ERP System and Current Practices

References

Vernadat, Enterprise modeling and integration 王立志 , 系統化運籌與供應鏈管理 Keller, SAP R/3 process-oriented implementati

on Oracle ERP training handouts Shtub, Enterprise Resource Planning

Drivers for Enterprise Integration

Enterprise

Lower price Lower customer loyalty

Shorter time to market / customerBetter quality

Shorter productlife cycle

More choices

Source: 林欽文 , “Supply chain management in Taiwan’s mfg,” in 1999 CALS/eBusiness 管理與技術研討會

Enterprise System Integration Trend

ACC

BOM PUR

INV EOS

POS

FIN SFC

CAD/CAM

MRP MRPⅡ

EISCIM

ERPEDI

CALS SCP/SCM

Time

ExtranetECGL

Systemintegration

Island system

Partiallyintegrated

system

Individualenterpriseintegration

Supply chainintegration

Inter-Enterprise Integration vs. Intra-Enterprise Integration

Partnershipcontrol system

Bank

Retailers

In-houseinventory

control

PlantX

PlantA

PlantB

In-housemanufacturing

logisticscontrol

inter-enterpriseinteractions

MPR

Enterprise 1 Enterprise 2

Inter-enterpriseintegration level

Intra-enterpriseintegration level

Local sitecontrol systems

Enterprise Integration: Definition

Enterprise integration is concerned with facilitating information, control, and material flows across organizational boundaries by connecting all the necessary functions and heterogeneous functional entities in order to improve communication, cooperation, and coordination within this enterprise so that the enterprise behaves as an integrated whole, therefore enhancing its overall productivity, flexibility, and capacity for management of change.

The aims of enterprise integration are: to enable communication among the various functional entities of the

enterprise to provide interoperability of IT applications, and to facilitate coordination of functional entities for executing business

processes

Enterprise Integration Migration Path

Migration PathEnterprise

AS-ISState

EnterpriseTO-BEState

BusinessObjectives

BusinessConstraints

ReferenceModels

ModelingFormalism

EvaluationCriteria

StructuredApproach

Your Enterprise

Distribution

CustomerServices

SharedServices

OrderMgmt

AR

Production

Planning

Engineering

Procurement

AP

Supplier Network

CustomerNetwork

EDI EDI

ERP was the Enabler of Intra-Enterprise Integration

The Old ERP World

3PL

delivery schedule

confirmation

Business Process

Outsourcing

self-service

ContractManufacturing

schedulesconfirmation

CRM

Port

al

Fulfillment Planning

FinancialInstitutions

e-invoicee-checkconfirmation

Trading Exchange

requisition

FinancialInstitutions

e-invoicee-check

confirmationrequirementsfeedback

Customers

CollaborativeDesign

e-ERP Model

e-Business Application Architecture

Acc

ou

nti

ng

&A

cco

un

tin

g &

Fin

anci

als

Fin

anci

als

Acc

ou

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ng

&A

cco

un

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g &

Fin

anci

als

Fin

anci

als

Pro

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ctio

nP

rod

uct

ion

Pro

du

ctio

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rod

uct

ion

Lo

gis

tic

sL

og

isti

cs

Lo

gis

tic

sL

og

isti

cs

Sal

es &

Sal

es &

Dis

trib

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on

Dis

trib

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on

Sal

es &

Sal

es &

Dis

trib

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on

Dis

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on

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ma

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um

an

Res

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rces

Res

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rces

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rces

Enterprise Resource PlanningEnterprise Resource PlanningEnterprise Resource PlanningEnterprise Resource Planning

e-Supply Chain Managemente-Supply Chain Managemente-Supply Chain Managemente-Supply Chain Management

Business Business Partners,Partners,SuppliersSuppliers

Business Business Partners,Partners,SuppliersSuppliers

Customers,Customers,ResellersResellers

Customers,Customers,ResellersResellers

CR

MC

RM

CR

MC

RM

Em

plo

yees

Em

plo

yees

Em

plo

yees

Em

plo

yees

HR

MS

/OR

MS

HR

MS

/OR

MS

HR

MS

/OR

MS

HR

MS

/OR

MS

Source: 鄭正中 , Paragon

e-Supply Chain Information Backbone

Elements of Enterprise Information System

Advanced planning and scheduling (APS) advanced system to provide from supply chain optimization to

real-time shop floor control Enterprise resource planning (ERP)

transactional backbone to ensure data integrity and best business processes

Manufacturing execution system (MES) management of information related to the production processes to

efficiently utilize resources (macro-level process control) Manufacturing control system (MCS)

real-time control of the production processes (micro-level process control)

Product data management (PDM) management of product data information across the enterprise

Functions of Enterprise Information System

Supply ChainStrategic Planning

Supply Chain Planning

Supply ChainNetwork Planning

Finance

Project Management

Service Management

WarehouseManagement

Demand planning and Forecasting

Supply Planning

Inventory Planning

Sales and OperationsPlanning

Distribution Planning

Transportation Planning

Shipment Scheduling

ManufacturingForecasting

MPSMRPCRP

DistributionDRP

Inventory ControlPurchase Control

TransportationManagement

APS ERP

DispatchingProduction Unit

Product Tracking &Genealogy

Shop FloorOperation Scheduling

Shop Floor Control

Resource Allocation& StatusMaintenance

ManagementPerformance

Analysis

Quality Assurance

Product Structure,BOM

ConfigurationManagement

Process Planning

Manual Process Control

Programmable LogicController

Supervisory Controland Data Acquisition

Distribution Control System

Human Machine Interface

EngineeringChange

CAD / CAM

MES

MCS

PDMQualityManagement

Data CollectionAcquisitionLabor Management

Document Control

Process Control

Interactions between ERP/APS and MES

Shop Floor ScheduleProduct DemandBOM / Recipe / Formula / DrawingResourceRouting / ProcessLabor CharacteristicsInventory StatusSOP, HEALTH, WORK Instructions

Order Status / CompletionsResource Status / Usage

Labor Status UsageMaterial Status / Usage

Actual BOM / RecipeActual Routing / Process

Product TraceabilityScrap / Waste

CostingProduct DefinitionProcess DefinitionHuman ResourcesStandard Operation ProcedureInventory ManagementPurchasingDistributionProduction Planning Forecasting Shop Floor Operation Scheduling

Resource AllocationProduction DispatchingDocument ControlData Collection / AcquisitionLabor ManagementWIP Status / TraceabilityProduct TrackingQuality ManagementPerformance AnalysisProcess ManagementMaintenance Management

ERP/APS MES

Enterprise Resource Planning

Enterprise transactional backbone to ensure data integrity and best business processes

Using a single database streamlines the flow of information through a business

Four main (M) functions: Money (financial) Man (human resources) Manufacturing (production and logistics) Marketing (sales and distribution)

Need for an Integrated Database

Primaryrequirements

Demand foroutsourced

partsReference

units

Order foroutsourced

parts

Customerorder

Invoices

Pn-1PnP1 P2

Sales / Marking

Production

Engineering

Purchasing

Accounts payable

Accounts receivable

Production controllingSales / Marketinginformation system

．．．

．．．

．．．

Process : Order processing Function-orienteddata islands

Integrateddatabase

Functions Objects / Outputs = Products

Enterprise Resource Planning

CentralDatabase

Humanresource

managementapplications

Reportingapplications

Serviceapplication

Sales anddelivery

applications

Inventory and supplyapplications

Manufacturingapplications

Financialapplications

Managers andstakeholders

CustomersSuppliersBack-office

administratorsand workers

Sales forceand customerservice reps

Employees

Features of ERP Compared to MRPII Focus on external supply chain Client/server architecture (3 levels) Relationship database and SQL Graphic user interface Multiple database support Front-end systems for decision support Automated EDI Interoperability with multiple platforms Standard application programming

interfaces

Client/Server: Scalability

Presentation

ApplicationScalability

Database

......

ERP Market Size in 2000-2005

Data source: Gartner Group, 2002/10

Year Market Size(Million)

2000 33,619

2001 29,463

2002 30,203

2003 31,917

2004 34,157

2005 37,051

Global ERP Information Service in 2000-2005

Data source: Gartner Group, 2002/10 (in million)

2000 2001 2002 2003 2004 2005

Software support 2,860 3,267 3,653 4,153 4,667 5,172

Consulting 4,154 3,648 3,816 4,071 4,255 4,602

Training 814 684 707 744 832 823

Development & Integration

15,946 13,827 14,556 15,624 16,585 18,122

Outsourcing Management

2,346 2,539 2,631 2,871 3,322 3,700

Total 26,120 23,965 25,363 27,464 29,661 32,419

Global ERP Information Service Market Growth Rate in 2000-2005

Data source: Gartner Group, 2002/10

2001 2002 2003 2004 2005 01-05 CAGR

Software support 14% 12% 14% 12% 11% 12.17%

Consulting -12% 5% 7% 5% 8% 5.98%

Training -16% 3% 5% 12% -1% 4.74%

Development & Integration

-13% 5% 7% 6% 9% 7.00%

Outsourcing Management

8% 4% 9% 16% 11% 9.87%

Total -8% 6% 8% 8% 9% 7.85%

Global ERP Information Service Regional Market Growth Rate in 2000-2005

Data source: Gartner Group, 2002/10

Total 4.42%

Eastern Europe 5.51%

Japan 9.74%

Rest of the world 0.3%

Pacific Asia 9.58%

Western Europe 4.29%

Northern America 3.43%

Latin America 4.97%

Global ERP Software Market

Data source: Gartner Group, 2002/10 (in million)

2000 2001 2002 2003 2004 2005

Manufacturing Management

3,192 2,147 1,931 1,757 1,774 1,824

Personnel Management

1,148 1,033 962 893 902 923

Financial

Management

3,159 2,318 1,947 1,803 1,820 1,885

Total 7,499 5,498 4,840 4,453 4,496 4,632

台灣 ERP 市場發展MRP部門

大型主機成本

少樣大量大眾市場

MRPII工廠

迷你電腦品質

多樣少量區隔市場

ERP企業

主從架構速度

多樣大量利基市場

EERP供應鏈網路運算協同規劃大量客製1對 1行銷

應用軟體應用範圍系統架構管理重點生產模式市場特性

2000-2003 年台灣 ERP 市場規模分析單位：新台幣十億元

1997 2.13

1998 4.68

1999 6.13

2000 7.72

2001 9.88

2002 12.65

2003 16.19

2000 年台灣 ERP 市場營收項目分析硬體 9%

軟體授權 31%

教育訓練 7%

維護支援 8%

顧問服務 45%

2000 年台灣 1000 大製造業 ERP 導入分析

暫時不考慮 24%

兩年內導入 13%

一年內導入 17%

已導入 46%

2000 年台灣中小企業 ERP 需求分析

不需要 50.2%

已導入 11.6%

計劃導入 38.2%

(26% 外商， 74%本土業者 )

SAP R/3 System

R/3

Client/Server

ABAP/4

FIFinancial

Accounting

COControlling

IMInvestment

Mgmt.

ISIndustrySolutions

WFWorkflow

PSProjectSystem

PMPlant

Mainten.

HRHuman

Resources

SDSales&

Distribution

QMQuality

Management

PPProductionPlanning

MMMaterials

Mgmt.

Oracle ERP System

Planning• Oracle Supply Chain Plannin

g• Oracle Rythmn• Oracle Master Scheduling• Oracle MRP• Oracle Capacity

Procurement• Oracle Purchasing• Oracle Payables• Oracle Supplier Scheduling• Oracle Web Suppliers

Manufacturing• Oracle Engineering• Oracle Bills of Material• Oracle Work in Process• Oracle Cost Management• Oracle Quality

Distribution• Oracle Order Entry• Oracle Product Configurator• Oracle Inventory • Oracle Receivables• Oracle Web Customers

Front Office• Oracle Sales & Marketing• Oracle Service• Oracle Apps. Data Warehou

se• Oracle Sales Compensation

Electronic Commerce• Oracle EDI Gateway• Oracle Alert• Oracle Workflow• Oracle Interoffice

Finance• Oracle General Ledger• Oracle Cash Management• Oracle Assets• Oracle Financial Analyzer• Oracle Project Costing• Oracle Project Billing• Oracle Prs’l Time & Expens

e

Human Resources• Oracle Human Resources• Oracle Payroll• Oracle Training Admin.• Oracle Time Management• Oracle Web Employees

Process Manufacturing • Oracle GEMMS

Oracle ERP Solutions

總帳系統

客戶訂單客戶訂單

主生產排程MPS

主生產排程MPS

要徑產能模擬

RCCP

要徑產能模擬

RCCP

物料需求計劃MRP

物料需求計劃MRP

請購作業 請購作業 採購作業 採購作業 收料作業 收料作業

生產指示DiscreteRepetitiveFlowProject

生產指示DiscreteRepetitiveFlowProject

生產發料生產發料

生產控制製程移轉

生產控制製程移轉

生產入庫生產入庫

出貨作業出貨作業細部產能模擬CRP

細部產能模擬CRP

應付帳款立帳

應付帳款立帳 付款作業 付款作業

應收帳款立帳

應收帳款立帳 收款作業 收款作業

票據管理 票據管理 成本管理成本管理主需求排程

MDS

主需求排程MDS

固定資產管理固定資產管理

供應鍵管理最佳化排程供應鍵管理最佳化排程

銷售預測FCST

銷售預測FCST

統一發票管理

統一發票管理

Generic Functions in an Enterprise

OrdersProcessing

OrdersDB

WarehousingDB

WarehousingManagement

TransportationManagement

OrdersDelivery

CustomerService

DistributionManagement

ATPAvailable to

Promise

MasterProductionSchedule

DemandPlanning

Sales & Distribution

SupplyPlanning

Procurement

PurchaseDB

PartsDB

InventoryManagement

Shop FloorControl

ManufacturingExecution

EquipmentControl

OperationsScheduling

WIPDB

SPCDB

QualityManagement

PlantMaintenance

Customer

FinanceControl

Administration

EIS /DSS

HRDevelopment

PersonnelDB

Acc.DB

Product DataManagement

CAD / CAE /CAx

ProductionEngineering

ProcessDesign

BOMDB

FacilityDB

Supplier

MaterialsPlanning

ProductionPlaning &Scheduling

Logistics Supporting

Product/ProcessDevelopment

Production

Source: 林欽文 , “Supply chain management in Taiwan’s mfg,” in 1999 CALS/eBusiness 管理與技術研討會

Potential Functions in ERP

OrdersProcessing

ERP

OrdersDB

WarehousingDB

WarehousingManagement

TransportationManagement

OrdersDelivery

ERP

CustomerServiceERP

DistributionManagement

ATPERP

SCP / MPSERP

DemandPlanning

ERP

SupplyPlanning

ProcurementERP

PurchaseDB

PartsDB

InventoryManagement

ERP

Shop FloorControl

MESERP

EquipmentControl

OperationsScheduling

WIPDB

SPCDB

QMERP

PMERP

Customer

FI & COERP

AdministrationERP

EIS / DSSERP

HRERP

PersonnelDB

Acc.DB

PDMERP

CAD / CAE /CAx

ProductionEngineering

ProcessDesign

BOMDB

FacilityDB

Supplier

MPRERP

FactoryPlanning

Sales & Distribution

Logistics Supporting

Product/ProcessDevelopment

Production

Source: 林欽文 , “Supply chain management in Taiwan’s mfg,” in 1999 CALS/eBusiness 管理與技術研討會

Order Fulfillment Process

The process is triggered by customer’s order.

The process is aimed at fulfilling customer’s order to ensure the long-term success of the organization.

Design of Order Fulfillment Process

Focus on Time, Cost, Flexibility, and Quality.

The key design factor is the way production and purchasing orders are initiated.

Order Fulfillment Process Chart

Order Management Order entry, order processing, order fulfillment

Customer Service Customer management, sales support (post-sales service), sales

returns

Sales & Marketing Sales planning, forecast, sales & distribution system information,

sales compensation, pricing & discount management.

Part I: Outbound Logistics

Order Management for e-BusinessGoal: Improve responsiveness & customer service

• Demand from all sources

• Customer self service

• