1. Concepts in Enterprise Resource Planning 2nd Edition Chapter 4 Production and Supply Chain Management Information Systems
2. Concepts in Enterprise Resource Planning, Second Edition 2 Chapter Objectives • Describe the steps in the production planning process of a high-volume manufacturer such as Fitter Snacker. • Describe Fitter Snacker’s production and materials management problems. • Describe how a structured process for supply chain management planning enhances efficiency and decision making. • Describe how production-planning data in an ERP system can be shared with suppliers to increase supply chain efficiency.
3. Concepts in Enterprise Resource Planning, Second Edition 3 Introduction • Enterprise Resource Planning (ERP) has its roots in Materials Requirements Planning (MRP) • MRP is still a large part of ERP systems • Supply Chain Management looks at the entire supply system from raw materials to finished goods on the retail shelf
4. Concepts in Enterprise Resource Planning, Second Edition 4 Production Overview • A production plan answers two questions: 1. How many of each type of snack bar should we produce, and when? 2. What quantities of raw materials should we order so we can meet that level of production, and when should they be ordered? • A successful company must be able to: • Develop a good production plan • Execute the plan • Make adjustments when customer demand differs from the forecast
5. Concepts in Enterprise Resource Planning, Second Edition 5 Production Overview • Three general production approaches: • Make-to-stock: products are made for inventory in anticipation of sales orders • Most consumer products are make-to-stock • Make-to-order: products are made to fill specific customer orders • Expensive products or products made to customer specifications • Assemble-to-order: combination of make-to-stock and make-to-order • Final product assembled for a specific customer order from stock components