Introduction
Requirements of an ERP
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Requirements of an ERP enterprise modeller            The Journal of Enterprise Information Management
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Requirements of an ERP enterprise modeller            The Journal of Enterprise Information Management
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Requirements of an ERP enterprise modeller            The Journal of Enterprise Information Management
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Requirements of an ERP enterprise modeller                     The Journal of Enterprise Information Management
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Requirements of an ERP enterprise modeller                 The Journal of Enterprise Information Management
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Requirements of an ERP enterprise modeller                 The Journal of Enterprise Information Management
              ...
Requirements of an ERP enterprise modeller            The Journal of Enterprise Information Management
                   ...
Requirements of an ERP enterprise modeller            The Journal of Enterprise Information Management
                  M...
Requirements of an ERP enterprise modeller            The Journal of Enterprise Information Management
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Requirements of an ERP enterprise modeller                         The Journal of Enterprise Information Management
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11. Requirements Of An Erp Enterprise Erp Modeller

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11. Requirements Of An Erp Enterprise Erp Modeller

  1. 1. Introduction Requirements of an ERP New paradigms of supply chain management have enterprise modeller for emerged during the last decade. At the outset of the new millennium, leaner and more efficient pull optimally managing the supply chains tend to replace push ones. Push fashion industry supply environments were typically grounded on a make to stock approach to the flow of goods through the chain logistics pipeline, with inventories at different levels in order to achieve the required service level (Wight, 1990; Vollmann et al., 1997). Pull supply Massimo Bertolini chains, on the contrary, aim at recovering Maurizio Bevilacqua efficiency by cutting down inventories from the distribution channel up to that of procurement. Eleonora Bottani and Inventories are seen as inefficiencies in the supply Antonio Rizzi chain, which can be trimmed through a just-in- time approach to distribution, operations and The authors procurement. On the one hand, finished goods are supplied directly to customers from production Massimo Bertolini is a Lecturer, Eleonora Bottani is a PhD facilities, given that there is a strict planning and Candidate and Antonio Rizzi is an Associate Professor, all at the scheduling of orders delivery which allows ` Dipartimento di Ingegneria Industriale, Universita degli Studi di Parma, Parma, Italy. consolidation. Operations are just-in-time Maurizio Bevilacqua is a Professor at the Dipartimento di organized, because of point of sales data sharing Ingegneria delle Costruzioni Meccaniche, Nucleari, Aeronautiche and the flexibility of production systems. On the ` e di Metallurgia, Universita degli Studi di Bologna, Bologna, other hand, parts and raw materials are supplied Italy. on a JIT basis as a result of the integration and data sharing in the procurement pipeline between the Keywords buyer and its suppliers (Christopher, 1998). To Manufacturing resource planning, Fashion industry, summarize, the distinctive elements which Production planning and control characterize market leaders in today’s marketplaces can be found in the total integration Abstract of supply chain players. This integration is mainly This paper presents the results of a panel of experts, made up of achieved through cross enterprise data sharing at academics in the field of operations and supply chain management, different levels in the supply chain, from point of enterprise requirement planning software developers, and end-users, sales data to inventories, from production planning whose work has aimed at defining the main features that to transports (Kennerly and Neely, 2001). Focal characterize an enterprise modeller for the fashion industry. The characteristics required by the enterprise requirement planning companies in the integrated supply chain are enterprise modeller have been identified, with specific attention to constantly linked to their suppliers, distributors, the production planning and control module. Because of the third-party logistics service providers, financial peculiarities of this line of business, it is widely recognized that both providers, with whom they share up-to-date vendors and buyers would benefit from such a tool. For the formers, information. Through the knowledge of processes the availability of a pre-customized reference model would represent and transactions status, firms achieve competitive a competitive advantage in the marketplace, for the latter, on the other hand, it would enhance the effectiveness, the efficiency and advantage through higher service levels and the likelihood of success of the enterprise requirement planning optimized total logistics costs (Boriello, 1999). implementation project. One of the main drivers of supply chain integration can be found in the adoption of Electronic access enterprise resource planning platforms to operate The Emerald Research Register for this journal is and manage the informative backbone of internal available at and external supply chain. In an enterprise www.emeraldinsight.com/researchregister requirement planning (ERP) environment, in fact, internal and external transactions are managed The current issue and full text archive of this journal is through a horizontal, by-process approach rather available at www.emeraldinsight.com/1741-0398.htm than through a traditional vertical, and functional one. Indeed, the need for faster and even more up- to-date information sharing to support the The Journal of Enterprise Information Management Volume 17 · Number 3 · 2004 · pp. 180-190 integration process has been found to be one of the q Emerald Group Publishing Limited · ISSN 1741-0398 main antecedents to the growth of the ERP DOI 10.1108/17410390410531434 industry (AMR Research, 1999). As a 180
