SAP MRP Kent State MBA

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SAP: MATERIALS REQUIRMENT PLANNING:

SAP: MATERIALS REQUIRMENT PLANNING Kelly Finnegan Jing Gui Josh Hostetler Bryce Shirley Sili Wang Abdulrahman Binsahman Image:www.referenceforbusiness.com

SAP:

SAP Business applications Customer relationship management Enterprise resource planning Product lifecycle management Human capital management

Materials Requirement Planning:

Materials Requirement Planning MRP To guarantee material availability Required to procure or produce required quantities on time Procedures Material requirements planning Master production scheduling Consumption based planning

7 Recommendations on how to use MRP technologies:

7 Recommendations on how to use MRP technologies Image: http://www.referenceforbusiness.com

Consolidated Buying Power:

CONSOLIDATE PURCHASES Increase negotiating power Consolidate purchases from vendor into single P.O. Quantity discounts information stored in item data Larger consolidated orders trigger more discounts Consolidated Buying Power

Consolidated Buying Power (cont.):

OPTIMUM LOT SIZING Finds the optimum lot size which reduces overall item costs by utilizing: Consolidated Purchase Orders Item volume discount information Minimum safety stock criteria Consolidated Buying Power (cont.)

Improved Lead Times:

MASTER PRODUCTION SCHEDULE Utilizes B.O.M. to determine component inventory flows Based on materials requirements, component lead times, stock inventory levels and production schedules Reduces down time resulting from component stock outages Improved Lead Times

Improved Lead Times (cont.):

Streamlines & automates ordering process More efficient processes reduce component lead time Reduces overall time to deliver product to consumer Improved Lead Times (cont.)

Improve Stability of Network with Global Suppliers:

PLANNING PROCESS Scheduling for External procurement Forward scheduling: reorder point planning Backward scheduling: release date& delivery date Improve Stability of Network with Global Suppliers

Improve Stability of Network with Global Suppliers:

PLANNING PROCESS Determining Source of Supply for External Procurement Quota arrangements: Allocation quota arrangement & Splitting quota arrangement Source List Improve Stability of Network with Global Suppliers

Improve Stability of Network with Global Suppliers:

PROMISE Provide order plan to global suppliers in advance Increase accuracy of order and decrease urgent need and uncertainty Optimize the global suppliers’ network RISK Based on the accuracy of other data inserted Improve Stability of Network with Global Suppliers

Streamline Inventory:

MATERIALS MANAGEMENT Multiple warehouse coordination Real time inventory status What materials do you have? When do you need materials? Who has the materials you need? How much will materials cost? Streamline Inventory

Streamline Inventory:

Optimal inventory positioning Inventory relationships Capacities Safety stocks (costly) Reduce Working capital tied to inventory Identify Trends Streamline Inventory

Streamline Inventory:

Supply-Demand info Ability to order materials knowing what is being demanded to keep inventory optimized INTEGRATION OF INFORMATION Streamline Inventory

Eliminating Errors in Order Fulfillment:

Easily manage Production schedules Inventory Capacity Increased efficiency across entire supply chain Increased on-time performance Global, real-time facts and figures Reduced response time Eliminating Errors in Order Fulfillment

Eliminating Errors in Order Fulfillment:

Seamless flow Customers’ orders Manufacturing Shipping Order tracking Meet customer demands Re-plan resources Reduce stock-outs Eliminating Errors in Order Fulfillment

Eliminating Errors in Order Fulfillment:

Bill of materials Calculate gross requirements for BOM based on sales orders and independent demands Identify components required by a particular work order Review demands and safety stock requirements ensuring accurate delivery What needs ordered, how much, when, and to where Eliminating Errors in Order Fulfillment

Reduce Waste:

Minimize redundancies Reductions in double reporting Reduce employee overtime Managers don’t have to worry about inventory levels Reductions in unnecessary human resources Reduce Waste

Reduce Waste:

Minimize obsolete materials All materials are documented in centralized location Order efficient lot sizes, Creates a flexible and adaptable operation No over-investment in perishable or potentially technologically obsolete materials Reduce Waste

Reduce Waste:

More efficiently dispose of waste materials MRP can also document disposable materials Know when to efficiently dispose of unwanted materials. Reduce Waste

PowerPoint Presentation:

VALUES OF AUTOMATION: What does it achieve? WHAT IF A PROCESS GOES WRONG? Automation and Security

PowerPoint Presentation:

Ways to have reliable automation! Master Data Error proof RELIABLE INFORMATION IS THE KEY Automation and Security

PowerPoint Presentation:

Reliable network Ensure connections internally and externally. MRP IS ALL ABOUT DATA COLLECTION Automation and Security

PowerPoint Presentation:

CONCLUSION: To reach MRP objectives => Data accuracy and availability

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