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Supply Chain Management (SCM) :Techno-functional Guide

Posted on July 25th, 2008 by Sanjit Anand | Print This Post | Email This Post

Read this:

KNOW WHAT IS SUPPLY CHAIN MANAGEMENT (SCM)? : An Overview

SCM Subsystem

This article is an easy guide for Techno-functional consultant to understand SCM from Implementation as well asOracle Application product Prospective.Lets start the topic with some of high points of earlier post .

As mention in earlier post a Supply Chain is a network of retailers, distributors, transporters, storagefacilities and suppliers that participate in the sale, delivery and production of a particular product.

Make a note a supply chain is product specific, not company specificSupply chain management (SCM) is a systematic approach to manage the entire flow of information,materials, and services from raw material suppliers through factories and warehouses to the end customer.

SCM Certification Program Certified Supply Chain Professional Accelerate your career today. www.apics.org/cscp

Siemens answers: The digital factory Answers for industry. www.siemens.com/answers

JD Edwards Global Rollout Run a single JD Edwards instance across the world. www.systime.net/jdedwards


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Moreover , SCM involves the flows of material, information and finance in a network consisting ofcustomers,suppliers, manufacturers, and distributors.You should be clear with Flow that SCM can manage :

The flow of actualmaterials, the top middlebars

From suppliers :flows of rawmaterials,intermediateproducts, finishedgoodsReverse materialflows : returns,repairs, servicing, recycling, disposal

and the information flowsFrom suppliers : manufacturing capacity, delivery schedules, promotions they have goingReverse flows : sales, orders, inventory, quality, promotions

And finally, there are financial flows:From suppliers: Credits, consignment, payment terms, invoiceReverse Flows : payments, consignment

Supply Chain Management is the management of the entire value-added chain, from the supplier tomanufacturer right through to the retailer and the final customer.SCM has three primary goals: Reduce inventory, increase the transaction speed by exchanging data inreal-time, and increase sales by implementing customer requirements more efficientlyThe need for SCM is because effective Supply Chain Mgt. is the next logical step towards increased profitsand market share.Supply Chain Management (SCM) in line manager prospective is "let's-keep-things-moving-efficiently".

Read the rest of this entry »

Posted in Functional, Oracle Manufacturing | 2 Comments »

OPM API’s

Posted on February 14th, 2008 by Sanjit Anand | Print This Post | Email This Post

As usual APIs facilitate integration with complementary third party , in-house developed, or legacy applications.These APIs are standard in Oracle Process Manufacturing in various releases.

The benefits of OPM APIs are same usual:

Automate data collection from plant devicesReduce custom interface codeProvide easier software upgradesAllow connection to legacy systemsEliminate manual data entry and errors

Inventory Optimization Multi-Echelon Optimization - Safety Stock, Cycle Stock and Pre-Build www.LLamasoft.com/Technology

Manufacturers From China Inquire for Lower Prices in China Contact Quality Manufacturers Now! www.GlobalMarket.com

Top 50 ERP & MRP Systems Get Free ERP Evaluation Reports for Software Selections & Comparisons! ERP.SoftwareResearchTools.com


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So here are the List of APIs for Integration in OPM (Adopted)

Production / POCStart Resource UsageEnd Resource UsageClose BatchCancel BatchRelease, Certify, and Close StepPost Resource TransactionIncremental Resource TransactionTimed Resource TransactionCostingItem CostResource CostAllocation DefinitionBurden DetailsFormulaCreate Formula

Insert Ingredients, (By)ProductsCreate Formula Usage Rules

InventoryCreate ItemCreate LotCreate Item/Lot UOM ConversionCreate, Adjust, or Move InventoryChange Lot Status or QC Grade

QualityAssaysSpecificationsSamplesSample LabelsResults

You can see the more details for API's and underline API name either document Part No# A83748-01 or you cancheck in the responsibility IREP

Posted in OPM | 1 Comment »

What are OPM Products ..


Obvious question was asked by yet another reader after this post?

"What are the modules that come under the umbrella of OPM ? "

Th answer is OPM includes OPM Process Planning, Product Development(which includesFormula,Recipe,Quality), Production, Financials(Costing,MAC), Logistics, Regulatory Management etc. These areproducts which come under this umbrella..