  2. 2. Requirements of an ERP enterprise modeller The Journal of Enterprise Information Management Massimo Bertolini et al. Volume 17 · Number 3 · 2004 · 180-190 consequence, ERP systems have evolved into have been fully trained in the new environment. strategic tools for supply chain integration, Other success criteria that have to be considered implementing all business functions to manage before starting the ERP implementation are fully transactions and processes in the logistics pipeline, described by (Nah et al., 2001). Their research, connecting and sharing information from suppliers carried out through a comprehensive review of the to end customers. Many researchers today agree in literature, highlights 11 success factors that are considering ERP platforms to be “do it all” tools, critical for the ERP implementation success. which manage the effective and efficient flows of A significant key factor which emerges from the materials and information through the pipeline literature review (see, for example, Cliffe, 1999; (Gupta, 2000). Nah et al., 2001) as a critical hurdle to overcome is A common trait which characterizes most of the the need of Business Process Reengineering (BPR) ERP solutions is the wide modular environment. with minimum ERP customization. Firms This is based on a central management of firms’ implementing the ERP should better reengineer databases, therefore ERP applications can be their processes to fit software characteristics depicted as centralized, constantly up-to-date instead of trying to modify the ERP (Bingi et al., enterprise database, allowing users to query and 1999). Modification to the software should be kept exploit retrieved information. Moreover, while to a minimum in order to reduce the likelihood of traditional legacy platforms separately manage errors and take advantage of new releases (Rosario, transactions, each one at a time and in its own 2000). To this extent, Chen (2001), emphasizes functional environment, ERP software considers that major modifications are complex, impractical the mutual influence of transactions in the whole and extremely costly, therefore companies which supply chain process (Gupta, 2000). Hence, one of succeed in installing ERP systems have to fit their the distinctive characteristics that differentiate business processes to the system requirements. ERP software from a traditional enterprise Many implementation projects fail because management platform has surely to be found in the companies installing ERP systems are not able to management of the supply chain transactions as a reengineer their processes to fit the system whole, either in terms of front office or back office requirements. Both internal and external processes processes (Siragher, 1999). should be tailored to the new operative The literature review has underlined that, while environment. Hence, firms implementing ERP ERP adoption can be found as a valuable mean for software must have a strong positive attitude integration through the supply chain, the toward reengineering processes (Attaran, 2001; implementation stage is indeed a critical issue for Holland and Light, 1999). success. Themistocleous et al. (2001), describe the ERP platforms have to be suitable to be adopted main problems that affect ERP system in firms operating in different industries, thus they implementation stage and which circumstances have to be flexible and of general purpose. The may turn the implementation into a lengthy, reverse side of flexibility is generality and cumbersome and expensive process, threatening complexity. ERP requires a consistent the project right from the start and leading the parameterization phase, where modules, tables whole integration to failure. Kennerley and Neely and fields are initialized to model the specific (2001), Stedman (1999), and Nah et al. (2001) business processes of the industry. To overcome point out compatibility with legacy software as well this cumbersome issue, ERP vendors have as compatibility with information systems of other developed pre-customized tools, called either supply chain partners as one of the most critical enterprise modelers (Rizzi and Zamboni, 1999) or issues to consider during implementation. Other reference models, where business processes have key factors are typically identified in the top been already modeled, in accordance with the management commitment to the implementation requirements and best practices of a specific project: Nah et al. (2001), Gupta (2000), industry. Some examples and applications of Kennerley and Neely (2001), Rao (2000) and reference models are presented in (Davenport, Attaran (2001), agree that the chances of success 1998; Wortmann, 1998; Hoffmann, 1998). Both of the ERP implementation project drastically these terms will be in differently use through the plummets without the full support and rest of the paper. commitment of top management. At the same Enterprise modelers are particularly relevant for time, the authors highlight reluctances of the fashion industry. It is widely agreed by industry employees to accept changes in tools, methods/ market leaders, that an ERP system which processes and procedures as critical barriers to be implements a reference model featuring the best passed. Users will consider the ERP as an practices to organize and manage business impediment rather than a positive tool to handle processes across the fashion supply chain could transactions and business processes unless they lead to competitive advantage for ERP vendors. 181
  3. 3. Requirements of an ERP enterprise modeller The Journal of Enterprise Information Management Massimo Bertolini et al. Volume 17 · Number 3 · 2004 · 180-190 Basing on these premises, the aim of this paper production planning and control, distribution is to sketch the main features which should and supply chain management; characterize a “To-be” ERP reference model for . two managers of a primary software house the direct system implementation in the fashion developing ERP platforms in the fashion industry. On the one hand, the reference model industry; should make it possible to speed up the . three senior consultants of a firm implementation phase, increasing the chances of implementing ERP solutions; and success of the project, and on the other one it . twelve people working for firms in the fashion should smooth the need for a fashion company to industry (tailor garments, suits, sport apparel, reengineer business processes to fit the system casual outfit, shoes, leather, underwear). requirements. The characteristics of the enterprise This group composition assures the