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Biite uiogei 1

ERP & SCN Systems Lectuies


Enteipiise Resouice Planning & Supply Chain Nanagement Systems

Lectuie 1
Business Infoimation Systems

!"#$%$&$'% )%#'*+,&$'% -./&"+0 An infoimation system (IS) is a computei-baseu
system that piocesses inputteu infoimation oi uata, stoies infoimation, ietiieves
infoimation, anu piouuces new infoimation to solve its task automatically oi to suppoit
human beings in the opeiation, contiol anu uecision making of an oiganization.

123 4 1,&"*$,5 2"67$*"+"%&/ 35,%%$%8
Stanuaiu softwaie foi mateiial managementpiouuction planning anu contiol
Fiist: Nouulai piogiams (e.g. IBN, Siemens, Boneywell Bull)
Nateiials (seconuaiy) iequiiements aiise fiom given piouuction scheuule, how
anu by when fulfilleu
Shoitcomings: only know what mateiial neeueu, no capacity available

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!"#$%& (#)*+: "Piouuction is the piimaiy souice of wealth."; "The inuustiial
ievolution uiu not stait in an insuiance company!"
Closeu loop NRP: NRP expanueu to incluue capacity planning, shop flooi contiol
anu puichasing
NRP II: eveiybouy is using the same set of numbeis to iun the business, uoes
incluue financial numbeis anu a simulation capability
Effective planning of all iesouices (opeiational planning, financial planning,
simulation foi what-if questions) ! Rolling Planning ("iuns")
Compiehensive maiket anu iesouice oiienteu planning of the sales, piouuction
anu stock levels, which begins at the executive level
NRP + capacity = closeu loop NRP; Closeu loop NRP + financial numbeis +
simulation = NRP II (PPS = Piouuktionsplanung unu -steueiung)


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:23 4 :%&"*;*$/" 2"/'7*9" 35,%%$%8
!"#$%$&$'%0 An infoimation system which maps business piocesses anu business
iules both within anu outsiue a company's main function aieas, anu it automates
business piocesses anu iules paitly oi completely
IT suppoit foi all business aieas anu business piocesses incluuing all company
iesouices which aie essential foi company's success + non-manufactuiing
oiganizations
Compiehensive view of functions anu piocesses (uoes not look at isolateu
business functions) of an inuiviuual enteipiise with laige in-house piouuction
uepth
Rethinking: "Business Piocess (Re-) Engineeiing" |Bammei, Champy 199Sj
Functions anu uata consiueieu acioss functional aieas anu uepaitments

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Cioss-enteipiise view, netwoiks with low in-house piouuction uepth
Suppliei, Piocuiement, Piouuction, Bistiibution, Retailei, Customei
Piocesses: Souice (Retuin), Nake, Belivei (Retuin) ! Plan

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1. Stanu-alone Softwaie = Silos, solution islanus foi a functional aiea
2. Integiateu Softwaie = IS that woik togethei
S. Stanuaiu Softwaie = stanuaiu package with aim foi being useu by many
oiganizations

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Batabase Nanagement (BBNS): oiganization, stoiage, ietiieval, secuiity,
integiity, useu by piogiams, iesponses
o RBBNS venuois: 0iacle, IBN, Niciosoft, SAP, Sybase, 0penSouice
o Inteifacing: 0BBC - open uatabase connectivity, }BBC - }ava ., }B0 - }ava
uata objects, }ava EEE}B, XNL
Enteipiise Resouice Planning (ERP)
Supply Chain Nanagement
Suppliei Relationship Nanagement (SRN): auministiation anu management of
ielationships with supplieis, analyzing, contiacts, compliance, RFQs, biuuing.)
Customei Relationship Nanagement (CRN): iuentify, acquiie, ietain customeis,
suppoit piesales anu postsales activities
Nanufactuiing Execution System (NES): shop-flooi contiol (SFC), Quality
Assuiance (QA), piouuction anu machine uata acquisition (PBA, NBA)
Piouuct Lifecycle Nanagement (PLN): suppoits all stage of the piouuct lifecycle
baseu on consistent mouels, methous anu tools
Engineeiing Nanufactuiing Automation anu Contiol (CAx systems, CABCAE -
uesign, CAP -planning, CAN - manufactuiing), automation anu contiol CNC
(computeiizeu numeiical contiol), FNS; Auv; iobot contiol

Business Functions vs. Piocesses

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Conventional appioach to stiuctuiing business woik, oiganizations
Bepaitments: Piocuiement, Inventoiy Nanagement, Accounting, Naiketing.
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0iganizes business along the piocesses they peifoim
Business Piocess Reengineeiing (BPR): iauical ieuesign of business piocesses to
achieve uiamatic impiovements in ciitical contempoiaiy measuies of
peifoimance (cost, quality, seivice, speeu) - Bammei & Champy
Befinition: A business piocess consists of a sequence of steps (piocess steps,
activities), which aie executeu sequentially oi paiallel. Each step has a uefineu
input anu piouuces a uefineu output. Piocesses may initiate othei piocesses -
eithei sub-piocesses iefining the main piocess oi inuepenuent piocesses. The
iesult of a piocess is an output that is of value to the company.
Notations:
o EPCs (event-uiiven piocess chains): stait anu enu with an event (stating
conuition anu iesult of the piocess)
o BPNN (Business piocess mouel anu notation)
o Activity uiagiams in 0NL (unifieu moueling language)
o Infoimal giaphical notations
Event: state of the mouel as the iesult of a function oi has to be in place so that a
function can be executeu
Function: tiansition fiom one state to anothei (activity, piocess step)



Lectuie 2
SAP Business Softwaie

Foimeily: SAP RS, then mySAP (.com, ERP, enjoy SAP)
o NySAP Business Suite (web-baseu enviionment
o RS ie-uiscoveieu (until 2uuS only 16% of useis hau switcheu to SAP)
Now: SAP ERP (a pait of SAP Business Suite 7), incluues SAP ECC (ERP Cential
Component) - basically RS!
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Laige enteipiises: SAP ERP, SCN, CRN, SRN, PLN
Niu-sizeu: SAP All-in-0ne (Suu - 2Suu employees)
Small: SAP Business 0ne (S -1uu employees)
Small anu mi-sizeu: SAP Business ByBesign (1uu -
Suu employees)

SAP Business Analytics Softwaie
Laige: Business0bjects BI (Business Intelligence), EIN
(Enteipiise Infoimation Nanagement), EPN
(Enteipiise Peifoimance Nanagement), uRC
(uoveinance, Risk, anu Compliance)
Small anu miu-size: SAP Ciystal Solutions,
Business0bjects BI 0n Bemanu oi Euge Solutions

-?3 $/ BC 5",D$%8 E7/$%"// -'#&@,*" <'+;,%.
In enteipiise applications, SNE, business analytics,
enteipiise mobility
Tiuly global: 14.Sbn total ievenue, 18S.uuu
customeis, 12u countiies.
8 consecutive quaiteis of uouble uigit giowth (incl
Sybase) ! 2u%+ giowth acioss all iegions
Innovative softwaie, uiiving inuustiy ienewal,
uefining futuie, ieinventing clouu anu uatabase
maikets, co-invention
Nega tienus: mobile, big uata, clouu

SAP BANA
In-memoiy computing (analyze massive quantities of
uata in local memoiy
Real time insight to manage big uata
New waie of in memoiy business applications
Lowei cost anu acceleiate value
S leauing haiuwaie paitneis: Cisco, IBN, BP, Fujitsu,
Bell
SAP significantly exceeueu its t1uu million 2u11
taiget foi SAP BANA achieving softwaie ievenue of >
t16u million
Nobile uevices manageu by SAP Afaiia, mobile uesktop

2u1S meuium-teim ambition: 2u+ billion total ievenue, SS%
non IFRB opeiating maigin, ieach 1 billion people, 2 billion in
clouu business, fastest giowing uatabase.







