Orders

ATP/CTP
Customers, Products,
Backend resources

DF
Sales Order
Info

2006 Trainers` Training

Order
Promise

Order
Inquiry

ERP/
Legacy

DB

FP
FP
FP
FP


The Practice of Multi-Sites
Production Planning

2006 Trainers` Training


SCM Planning Cycle

2006 Trainers` Training


Solution Architecture
E-Procurement

ERP

APS
FCST Net

FCST Net

Procure Req.

PO EDC

Quote<-->Commit

ata
gD
nin
Plan
lan
nP
tio
Planning Server
duc
ro
P

MO
Sc
hed
ule

PO Commit

Adapter
Adapter

Adapter
Adapter

2006 Trainers` Training

Customer

ATP

In FCST
In FCST

Out of FCST
Out of FCST

Scheduling Server

Quote

ATP

Transformer
Transformer


Data Accuracy
• Like MRPII/ERP
transaction
systems, Factory
Planner requires

highly accurate
data.
• Accurate Bill of
Materials
• Accurate Inventory
2006 Trainers` Training
Balances


Rhythm Planning Cycle
SERVER

CLIENT
4

Execution
Systems

Execution
Systems

1

2
Spec
Files

Rhythm
ASCII
Data Files

Execution
Systems

Rhythm
MemoryResident
Data

DOWNLOAD DATA

2

Pull data from ASCII files to
memory-resident using
spec file mapping

Upload ASCII files to
execution system

2006 Trainers` Training
Copyright ©1997 i2 Technologies

RUN CLIENT

Generate material-constrained,
infinite capacity plan(ICP)

CLOSE LOOP

7

5
Modify
Plan

SERVER STARTUP

3

1

Generate
Plan

6

7

Download data from
execution system to ASCII
files on periodic basis

3

Modify
Plan

4

SAVE PLAN

6

Safe modified plan to
Rhythm ASCII database
(actual or simulation)

Generate client/user-specific
screen using .ad files

MODIFY PLAN

5

Modify plan using Rhythm
tools, updating memoryresident data


Summary—Typical Rhythm
Planning Cycle
Approval
Process

Execution
Systems
13

1

Rhythm

What-If
Data Files

12

Rhythm
Data Files
2

11

3

Run Rhythm
Server &
Client

4

5

Data
Cleanup

Material
Planning

7
Capacity
Planning

6
1

Download data

2

Run Rhythm (cron job)

Auto
Capacity

10
Detailed
Scheduling

Save
Plan

8

Plan Capacity
Automatically

8

Review late orders—
Expedite, or Notify
Sales of delayed

demand order

9

Clean Data—
Engineering

Generate
Advanced Schedule

2006 Trainers` Training
Copyright ©1997 i2 Technologies

4

Plan Material—Material
Planning

5

Plan Capacity
Manually— Production
Scheduling

6
7

3

9

Update Material

10 Save Plan to Simulation Database
11 Management Approval
12 Save Plan to Production
13 Close Loop