necessary modeller have emerged from the work of a panel of balancing between the different skills involved in experts, specifically set up for this purpose. the decision making process (Akkermans et al., The reminder of the paper is organized as 1999; Klassen and Whybark, 1994). follows. In the next paragraph a brief description of The panel worked for a period of about two the work carried out by the panel of expert is weeks, and sessions were planned on a three round sketched. Then, the main characteristics of the Delphi process. In the first stage a series of fashion industry are detailed. Finally, the main statements concerning the requirements of both features of the enterprise modeller for the direct ERP implementation in the fashion industry are the ERP reference model and the fashion industry described. were generated individually and anonymously by the experts. Then, all the statements were collected and delivered to the panel group participants, who were required to indicate their The research method level of agreement; answers were finally feedback to the panel. Indeed, this is a paramount issue of As sketched before, a panel of experts was formed the Delphi technique, which relies on the and operated in order to outline the main features opportunity of receiving feedbacks on earlier which should characterize an enterprise modeller comments, as well as the possibility of further for direct field application in the fashion industry. elaboration through an iterative process. This paragraph details how the panel of experts Topical interview guide was used by the has been formed and which techniques have been moderator to introduce and probe issues of adopted during its work. interest during the roundtable discussions. The The panel was made of 21 participants, research team was assisted by clarifying subjects, encompassing academicians, ERP developers and encouraging the discussion progress, and potential users in the fashion industry. This analyzing the resulting data. Participants were number, which at first sight may seem rather large, informed that the sessions were being taped. As derives from the Delphi technique (Linstone and previously sketched, roundtable discussion made it Turoff, 1975) adopted to operate with the panel. possible to satisfy one of the relevant This methodology requires a minimum group size characteristics of the Delphi technique, namely the of about 20 participants, in order to reduce the need of an efficient feedback and continuous bias due to individual opinions. The Delphi elaboration of concepts by the panel. technique is a structured process which investigates a complex or ill-defined issue by means of a panel of experts. The methodology proves to be an appropriate research design for this The fashion industry type of theory-building research and permits to obtain individual opinions by a structure of a Information technology has seen significant group during a communication process (Delbecq development in recent years, with a wide strategic et al., 1975). The technique is particularly diffusion in many industrial fields. The fashion indicated in case of complex, interdisciplinary industry is a worthwhile field of business for problems often involving a number of new software houses developing ERP platforms. The concepts (Meredith et al., 1989). reason is twofold: on the one hand the specific The panel was led by an experienced moderator business know-how for ERP implementation in the assisted by a research team and included: field is not yet well established and, on the other . four academicians from the industrial hand, the industry and the supply chain is engineering department of the University of characterized by very specific and complex issues. Parma, whose research studies are mainly A product specifically tailored for the field could focused on procurement management, easily gain market share. Moreover, the industry is 182
  4. 4. Requirements of an ERP enterprise modeller The Journal of Enterprise Information Management Massimo Bertolini et al. Volume 17 · Number 3 · 2004 · 180-190 extremely valuable. Merrill Lynch (2001) in order to take the opportunities given by local estimated worldwide 2001 sales of premium priced market conditions as well as specific market branded clothing, footwear, perfumery, luggage, segments, many have developed diffusion brands, eyewear and other products of the fashion industry which are usually targeted at younger marketplaces to be about 100 billion $US, with a steadily and are often cheaper than the main merchandize. growing increase of sales of about 8-12 per cent per Both the diffusion of branding and the adoption of year in the last five years. new distribution channels require the management Based on these premises, one of the preliminary of a wide range of products through a common objectives of the focus-panel was to identify the core database, since many departments purchase main aspects which characterize firms operating in and sell many groups of items. An essential this line of business, their processes and requirement that emerged was the possibility to requirements. It emerged from the discussions that totally manage a wide range and combination of leading firms have radically changed their products with a central core database, both approach to the business during the last decade. horizontally in terms of articles and vertically in These changes touched not only the management terms of number of models per article and items of the supply chain (procurement, operations, per model. distribution), but also had implications on the As far as production networking is concerned, organizational and financial sides. Leading the panel remarked how a common trait of leading companies at the outset of the new millennium groups is their tendency to decentralize low value have created strong retail groups and have reached operations, while focusing on those of high value. wider marketplaces through branding and new Typically, production operations are outsourced to distribution channels. The main drivers of this both the East Europe and the Far East, in order to BPR are summarized below. cut down production costs. This puts pressure on the supply chain, since products should be mainly manufactured in advance in order to balance time Characteristics featuring leading edge consuming transportation activities. On the competitors in the fashion industry contrary, purchasing, distribution, information management, styling, marketing and finance are . Fashion brand management (branding); usually managed internally. extension of branding to new products and to With regards to distribution issues are new markets; concerned, leading edge groups tend to push sales . Production is networked. High value added through new distribution channels, consisting, on operations are centralized, while low value the one hand, in the “traditional” department operations are outsourced; stores, and on the other hand in “flagship” . Distribution: the focus is on the department designer stores. These stores are either franchised stores chains and on the “flagship” stores, or owned within a very specific targeted zone in sales through traditional wholesaler to retailer major cites and showcase the whole product range. channels are reduced. Sales are The availability of fresh Point of Sale Data internationalized: geographic diversification (POSD) at different levels in the logistics pipeline of sales grants safer and more stable turnover, was recognized by the panel of experts as one of the balancing demand fluctuations; and most critical issues to manage, nonetheless it has . Consistent investments in up-to-date logistics been acknowledged as an essential requirement for and information technology. The focus is on the JIT management of the logistics pipeline. the flow of goods and of information. During the roundtable discussions, it was agreed Branding has been recognized as a very important and stressed that products of the fashion industry issue for fashion competitors. Fashion brands have are characterized by a demand pattern which is been applied by leading firms across a wide range very difficult to predict. This is due both to the of product categories, from clothing to furnishing, very short life cycle of products and to exogenous from leatherwear to eyewear, personnel accessories factors that could affect demand and trends. For and perfumery. Since fashion products are poorly this reason, production has to be JIT managed, differentiated from a functional point of view, based on first season sales POSD. Trends are brand conveys value to the customer through a retrieved from these data and short term value surround which is developed through the production is managed accordingly. From the careful management of the marketing mix foregoing, the enterprise modeller should elements. Brands surround allows leading encapsulate accurate demand prevision routines, companies to gain market shares because of fostered by constantly updated POSD and customer loyalty to the brand. Today, fashion inventory positions. To this extent, the importance competitors operate worldwide, therefore a brand of having an ERP platform fully compatible with must convey the same value worldwide. However, legacy information technology has been stressed. 183
  5. 5. Requirements of an ERP enterprise modeller The Journal of Enterprise Information Management Massimo Bertolini et al. Volume 17 · Number 3 · 2004 · 180-190 Moreover, the panel agreed on the importance sector to invest in this direction is linked to the of an object oriented (OO) ERP application. In the need to offer flexible solutions to the market, ERP environment, application modules can be which are able to absorb the continuous changes in conceived as business objects (BOs) sets adopting business and technological set up faced by all the same communication standards and protocols. companies at a low cost and with reduced inertia. BOs can be thought of as application cells made up With such a system in mind, the only solution of a core part and outer interface. The BO core is possible is believed to be software architecture with made up of objects, attributes, methods, functions independent modules, which are able to dialogue and properties which define its operational logic, with one another and, because of a standard form the public interface allows the BOs either to of communication, transmit output and input interact with one another dynamically and in information without knowing the source of accordance with the set of rules implemented, or activation. to receive information from the external environment. This connective tissue is essential to grant an effective management of processes Enterprise modeler involving different BOs. To conclude, BOs are In this paragraph we describe in detail the autonomous applications adopting the same characteristics required by BO of the ERP communication protocols and standards, which reference model as they emerged from the work of rely on a common database. They can receive the panel group. triggering inputs and supply outputs, in For clarity sake, it should be first of all noticed accordance with the set of rules which has been set. that BOs shown in Figure 1 as well as connections Figure 1 shows a possible scheme of interactions between them resemble in some way standard ERP between the business objects of the ERP enterprise architectures. However, it is important to stress modeller as it emerged from the panel work and that the main purpose of the panel was to highlight roundtable discussions. fashion industry best practices that should be Figure 1 summarizes the functional connections implemented in BOs rather than defining a new and the flows of information that the various ERP architecture. As previously sketched this components must exchange. would make the implementation stage easier, more The main reason that encouraged the team and, efficient and effective, increasing the likelihood of in particular, the market leader in the informatics success of the whole project. Figure 1 Logical structure of connections between the BOs of a ERP for the fashion industry 184