OPM Cost ManagementOPM Formula ManagementOPM Intelligence


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OPM Inventory ManagementOPM Laboratory ManagementOPM Master Production SchedulingOPM Material Requirements PlanningOPM Production ManagementOPM Purchasing ManagementOPM Quality ManagementOPM CapacityOPM Sales ManagementOracle Financial

Is there any difference from Oracle Discrete Manufacturing?

Yes, there is ..If you came from Discrete manufacturing background, these are one -to-one mapping betweenmodules.

.. OPM history

The history of Oracle OPM is one decade old, This is worth to know about OPM Life Cycle.

Next would like to provide some more information for OPM API's availability....

Posted in OPM | 1 Comment »

ERP Options for “Process Related Industries” -Aberdeen Report


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Aberdeen Group, has recently published one report for "ERP Options for Process Related Industries ", Here is thelink for free report.

ERP Options for Process Related Industries by Cindy Jutras

What you should know about Oracle OPM products

Oracle OPM designed exclusively for catering the business need for process manufacturers industrylike:

Consumer Packaged Goods

Food, Beverage, Health and Beauty, Household ProductsIndustrial Products

Chemical, Pharmaceutical, Petroleum, Metals, Mining, Paper and Glass

The difference between Discrete and Process manufacturing can be best understood in my previouspost.

Oracle OPM product Strengths

For those who are very new or not aware to Oracle OPM product, here are some of high points ofOperational Functionality that product offered.Moreover there is significant changes has been seen inage of internet that has re-defined the operation of the supply chain(SCM) thus Oracle OPM Productstoo.

Please Check with Oracle OPM Page, to see what are the recent changes has been incorporated.based out of my exposure very long time back, these are the functionlity that product had.

Lot Traceability :In this some features like Lot/Sub lot,Forward/Backward Genealogy,Status Control,Grade Control,Lot Expiration,Allocation for Shelf DaysMultiple Formulas (Bills) :These are typically used for formulas for production, costing planning,MSDS,Effectivities By Date for Seasonality,Effectivities by Quantity,Scaling,Alternate Routings,Scrap factors and theoretical yieldSupport for A and V type Formulas : All three kind of formula like well suited here:

V Bills are constructive- Multiple ingredients one productA Bills are destructive- One ingredient, multiple productsA Bills support co-products and- by-products

Ingredient Substitutions

The features like mass ingredient substitutions for formulasDesigned for ingredient substitutions in manufacturing orders (batches)Manufacturing variances for substitutions tracked and reported.

Dual UOMs functionlity

Item specific UOMsCount to MassCount to VolumeMass to VolumeUser defined UOM types

Lot specific UOMsDual UOM Types

FixedDefaulted with toleranceNo relation

Uses


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Sell by count, invoice by weightDry pounds, wet pounds% solids, % moisture

Specification Matching Functionlity

Some of the great features like

QC Specs and Results : This may be based out of vendor,customer,plant or by lotThere was yet another feature for customer spec matching.

Regulatory Compliance

Material Safety Data Sheets (MSDS) are configurable, also formulas for MSDSOther features are flexible Costing, which can be either processIf Costing (Standard,Actual) orOrganization Level basis (Warehouse,Item)

Related article

Discrete & Process manufacturing in ERP ?KNOW WHAT IS SUPPLY CHAIN MANAGEMENT (SCM)? : An Overview11i EBS and Food Industry

Posted in OPM | 2 Comments »

SCM Subsystem

Posted on November 15th, 2007 by Sanjit Anand | Print This Post | Email This Post

In last post we have understood SCM flow. Let's talk in term of SCM IT requirement. SCM subsystems areimportant because this is required to support manufacturing managers in making their decisions so that they canoptimize the trade off between capital tied up in stocks and inventories, versus the ability to deliver goods at pricesand delivery dates agreed with customers.

A typical flow and SCM cycle can be understood as fig below:

Typically A SCM consists of these sub-systems can be categorize and consist of:


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Demand Management

This is basically co-ordination sales forecasts from all the players, including sales representatives at the point ofsale through production to raw material suppliers, so that everyone is working to the same plan, rather thancreating unnecessary safety stocks.

Distribution Resources Planning (DRP)

This will Keep track of the status of production and procurement of materials for each order, where the goods arelocated, what transport and warehousing is in use, what stock to keep and when to re-order.

