9/25/2009
ERPSIM ACTIVITY THREE—
PROCUREMENT THROUGH MRP
Fall 2009
CSCI 5720 Enterprise & e‐Business Integration
Understanding the procurement process
1
9/25/2009
Purchase Requisitions
Internal document that initiates the procurement process.
Can be created manually or through other business
Can be created manually or through other business processes.
Creation through the Materials Requirement Planning (MRP) process
View Stock information—MD07
2
9/25/2009
Planning process
Creating a sales forecast—MD61
3
9/25/2009
MRP Process Outcomes
The MRP Evaluation Process
Sales forecasts create inputs to the MRP process.
Each product is evaluated to see how much needs to be produced to fulfill the forecasts creating independent
produced to fulfill the forecasts, creating independent requirements.
Example:
Blueberry Muesli sales forecast:
less stock on hand
l
less production orders pending
d ti
d
di
Independent Requirement
4
9/25/2009
Independent and Dependent Requirements
Independent Requirements use item Bills of Material to determine Dependent Requirements for raw materials.
materials
Dependent Requirements less available materials generate purchase requisitions for materials.
Example:
Independent Requirement for 1 KG Blueberry
D
Dependent Requirement for 1 KG Boxes
d tR
i
t f 1 KG B
Unreserved 1 KG Boxes on hand
Purchase Requisition for 1 KG Boxes
MRP run
1
Save setting
3
1
3
x
5
9/25/2009
MRP Process Outcomes
Convert Purchase Requisition to Purchase Order
6
9/25/2009
Purchase Order Tracking
Convert Planned orders after goods receipt
7
9/25/2009
Planning data
Execution data
Procurement
Purchase requisitions
Purchase order
Prroduction
Planning VS execution
Planned order
Production order
Understanding Material Requirements Planning (MRP)
8
9/25/2009
Suppose we have 20,000 boxes of blueberry and expect to sell 70,000
Creation of an independent requirement 9
9/25/2009
Creation of a planned order
Creation of a dependent requirement
10
9/25/2009
Automatic creation of purchase requisition
After goods reception
11
9/25/2009
After production confirmation
After sale of 30,000 boxes
12
9/25/2009
Suggested strategy
Look at stock on hand and consider production.
Plan out your product need for the next x days based on production capability
production capability.
Develop a sales forecast with that in mind. (Make x units of muesli y, then z units of muesli q.)
Run MRP. Independent requirements are created.
Generate POs.
W i f
Wait for raw materials to arrive. i l
i
Release Planned Orders to production.
Repeat
13
9/25/2009
Copyrights
Presentation prepared by and copyright of Dr. Tony Pittarese, East Tennessee State University, Computer and Information Sciences Dept. (pittares@etsu.edu)
Podcast lecture related to this presentation available via ETSU iTunesU.
Microsoft, Windows, Excel, Outlook, and PowerPoint are registered trademarks of Microsoft Corporation. IBM, DB2, DB2 Universal Database, System i, System i5, System p, System p5, System x, System z, System z10, System z9, z10, z9, iSeries, pSeries, xSeries, zSeries, eServer, z/VM, z/OS, i5/OS, S/390, OS/390, OS/400, AS/400, S/390 Parallel Enterprise Server, PowerVM, Power Architecture, POWER6+, POWER6, POWER5+, POWER5, POWER, OpenPower, PowerPC, BatchPipes, BladeCenter, System Storage, GPFS, HACMP, RETAIN, DB2 Connect, RACF, Redbooks, OS/2, Parallel Sysplex, MVS/ESA, AIX, Intelligent Miner, WebSphere, Netfinity, Tivoli and Informix are trademarks or registered trademarks of IBM Corporation.
Linux is the registered trademark of Linus Torvalds in the U.S. and other countries.
Oracle is a registered trademark of Oracle Corporation. HTML, XML, XHTML and W3C are trademarks or registered trademarks of W3C®, World Wide Web Consortium, Massachusetts Institute of Technology.
Java is a registered trademark of Sun Microsystems Inc
Java is a registered trademark of Sun Microsystems, Inc.
JavaScript is a registered trademark of Sun Microsystems, Inc., used under license for technology invented and implemented by Netscape. SAP, R/3, SAP NetWeaver, Duet, PartnerEdge, ByDesign, SAP Business ByDesign, and other SAP products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of SAP AG in Germany and other countries. Business Objects and the Business Objects logo, BusinessObjects, Crystal Reports, Crystal Decisions, Web Intelligence, Xcelsius, and other Business Objects products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of Business Objects S.A. in the United States and in other countries. Business Objects is an SAP company.
ERPsim is a registered copyright of ERPsim Labs, HEC Montreal.
Other products mentioned in this presentation are trademarks of their respective owners.
14