  6. 6. Requirements of an ERP enterprise modeller The Journal of Enterprise Information Management Massimo Bertolini et al. Volume 17 · Number 3 · 2004 · 180-190 The work of the panel has been focused on the . analyse the workloads of the productive production planning and control module, the resources on the basis of orders and/or on reason being twofold: first, the production the basis of the production plan; and planning and control module represent the true . produce a MPS directly linkable to the heart of the ERP reference model for the fashion specific client order. industry, second, competences of the panel group (3) Operating tools. were specifically inherent to production planning. . demand management; Hence, findings related to the characteristics of . MPS for finished articles; this BO to manage activities related to production . MRP for components; and planning and control are detailed in the rest of the . CRP. paper. In the description, the terms planning module and control module are adopted. As far as the demand management issue is Moreover, the sketch of the various points is concerned, it emerged from roundtable discussions tackled by adopting a taxonomic approach, in that the planning module should make it possible to order to help the reader in the understanding and analyse products demand from different to better describe the connections between the perspectives: specifically, both season analysis various parts. (autumn-winter collections rather than spring- summer ones) and analysis over temporal horizons which are not a priori defined should be allowed. Production planning module With reference to the MPS module, one of the The planning model to be implemented within the most important requirement came out from application has to be able to plan all of the activities discussions is that, although demand has to be that, starting from the demand management make aggregated from a capacity requirement point of it possible to generate production and purchasing view, yet it should be possible to keep track of proposals consistent with capacity and lead times client orders from which the aggregate demand constraints respectively. Therefore, the module stems. Moreover, the production schedule should must be aimed at resolving the typical problems be updated in real time as a consequence of related to production planning of the clothing variation in demand, supply, and product industry, through the adoption of the most suitable availabilities. To this extent, the module should tools such as the Master Production Schedule automatically suggest changes to the production (MPS), the Material Requirements Planning plan, which would punctually reflect these (MRP) and Capacity Requirements Planning variations. These proposals will have procedural (CRP). The list in the next section illustrates the courses that differ depending on whether articles common production planning problems which are to be purchased or produced. In the first case, characterize the fashion industry, as they emerged there must be a functionality which makes it from the discussions of the panel of experts. The possible to generate purchase requests on the basis principal objectives of the planning module are of the suggestions, both in a punctual and in an also indicated, as well as the required operating aggregated manner. In the second case, instead, tools supporting the modules. the feasibility of proposals has to be checked both in terms of availability of critical components, Characteristics of planning module materials and capacity of production resources. (1) Solutions for the industry. Once approved, an order release procedure will be . planning by client order: each specific automatically issued accordingly. The list in the production order is linked to a client order; next section shows a summary of the principal . planning on the basis of the critical characteristics of the MPS to be implemented component delivery dates: it is possible to within the planning module. schedule production by maximizing usage of critical components, typically fabrics; and Specifics of the MPS . resources capacity can be expressed either (1) Elements that characterize the MPS. in terms of clothes or workload on . item; workstations. . inventory; (2) Principal objectives of the module. . due dates; . define a medium/long term production . forecasts; plan for finished product; . order quantity; and . define a medium/long term procurement . aggregated demand. plan for components; (2) Changes to the MPS due to demand variations. . create production and purchasing . input of new client orders; proposals to be automatically converted . changes to pre-existing client orders; into purchasing requests or specific . cancellation of client orders; production orders; . input of sales forecasts; and 185
  7. 7. Requirements of an ERP enterprise modeller The Journal of Enterprise Information Management Massimo Bertolini et al. Volume 17 · Number 3 · 2004 · 180-190 . changes to sales forecasts. . independent requirements of components (3) Changes to the MPS due to components, materials and raw materials belonging to the end and production capacity availability. items BOMs; . input and changes in purchase requests . inventories available; and orders; . WIP; . assignment of production lots and . subcontracting; inventories to orders; . independent demand; and . inventory changes; . dependent demand. . confirmation of requests of purchasing/ (2) MRP processing. production; and . independent demand identification; . order release and scheduling procedures. . bill of materials explosion and assessment (4) MPS given out suggestions. of gross requirement of BOM components . release of new orders: purchasing and/or per period; processing orders on the basis of the flag . aggregated requirements per period per make/buy value; group of products/components; . expediting/delay of orders: both in terms of . netizaztion based on “on hand” availability purchasing and processing date; and (inventories, scheduled receipts from . cancellation of orders: cancellation of suppliers and/or subcontractors); purchasing/processing orders. . purchasing policies analysis; and (5) MPS outputs. . release of purchasing/processing proposals . year/season; based on lead times. . item; (3) MRP outputs. . planning date; . year/season; . aggregated requested quantity; . end item; . quantity from client orders; . planning date; . quantity from sales previsions; . requested quantity; . quantity already scheduled; . quantity from client orders; . quantity in inventory/stores; . quantity from sales previsions; . quantity from request of purchasing; . quantity from sales projections; . quantity from suppliers; . quantity requested from BOM explosion; . quantity from planned/released production . quantity already assigned; orders; . quantity from inventory; . quantity available; . quantity from supplier orders; . quantity to order from suppliers; and . quantity from scheduled production . quantity to be manufactured. orders; . quantity from “in process” production The MRP has been found by the panel as a orders; paramount tool which must be comprised in the . quantity available; production planning module of the reference . quantity to order from suppliers; and model for the fashion industry. MRP has in fact to . quantity to manufacture. supply the information required for procurement of components and raw materials, which can