Transport Management Systems (TMS)

This kind of subsystem normally keep the information such as :what modes of transport at what cost are availableto the shipper; what costs and timings are associated with each route; the order in which to load transport;optimization of multi-segment deliveries; compliance with documentation required for customs and shippers.

Warehouse Management Systems (WMS)

These are the systems which are used to optimize the storage and picking of goods in a warehouse, also includescompliance with carrier and customer documentation standards.

Supplier Relationship Management (SRM)

This kind of subsystem keeps the information about suppliers of direct and indirect materials, such as agreed termsof trade, records of status, records of contacts between the enterprise and the various points of contact insuppliers.

Component Supplier Management (CSM)

Management of lists of preferred suppliers and preferred parts; terms of trade such as delivery and price associatedwith them; rationalization of existing parts to minimize costs by substituting equivalent parts.

I guess, the next question in mind would what are applications which are going to enable if anyone is going to rollout SCM functionality in Oracle EBS. Keep watching this space.

Posted in EBS Suite, Functional, Oracle Manufacturing | No Comments »

KNOW WHAT IS SUPPLY CHAIN MANAGEMENT (SCM)? : An

Overview


This is one of the basic areas from management books. In fact lot of people have requested some more informationon SCM, OPM and other manufacturing area. therefore,I take this opportunity, as this is one of my favorite topic,as I started my first job in PPC (Production Planning &Control) department of a big steel company a decades ago,so I hope I will surly help in giving a clear picture of SCM. Let's start with basic and gradually will move into ERParena:

SCM is defined as combination of art and science that goes into improving the way your company find the rawcomponents that needs to make a product or services and deliver it to customer. In Business word this art andscience become functions that an organization undertake.

If you are IT guys you can understood SCM as:


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Systems that support manufacturing managers in making decisions that optimize the trade off between capital tiedup in stocks and inventories, versus the ability to deliver goods at prices and delivery dates agreed with customers.

In principle and reality, both inwards logistics operations to acquire materials to make products and outwardslogistics operations shipping finished goods to final customers are monitored.

WHAT EXACTLY IS SUPPLY CHAIN MANAGEMENT OR WHAT IS BASIC COMPONENT OF

SCM?

As per Supply-Chain Operations Reference-model (SCORÃ‚Ã‚ÂÂ®) which has been developed by Supply-ChainCouncil. This model organized and focused on the five primary management

PLAN1.SOURCE2.MAKE3.DELIVER4.RETURN5.

1. Plan: This is vital part of SCM philosophy, where the companies normally need to make strategyfor managing all the resource that go towards fulfilling the customer demand for the product andservices that they offers. A big piece of planning is developing a set of matrices to monitor the Supplychain so that it would be efficient, cost effective and deliver high quality and value to the customer.

2. Source: It means processes that procure goods and services to meet planned or actual demand. Thispart of SCM consists of selecting right suppliers that will deliver the good and services that need tocreate your product. Developing a set of pricing, delivery and payment process with supplier isimportant. Also this will also take care of managing the inventory of goods, and services you receivefrom your suppliers, including receiving shipping, verifying them, transferring them into variousfacilities and authorizing supplier payment.

3. Make: This is basically a step where your company starts fulfilling the request or BUILT forproducts into finished state to meet planned or actual demand. Schedule activity necessary forproduction, testing, packaging and preparation for delivery.

4. Deliver: This is also called Logistic Process. This is the processes that provide finished goods andservices to meet planned or actual demand, typically including order management, transportationmanagement, and distribution management.

5. Return - This is real pain of SCM model, which defined as processes associated with returning orreceiving returned products for any reason.

Typical model can be best described as:


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WHO IS THE STAKEHOLDER OF SUPPLY CHAIN

These are considered as stake holder of SCM:

CustomersYour CompanyDesign PartnersMaterial SuppliersContract ManufacturersLogistic Providers

WHAT ARE DRIVERS OF THE SUPPLY CHAIN?

These are the main drivers :

ProductionInventoryLocationTransportationInformation

1. Production

This driver addressing these questions: what products does the market want? How much of whichproducts should be produced and by when?This activity includes the creation of master production schedules that take into account plantcapacities, workload balancing, quality control, and equipment maintenance.