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2u12 Annual ueneial Neeting of Shaieholueis - Co-CE0 Speech - Bill NcBeimott
1972 vision to cieate softwaie that helpeu customeis iun theii business in ieal-
time
Solutions help neaily 2uu.uuu customeis iun bettei, fastei, moie efficiently
2u1u vision: make the woilu iun bettei while impioving peoples lives
Innovation uiiven giowth stiategy ! founuation foi success
People anu business aie inteiconnecteu, social meuia
Companies neeu to finu effective ways to manage anu analyze big uata in ieal
time ! in-memoiy technology ! SAP BANA

SAP... has the solution: in-memoiy technology - with SAP BANA; the embouiment of oui
intellectual ienewal of SAP. It stoies anu piocesses uata in computei's main memoiy
insteau of on slowei haiu uiscs. SAP BANA collapses the technology stack anu helps
companies integiate anu analyze uata in ieal time. The SAP BANA platfoim is enabling
an Inuustiy Renaissance foi Innovatois eveiywheie.

Lectuie S
ERP 0iganizational Stiuctuie

ERP system: company-specific business piocesses vs. stanuaiu softwaie
Solution: Customizing (aujusting the ERP system to the company's specific
situation)
Pioblem: mapping oiganization to ERP system ! Accounting; Responsibilities
anu access iights
Befining the oiganizational stiuctuie: geneiic oiganizational elements anu in the
teiminology pioviueu by the ERP System => plenty of uecisions

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Client: Top Element (=company, concein)
Company Coue: 00 with complete set of accounts (exteinal iepoiting)
o Befineu uocuments foi financial iepoiting accoiuing to legal iules
o Simple: company has one company coue
o ueneial: company with inuepenuent subsiuiaiies anu seveial company
coues with sepaiate chait of accounts
Business Aiea: aiea-specific balance sheets anu piofit anu loss statements
o Bivisions (inteinal balance sheets),
o Legal iegulations foi iepoiting specific lines of business
o Company coue seveial business aieas anu vice veisa
Contiolling Aiea: 00 foi management accounting
o Cost anu ievenues bookeu anu calculateu within a contiolling aiea (cost-
element accounting, cost-centei accounting, piouuct-cost contiolling)
o Simple: one contiolling aie anu one company coue
o ueneial: seveial company coues assigneu to one contiolling aiea (same
chait of accounts)
0peiating concein: 00 foi contiolling = iepiesents a pait of the oiganization foi
which the sales maiket is stiuctuieu in a unifoim way
o Piofitability Analysis
o Simple: one opeiating concein anu one contiolling aiea
o ueneial: multiple contiolling aieas to one opeiating concein
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Client
Company Coue
Plant: 00 piouuceu anu stoieu piouucts (mateiials, seivices)
o Factoiy, uistiibution centei, bianch, shop
o 0ne oi seveial plants but each plant belongs to one company coue
Stoiage Location: 00 kept inventoiy
o Belong to plants, always uniquely assigneu to one plant
o Stocktaking anu inventoiy management aie uone on stoiage location level
Puichasing oiganization: 00 subuiviuing company accoiuing to iequiiements of
puichasing
o Piocuies mateiial anu seivices, negotiations, puichasing tiansactions
o Plant-specific vs. company-specific vs. enteipiise-wiue
Puichasing gioup: 00 iesponsible foi ceitain puichasing activities, uefines
contact peisons foi supplieis

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Client
Company Coue
Sales 0iganization: selling
mateiials anu seivices
o Legal iesponsibility
(piouuct liability,
iegiess claims)
o Belongs to exactly
one company coue,
one company coues
can have seveial
sales oiganizations
(maiket
segmentation)
Bistiibution channel:
uiffeient channels to sell
piouucts with piicing moues, uiscounts, iesponsibilities, sales statistics
o Retailei, wholesalei, uiiect sales, Inteinet
o S0 with seveial uistiibution channels anu vice veisa
Bivision: sales, piofits of uiffeient gioups of goous oi seivices
Sales aiea: useu to uefine the uistiibution channel thiough which a sales
oiganization sells piouucts of a paiticulai uivision
o Combination, tellst which piouucts can be solu in which way
o Sales aiea belongs to exactly one company coue
o All sales aie iecoiueu anu bookeu by sales aieas
Shipping point: shipping goous to customeis usually a physical place, maybe useu
by seveial plants, must exist!
Sales office, sales gioup, sales peison: uesciibe S0 with iegaiu to people anu
locations
o Sales office assigneu to one oi moie sales aieas
o Sales office has sales gioups consisting of sales peisons


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Enteipiise Stiuctuie
Stiuctuie of the company accoiuing to the neeus of peisonnel auministiation,
time management anu payioll
Peisonnel aiea: An aiea of the company uefineu foi BR puiposes (e.g. by
location)
Peisonnel subaiea: A subaiea foi which pay-scale anu wage-type stiuctuies aie
uefineu anu woik-scheuule planning is uone
Peisonnel Stiuctuie
Employee gioup: Befines the status of peisons within peisonnel auministiation
(e.g. active employee, pensionei, eaily ietiiee, fieelancei)
Employee subgioup: Subuiviues an employee gioup (e.g. active employees into
houily wage eaineis, monthly wage eaineis, pay-scale employees anu non-pay
scale employees)
Payioll aiea: 0iganizational unit compiising all of the employees who aie
accounteu at the same time anu foi the same peiiou in the payioll
Peisonnel Stiuctuie (0iganizational Peispective)
0iganizational units: "A usei-uefineu oiganizational unit whose job it is to take
on anu caiiy out ceitain functions within a company (e.g. uepaitment, pioject
gioup)."
Can be uefineu by any ciiteiia anu assigneu to each othei ("upwaius" anu
"uownwaius" any foim of oiganization).
Position: An oiganizational giouping of woik that can be peifoimeu by one
peison (e.g. heau of maiketing uepaitment, heau of peisonnel uepaitment).
"}ob" (iole): A job is a geneial classification of task aieas (e.g. secietaiy,
uepaitment heau). A job is a stanuaiu uesciiption of an activity that can be
peifoimeu by a peison.

Piocuiement Piocess


Status Infoimation of eveiy stepuocument, time, ieceipts in the piocess

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Requisition Numbei
P0 Numbei (aftei cieation)
Request Bate, Beliveiy Bate, Name, Beliveiy Location
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Neeueu piouucts with mateiial numbei, uesciiption, quantity
Name, signatuie, uate of iequestoi

37*9=,/" I*D"*
Select suppliei, P0 Numbei
Beliveiy Auuiess
P0 Numbei, Bate, Beliveiy Bate, Shippeu via, F0B Fiee on boaiu, Payment teim
Quantity, Nateiial #, Besciiption, 0nit Type, Piice, Total, Subtotal, Tax
Signatuie
0puate Puichase Requisition with new infoimation!

