CH 5 ERP Systems_ Production and Materials Management

CH 5 ERP Systems_ Production and Materials Management -...

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Materials Management
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Production and Manufacturing are the most important parts of any organization, and are in evolution since and before the industries became a trend. Reorder point systems were designed in 1960s to manage high volume production of a few products, with constant demand. These systems failed to provide customized products in limited quantities quickly. Due to increase and fluctuation in customer’s demands, Manufacturing Execution Systems (MES) were introduced. MES provided continuous feedback and control of manufacturing processes, so changing market needs could be addressed. Background
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MES provided components to manage machine resources, to prioritize production schedules, to control workflow, to manage labor, and to automate document flow. In the 1990s, ERP systems were used in integrating manufacturing processes with other business processes. ERP systems manage processes across the supply chain so that customer’s needs for information about products and services are met Background
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Background Problems in Production Planning and Material Management: Subsystems Problems Production Planning Production planning may not be linked to expected sales levels; difficulty in adjusting production to reflect actual sales; difficulty in meeting anticipated sales demand Production Materials costs and labor costs can deviate from standard costs and this will change manufacturing costs Purchasing/Materials Management Production manager may not be able to give the Purchasing/Materials Management manager a good production forecast Accounting Differences occur between standard costs and actual costs
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Background Inaccurate production forecasts trigger incorrect purchasing decisions by Materials Management, leaving excess raw materials and finished goods inventory
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Production Panning and Manufacturing Processes Production systems achieves these objectives: - Producing the production plan Acquiring raw materials Scheduling equipment, facilities, and workforce to process these materials Designing products and services Producing the right quantity and the required level of quality at the time required by production goals
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Production Panning and Manufacturing Processes The production planning and manufacturing processes include: - Operational (Purchasing, Receiving, Quality Control (QC), Cost Accounting, Materials Management, Inventory Management/Control) Management Control (MRP, Just-in-time (JIT) manufacturing, Capacity planning, Production scheduling, Product design)
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This note was uploaded on 11/08/2010 for the course SCM STSCM taught by Professor Hoogover during the Spring '10 term at E. Kentucky.

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CH 5 ERP Systems_ Production and Materials Management -...

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