Your SlideShare is downloading. ×
Advance Supply Chain Management : Holistic Overview with respect to an ERP and Inventory Control Systems
Upcoming SlideShare
Loading in...5
×

Thanks for flagging this SlideShare!

Oops! An error has occurred.

×
Saving this for later? Get the SlideShare app to save on your phone or tablet. Read anywhere, anytime – even offline.
Text the download link to your phone
Standard text messaging rates apply

Advance Supply Chain Management : Holistic Overview with respect to an ERP and Inventory Control Systems

10,552
views

Published on

Advance Supply Chain Management : Holistic Overview with respect to an ERP and Inventory Control Systems …

Advance Supply Chain Management : Holistic Overview with respect to an ERP and Inventory Control Systems

Inventory System Design
Inventory Costs
Independent vs. Dependent Demand
Basic Fixed-Order Quantity Models
Basic Fixed-Time Period Model- we will omit.
Economic Production Quantity Model- we will omit.
Single Time Period Model- we will omit.
Quantity Discounts-also known as price break models.

Published in: Technology, Business

11 Comments
54 Likes
Statistics
Notes
  • Can you send me a copy?>???????? Please?
    Thanks..
    alfredjohn.anastacio@yahoo.com
       Reply 
    Are you sure you want to  Yes  No
    Your message goes here
  • Great presentation! I’d like to have a copy if available. Please forward to caquesinberry@aol.com, Thank you. Carl
       Reply 
    Are you sure you want to  Yes  No
    Your message goes here
  • please if possible provide me a copy of your excellent work to rubel_ipe@yahoo.com
       Reply 
    Are you sure you want to  Yes  No
    Your message goes here
  • Excellent one
       Reply 
    Are you sure you want to  Yes  No
    Your message goes here
  • Dear, can you send me a copy of this presentation please. Thanks.
       Reply 
    Are you sure you want to  Yes  No
    Your message goes here
No Downloads
Views
Total Views
10,552
On Slideshare
0
From Embeds
0
Number of Embeds
8
Actions
Shares
0
Downloads
1
Comments
11
Likes
54
Embeds 0
No embeds

Report content
Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
No notes for slide
  • Transcript