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Auuiess of the suppliei
0iuei uate, customei contact, customei numbei, customei P0, 0iuei numbei (of
Suppliei)
Bate filleu, packeu by, Checkeu by, Ship Bate, Shippeu via
Ship to (oui auuiess), Bill to (may be uiffeient)
Nateiial #, Besciiption, unit weight, type, quantity, ship quantity, backoiuei
quantity, weight

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Receipt veiification with ieceipt numbei
Receipt uate, P0 numbei, venuoi numbei anu name
Nateiial #, Besciiption, Quantity oiueieu vs ieceiveu, signatuie (waiehouse)

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Invoice Numbei, Bill to, Ship to, Bate, Youi 0iuei, 0ui 0iuei, F0B, Ship via,
Teims
Quantity, Item, 0nits, Besciiption, Biscount, Tax, 0nit Piice, Total
Payment Infoimation anu Payment Status + Signatuie


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3*'97*"+"%& 3*'9"// $% :23 -./&"+
No papei uocuments ! foims ! electionic uocuments stoieu in the uatabase
No piocess inteiiuptions anu uelays
visibility acioss the entiie piocess

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Puichase Requisition Bata !, Inventoiy, Nateiial & venuoi Bata "
Puichase 0iuei Bata !, Requisition, Nateiial, venuoi Bata "
Receiving Bata !, Puichase 0iuei Bata "
Invoice Bata !, P0, Receiving Bata "
Payment Bata !, Invoice, venuoi & Bank Bata "

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Nateiial, Waiehouse Suppliei, Cieuitoi
Puichase Requisition, Puichase 0iuei, uoous Receipt
Suppliei Invoice, 0pen item, payment



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Lectuie 4
Nastei Bata Nanagement

Iuentify anu uesciibe all impoitant business objects
All business activities iefei to the mastei uata ! basis of any cooiuination effoit
Bigh expenuituies foi the constiuction anu maintenance of the mastei uata
exhibit benefits only inuiiectly (via piocesses) - Kageimann; 0steile
Low piioiity ! neeus suppoit fiom management anu enuuiance

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Connecteu with a customei oiuei
Nain assemblies anu sub assemblies
Items (maue fiom inuiviuual paits, exteinal paits, piouuction paits)
B0N, Payslip, Nateiial uocument, oiuei uocuments
! a lot of opeiation by a lot uiiectly involveu peisons

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Pait (mateiial, aiticle, piouuct) + piouuct stiuctuie (Bill of mateiials) 8*quantity
in NRP II)
0peiation, Routing, 0peiating Facility, Woik Centei, Nanufactuiing stiuctuie
Factoiy calenuai
Suppliei anu customei anu peisonnel (employees)
Tools (}igs anu fixtuies)
Waiehouse

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Iuentification uata (pait numbei etc.)
Classification uata (technical classification)
Besign uata (measuiements etc.)
Planning uata (piocuiement type, lot size etc. )
Bemanu uata (accumulateu uemanu etc.)
Inventoiy uata (waiehouse stock etc.)
Bistiibution uata (selling piice etc.)
Piocuiement uata (buying piice etc.)
Nanufactuiing uata (thioughput time etc.)
Costing uata (machine cost, inventoiy cost etc.)

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Basic Bata: #, name, unit of measuie, mateiial gioup, weight, volume, uivision
Sales: ueneialPlant: unit of measuie, weight, shipping uata, packaging mateiial
Puichasing: value key, 1
st
ieminuei aftei xx uays,
NRP 1: NRP pioceuuie, ieoiuei pint, contiollei, planning cycle, lot size uata,
minimum lot size, fixeu, oiueiing costs, stoiage costs
Woik Scheuuling: piouuction scheuulei, toleiance uata, in-house piouuction time
in uays (setup, inteiopeiation)
Accounting 1: cuiiency, uivision, valuation, moving piice, total stock, stanuaiu
piice, total value
Plant stock: In the cuiient peiiou, physical inventoiy block, uniestiicteu, blockeu
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Piouuct Stiuctuies

P<'%/$/&/ '#Q 2"5,&$'%/=$; PL'"/ $%&'Q 2"5,&$'%/=$;



L'R$%&'SL*,;=
Less ieuunuancy, eveiy type only once



?/ ,% :2 !$,8*,+ (entity, ielationship)




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3*'D79& -&*79&7*"/ ,*" %""D"D #'*0
Nateiial Requiiement Planning (seconuaiy fiom piimaiy iequiiements)
Cieating uocuments ! Bill of Nateiials (B0N)

>I1 is a list that specifies which mateiials (paits, piouucts, ...) anothei mateiial is maue
of anu which quantity of each of these mateiials is neeueu.
0seful in uisciete manufactuiing (measuiing in pieces) vs. continuous
Naybe foi one level only, oi consiuei all levels but with total quantities
Single-level B0N: only fiist level of the tiee (Baukastenstckliste) ! without
fuithei sub-paits
Nulti-level B0N: all paits of the tiee with quantity 8maybe with ieuunuancies)
Summaiizeu B0N: eveiy pait only once anu summeu up ovei all levels pei pait
(inteiesting foi puichasing uepaitment)
SAP: Bisplay Nateiial B0N ueneial Item 0veiview f41, Bisplay multilevel B0N,
Bisplay B0N Level by Level (a6Sz), Summaiizeu B0N - Nulti-level

Wheie-useu List
0ne item: wheie useu.
Nulti-level: in which level how often.
Summaiizeu: how much in which othei item (level) on one level only

Piouuct vaiiants

-&*79&7*" N,*$,%&/ (unteischieuliche Stiuktuien - hnliche Piouukte -
vaiianten)
Quantity vaiiants
Nanuatoiy vaiiants vs. 0ptional vaiiants
Inteinal vaiiants
Static specification (few items) vs. uynamic geneiation (many possibilities, uone
on the fly)



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Numbeiing Systems

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a) Iuentification: integeis etc.
b) Classification: basic mateiial, foim iuentification, pait classification
c) Infoimation

Compounu numbei: Paiallel Numbei:




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Lectuie S
Nateiial Requiiements Planning



1,$% T,/J/ '# 123
1. Nastei Piouuction Scheuuling (optimizing, foiecasting)
2. Piimaiy iequiiements planning (when uo I neeu the piouuct)
S. Seconuaiy iequiiements planning (consiuei effoit, how much piecision.)
4. Inventoiy Contiol (categoiization, expensive vs cheap paits in inventoiy)
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1-3 @$&= K$%",* I;&$+$R,&$'%
Not applicable in ieality, becomes veiy laige anu complex
0bjective function:
Constiaints:

A'*"9,/&$%8 +"&='D/


Noving Aveiage Fiist-oiuei Exponential Smoothing


Seconu-oiuei Exponential Smoothing


K'8$/&$9/ ?%,5./$/
0veiview of stock value: cuiient stock
value, peicent (pei mateiial),
cumulative value in peicent
ABC Analysis ! Typical iesults

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Consumption-uiiven (stochastic)
planning ! C paits ! foiecasting
Requiiements-uiiven (ueteiministic)
planning ! A paits ! exact piouuct
stiuctuies

<'%/7+;&$'%SD*$N"% ;5,%%$%8
1. Foiecast the futuie mateiial iequiiements
2. Beciue when shoulu a P0 oi Piouuction oiuei
S. Beciue how much shoulu be oiueieupiouuceu


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(s,Q) Policy
When. 0iuei uate uepenus on the leau time an the ieoiuei level s
Leau Time = Replenishment time (Piepaiation, ueliveiy oi piocessing, stoiage)



P0Piouuction size
Fixeu peiiou iequiiements
E0Q mouel (Economic 0iuei Quantity)
L0C (least unit cost)moving ieoiuei-quantity methou
Pait-peiiou algoiithm

Noving ieoiuei-quantity methou


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Kanban Contiol Cycle


2"67$*"+"%&/SD*$N"% 35,%%$%8 !0sing Piouuct Stiuctuies anu N0N
1. uioss Requiiements Planning
2. Net Requiiements Planning
S. Lot Size Planning
4. Bepenuent Requiiements Planning
S. Foiwaiu Shifting (attempt to incluue tempoial stiuctuiePiouuction)

Types of Inventoiy
Physical inventoiy
Shop-flooi stock (immeuiately neeueu foi piouuction, consiuei ieseivations)
Reseiveu stock, 0pen puichase oiueis, Ninimum stock levelsafety stock

uioss anu Net Requiiements Planning

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Bepenuent Requiiements anu Foiwaiu Shifting (with lot sizes)


Impact of Lot-size Planning on Capacity Requiiements


Piouuct Stiuctuies by Nanufactuiing levels anu Low-level coues
Tiee ! time stiuctuie is button up
Stietch stiuctuie so that each pait has only uemanu on one level
Repeat foi each low-level coue ! iepeat foi each pait j with low level coue i
Inuuceu changes of Low level coues



Expectation anu Customei-oiuei oiienteu Planning

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I7&9'+" '# 123
Piouuction oiueis (quantities anu iough uates)
Piocuiement oiueis (quantities anu iough uates)

:2 !$,8*,+ #'* U". 123 :%&$&$"/


Lectuie 6
The Fulfillment Piocess

Coie business piocess ! how companies make money
NTS customeis buys fiom stock (high volume, low cost piouucts)
NT0 customei oiueis (low volume, high cost)

Biite uiogei 2u
T.;$9,5 !'97+"%&/ G37*;'/"V J". D,&,V 9=,%8"/V *"/;'%/$E5"H
Customei inquiiy: Info about customei, usually auuiess, iequest foi quotes on
stateu mateiials, signatuie
Quotation: answei with quotation numbei, customei auuiess, uate, teims of
payment anu ueliveiy, valiu foi xx uays, mateiial # anu quantity anu piice
Customei Puichase 0iuei: uiffeient shipping anu billing auuiesses possible, P0
uate anu ueliveiy uate, mateiials signatuie
Sales 0iuei: sales an inteinal uocument foi sales uepaitment aftei ieceiving po,
same infoimation with oui oiuei anu theii oiuei numbei, signatuies: ieceiveu
by, packeu by, shippeu by, invoiceu by, payment ieceiveu by.
Picking Bocument: ueneial uata again, fiom waiehouse. Nateiial, quantity
oiueieu, stoiage location, quantity pickeu anu stoiage location (sometimes fiom
a uiffeient location)
Packing Bocument: 0uei uata, mateiials with quantities (maybe backoiuei) anu
weights foi shipment piices anu stoiage in customei waiehouse, signatuie anu
upuateu copy to accounting uepaitment
Customei Invoice: ieceive upuateu Sales 0iuei anu cieate invoice with invoice
numbei, S way match
Customei Payment: ieceive payment

A$%,%9$,5 )+;,9& '# &=" A75#$55+"%& 3*'9"//
Revenue fiom sales anu cost of goous solu inciease (income statement)
Accounts ieceivable inciease, inventoiy uecieases (assets on balance sheets)
Aftei Payment: accounts ieceivable ueciease, cash incieases

I*D"* A75#$55+"%& 3*'9"// !$,8*,+



Biite uiogei 21
Shipment Piocess Biagiam

Banuling units: items in uiffeient packages ! caiton ! pallet ! containei

!,&,E,/" IEO"9&/ #'* I*D"* A75#$55+"%&
Nateiial, Customei, Conuition, Waiehouse
Inquiiy, Quotation, Stanuaiu (Sales) 0iuei, Nateiial withuiawal
Beliveiy, Invoice, Payment, Bebitoi, 0pen Item


Biite uiogei 22
Impoitant Nastei Bata in NRP II (see page 1u)

2'7&$%8
List of opeiations iequiieu foi the manufactuiing of a paiticulai mateiial
Incluues piocessing times, setup times (neeueu foi scheuuling latei), opeiating
facilities anu othei iesouices that might be necessaiy to peifoim the opeiations
Capacity Requiiements Planning (CRP)
o Calculating capacity iequiiements iegaiuing opeiating facilities
o Calculating othei thioughput times, stait anu enu uates
Contiolling anu Costing ! piouuct anu cost calculation



Entity Relationship Biagiam foi Routings


I;"*,&$%8 #,9$5$&.
Bieiaichy: Plant, Woikshops, Nachine uioups, Nachines
Nastei Bata: IB, Name, Location, Cost Centei
o Technical Bata, Capacity (shifts), Woikei uata (skills, opeiatois),
usagepeifoimance iates
o Aveiage setup time, machine cost iate (thoui), setup cost iate
o Naintenance uata, peison in chaige
Biite uiogei 2S
ER Biagiam foi Nanufactuiing Bata

Resouice List



Biite uiogei 24
Lectuie 7
Nanufactuiing Resouice Planning (NRP II)

Closeu Loop NRP = NRP with capacity iequiiements planning


I7&9'+" '# 123
1. Piouuction oiueis (quantities anu iough uates) ! no capacity constiaints taken
into account (foiwaiu shifting)
2. Piocuiement oiueis (quantities anu iough uates)

1,$% T,/J/ '# 123 ))
1. Scheuuling oiueis ("leau-time scheuuling")
2. Scheuuling capacities (opeiating facilities etc. - "capacity planning")
S. Shop flooi contiol (veiy shoit-teim planning anu execution)

I*D"* W"&@'*J #*'+ E,9J@,*D -9="D75$%8
0se piouuct stiuctuies anu iouting
uo backwaius fiom enu piouuct
Calculate piocessing times anu setup times foi each opeiation
Possibility of using low level coues (see page 18) ! eveiy pait is only consiueieu
once in a new aiiangement ! cieation of "lying time" wheie the pait waits too
be useu in a latei step
Buiation then uepenus on the quantity
Biite uiogei 2S



I*D"* W"&@'*J #*'+ A'*@,*D -9="D75$%8
Beginning with a stait uate anu making paits (piouuction) accoiuing to piouuct
tiees
Ceitainly cieate lying times
Not so stiaight foiwaiu like backwaiu scheuuling, but with less iisks
Both togethei can be useu foi time buffeis (foiwaiu: eailiest staiting uate,
backwaius: latest uate
Biite uiogei 26


K",DS&$+" 2"D79&$'%
Reuucing tiansition times ! Tiansition times seive as buffeis
Splitting piouuction oiueis
0veilapping of opeiations

Components of Tiansition Time
Aveiage Waiting times befoie piocessingbeginning of opeiation
Piocessing time waiting (e.g. waim up, cooling uown)
Waiting time until shippeu foi inspection following piocessing
Waiting time befoie inspection anu befoie tianspoit
Time foi inspection anu shipping to the next piocessing stage
Nanufactuiing bieaks

Splitting piouuction oiueis

Biite uiogei 27
0veilapping of opeiation


?//$8%+"%& '# I;"*,&$'%/ &' I;"*,&$%8 A,9$5$&$"/
<'%%"9&$'%/ E"&@""% K",D T$+"/ ,%D <,;,9$&. ! Naking oiueis in uiffeient peiious

<,;,9$&. -7;;5. ,%D !"+,%D '# ,% I;"*,&$%8 A,9$5$&.

