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ERP- Enterprise Resource Planning Enterprise resource planning system refers to a management platform based on information technology and providing decision-making operation means for enterprise decision makers and employees with systematic management ideas. It is the product of the continuous development and combination of information technology and management thought. This topic starts with the ERP phenomenon. By introducing the concept, origin, development process, development, function and role of ERP in China, including the main functional modules and the five stages of introducing ERP, we can have a thorough understanding of ERP from beginning to end.
Approaching ERP
introduce
In today's fierce global market, whether it is process or discrete manufacturing, whether it is single-piece production, multi-variety and small-batch production, repeated production of few varieties or batch production of standard products; The internal management of manufacturing industry may encounter the following problems: for example, the enterprise may have excellent sales staff to promote products, but the workers on the production line can't deliver the goods on time, and the workshop manager complains that the purchasing department doesn't supply the raw materials they need in time; In fact, the efficiency of the purchasing department is too high, some materials are piled up in the warehouse 10, which can not be used up, the warehouse location is saturated, and the capital turnover is very slow; Many companies need 6 ~ 13 weeks to calculate the required material quantity, so the order cycle can only be 6 ~ 13 weeks; The purchase order and the date on the purchase order are different from the date on the bill of materials, and they are both uncertain; The financial department does not trust the data of the warehouse department and does not use it to calculate the manufacturing cost. ...
Undeniably, the above situation is a serious problem faced by most enterprises in China at present. However, is there any effective way to solve this phenomenon? The fact is that when the business circles in China have not fully realized the seriousness of this problem, foreign ERP/MRP II software manufacturers have quietly entered the China market, and with the passage of time, ERP has gradually been recognized by the business circles and theoretical circles in China.
ERP phenomenon
Today, as long as we look through newspapers and magazines related to management and information technology, a large number of MRP II/ERP advertisements and related reports will appear. Just when people are still confused about what ERP is, a new generation of concepts such as "ERP in e-commerce era" and "iERP" keep coming.
In fact, the huge benefits that ERP can bring are indeed quite attractive to many enterprises. According to the data of American Production and Inventory Control Association (APICS), using MRP II/ERP system can bring the following economic benefits to enterprises on average:
1. Inventory decreased by 30% ~ 50%. This is the most talked about benefit. Because it can reduce the inventory investment of general users by 1.4~ 1.5 times and improve the inventory turnover rate by 50%.
2. Delayed delivery is reduced by 80%. When the inventory is reduced and stabilized, the customer service level is improved, which makes the on-time delivery rate of enterprises using ERP/MRP II increase by 55% on average and the delayed delivery rate decrease by 35% on average, which greatly improves the reputation of the sales department.
3. The procurement lead time has been shortened by 50%. With timely and accurate production planning information, purchasing personnel can concentrate on value analysis, source selection, research negotiation strategies, understand production problems, shorten procurement time and save procurement costs.
4. The downtime is reduced by 60%. Due to the transparency of parts demand, the plan has also been improved, which can be timely and accurate, and parts can arrive on time at a more reasonable speed. Therefore, the phenomenon of production line shutdown will be greatly reduced.
5. The manufacturing cost is reduced by 12%. Due to the reduction of inventory cost, labor saving, procurement cost saving and a series of human, financial and material effects, the production cost will inevitably be reduced.
6. With the improvement of management level, the number of managers decreased by 10%, and the production capacity increased by 10% ~ 15%.
In addition, the rapid growth of ERP market in recent years also shows its great development potential:
From the domestic situation, the average annual growth rate of MRP II/ERP industry in China from 1995 to 1997 is about 27%, while the growth rate of 1998 is as high as 35% (excluding financial software), and the market sales amount reaches 420 million yuan. 1999 Due to the lag effect of the Asian financial turmoil and other factors, the ERP market has obviously declined. However, with the successful convening of the Fortune Forum in Shanghai and the final signing of the WTO agreement between China and the United States, most Chinese and foreign-funded enterprises have strengthened their confidence in further investment. This made the ERP market reappear in the second half of 1999 and 2000. According to Hong Kong Ta Kung Pao, the market size of ERP software products in China will reach about10 billion yuan in the next two years. According to statistics, there are about11million registered enterprises in China, of which 10% are large enterprises. Among southern enterprises, more than half of large and medium-sized enterprises have plans to adopt and purchase ERP products, but there are fewer small and medium-sized enterprises, while the number of ERP products purchased by northern enterprises is gradually increasing.