    • 1. Adva nce Supply Chain Management Holistic Overview with respect to an ERP and Control Systems Rahul Guhathakurta, Associate Consultant – SCM Email: rahulg@evosys.co.in or rahulogy@gmail.com
    • 2. Contents
      • Inventory System Design
      • Inventory Costs
      • Independent vs. Dependent Demand
      • Basic Fixed-Order Quantity Models
      • Basic Fixed-Time Period Model- we will omit.
      • Economic Production Quantity Model- we will omit.
      • Single Time Period Model- we will omit.
      • Quantity Discounts-also known as price break models.
    • 3. Purposes of Inventory
      • 1. To maintain independence of operations.
      • 2. To meet variation in product demand .
      • 3. To allow flexibility in production scheduling.
      • 4. To provide a safeguard for variation in raw material delivery time.
      • 5. To take advantage of economic purchase-order size.
    • 4. Types of Inventory Costs
      • Holding (or carrying) costs.
        • Costs for storage, handling, insurance, etc.
      • Setup (or production change) costs.
        • Costs for arranging specific equipment setups, etc.
      • Ordering costs.
        • Costs of someone placing an order, etc.
      • Shortage costs.
        • Costs of canceling an order, etc.
    • 5. Independent vs. Dependent Demand Independent Demand (Demand not related to other items or the final end-product) Dependent Demand (Derived demand items for component parts, subassemblies, raw materials, etc.)
    • 6. Inventory System Design ERP » sells » delivers » collects purchases « pays « receives « payments/collections « » products Client Supplier Bank Logistics
    • 7. Participants of the Process Client Supplier Bank Private Accountancy IRS Logistics W W W
    • 8. Inventory System Design: EBS Integration
      • Introduction of the ERP Platform
      • Local non-intrusive integration devices
      Private Accountancy Receivables W W W Client Supplier Bank Logistics
      • Purchase Process
      • Electronic Invoice
      • Collection & Reconciliation
      • Central Repository
    • 9. Purchase Process 1) The Company requests a quote 2) The Supplier sends the estimate 3) The Purchase Order is issued Private Accountancy Rec. W W W Logistics Supplier Client Bank Quote Purchase Order I.ERP I.ERP
    • 10. Purchase Process 4) Supplier requests the delivery to Logistics 5) It issues the Packing Slip 6) Logistics delivers the products with the packing slip Private Accountancy Rec. W W W Supplier Packing Slip Client Bank Logistics
    • 11. Purchase Process 8) The Company pays the purchase 9) Supplier receives notification of the payment 7) The Invoice is sent $ Private Accountancy Rec. W W W Invoice Supplier Invoice Integration with Receivables Client Bank Logistics
    • 12. Purchase Process 10) Other entities related to the process may be integrated into the Platform and receive relevant information Private Accountancy Rec. W W W Client Supplier Bank Logistics
    • 13. Electronic Invoice
      • Documents are available from any web access, anytime
      • Visualization, printing, editing, forwarding capabilities, and more
      • Costs and time optimization
      • Centralized storage
      Informs IRS Supplier Client Invoice XXX XXX XXX Invoice
    • 14. Collection and Reconciliation The Client decides how and where to pay Notification to the Reconciliation module Information sent to the Supplier Integration with other entities available Supplier Bank Client IRS W W W Private Accountancy
    • 15. Central Repository
      • They can be reviewed and retrieved from a web access
      • All documents created are stored on a Central Repository
      Private Accountancy Rec. W W W Client Supplier Bank Logistics Quote Purchase Order Packig Slip Invoice REPOSITORY
    • 16. Basic Fixed-Order Quantity Model and Reorder Point Behavior R = Reorder point Q = Economic order quantity L = Lead time L L Q Q Q R Time Number of units on hand R = Reorder point Q = Economic order quantity L = Lead time L L Q Q Q R Time Number of units on hand
    • 17. Cost Minimization Goal Ordering Costs Holding Costs Q OPT Order Quantity (Q) C O S T Annual Cost of Items (DC) Total Cost
    • 18. Deriving the EOQ
    • 19. EOQ Example Problem Data Annual Demand = 1,000 units Days per year considered in average daily demand = 365 Cost to place an order = $10 Holding cost per unit per year = $2.50 Lead time = 7 days Cost per unit = $15 Given the information below, what are the EOQ and reorder point?
    • 20. EOQ Example Solution “ WITH NO SAFETY STOCK”
    • 21. Safety Stock Safety stock reduces risk of Stock-out during lead time LT Time Expected demand during lead time Maximum probable demand during lead time ROP Quantity Safety stock
    • 22. Reorder Point The ROP based on a normal Distribution of lead time demand ROP Risk of a stockout Service level Probability of no stock-out Expected demand Safety stock 0 z Quantity z-scale
    • 23. Special Purpose Model: Price-Break Model Formula Based on the same assumptions as the EOQ model, the price-break model has a similar Q opt formula:
      • i = annual percentage of unit cost attributed to carrying inventory
      • C = cost per unit
    • 24. Price-Break Example Problem Data (Part 1) Order Quantity(units) Price/unit($) 0 to 2,499 $1.20 2,500 to 3,999 1.00 4,000 or more .98 Start at lowest price per unit
    • 25. Price-Break Example Solution (Part 2) Annual Demand (D)= 10,000 units Cost to place an order (S)= $4 First, start with the lowest price per unit. Carrying cost % of total cost (i)= 2% Cost per unit (C) = $1.20, $1.00, $0.98 Interval from 0 to 2499, the Q opt value is feasible. Interval from 2500-3999, the Q opt value is not feasible. Interval from 4000 & more, the Q opt value is not feasible. Next, determine if the computed Q opt values are feasible or not.
    • 26. Price-Break Example Solution (Part 3) TC(1826)=(10000*1.20)+(10000/1826)*4+(1826/2)(0.02*1.20) = $12,043.82 TC(2500) = $10,041 TC(4000) = $9,949.20 Next, Compare total cost for the feasible root Q and price break Q values.
    • 27. Price-Break Example Since the feasible solution occurred in the first price-break, it means that all the other true Q opt values occur at the beginnings of each price-break interval. Why? 0 1826 2500 4000 Order Quantity Total annual costs Because the total annual cost function is a “u” shaped function. EOQ Not EOQ Not EOQ
    • 28. ABC Classification System
      • Items kept in inventory are not of equal importance in terms of:
        • dollars invested
        • profit potential
        • sales or usage volume
        • stock-out penalties
      0 30 60 30 60 A B C % of $ Value % of Use So, identify inventory items based on percentage of total dollar value, where “A” items are roughly top 15 %, “B” items as next 35 %, and the lower 65% are the “C” items.
    • 29. Bibliography
      • Essentials of Supply Chain Management by Michael Hugos
      • Oracle E-Business Suite Manufacturing & SCM by Bastin Gerald, Nigel King and Dan Natchek
      • Oracle’s Inventory User Guide
    • 30.
      • THANK YOU!
    • 31.
      • Feel free to use this PowerPoint for your personal,
      • educational and business presentations.
      • Do
      • Make a copy for backups on your harddrive or local network.
      • Use the free templates for your presentations and projects.
      • Print hand outs or other promotional items.
      • Link back to our SlideShare account
      • Embed my PowerPoint of to your website or blog.
      • Please feel free to contact me , if you do have any questions about usage.
      • Don‘t
      • Resell or distribute of my work
      • Make it available on a website , portal or social network website for download . Edit or modify the downloaded templates and claim / pass off as your own work.
      • All copyright and intellectual property rights, without limitation, are retained by
      • Rahul Guhathakurta. By downloading and using this PowerPoint , you agree to this statement.
      Copyright N otice