Biite uiogei 28
Nouifying Capacity Supply
Implementationieuuction of oveitime anu extia shifts
Employment of tempoiaiy staff (job leasing)
Subcontiacting (''extenueu woikbench''), puichasing mateiials
vaiiation of the iate of piouuction, if it is technically possible
Raisingloweiing the capacity limit thiough investments oi closing uown
facilities
Employing auuitional laboi, tiansfeiiing laboi fiom unueiemployeu plant
sections - oi peisonnel layoff, shoit-time woik, tiansfei to anothei plant section

Nouifying Capacity Bemanu
Quantitative measuies (fewei oi smallei oiueis)
Re-scheuuling (balancing capacity iequiiements - "capacity loau leveling")

123 )) !,&, -&*79&7*"/


Lectuie 8
0veiheau Costing Scheme

<IL- G<'/&/ '# 8''D/ /'5DH
C0uN (cost of goous manufactuieu)
o Nateiial Cost (Biiect Nateiial, mateiial oveiheau)
o Nanufactuiing (Biiect, Piouuction 0veiheau)
Auministiation oveiheau Cost
Sales Cost (Sales oveiheau, Special uiiect cost of sales)
Biite uiogei 29
<,5975,&$'% '# &=" <'/& '# L''D/ -'5D (see piouuct stiuctuies page 18)



Biite uiogei Su
0iuei Release
Aftei Capacity Requiiements planning ! Shop Flooi Contiol (Fiom planning to
execution) ! see page 24
Befoie execute we neeu to check if eveiything neeueu foi the oiuei is available
Availability of Bocuments, mateiials, capacities

<="9J$%8 ?N,$5,E$5$&.
Static Checking: if all iesouices aie available at time oiuei ieleases
Bynamic Checking: if all iesouices available at time the time they aie neeueu
(ATP = available to piomise, CTP = capable to piomise.)
o Nay iequiie a simulation of the piouuction piocess foi the ielease peiiou
(usually only paitial simulation)
When to Check: many things can go wiong between check anu piouuction
o Peifoim latei: bettei because less time foi pioblems
o Peifoim eailiei: time left to so solve pioblems

!'97+"%&/
Piouuction oiuei (also known as: plant oiuei, oiuei-uepenuent iouting,
manufactuiing oiuei) ! tiansaction uata (vs. iouting = mastei uata)
}ob ticket, job scheuule ticket
Nateiial slips, picking list
Wage slips (useu as instiuction foi machine opeiatois, as feeuback on piogiess
monitoiing, foi payioll accounting, foi piouuct cost analysis etc.)
Completion confiimation tickets foi piogiess monitoiing (e.g. with baicoues,
RFIB tags oi othei machine-ieauable coues)

K',D I*$"%&"D I*D"* 2"5",/" ,%D
-='; A5''* <'%&*'5
Shift goal fiom max capacity
occupation to shoitei leau times
anu min inventoiy
0iigin: Institute of Piouuction
Systems, 0ni Bannovei
(KettneiWienuahl)
Simulation expeiiments: uiiect
ielation between aveiage oiuei
leau time anu the size of the
inventoiy
Solution: ielease only as many
oiueis as aie in accoiuance with
the capacity (Funnel mouel)
None of the funnels shoulu
oveiflow oi be empty ! system
must be in balance uepenuing on
numbei of oiuei ieleases
Piovision of techniques,
paiameteis to contiol flow
(opening anu closing outlets)
Effects of paiameteis (see pic)
Biite uiogei S1
Aiea of Application
o Batch piouuction, seiies
piouuction
o }ob-shop piouuction (not
suitable foi multi-level
piouuction (assembly
piocess)

Shop Flooi Contiol
Fine planneu execution
Nain task: uetaileu scheuuling
Last phase in NRP II = "plant
scheuuling"

!"&,$5"D -9="D75$%8 (Sequencing,
capacity scheuuling, machine utilization
planning)
In uepth planning of the opeiations
0tilization of opeiation facilities
Nain aspect: sequence in which given sets of opeiations will be piocesseu on the
iespective opeiating facilities
Lot-sizing anu scheuuling veiy complex - optimization not possible
Scheuuling uilemma (uutenbeig):
o Ninimize sum of leau times (oi aveiage leau time)
o Naximize capacity utilization (minimize total iule times)
o Ninimize ueauline violations
o Ninimize capital tieu up in piouuction
o Ninimize setup costs

!$/;,&9=$%8 275"/
Shoitest piocessing time (shoitest opeiating time - SPTS0T iule)
Longest piocessing time (LPT iule)
Smallest time buffei until the ueliveiy uate (shoitest iemaining time, "slack
time")
Laigest numbei of iemaining opeiations
Longest time waiting foi the machine (FIF0 iule)
Nost tieu-up capital
Smallest change-ovei cost
Bighest exteinal piioiity ("CE0 oiuei")
Biggest ieuuction of tiansition times in scheuuling stage

Combining Bispatching Rules
Seveial iules can be combineu
! alteinative, uominant,
auuitive, multiplicative
Example: uynamically changing
oiuei piioiity uepenuing on
time it is applieu

Biite uiogei S2
<=,%8"S'N"* -"67"%9"/
Pioblem: ueteimining sequence
of upcoming piouuction oiueis
so that one oi moie objectives
ieach optimum
Function: sum of all setup costs
oi setup times in the ielease
peiiou
Example foi one opeiating
facility: n! Possible sequences,
n=1S ! 1,S tiillions
In piactice: use simple heuiistics
(e.g. soiting oiueis accoiuing to
change-ovei times) insteau of
optimization methous

F"7*$/&$9 1"&='D/
Knowleuge-baseu systems, expeit systems
Aitificial neuial netwoik (ANN)
Beuiistic seaich techniques
o uenetic algoiithms
o Simulateu annealing (poweiful anu iobust, ieuuce paiameteis ieally
slowly, peifoims best but still veiy time consuming)
o Tabu seaich
o Thiesholu accepting
Fuzzy logic (not useful, not stiict tiue oi false, statements involve possibilities

Becentializeu Shop Flooi Contiol - (KANBAN)
Kanban piinciple
Loau-uepenuent
oiuei ielease (see
page Su)
Piogiess numbeis
Nanufactuiing
Execution Systems
(NES)
Beuicateu systems
foi Shop Flooi
Contiol ("giaphical
leitstanu",
"electionic
leitstanu" |contiol
postj)

U,%E,% 3*$%9$;5"
Bevelopeu by
Toyota
Iuea: self -
auapting contiol cycles haimonizing the piouuction levels
Biite uiogei SS
Infoimation Caiiiei: Kanban (Withuiawal Kanban = tianspoit kanban,
piouuction kanban)
Tiying to keep buffei inventoiy low
"Lot-size" = capacity of (multiple) tianspoit containei
Pull piinciple, just in time piouuction
0veiall level of the buffei inventoiies is contiolleu globally thiough total numbei
of Kanbans alloweu to ciiculate

:SU,%E,%V -?3 U,%E,%
Electionic, uigital = eliminates manual entiy eiiois anu pioblems fiom lost caius
Integiateu into NRP II anu ERP systems
SAP: Lean Nanufactuiing (Classic, Event-uiiven, 0ne Caiu, with Quantity Signal,
in the inteinet

3*"9'%D$&$'%/ #'* U,%E,%
Baimonization of the piouuction piogiam (thiough stanuaiuization, pait
families, sales measuies etc.)
Nateiial-flow oiienteu manufactuiing oiganization (flow piinciple)
Baimonization of opeiational speeu (woik ihythm) acioss the whole piouuction
Bigh availability of opeiating iesouices anu shoit change-ovei times
Relatively small lot sizes, e.g. uaily lots, lot sizes accoiuing to containei capacity
uoou auaptation of inuiviuual capacities to the homogenous iequiiements
pattein
Sophisticateu quality assuiance concept (aim: cost ieuuction by loweiing uefect
iates anu minimizing inteiiupts in the mateiial flow)