2. Inventory

This driver addressing these questions: What inventory should be stocked at each stage in a supplychain? How much inventory should be held as raw materials, semi finished, or finished goods?The primary purpose of inventory is to act as a buffer against uncertainty in the supply chain.

3. Location

This driver addressing these questions: Where should facilities for production and inventory storage belocated? Where are the most cost efficient locations for production and for storage of inventory?Should existing facilities be used or new ones built?Once these decisions are made they determine the possible paths available for product to flow throughfor delivery to the final consumer.


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4. TransportationThis driver addressing these questions: How should inventory be moved from one supply chainlocation to another? Air freight and truck delivery are generally fast and reliable but they areexpensive. Shipping by sea or rail is much less expensive but usually involves longer transit times andmore uncertainty.

5. InformationThis driver addressing these questions: How much data should be collected and how much informationshould be shared?

Timely and accurate information holds the promise of better coordination and better decision making.With good information, people can make effective decisions about what to produce and how much,about where to locate inventory and how best to transport it.

GET FAMILIAR WITH TOP 10 TERMS, DEFINITIONS AND TERMINOLOGY IN SCM

Master Demand Schedule - MDS

The MDS is a consolidation of demand by product and time bucket

Master Production Schedule- MPS

The MPS is a statement of supply required to meet the demand for the items contained in the MDS.The master production schedule defines the anticipated build schedule for all products. The masterproduction schedule also provides the basis for order promising (ATP) function

Material Requirements Plan-MRP

The Material requirements planning (MRP) calculates net requirements from gross requirements byevaluating:

The master scheduleBills of materialScheduled receiptsOn-hand inventory balancesLead timesOrder modifiers

Advanced Supply Chain Plan- ASCP

Constrained Based and optimized version of MRP

Planned Order

Automatically suggested action from planning engine

Consumption

The process of "relieving" the forecast to prevent double counting of demand

Drop Ship

Having an order ship directly from the vendor to the customer without physically being in yourinventory.

Vendor Managed Inventory- VMI


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The process of giving the vendor the authority and visibility to determine what your inventory shouldbe

Customer Owned Inventory- COI

Where you are managing the customers inventory on your premises and supply as required

Work Order/Sales Order

The request that you received from the customer for fulfilling there demand.

SIMPLE PLANNING CYCLE WITHIN AN ORGANIZATION

A typical planning cycle would start by loading the sales orders, forecast and other demand such internal ordersinto the master demand schedule (MDS). That demand statement would then be used as the schedule that drivesthe Master Production Schedule (MPS) . Take a note in regular MRP implementations the MPS is used as theschedule for ATP. Once the MPS is reviewed and updated is used as the schedule to drive the MRP process. Theresult of the MRP process is planned orders and exception messages. When released from MRP the planned ordersfor "buy" items become requisitions or purchase orders in the purchasing module and the "make" items becomediscrete jobs in the Work In Process Module. Once the finished goods are received into inventory it is shipped tosatisfy customer orders.

Scenario I :Sales Order - Forecast Planning Cycle

This is the scenario where normally we arebuilding to stock and satisfying sales orderdemand from stock. Here you will see thedifference as planned orders are released tobecome purchase requisitions for componentsand work orders for sub assemblies andfinished goods. The finished goods are thenshipped to satisfy the sales orders.


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Scenario II : Planning - Procurement Cycle

In the Planning-Procurement cycle we normallystart where the first part of the planning cycle iscomplete and we have a planned order for a buyitem from MRP. The planned order is releasedand becomes a requisition or purchase order inthe purchasing module. A purchase order is thencreated from the requisition and sent to thevendor. The vendor would supply the materials.The materials would be received into inventoryand the purchase order would be closed.

Scenario III :Planning - Drop Ship Cycle

In the Drop Ship cycle the process is as follows:

A sales order is received from the customer.After the sales order is entered a process is run that creates a purchase order that matches the sales ordersThe item, quantity and required date information on purchase order matches that information on the salesorder.The ship to address on the purchase order is the ship to address of the customer.The vendor ships the product directly to your customer. Once the vendor ships the product you receive" thepurchase order and that creates the shipping transaction to satisfy the sales order.Matching accounting transactions complete the process

You can also see technical details for drop ship cycle in my earlier post.