be It is worth stressing that an agreement was also either purchased or manufactured. Starting from reached on the need to generate a function which end items demand and bill of materials explosion, makes it possible to track back to details of the the MRP module computes dependent demand origin of the requirements in both a punctual and for components and raw materials, which will be reconstructible manner. This is possible via an balanced by on hand availabilities. The MRP upward reconstruction procedure which, following output consists of the scheduled plan of the tree of each bill of materials from the bottom requirements for both manufactured and upwards, links the request for bottom level purchased orders. These production/purchasing components to the client orders of end items. The requirements are passed from the MRP to the difficulty with this so-called “pegging” process is MPS, which releases purchasing and/or the disaggregation of the quantities previously production orders. MRP requirements taxonomy brought together either into purchasing or is shown below. production orders, in situations where a lot-for-lot policy is not used. Characteristics of the MRP As far as the module for scheduling production (1) MRP inputs. resources is concerned, this module must make it . suggestions of changes to the production possible to check the available production plan from the MPS; capacity, and to allot jobs to resources on the 186
  8. 8. Requirements of an ERP enterprise modeller The Journal of Enterprise Information Management Massimo Bertolini et al. Volume 17 · Number 3 · 2004 · 180-190 ground of production requirements. This process the standard processing cycle for a job implies the balancing between the theoretical order or shift jobs from one production capacity of resources and that which is absorbed for resource to another. each production lot. For clarity sake, the theoretical capacity expresses the potential productivity of each While CRP computes capacity requirements on resource, whereas the absorbed capacity expresses the ground of punctual process cycle times of every the total requests, determined by the issued, phase, in RCCP each production resource is planned and suggested jobs. From the panel there declared with a daily production capacity for every emerged the need to assume an infinite production type of product. Each production resource is then capacity. It has been agreed, in fact, that a manual loaded with all of the jobs that have a production balance of workload between production resources phase involving that specific resource, regardless of stemmed from capacity constraints should be the production capacity that is available at that preferable to adjustments to the material time. For each period, the system will then requirement planning due to capacity constraints. highlight cases where production capacity of Capacity requirements can be assessed in the resources is either over or under utilized. As stated module both through Rough Cut Capacity above, the planning supervisor will manually Planning (RCCP) based on the temporal horizon, define the required interventions, shifts and and through CRP. The following details the changes to match the production capacity characteristics of RCCP and CRP. constraints for all the production resources. Functionalities in the form of both graphs and tables are required for the analysis of the results Planning using RCCP and CRP obtained from the production capacity planning (1) RCCP. process. These procedures would make it possible . In the medium-long term: it checks the to easily identify the criticalities, to analyse the production capacities in terms of daily specific details and to quickly decide about units to be produced for product type and interventions to be made. The principal analysis to compares them with the daily capacity for be carried out is that of the allotment of production the type of product available in the various to the production sites, which considers workloads companies that are used for production on different production factories as a function of (owned factories and outsourcing time and group of products. Then, a punctual resources). analysis of workloads for every factory is carried . In the short term: defines the production out. Functionalities allowing “What if” loads through the assessment of set-up simulations are required to analyze the impact of time, manpower and machine time, for changes and shifts on workloads balances, both in each work phase, loading the work centers terms of production resources and sites. on the basis of the quantities to be produced. An infinite production capacity Production control module is considered for each resource; in other The panel has agreed that the main objective to be words, all of the work hours for the various reached by the production control module is that periods are loaded and are compared with of defining a short-term production plan, the capacity available. The planning generating and controlling the progress of the supervisor will shift work phases from one production jobs and the work orders for every centre to another, to level out the loads at production resource. Moreover, the module must the various work centers. generate and manage the picking/transfer lists for (2) CRP. the raw materials and components, checking their . Planning of the factories: this is required to allotment and use. The next section sums up the check whether, on the basis of a seasonal characteristics of the production control module as sales prevision, the production they emerged from roundtable discussions. The organization will be able to satisfy the characteristics are grouped in terms of input data marketing requests. This planning is to be analysed, output data to be supplied, specific performed in terms of daily units that each problems of the sector to be resolved, and factory makes available according to the proposed solutions. As done before, a taxonomic resources owned and the contracts approach is adopted. stipulated with outsourcing third-parties. . Planning of the work centers: this is required to check, over the medium/short Characteristics of production module time period, the saturation of the (1) Input. individual work centers with respect to the . production proposals for finished request. In this way it is possible to change products; 187