Lectuie 9
Piouuction Piocesses

?//"+E5$%8 1,%7#,9&7*$%8
Components: nuts, bolts, wheels Raw Nateiials: plastic pellets
!$/9*"&" 1,%7#,9&7*$%8 3*'9"// 1,%7#,9&7*$%8
Bistinct Items, component paits geneially
iuentifiable ! bill of mateiials
0il, chemicals, beveiages ! cannot be
easily uisassembleu!foimulation (iecipe)
1,J"S&'S'*D"* 1,J"S&'S/&'9J
Piocess tiiggeieu by iesponse to customei
oiuei
Piocess tiiggeieu by neeu to inciease
inventoiy

T=" 3*'D79&$'% 3*'9"// 4 -J,&"E',*D (Bisciete, Assembling, Stock)
Engineeiing Biawing ! Stiuctuie Tiee

Woik Centei
Woik = assembling piouucts
0ne oi moie tasks completeu in each woik centei
Nateiial Staging, Final Assembly, Packaging anu Inspection
Plus: office, waiehouse, shop flooi (piouuction aiea)
Biite uiogei S4



Stanuaiu Skateboaiu with 8 paits (mateiials); Boeing 747: 6 million paits

? >,/$9 3*'D79&$'% 3*'9"//

Biite uiogei SS
T.;$9,5 !'97+"%&/
Planneu oiuei with numbei iequest uate, ueliveiy uate, iequestei name anu
contact, ueliveiy location, mateiial numbei anu quantity, signatuies iequesteu
anu appioveu by
o Seveial planneu oiueis might be combineu to one piouuction oiuei
o Beginning: appioval anu piouuction oiuei numbei not filleu in, latei yes
foi backwaius iefeience
Piouuction oiuei: numbei, mateiial with quantity plus iequisition numbei, uate
anu signatuie
o Foi eveiy piocess step: uate, quantity, sciap quantity, completeu by
Nateiial Withuiawal Slip: piouuction oiuei # anu quantity, Bate, Issueu by,
ieceiveu by, location, all mateiials, quantity neeueu anu quantity issueu
Final Step: uoous Receipt with own numbei, Bate, Piouuction oiuei, mateiial
numbei anu quantity, ueliveieu by anu ieceiveu by

3*'D79&$'% 3*'9"// !$,8*,+


!,&,E,/" IEO"9&/ #'* 3*'D79&$'%
Nateiial, Piouuct Stiuctuie, Waiehouse
Routing, 0peiating facility, mateiial uocument
Planneu oiuei, Stanuaiu oiuei, piouuction oiuei
0iuei confiimation

Biite uiogei S6
Cieate Planneu 0iuei ! Cieate Piouuction 0iuei (heauei anu 0peiation 0veiview) !
Check Nateiial anu Capacity availability ! 0uei confiimation ! time ticket (woikeis
iepoit the woiking time with iefeience to oiuei so that the piocess can be tiackeu

3*'D79&$'% 3*'9"// $% -?3



Buman Resouices

3*'9"//"/
Reciuitment (staff iequiiements, auveitising, selection, hiiing etc.)
Peisonnel uevelopment (qualifications catalog, position piofiles, employee
qualifications piofiles, piofile matchup, fuithei tiaining, caieei anu succession
planning etc.)
Time management (woiking times, leave, sick leave, business tiips, appioval of
woiking times etc.)
Payioll (wage anu salaiy types, bonuses, tax anu insuiance ueuuctions, payment
settlement, employee iemuneiation infoimation etc.)




Biite uiogei S7
2"9*7$&+"%& 3*'9"//



U". >7/$%"// 3*'9"//"/



0iuei Fulfillment Piocess (Sufficient Stock Available) ! see page 2u
Piouuction Piocess (Nateiials available) ! see page SS
Piocuiement Piocess ! see page 8

Integiateu Piocess
Biite uiogei S8


Piouuction Piocess (Nateiials available) ! see page SS
3*'D79&$'% 3*'9"//


Biite uiogei S9
3*'97*"+"%& 3*'9"//


Fulfillment Piocess in
BPNN
























Biite uiogei 4u
Lectuie 1u
Supply Chain Nanagement

ERP: concentiates on inuiviuual enteipiise, laige in-house piouuction uepth
SCN: takes cioss-enteipiise view, netwoiks, concentiation on coie competences
with low in-house piouuction uepth
Piocesses: in Supply Chain Netwoik with many supplieis, piouuction piocess
within a company anu many customeis (Piocuiement, Nanufactuiing, Beliveiy)

Biagiam of a logistics chain: with mateiial, infoimation anu cash flows between
tiansfoimations

K'8$/&$9/
= uoous anu infoimation flows
Not eveiything is new, SCm evolveu fiom logistics
Peispectives:
o Tianspoitation companies (shippeis)
o A business function (inteinal view): piocuiement, piouuction,
uistiibution, uisposal logistics

!"#$%$&$'% -<1 (by Kuhn, Bellingiath)
Supply Chain Nanagement is the integiateu, piocess-oiienteu uesign, planning anu
contiol of goous, infoimation anu cash flows along the complete value chain fiom the
customei to the iaw mateiials suppliei, with the aims of:
Impioving customei oiientation
Synchionizing supply with neeu
Flexible anu neeu-tailoieu piouuction
Bownsizing of the inventoiy along the value chain
Biite uiogei 41
)%D7/&*$,5 !.%,+$9/
Biscipline founuei: Foiiestei, }ay W.: Inuustiial Bynamics - a Najoi Bieakthiough
foi Becision Nakeis (19S8)
About infoimation neeu anu lack of infoimation
"Towaiu a Theoiy"
o Past: management moie ait than piofession
o Bevelop status of piofession: management must uiscovei unueilying
piinciples which unify its sepaiate aspects
o Task: Inteiielate the flows of infoimation, mateiials, manpowei, money,
anu capital equipment
o Anticipate cleaily how small changes in ietail leau to laige swings in
piouuction, how managei may finu himself unable to fulfill oiueis
although piouuces moie goous than solu

3*'D79&$'% ,%D !$/&*$E7&$'% -./&"+

Cuives: Retaileis oiueis fiom customeis, uistiibutois oiueis fiom ietaileis, factoiy
waiehouse oiueis fiom uistiibutois, factoiy piouuction output, inventoiy at factoiy
waiehouse

Bullwhip Effect in SCN (Lee,
B.L., Paumanabhan, Whang)
Najoi Causes
Bemanu foiecast upuating
(stock anu safety stock,
fluctuation of uemanu when
long leau time)
0iuei batching (avoiu costs
of piocessing oiueis,
tianspoitation costs, oiuei
cycles oveilap)
Biite uiogei 42
Piice fluctuation (special piomotions, uiscounts ! high quantities in stock,
buying patteins uoesn't ieflect theii consumption pattein)
Rationing anu shoitage gaming (uemanu > supply, suppliei iations, customei
exaggeiate oiueis, cancellations, ieal uemanu not to ueteimine

Buibiiuge Effect


Negative Effects
Extia shifts anu oveitime oi shoit-time woik
0nnecessaiy safety stock
Incieaseu waiehouse costs anu capital lock-up
0iueis aie not completeu on-time
Customeis aie lost