Judging from the whole international situation, AMR Research, an authoritative market forecasting research institution in the United States, predicts that the global ERP market will develop at an annual compound growth rate of 37% in the next five years. From 65438 to 0998, the total revenue of global ERP market reached148 billion US dollars, and this figure will increase to 52 billion US dollars in 2002.
As can be seen from the above figures, ERP has set off a revolution in management thought and technology, both in China and around the world. What is more noteworthy is that MPR II has developed into ERP in today's e-commerce era in just a few years before it has been fully recognized by business people in China. It can be seen that this new management method and means is being applied and developed in China enterprises at an unimaginable speed, which undoubtedly injects new blood into many enterprises struggling in the tide of market economy. Therefore, in order to better master and use this new management tool, we need to have a clear understanding of ERP first.
The concept and process of ERP
ERP- Enterprise Resource Planning Enterprise resource planning system refers to a management platform based on information technology and providing decision-making operation means for enterprise decision makers and employees with systematic management ideas. ERP system integrates information technology and advanced management ideas, and becomes the operation mode of modern enterprises, which embodies the requirements of the times for enterprises to rationally allocate resources and create social wealth to the maximum, and becomes the cornerstone for enterprises to survive and develop in the information age.
We can define it from three aspects: management thought, software products and management system:
1. is a set of enterprise management system standards put forward by Garter Group Inc, a famous American computer technology consulting and evaluation group. Its essence is a supply chain-oriented management idea that is further developed on the basis of MRP II ("Manufacturing Resource Planning").
2. It is a software product that comprehensively applies the achievements of information industry such as client/server system, relational database structure, object-oriented technology, graphical user interface, the fourth generation language (4GL), network communication and so on. And take ERP management thought as the soul;
3. It is an enterprise resource management system integrating enterprise management concepts, business processes, basic data, manpower and material resources, computer software and hardware.
Specifically, the relationship between ERP and enterprise resources, the role of ERP and the development of information technology can be expressed as follows:
1. Enterprise resources and ERP
Factory buildings, production lines, processing equipment, testing equipment, transportation tools, etc. They are all hardware resources of enterprises, while manpower, management, reputation, financing ability, organizational structure and employees' labor enthusiasm are all software resources of enterprises. In the business development of enterprises, these resources interact with each other to form the basis for enterprises to carry out production activities, complete customer orders, create social wealth and realize enterprise value, which reflects the position of enterprises in competitive development.
The management object of ERP system is the above resources and production factors. Through the use of ERP, the production process of enterprises can complete customers' orders in time and with high quality, give full play to the role of these resources, and make decisions to adjust resources according to customers' orders and production conditions.
2. Adjust the use of enterprise resources
An important sign of enterprise development is the reasonable adjustment and utilization of the above resources. Without modern management tools such as ERP, the enterprise resource situation and adjustment direction are not clear, and it is quite difficult to make adjustment arrangements, and the adjustment process will be quite long. The organizational structure of enterprises can only be pyramid-shaped, and the cooperation and communication between departments are weak, so it is difficult to grasp the operation of resources and make adjustments. The development of information technology, especially the ERP system designed for enterprise resource management, is designed to solve these problems. Successful implementation will make enterprises make better use of resources.
3. The stage development process of the role of information technology in resource management
The development of computer technology, especially the development of database technology, plays an inestimable role in establishing management information systems and even changing management ideas. The development of management thought and information technology is a mutually causal cycle. Practice has proved that information technology plays an increasingly important role in enterprise management.
The initial application of information technology in management is also very simple, mainly to record some data for easy query and summary, but now it has developed into a transnational and cross-enterprise operating system based on the global Internet, which can be divided into the following stages:
A.MIS system stage (management information system)
Enterprise information management system mainly records a large number of original data, and supports query and summary.
B.MRP stage (material requirements planning)
The information management system of an enterprise manages the product composition, and with the help of the computing power of the computer and the management ability of the system to customer orders, inventory materials and product composition, the material demand plan is formulated and calculated according to the customer orders and product structure list. Achieve the management objectives of reducing inventory and optimizing inventory.
C.MRP stage (manufacturing resource planning)
On the basis of MRP management system, the system adds the management of enterprise production center, processing hours and production capacity, thus realizing the function of computer production scheduling, including financial function, forming a closed-loop management system with computer as the core in the enterprise, which has been able to dynamically monitor the whole production process of production, supply and sales.