  9. 9. Requirements of an ERP enterprise modeller The Journal of Enterprise Information Management Massimo Bertolini et al. Volume 17 · Number 3 · 2004 · 180-190 . suggestions from MPS - MRP systems; intervening to manage exceptional situations. and Definitions must be made of the general settings . availability and production capacities of that are product-independent (definable for production resources. company, planner, type of planning), as well as (2) Output. product-specific settings (definable for year, . short-term master production plan; season, line, class/sub-class of launchability or . creation and management of the production, object) and settings linked to the production job orders; combination of the product and the jobs to be . creation and management of the work performed. All of the passages set out to obtain the orders for each productive resource; work orders and therefore the production . management of picking/transfer lists for documents (cuts notes, materials picking lists, raw materials and components; etc.) must be parametrically scheduled so that they . check of the the progress of the production can be automatically performed in sequence job orders and the work orders; and without the user having to intervene to check and/ . check of the allotment and use of or confirm the output of each passage. productive resources and materials. The panel has stressed the importance of the (3) Typical problems of the clothing industry. implementation of a short-term operating tool . job orders authorization only when the which, using the elaborations of the planning materials and resources are available; module (in particular MRP and MPS outputs) as . production control by client order; input data, has the scheduling of job orders as . materials checking and allocation based on principal objective, passing them on as production fabric type, colour, supplier batch; job orders. Such an instrument will be called . creation of specific documents for fabric “launchability in production” and its cuts; characteristics are shown below. . traceability of the items (by individual serial number, by batch order, by fabric); and Launchability in production . outsourced production management. (1) Input. (4) Feasible solutions as they emerged from the . MPS; and discussions. . MRP. . check of the availability of the critical (2) Objectives. resources and materials before production . release orders in conformity with priority launches; criteria; . allotment of the client orders to the job . check of the availability of the critical orders at the moment of production elements and the critical productive launch; resources; . materials assignment at the level of fabric . allotment of the available stock and the type, colour, supplier batch; productive resources to the orders; and . management of specific cut . creation, planning and authorization of job documentation for each product and orders. material to cut; (3) Launchability parameters. . definition of the parametric criteria for . parameters for the filter of MPS/MRP generation of work orders; suggestions; . definition of the parametric criteria for . parameters for the control of the checking the production progress; availability of the critical productive . possibility of checking the serial number resources and materials; end items at an individual level; . parameters for the definition of the . progress checking via the Web; sequence of ordering of the inputs; and . creation and management of . parameters for the use of materials and manufacturing orders to be outsourced to productive resources following the third parties; and suggestions. . check of availability of materials held by (4) Procedural phases. third party manufacturers. . definition of input parameters . batch processing The work performed by the panel suggested that . creation of planned job orders: Extraction all of the processes must be governed through the of requests (extraction of MPS-MRP use of parametric settings, making it possible to suggestions that satisfy the set parameters); automatically manage the “ordinary Definition of priorities; Definition of manufacturing process” with the user only productive resources (identification of the 188
  10. 10. Requirements of an ERP enterprise modeller The Journal of Enterprise Information Management Massimo Bertolini et al. Volume 17 · Number 3 · 2004 · 180-190 department and/or third party the related production materials. This must be manufacturer that has to produce the organized starting from the inventory allotment of item); Materials availability check quantities to be sent to production. A physical (analysed for each critical component) transfer must then follow from the components Productive resources availability check warehouse, with the inventory uploading based on (performed for critical resource/phase. The production work orders completed. available resources are allotted following The production process can be managed via two company priorities criteria); Production of types of documentation: cut notes and production the anomalies list. batches. Both are production documents, but the . analysis and modification of the results; former can be identified because they generate and particular types of work orders, linked to the cut of . confirmation of the planned job orders, the clothes rather than to the overall production and then the creation of the production job process. The production batches, instead, are orders. groupings of individual elements generated from work orders or other production batches, in The planning of the production job orders is then accordance with criteria that are summarized below. obtained from the launchability process. Planned job orders may be reorganized on the basis of specific grouping criteria for production resource, Production batch principal materials used, and details of tally or (1) Generation of batch. client order. . from work orders; Once the planned job orders have been . from cut notes; generated, the next step is the management of the . from other production batches; and job orders and the work orders, starting from the . manually with the breaking up of one definition of the production job orders. The production batch into a number of process is organized as shown below, resulting in production batches. the issuing of the work orders which are the result (2) Elements that generate a production batch. of the issuing in production of one or more . specific order; production job orders, through which it is possible . tally; and to generate the production batches. . quantity. The aim of the production control module is that of creating homogeneous production and/or Management of work