FIT3138 W5 - ERP in Production and Supply Chain Management

How do make-to-stock and make-to-order and assemble-to-order differ?

• Make-to-stock produces for inventory before customer orders.

• Make-to-order produces for specific orders.

• Assemble-to-order combines make-to-stock and make-to-order processes

What are the main stages of ERP-supported production planning?

Sales forecasting and starting inventory feed Sales and Operations Planning. The plan is disaggregated and passed through demand management to an MPS. MRP supports material supply while detailed scheduling supports production execution

How does ERP support sales forecasting?

SD records historical sales quantities as consumption values. Forecasts can use these data and CO plans linked to profit goals. Planners adjust for conditions and events such as promotions. A forecast is an estimate rather than a confirmed order

How should a forecast account for old and new promotions?

Historical sales - previous promotional growth + expected growth + new promotion

What is Sales and Operations Planning?

SOP creates an aggregate production plan that balances forecast demand with production capacity and reasonable inventory. Rough-cut capacity planning tests broad feasibility before more detailed planning

What is disaggregation in production planning?

Disaggregation allocates a product-group plan to individual products and shorter periods.

How do demand management and the MPS relate to MRP and detailed scheduling?

Demand management connects SOP to more detailed planning. In the course framework its output is the Master Production Schedule for finished goods. MRP determines material requirements while detailed scheduling considers machine capacity and labour and production timing

How do independent requirements and dependent requirements differ?

Independent requirements represent end-product demand such as forecasts or customer demand. Dependent requirements are component or material needs derived from planned production. Planned Independent Requirements support planning before actual orders in make-to-stock production

What does Material Requirements Planning determine and what are its main inputs?

MRP determines what material quantities are needed and when to produce or purchase them. Main inputs are the MPS or production requirements and the Bill of Materials and inventory status. Lead times and lot-sizing data support the calculation

How do the BOM and lead time and lot sizing affect material planning?

The Bill of Materials specifies components and quantities per product or batch. Lead time determines how early an order must be released. Lot sizing determines the quantity produced or ordered

How do gross requirements and net requirements differ?

Gross requirements are total material needs before accounting for available supply. Net requirements are the shortage after considering relevant inventory and receipts. Planned supply must cover that shortage under the applicable planning rules

How do scheduled receipts and planned receipts and planned releases differ?

Scheduled receipts are incoming supply already scheduled. Planned receipts are proposed future arrivals. Planned releases identify when to initiate orders so they arrive after the lead time. A Week 3 receipt with a two-week lead time requires a Week 1 release

How is projected ending inventory calculated in a simple MRP record?

Beginning inventory plus scheduled receipts + planned receipts - gross requirements.

How do planned orders and purchase requisitions and purchase orders differ?

A planned order is a supply proposal. A purchase requisition is an internal procurement request. A purchase order is the order sent to a supplier after purchasing decisions. They are not interchangeable commitments

What trade-off determines production run length?

Longer runs reduce setups and increase effective capacity but can raise inventory holding costs. Shorter runs reduce finished-goods inventory but need more setups. Detailed scheduling balances these costs while considering machines and labour

How does goods receipt connect physical operations with ERP information?

Receiving records accepted material and matches it to the purchase order. Successful posting increases recorded inventory and can update accounting automatically. Timely operational data capture keeps shared information accurate

How does sharing production-planning data with suppliers improve supply-chain efficiency?

Traditional participants react to orders with time lags. Shared plans and demand and stock information let suppliers anticipate needs. Trust and common data formats support collaboration which reduces paperwork and coordination time

What are the main supply-chain performance measures?

• Cash-to-cash cycle time — time from paying for materials to collecting customer cash

• SCM costs — inventory and order-processing and systems-support costs

• Initial fill rate — percentage supplied in the first shipment

• Initial order lead time — time to fill the order

• On-time performance — frequency of meeting agreed dates

How do CRM and SCM differ and how can ERP support disruption response?

CRM manages customer relationships and presents one face to the customer. SCM coordinates demand and supply across partners. ERP shares sales and inventory and production information so partners can identify disruption impacts and coordinate alternatives such as shifting production when capacity is available