D.ERP phase (enterprise resource planning)
After entering the ERP stage, the enterprise-level management system with computer as the core is more mature, and the system has added functions including financial forecasting, production capacity, resource scheduling adjustment and so on. Cooperate with enterprises to realize JIT management comprehensive, quality management, production resource scheduling management and decision-making assistance. Become a platform tool for enterprises to carry out production management and decision-making.
E. ERP in the era of e-commerce
The maturity of internet technology has increased the ability of information sharing and direct data exchange with customers or suppliers for enterprise information management systems, thus strengthening the relationship between enterprises, forming a survival chain of * * * and development, and embodying the supply chain management idea of enterprises competing for survival. ERP system realizes this function accordingly, which enables decision-makers and business departments to realize joint operations across enterprises.
It can be seen that the application of ERP can effectively promote the modernization and scientificity of existing enterprise management and adapt to the increasingly competitive market requirements, and its introduction has become the general trend.
The basic principle of MRP
ERP is a huge management information system. To clarify the principle of ERP, we must first follow the four main stages of ERP development and start with the basic principles of MRP in the 1960s.
Principle of basic material demand planning
As we all know, according to the different sources of demand, materials within an enterprise can be divided into two types: independent demand and associated demand. Independent demand means that demand and demand time are determined by the external demand of the enterprise, for example, products ordered by customers, samples needed for scientific research and trial production, spare parts needed for after-sales maintenance, etc. Associated demand refers to the demand of materials with independent demand according to the structural composition relationship between materials, such as the demand for semi-finished products, spare parts, raw materials and so on.
The basic task of MRP is
(1) Export the demand and demand time (related demand) of related materials (raw materials, parts, etc.). ) production plan from the final product (independent demand);
(2) Determine the time to start production (ordering) according to the demand time and production (ordering) cycle of materials.
The basic content of MRP is to prepare the production plan and purchase plan of parts. However, in order to make the parts plan correctly, we must first implement the production plan of products, which is called Master Production Plan (MPS) in MRP II terminology, and it is the basis of MRP development. MRP also needs to know the part structure of the product, that is, the bill of materials (BOM), so as to expand the master production plan into a part plan; At the same time, you must know the inventory quantity in order to accurately calculate the purchase quantity of parts.
Therefore, the basic MRP is based on:
(1) Master Production Plan (MPS);
(2) Bill of Materials (BOM);
(3) Inventory information.
The logical flow relationship between them is shown in the following figure.
Basic composition of MRP
I. Master Production Plan (MPS)
Master production plan is a plan to determine the production quantity of each specific final product in each specific period. The final product here refers to the finished product that is finally completed and delivered to the enterprise, which should be specific to the variety and model of the product. The specific time period here is usually in weeks, and in some cases, it can also be days, ten days or months. The master production plan specifies in detail what to produce and when to output it. This is an independent demand plan. According to the customer contract and market forecast, the master production plan concretizes the product series in the business plan or production outline, which becomes the main basis for making the material demand plan and plays a connecting role in the transition from comprehensive plan to specific plan.
Second, the product structure and bill of materials (BOM)
In order to correctly calculate the time and quantity of material requirements, especially the quantity and time of related materials, MRP system should first make the system know the product structure manufactured by the enterprise and all the materials to be used. The product structure lists the composition, assembly relationship and quantity requirements of all components, assemblies and parts that make up finished products or components. It is the basis of dismantling MRP products. For example, the following figure is a greatly simplified product structure diagram of bicycles, which generally reflects the composition of bicycles:
Figure 1 bicycle product structure diagram
Of course, this is not the final BOM we want. In order to facilitate computer identification, it is necessary to convert the product structure diagram into a standardized data format, and this file describing the product structure in a standardized data format is the bill of materials. It must explain the quantity of various material requirements in components (parts) and their structural relationships. The following table is a simple bill of materials corresponding to the bicycle product structure.
Table 1 Bill of Materials for Bicycle Products
Note: "M" is self-made parts and "B" is purchased parts.
Third, the inventory information
Inventory information is a database, which keeps the current status of all products, parts, products in process, raw materials, etc. In MRP system, products, spare parts, work in progress, raw materials and even tooling tools are collectively referred to as "materials" or "projects". In order to facilitate computer identification, materials must be coded. Material code is the unique identifier for MRP system to identify materials.
① Quantity on hand: refers to the available quantity of materials actually stored in the enterprise warehouse.
② Planned receipt quantity (in-transit quantity): refers to the quantity of materials received or completed in a certain period of time in the future according to the purchase order or production order being executed.
③ Allocated quantity: refers to the saved but allocated material quantity in the warehouse.