orders handling units that are smaller than the overall (1) Creation of the production job orders. work order. The only condition to be respected is . Confirm planned job orders: Specific that the elements of a particular batch must have orders that satisfy extraction criteria that the same production phases. can be defined by the user; Quantity A number of job orders for the same work order confirmed greater than zero. can be brought together in a single production . confirm MPS/MRP suggestions batch, and a job order can be subdivided into a . non allotted client order lines extraction number of production batches. . insertion of client orders of a particular Once the production job orders, the work orders type (e.g. restocking) and the production batches have been generated, it . manual insertion. is necessary to perform a check of the company (2) Approval of specific orders for production. work in progress (WIP). For the management and (3) Possible breakdown and change to specific valorization of the company’s WIP, particular orders for production. criteria that are based on the characteristic needs (4) Issuing of specific orders for production and of each company have been pondered: the function creation of work orders. that loads the WIP is the materials consumption. (5) Possible breakdown and change to work The quantity recorded in the WIP will therefore be orders. that which is declared as consumed for job order/ (6) Issuing of work orders. work phase/component and open job orders. (7) Possible creation of denomination notes, Finally, the production control module must production batches, serial numbers. make it possible to manage assignment of The work orders must be issued in production thus inventory to the finished goods warehouse. The generating, if necessary, the subsidiary production module must activate the logistics downstream documentation, such as picking lists for the phases, which control the flow of finished goods warehouse, tally cut notes, production batches. from factory warehouses to the distributors and/or With the generation of the work orders it is retail sales outlets, comprising their accounting necessary to activate the management process for and invoicing. 189
  11. 11. Requirements of an ERP enterprise modeller The Journal of Enterprise Information Management Massimo Bertolini et al. Volume 17 · Number 3 · 2004 · 180-190 Conclusions Chen, J.I. (2001), “Planning for ERP systems: analysis and future trend”, Business Process Management Journal, Vol. 7 The ERP implementation stage has been found as No. 5, pp. 374-86. Christopher, M. (1998), Logistics and Supply Chain a critical task for success. It is essential that Management, Prentice-Hall, London. companies reengineer their processes to match the Cliffe, S. (1999), “ERP implementation”, Harvard Business ERP characteristics, while customization on the Review, Vol. 1 No. 1, pp. 16-17. system should be kept to a minimum. Therefore, Davenport, T.H. (1998), “Serving up ERP value”, CIO Magazine, while on the one hand ERP modules have to take February, p. 1. into account requirements of processes for specific Delbecq, A.L., Van de Ven, A. and Gustafson, D.H. (1975), Group line of business, on the other hand they should also Techniques for Program Planning. A Guide to Nominal be flexible enough to be implemented in different Group of Delphi Processes, Scott Foresman, Glenview, IL. Gupta, A. (2000), “Enterprise resource planning: the emerging industry. organizational value systems”, Industrial Management & To this extent, ERP vendors have developed Data Systems, Vol. 100 No. 3, pp. 114-8. enterprise modellers (also called reference Hoffman, T. (1998), “Extending ERP’s reach”, Computer World, models), where industry process and best practices Vol. 32 No. 6, pp. 75-6. are encompassed. Through reference models, the Holland, C. and Light, B. (1999), “Enterprise resource planning: a implementation stage can be easier, leading the business approach to systems development”, Proceedings company to an efficient process reengineering. of 5th Conference on Information Systems, AMCIS 1999, Milwaukee, WI, pp. 785-785. The need for a reference model is particularly Kennerly, M. and Neely, A. (2001), “Enterprise resource crucial in the fashion industry, where a vertical planning: analysing the impact”, Integrated integration tool such as an enterprise modeller Manufacturing Systems, Vol. 12 No. 2, pp. 103-13. would add value both to ERP platforms and to the Klassen, R.D. and Whybark, D.C. (1994), “Barriers to the firms operations. management of international operations”, Journal of In this paper the work of an interdisciplinary Operations Management, Vol. 11, pp. 385-96. group of academics, information system Linstone, H.A. and Turoff, M. (1975), The Delphi Method, consultants and fashion industry manager has Techniques and Applications, Addison-Wesley, London. Meredith, J.R., Raturi, A., Amoako-Gyampah, K. and Kaplan, B. been described. The work group activity had relied (1989), “Alternative research paradigms in operations”, with the definition of the most relevant features of Journal of Operations Management, Vol. 8 No. 4, an ERP modeller to be developed for the fashion pp. 297-326. industry. Merrill Lynch and Co. Inc. (2001), Annual Report, Merrill Lynch More specifically, the panel work has sketched and Co., Jersey City, NJ, available at: www.ml.com/ the main structure of the ERP modeller, defining Nah, F., Lau, J. and Kuang, J. (2001), “Critical factor for the required BOs. The work of the panel has then successful implementation of enterprise systems”, Business Process Management Journal, Vol. 7 No. 3, been focused on the production planning and pp. 285-96. control module, which has emerged as the most Rao, S.S. (2000), “Enterprise resource planning: business needs critical module of the enterprise modeller, and and technologies”, Industrial Management & Data whose characteristics have been addressed in Systems, Vol. 100 No. 2, pp. 81-8. greater detail. Rizzi, A. and Zamboni, R. (1999), “Efficiency improvement in manual warehouses through ERP systems implementation and redesign of the logistics processes”, Logistics Information Management, Vol. 12 No. 5, pp. 367-77. References Rosario, J.G. (2000), On the Leading Edge: Critical Success Factors in ERP Implementation Projects, Business World, Akkermans, H.A., Bogerd, P. and Vos, B. (1999), “Virtuous and The Philippines. vicious cycles on the road towards international supply Siragher, N. 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