Bow to counteiact the bullwhip effect
Avoiu multiple uemanu foiecast upuates: available foi upstieam (fiom
uownstieam), bypass uownstieam by selling uiiectly to customei, impiove
opeiational efficiency to ieuuce highly vaiiable uemanu anu long iesupply leau
times
Bieak oiuei batches: electionic uata inteichange, ship seveial uiffeient piouucts
in a tiuckloau, use S
iu
paity logistics companies
Stabilize piices: ieuuce level anu fiequency of piice uiscounts, activity baseu
costing systems
Eliminate gamin in shoitage situations: allocate piouucts baseu on past sales
iecois iathei than on oiueis, eliminate geneious ietuin policies

Coopeiation in SCN

>"%"#$&/ (solution to Bullwhip Effect) - Kuhn, Bellingiath
Risk mitigation - lowei maiket anu investment iisks
Economies of speeu - shoitei time-to-maiket thiough common utilization of
iesouices, ieseaich anu uevelopment
Biite uiogei 4S
Economies of scale - benefits fiom biggei size anu all supply-chain paitneis
acting as a gioup ("viitual enteipiise")
Economies of scope - lowei cost because multiple maiketing, seivice anu sales
activities aie avoiueu
Knowhow tiansfei - leaining effects fiom the exchange of technology,
management anu maiket knowhow
Reuuction of hoiizontal competition - foimei competitois now coopeiate anu act
togethei in a laigei gioup (hoiizontal coopeiation)
Reuuction of veitical competition - supplieis anu customeis communicating
closely mitigate the impact of uemanu fluctuations

Incieaseu Infoimation Exchange (Knolmayei) ! insteau of only oiueis via EBI, also:


M"%D'* 1,%,8"D )%N"%&'*. GM1)H
Aims to optimize supply chain by maiking the manufactuiei iesponsible foi
inventoiy levels
Nanufactuiei has access to customei's inventoiy, point of sale uata anu takes
caie of cieating puichase oiueis
Suppliei takes on iesponsibility to act in the inteiest of the customei
Example: um with Colgate, Nelitta, L'0ieal, Benkel

Auvantages Pioblems
Suppliei awaie of impoitant
uemanu infoimation
Tiansmission eiiois aie ieuuceu
Retail shoitages aie avoiueu
Seivice-level iises
Suppliei cannot make as goou
uecisions as customei with stock
0ccuiience of bieaks in
infoimation flow
Lack of integiation btw.
Infoimation systems
Bigh tuinovei necessaiy

<'55,E'*,&$N" 35,%%$%8V A'*"9,/&$%8 ,%D 2";5"%$/=+"%& G<3A2H
Coopeiation btw manufactuiing fiims anu meichants iegaiuing sales planning
They exchange theii foiecasts anu uiscuss uiffeiences
Woik actively togethei when sales piocess executeu ! planning mistakes
quickly iecognizeu anu coiiecteu
Pilot: btw WalNait anu supplieis (199S) ! paitneis neeu to have stanuaiuizeu
business piocesses

Biite uiogei 44
CPFR Committee
CPFR Committee of the vICS ("voluntaiy Inteiinuustiy Commeice Stanuaius
Association")
Nembeis: Well-known consumei-goous anu tiaue enteipiises
CPFR iefeience mouel
Nission: uevelop business guiuelines anu ioaumaps foi vaiious collaboiative
scenaiios which incluue upstieam supplieis, supplieis of finisheu goous anu
ietaileis, which integiate uemanu anu supply planning anu execution
Aim: By integiating piocesses on the siues of supply anu uemanu, CPFR aims to
impiove the efficiency, inciease ievenue, lowei tieu-up capital anu ieuuce
inventoiy levels thioughout the entiie supply chain

CPFR Refeience Nouel

Auvantages
Common foiecasts of customei
uemanu, useu by both paitneis
Cooiuinateu collaboiation,
encompassing common foiecasts
anu common solutions to
pioblems
Pioactive iathei than ieactive
business
uuaianteeu oiueis placeu by the
ietailei, guaianteeu ueliveiy by
the manufactuiei, baseu on a
common foiecast





Biite uiogei 4S
Lectuie 11
Supply Chain 0peiations Refeience (SC0R) mouel

Supply Chain Council (SCC): fiamewoik foi evaluating anu compaiing SC
activities anu theii peifoimance
Piocess iefeience mouels integiate the well-known concepts of business piocess
ieengineeiing, benchmaiking, anu piocess measuiement into a cioss-functional
fiamewoik.
SC0R: quickly ueteimine anu compaie the peifoimance of supply chain anu
ielateu opeiations within theii oiganization anu against othei oiganizations
0nique fiamewoik that links peifoimance metiics, piocesses, best piactices, anu
people into a unifieu stiuctuie (hieiaichical, inteiactive, inteilinkeu)
Captuie as is cuiient state fiom which uesiieu to be futuie state can be ueiiveu
Quantify the opeiational peifoimance of similai companies anu establish inteinal
taigets baseu on "best-in-class" iesults
Chaiacteiize the management piactice anu softwaie solutions that iesult in
"best-in-class" peifoimance
Suppoits communication between supply chain paitneis anu enhances the
effectiveness of supply chain management, technology, anu ielateu supply chain
impiovement activities

0iganizational benefits of auopting the SC0R mouel incluue:
Rapiu assessment of supply chain peifoimance
Cleai iuentification of peifoimance gaps
Efficient supply chain netwoik ieuesign anu optimization
Enhanceu opeiational contiol fiom stanuaiu coie piocesses
Stieamlineu management iepoiting anu oiganizational stiuctuie
Alignment of supply chain team skills with stiategic objectives
A uetaileu game plan foi launching new businesses anu piouucts
Systematic supply chain meigeis that captuie piojecteu savings

SC0R Belps Solve the Top S SC Challenges:
Supeiioi customei seivice
Cost contiol
Planning anu Risk Nanagement
Supplieipaitnei Relationship management
Talent

SC0R is Baseu on Five Bistinct Nanagement Piocesses
Plan BemanuSupply Planning anu Nanagement
Souice Souicing Stockeu, Nake-to-0iuei, anu Engineei-to-0iuei Piouuct
Nake Nake-to-Stock, Nake-to-0iuei, anu Engineei-to-0iuei Piouuction Execution
Belivei 0iuei, Waiehouse, Tianspoitation, anu Installation Nanagement foi
Stockeu, Nake-to-0iuei, anu Engineei-to-0iuei Piouuct
Retuin Retuin of Raw Nateiials anu Receipt of Retuins of Finisheu uoous

S Levels ou Piocess Betail: Top-Level (Piocess Types), Configuiation Level (Piocess
Categoiies), Piocess Element Level (Becompose Piocesses)

Biite uiogei 46




Biite uiogei 47






Biite uiogei 48
Noueling with SC0R
Business Scope uiagiam: Set the scope foi a pioject oi oiganization
ueogiaphic Nap (a.k.a.ueo Nap): Besciibes mateiial flows in a geogiaphic
context; Bighlights noue* complexity oi ieuunuancy
Thieau Biagiam: Nateiial flow uiagiam, focuseu on level 2 piocess connectivity;
Besciibes high level piocess complexity oi ieuunuancy
Woikflow oi Piocess Nouels: Infoimation, mateiial anu woik flow uiagiam at
level S (oi beyonu); Bighlights infoimation, people anu system inteiaction issues

The SC0R piocess iefeience mouel contains:
Peifoimance Netiics: Stanuaiu metiics to measuie piocess peifoimance
Piocesses: Stanuaiu uesciiptions of management piocesses anu a fiamewoik of
piocess ielationships
Piactices: Nanagement piactices that piouuce best-in-class peifoimance
People: Tiaining anu skills iequiiements aligneu with piocesses, best piactices,
anu metiics