Scenario IV :Planning - WIP Cycle

In the Work In Process cycle after the planning cycle is complete a planned order is released to create a discretejob. Material/components is issued the job or back flushed from inventory. The job is completed from Work InProcess to Inventory.


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Scenario V : Planning - Outside Processing Cycle

With Outside Processing you could be buying a service, an item or capacity from an outside vendor. The setup foreach of these scenarios will be described in the training sessions to follow, however they all follow a similarprocess. A routing with an outside processing operation is setup.

After the planning cycle is complete a planned order is released to create a discrete job. Once the Discrete job ismoved to a outside processing operation, a purchase requisition is triggered. The requisition is imported toPurchasing and a purchase order is created. The details of the discrete job such as job number, assembly numberand quantity is tied to the purchase order. The purchase order is sent to the vendor. When the purchase order isreceived its destination will be shop floor and the assembly will be returned to the next operation on the workorder.

This make an end of this discussion. In Next post we will see what are the different subsystem SCM will have andwhat are the modules which comes under SCM Implementation. Any comment is welcome

Posted in EBS Suite, Functional, Oracle Manufacturing | 27 Comments »

Flow ,Discrete & Process manufacturing in ERP ?


This is a very basic question for ERP consultants , what is basic difference into two manufacturing operation :discrete manufacturing and process manufacturing . Lets redefined and understand in simple words:

As we know, in ERP prospective manufacturing operation can be broadly classified into two major category:

Flow manufacturing

Discrete manufacturingProcess manufacturing

Discrete Manufacturing

Discrete manufacturing is distinguished by the


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production of distinct items that use bills ofmaterial and routings to determine costs andlead times.

Examples: Automobile manufacturing,computer manufacturing, dishwasher andwashing machine manufacturing, etc .

Typically they follows either a Product, Process or a Combination Layout these layouts can beunderstood like:

Product Layout - Processes come to the product . typical example are Ship Building, CarAssembly Line, PC's, etc.Process Layout - Products go to Process areas Typical Example are Cabinets and Casings,Sub-assemblies, Rubber Mixing, etc.

Is normally a Product that is "Built Up" from components or sub-assemblies.

A note with Oracle Product

Discrete manufacturing is Oracle Applications method to handle the unique problems in manufacturing equipment,like electronics, medical devices or a complicated assembly like the space shuttle as indicated above.

Discrete manufacturing is based on piece parts that are assembled or machined to make larger assemblies.

Oracle Discrete Manufacturing has a great deal of functionality to manage the Bills of Materials, Routings andEngineering changes that are required to adequately track assembly and cost the finished product.

Flow Manufacturing

Flow manufacturing is also called Lean Manufacturing or JIT(Just-In-Time) and uses the principles of demandflow manufacturing to produce product is required, for customer orders, quickly and to meet the demand exactlyon-time.

Usually, in order to use Flow a company needs to have production facilities that subscribe to the principals of LeanManufacturing. It is necessary to design production facilities so that production lines, resources, machines, andlabor are making only what is needed for immediate customer orders.

Process Manufacturing

Process manufacturing is distinguished by a productionapproach that has minimal interruptions in actual processingin any one production run, or between production runs ofsimilar products. This approach produces multiple uniqueproducts in relatively small batches flowing throughdifferent production operations throughout the factory.

They typically follows a Process Layout.

They are normally producing a Product that is"Homogeneous" and equally divided for the convenience of packaging.

Typical examples are Food, pharmaceutical and other batched-based manufacturers such as refineries, wineries,etc .

A Note with Oracle Process Manufacturing

The OPM capabilities allow for multiple units of measure because the flexibility in batch production is required inprocess industries.


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Process manufacturing is used at companies that make products that use formulas, receipts and/or haveco-products or by products. Typical users of OPM are manufactures of food products or chemicals that havecomplex internal processes and need a high level of control.

The OPM capabilities allow for multiple units of measure because the flexibility in batch production is required inprocess industries.

What makes process manufacturing different from discrete?

Process manufacturing uses formulations or recipes. A discrete manufacturer uses Bills of Materials(BOMs). A discrete manufacturer assembles along a routing, whereas a process manufacturer blendsin a batch.Apart from these other difference with other factors are summurized as:

Which come under which category ?

Posted in Beginner, Oracle Manufacturing | 12 Comments »


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Oracle Manufacturing _ OracleApps Epicenter