④ Lead time: refers to the time consumed from the start to the completion of a task.
⑤ Ordering (production) batch: ordering from suppliers or asking the production department to produce certain materials within a certain period of time.
⑥ Safety stock: In order to prevent unpredictable fluctuations in demand or supply, the minimum stock quantity should always be kept as safety stock in the warehouse.
Based on the above values, you can calculate the net demand of an item:
Net demand = total demand+allocated quantity-inventory on hand planned to receive.
Basic operational logic
The operation logic diagram of basic MRP is as follows:
Figure 1 MRP operation logic diagram
The following examples illustrate the operational logic steps of MRP. Fig. 2 is a structural diagram of product a.
Figure 2 Product Structure Diagram
So, now we can calculate the requirements of each product and the corresponding parts.
It should be noted that due to the existence of lead time, the planned delivery time and net demand time of materials are sometimes inconsistent. In addition, in order to simplify the calculation, we have not taken safety stock into account for the time being.
Table 1 Calculation of product A demand (product A, lead time =2, lot size = 10)
The above calculation process shows that although 1, 2, 4 and 6 weeks need A, the actual A only needs to be delivered in 3 or 4 weeks 10. The release time and quantity of this plan are the time and quantity of gross requirements of parts B and C.
Table 2 Demand Calculation of Part B (Part B, lead time = 1, lot size =20, 1A = 2B = 2' 10 = 20)
Table 3 Demand Calculation of Part C (Part C, lead time =3, lot size = 60, 1A = 3C = 3' 10 = 30)
As can be seen from the decomposition of this layer, for Part B, 65,438+00 units need to be delivered in the third week, so we need to decompose the next layer according to the product structure. The decomposition method and steps are the same as before, so I won't expand them here.
After the above calculation, we can get the relevant requirements of the parts of product A, but in reality, the situation of the enterprise is far from so simple. In many manufacturing enterprises, due to the variety of products, not only product A needs parts B, C, D and E, but also other products. Parts D and E may have certain independent requirements (such as parts used as service parts, etc.). ). Therefore, MRP's job is to summarize the gross demand of enterprises for the same parts in a certain period, and then calculate their net demand and planned delivery volume in each period, and arrange production plans and procurement plans accordingly. Here, in order to illustrate its principle, we can assume that enterprises still need part D for product X, and in addition, part D has certain independent requirements. Then, as shown in fig. 3, the total demand of part d is calculated.
After obtaining the total demand of part D, we can further calculate the total net demand and planned delivery of this part according to the principle introduced earlier, so as to arrange relevant production plans and procurement plans at an appropriate time. In this way, we have completed a basic MRP operation cycle. Of course, all this is done with the help of computers, following the principle of hierarchical processing (ERP system starts with MPS, and then calculates related requirements layer by layer according to BOM until the next level). It should be said that compared with the traditional manual method, this calculation of material demand with the help of advanced computer technology and management software greatly shortens the calculation time and correspondingly improves the calculation accuracy.
Fig. 3 Demand calculation when associated demand and independent demand exist at the same time
Closed-loop MRP in 1970s
In the 1960s, MRP can calculate the exact time and quantity of related material requirements according to relevant data, but it is not perfect. Its main defect is that it does not consider the existing production capacity of production enterprises and the constraints of related procurement conditions. Therefore, the calculation date of material requirements may be unable to produce due to insufficient equipment and working hours, or unable to produce due to insufficient raw materials. At the same time, it also lacks the function of adjusting the plan according to the feedback information of the plan implementation.
In order to solve the above problems, MRP system developed into a closed-loop MRP system in 1970s. Closed-loop MRP system not only integrates material demand planning, capacity demand planning, workshop operation planning and purchasing operation planning into MRP to form a closed system.
First, the principle and structure of closed-loop MRP
The normal operation of MRP system needs a realistic and feasible master production plan. In addition to reflecting market demand and contract orders, it must also meet the capacity constraints of enterprises. Therefore, in addition to making the resource demand plan, we should also make the capacity demand plan (CRP) to balance the capacity of each work center. Only by taking measures to ensure that the capacity and resources meet the load demand can the plan be implemented.
To ensure the realization of the plan, it is necessary to control the plan. When MRP is executed, the priority of processing is controlled by the dispatch list, and the priority of purchasing is controlled by the purchase order. In this way, the basic MRP system is further developed, which also includes the functions of capacity requirement planning, execution and control planning, forming an annular loop called closed-loop MRP, as shown in figure 1. ...................