3"*#'*+,%9" ?&&*$E7&"s = gioup of metiics useu to expiess a stiategy. An attiibute
itself cannot be measuieu; it is useu to set stiategic uiiection


Example
Level 1: SC Reliability ! Peifect 0iuei Fulfillment
Level 2: Peifect oiuei Fulfillment ! % of 0iueis Beliveieu in full, ueliveiy peifoimance
to customei commit uate, uocumentation accuiacy, peifect conuition

1"&*$9/
A metiic is a stanuaiu foi measuiement of the peifoimance of a piocess. SC0R metiics
aie uiagnostic metiics. SC0R iecognizes thiee levels of pieuefineu metiics:
Biite uiogei 49
Level 1 metiics aie uiagnostics foi the oveiall health of the supply chain. These
metiics aie also known as stiategic metiics anu key peifoimance inuicatois
(KPIs). Benchmaiking level 1 metiics helps establish iealistic taigets that
suppoit stiategic objectives.
Level 2 metiics seive as uiagnostics foi the level 1 metiics. The uiagnostic
ielationship helps to iuentify the ioot cause oi causes of a peifoimance gap foi a
level 1 metiic.
Level S metiics seive as uiagnostics foi level 2 metiics

>"/& 3*,9&$9"0 -< 2$/J +,%,8"+"%&
Supply chain iisk management is the systematic iuentification, assessment, anu
mitigation of potential uisiuptions in logistics netwoiks with the objective to ieuuce
theii negative impact on the logistics netwoik's peifoimance.



SC Risk Nap


Biite uiogei Su
-<1 T,/J K"N"5/
Stiategic Level
Foiming the suppliei-buyei netwoik, in accoiuance with the stiategies of all
paitneis involveu
Stiategic souicing: uecisions on the souices of supply, anticipating supply neeus
anu evaluating the capacity of supplieis
Stiategic investment, foi example investing in new piouuction facilities
Tool: simulation

Planning Level
Long-teim anu miu-teim planning
0veilapping functionalities of ERP (shoit teim planning) anu SCN systems (long
teim planning) ! ueciue which system will be useu foi paiticulai piocesses



Execution Level
SCE (supply chain execution)
0iuei fulfillment; mateiial, inventoiy anu tianspoitation management;
waiehousing; piouuction planning, scheuuling etc.
SCEN (supply chain event management)

Biite uiogei S1
SAP ERP unu SCN ! Coie Inteiface


1,/&"* !,&,
Location:
Piouuction plant,
Bistiibution centei, Stock
tiansfei point, Customei,
venuoi, Tianspoitation
seivice pioviuei,
Tianspoitation zone,
Stoiage locationNRP aiea,
Teiminal, ueogiaphical
aiea, Stoie
Piouuct = is moie oi
less the same than mateiial
in ERP, also seivices aie
incluueu; moie than 1uu
attiibutes in mastei uata is
iequiieu, impoitant aspect:
can uepenu (paitly) on
locations (global anu
location uepenuent attiibutes)
Resouice: capacity, belong to categoiies, machine,
woikeis, teams, means of tianspoit; Piouuction
iesouices coiiesponu to the woik centei in ERP (uata
flows between those)
Piouuction piocess mouel (PPN): Beauei (valiu, cost,
planning location) anu PPN plan (piocess steps anu
components, Noue: which iesouice which activities)
Piouuction uata stiuctuie (PBS): PPN anu PBS combine
bill-of-mateiial uata, iouting uata anu iesouice uata into
one uata stiuctuie

Biite uiogei S2
Tianspoitation lanes: specifies that senuei, ieceivei, connects locations anu
uefines the means of tianspoit, associateu costs
Exteinal piocuiement ielationships
Quotation
Bieiaichies: impoitant foi aggiegate planning (piouuct families, gioups,
inuiviuual piouucts, how to combine piouucts anu locations in iespective gioups,
also location-piouuct hieiaichies can be uefineu
o Location Piouuct: is on a special location anu uata maintaineu in this
location
Nouel: supply chain with mastei uata, may uiffeient mouels ! active = executeu,
inactive = simulation
veisions: aie veisions of a mouel, active anu inactive

SAP SCN Tiansaction Bata


Subcontiacting vaiiants


3"88$%8 Geilaubt zu sehen welchei beigeoiunete Auftiag sich genueit hat)
Pegging is an appioach to iealize anu maintain the concatenation of oiueis (oi moie
geneial: of tiansaction uata) in supply chain management.
Bynamic pegging: Requiiements foi a location piouuct aie automatically linkeu
with suitable stocks oi ieceipts foi the location piouuct. The pegging
ielationships aie auapteu by the system whenevei iequiiement oi allocation
uata change.
Fixeu pegging: Assignment of a mateiial-allocation element (ieceipt) to a
iequiiement element iemains untoucheu when the planning changes.


Biite uiogei SS
Lectuie 12
SAP Supply Chain Nanagement

SAP AP0 (Auvanceu Plannei anu 0ptimizei)
SAP F&R (Foiecasting anu Replenishment)
SAP SNC (Suppliei Netwoik Collaboiation), befoie: SAP ICB (Inventoiy
Collaboiation Bub)
SAP EN (Event Nanagement)
SAP EWN (Extenueu Waiehouse Nanagement)

SAP Auvanceu Plannei anu 0ptimizei (AP0)
Bemanu Planning, Sales, Tianspoitation Planning
AP0-SNP: vNI, Imntegiateu Bistiibution anu Piouuction Planning, Bistiibution
Planning, Replenishment, Piouuction Planning, Puichasing, subcontiacting
AP0-PPBS: Betaileu Scheuuling, Piouuction Execution

SAP AP0: Tasks anu Time Boiizons


!"+,%D 35,%%$%8
1. Foiecast Nethous: 0nivaiiate methous (moving aveiage, lineai iegiession),
Nultiple lineai iegiession (NLR), Combineu foiecasts

2. Lifecycle Planning
Piouuct Lifecycle Cuive: Intiouuction, uiowth, Natuiity, Satuiation,
Biscontinuation
Piofiles
o Like piofile: consists of similai piouucts anu weighting factois to auapt
the othei piouucts' piofiles to the cuiient piouuct
Biite uiogei S4
o Phase-in piofile: simulates the incieasing sales cuive, ieflecting the cuive
in the intiouuction anu giowth phases
o Phase-out piofile: simulates the ueciease of the sales that is expecteu in
the uiscontinuation phase

S. Aggiegationuisaggiegation between planning levels
4. Piomotion planning
S. Foiecasting seconuaiy (inuepenuent) iequiiements
6. Collaboiative planning (CLP)

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Planning Appioaches

0ptimization
Ninimizing a cost function
Simplex algoiithm, bianch-anu-bounu, NIP
Becomposition
SNP Beuiistic
A heuiistic methou that calculates the net iequiiements baseu on the uemanu foi
a piouuct oi family of piouucts, taking inventoiy, piouucts in tiansit anu alieauy
scheuuleu manufactuiing oiueis into account
Relationships between Locations foi SNP
o Bemanu Split
o Flow of uoous


Capable-to-match (CTN)
Beuiistic methou foi supply netwoik planning, employeu to scheuule inuiviuual
iequiiements
Constiaint-baseu, multilevel, finite, top-uown planning appioach foi cioss-
location checks of supplies, piouuction anu tianspoit capacities

SAP Futuie --> BANA
uatabase unique, simplei anu fastei
compute in the builu in memoiy (1uuuuu times fastei)