ERP Final Exam Review

Bill of Materials

Identifies the components needed to make the material

Work Center

Where value-added work needed to produce a material is carried out

Examples of Work Centers

Machine or group of machines, production line, work area, person or group of people

Material Staging

The process in which component materials are moved from storage and prepared for use

MRP: Plant specific, Work Scheduling: Plant specific

Material master data for the MRP and Work Scheduling

Steps in the production process

1. Warehouse: request production

2. Production: authorize production

3. Warehouse: issue raw materials

4. Production: create production

5. Warehouse: receive finished goods

A need to increase inventory

Triggers production using the make-to-stock strategy

Results of a goods issue to a production order

-Material, Fl, CO documents

-Material master update

-GL account updated

-Material reservations update

-Actual costs updated

Examples of storage types

Shelf, pallet, receiving, shipping

Good movement options

Goods receipt, goods issue, stock transfer, transfer posting

Picking area

A division of a storage area based on removing or picking materials

Grouped in a picking area

Groups storage bins based on similar picking strategies

Transfer request

Used to plan the movement of materials

The process of changing the status of a material

1. The first three movements involve the physical movement of materials from one location to another.

2. The fourth, transfer posting, is used to change the stock type or status of material or to reclassify the material into a different material type

The role/purpose of warehouse management

The responsibility to effectively use resources to satisfy the planned throughput objective for the day

Materials planning process

The set of tasks or activities that are concerned when and how many materials will be procured or produced

Materials planning organizational data elements

Client, company code, plant, storage locations

Purchase requisition

A document that is used for internal purposes—namely, to request needed materials. It is not a commitment to purchase the materials or service

Differences in the MRP data view of the Material Master

MRP1 focuses on general planning parameters like MRP group and lot size, MRP2 handles procurement-related data and scheduling, MRP3 manages material availability and planning strategies, and MRP4 deals with bill of materials (BOM) explosion and repetitive manufacturing

What a procurement type represents

Indicates whether a material is produced in-house or internally (via the production process), obtained externally (via the procurement process), both, or none.

MRP type specifications

Specifies the production control technique used in planning

Replenishment lead time

Time gap between placing an order—the reorder date in the figure—and receiving the materials—the delivery date in the figure

Consumption-based planning

Calculates the requirements for a material based on historical consumption data. It manipulates these data to project or forecast future consumption.

Categories of consumption-based planning

a. Reorder point planning
b. Forecast-based planning
c. Time-phased planning

Use of low value materials

Give examples of products that would work best for consumption-based planning

Exploding the BOM

Used to calculate and plan requirements for materials at all levels of the BOM

Lot size key

Procedure that is used to determine the quantity of material that is specified in the procurement proposals generated by the material planning process

In-house production time elements

i. Setup Time
ii. Processing Time
iii. Interoperation time

Roles of the CIRs

(Customer Independent Requirements) Actual customer orders that create a requirement in the ERP system that is relevant for material planning

Roles of the PIRs

(Planned Independent Requirements) Independent requirements that are calculated or estimated based on actual and forecasted sales

SOPs

(Sales and operations planning) A forecasting and planning tool that businesses use to enter or generate a sales forecast, specify inventory requirements, and then generate an operations plan. SOP typically involves finished goods