Analysis of supply chain management in ERP system

Analysis of supply chain management in ERP system

all business and production activities in manufacturing industry are caused by market and customer demand. Demand management is the primary workflow for managing ERP system driven information, which has gone beyond the scope of internal integration. Therefore, only by using Internet technology to achieve external and internal integration, adhere to the principle of integrity and win-win among partners, adopt collaborative business model, and achieve real-time information sharing, can we really do a good job in demand management

1. The significance of demand management

the demand of manufacturing industry mainly comes from the market and customers. Demand management, like procurement management, is the meeting point of internal and external integration of ERP. Therefore, to do well in demand management, it is necessary to realize the information integration inside and outside the enterprise

the product life cycle is getting shorter and shorter, and the personalized needs of customers are becoming more and more diversified. Therefore, the demand management of ERP cannot be simply understood as obtaining orders. It also provides the basis for various strategies such as service level, inventory level, product development, market positioning and customer positioning, enterprise development and investment planning. In addition, it needs to analyze the benefits brought by demand information, which is the problem to be solved by customer relationship management (CRM); Whether the internal and external resources of the enterprise can meet the demand on time and in quantity is the problem to be solved by supply chain management (SCM). Therefore, ERP, CRM and SCM are originally an inseparable and unified integrated system, which is an indispensable means to achieve a comprehensive supply-demand balance

from the perspective of internal management of enterprises, how to continuously improve manufacturing flexibility and shorten various lead times is also an extremely important factor for demand changes and improving response speed

the concept of demand chain management proposed by Gartner is to integrate and synchronize CRM and SCM through collaborative operation. The traditional understanding regards requirements as a "given number" and then constantly modifies it. The concept of supply chain management is to regard demand as a "dynamic variable" that can bring value. Only real-time tracking, synchronization and collaboration can grasp and meet it

among various sources of demand information, competitive intelligence or business intelligence is an important aspect. More than 90% of the world's top 500 enterprises have established their own competitive intelligence institutions and competitive intelligence systems. About 35% of the operating profits of American enterprises are created by competitive intelligence (o) competitive intelligence information can be obtained through analysis and processing from publicly published materials and stations. It can also appoint liaison officers to timely report business opportunities in the market fields involved by enterprises. In terms of intelligence collection, every enterprise has its own uniqueness. ERP system must take competitive intelligence information as an important group of demand information. Nanjing will continue to optimize the layout of heavy chemical industry into parts and integrate with it.

AMR in May 2004 In a research report published, it explains the benefits for enterprises after accurately grasping the demand information

● inventory decreased by 15%

● delivery performance rate increased by 17%

● capital occupation decreased by 35%

● out of stock was an average of 1/10

these benefits were originally due to the lack of attention to demand management, which was inadvertently and invisibly lost. It illustrates the importance of demand management from another side

the position of demand management in ERP system is shown in Figure 14.1. Explain how to integrate crm-scm-drp-s&op-mps through demand management. We should not only grasp and select the demand, but also meet the demand, so as to make the enterprise truly profitable

demand management has gone through the stage from demand prediction to demand coordination, and developed to the future demand optimization stage. With the support of information technology, demand management strategy will be more effective and strengthened

2. The demand type is different from the demand response strategy

and it is necessary to ensure that one part to the next is reliable. The demand type corresponds to different demand response strategies, and corresponds to the market positioning of different customer groups. These information will be automatically integrated from different subsystems to the main production plan

2.1 distribution demand

the problems faced by the two response strategies of spot production (MTS) and order assembly (ATO) are mainly the demand for consumer goods and durable consumer goods. Through various sales channels, DRP or CPFR mode is adopted to summarize the demand information to the enterprise headquarters. There are replenishment orders, distribution contracts, forecasts and other forms of replenishment

2.2 sales contract (order)

except that spot production (MTS) can be supplemented and predicted according to inventory, other demand response strategies (ATO, mid, ELD) require production according to the contract. Even for replenishment of inventory, a contract agreement is required to specify the time and quantity of replenishment of inventory. The contract is the legal basis of the production plan and must be resolutely completed. Although the seriousness of the contract in our country is still very poor at present, breach of contract is a common occurrence. With the improvement of the legal system, it will be standardized sooner or later. The view that "it is impossible to arrange the plan by order in China" does not look at the problem from the perspective of development, which is a pessimistic and idle view

complete contract management includes pre-sales service, contract confirmation and commitment, order entry and other businesses

when inputting contract information into the system, you must first establish a customer file, explain the customer's group type, importance level and reputation record, otherwise, the system cannot perform sales operations

all contracts must be coded, indicating the year, customer's industry and region, commodity type, etc. According to the needs of enterprise sales management, the contract management subsystem of the software should be able to flexibly implement various situations. For example, multiple lines of materials are recorded in a customer contract. Different materials can have different delivery dates, and the same material can also have different quantities and delivery dates. Each line must indicate the material number, quantity, unit price, total price, the customer's material number and purchase order number, the customer's demand date, the agreed delivery date, mode of transportation, freight payment conditions, delivery place, payer, and the place to which the invoice is sent. Incomplete data will be considered invalid and cannot be recorded in the system. This information will be used as input data for planning, picking up, receiving, invoicing, and shipping operations

the order issued according to the predicted value can be regarded as an "internal order" before receiving the sales order. Once there is an actual sales order, it should be written off in time. Other requirements in Section 2.4 can also be in the form of internal orders, which is conducive to accounting settlement

a blanket order is essentially a forecast report and intention formulated by the customer, which is not a real sales contract. Only the total amount is recognized in the form of contract, but the specific demand should be clarified by the sales order (contract) phase by phase (month). However, this method improves the reliability of demand forecasting, which is beneficial to both supply and demand sides

2.3 demand prediction

the prediction objects of different demand response strategies are different. The main basis of spot production (MTS) is prediction. Even if the enterprise does not predict, the reseller should also predict. MTO mainly forecasts raw material reserves, and can use planned bill of materials. For the order assembly type (ATO), it is necessary to predict the basic components and options. Once there is an actual demand (sales order), the predicted value of the product and the predicted value of the related low-level materials should be offset at the same time to avoid double counting and increasing inventory

most of the prediction models predict future demand based on historical sales records. However, the capacity of an enterprise is limited, and the sales volume is often less than the actual total market demand. Therefore, it is necessary to consider the possible market share and make necessary adjustments when forecasting. There are many prediction models, which are introduced in detail in special textbooks and are not discussed in this book. No matter which prediction mode is adopted, the prediction result will always be different from the actual situation, and there can be no completely accurate prediction. Therefore, the following principles should be paid attention to when forecasting

(1) predict by product category or series. It covers a wide range, and the error may be smaller

(2) the span of prediction period should not be too long, the longer the more inaccurate

(3) use a numerical range to express the prediction and explain the tolerance

(4) compare with each other with various prediction methods

(5) the prediction results are often reviewed, and the prediction can not be finalized at one time

(6) the prediction method and results should be concise and easy to understand

(7) the market department must jointly predict with the technology department to consider the impact of technological progress on product development

the prediction subsystem of the software only provides several calculation modes, which cannot replace market research and market development. It is important to increase the transparency of demand information, so that the personnel of each business department can clearly understand how the work of this post should respond to demand changes quickly. Potential customers, or the volume of transactions that are being negotiated but not finalized, can also be used as a part of the forecast volume

2.4 other requirements

other requirements include spare parts, trial products, exhibits, destructive test products, collaborative parts between departments in the enterprise, allocated materials, etc. These requirements can be independent requirements or related requirements in the form of internal orders. If the demand quantity is not calculated by expanding the BOM, it can also be entered manually at the MPS or MRP level

3. CPFR mode

we should clearly see that no prediction is 100% accurate, and there are a large number of uncertain factors in the objective world. Only by using Internet technology and realizing the collaborative operation between partners on the basis of adhering to the principles of integrity and win-win can we quickly deal with various uncertain factors

the collaborative planning, forecasting and replenishment mode adopted by the company has been extended to all kinds of consumer goods and durable consumer goods. For example, in the retail system industry, consumption data can be collected through retailers' POS (point of sales) as the basis for replenishing inventory. With the support of Internet technology, manufacturers, distributors and retailers are united to realize information sharing, eliminate the bullwhip effect, and achieve obvious benefits in improving service level, shortening delivery time and increasing sales volume

the experience of Nike, a famous sports shoe manufacturer, is that "if information can be shared among relevant personnel faster and more accurately, market trends will be found earlier". As far as possible, all products of enterprises are produced on demand according to orders, rather than relying on formulas provided by some software to predict demand. These prediction formulas often simplify assumptions, and it is difficult to consider different business rules of different enterprises

cpfr is essentially a collaborative e-commerce between enterprises and partners, which is an e-business. It requires partners to establish good mutual trust, have common business goals, and establish a ring stiffness experimental machine that can exchange information in real time, and use the information means to realize real-time information sharing. In the case of spot production (MTS) and order to assemble (ATO), it is an effective demand management mode

cfpr's core idea is still to make demand (prediction) and supply (replenishment of inventory) collaborative planning to reduce uncertainty, which is one of the important contents of supply chain management. However, its scope of application is mainly the type of repeated production in the manufacturing industry, as well as the wholesale and retail industry (collecting commodity consumption information from electronic cash registers)<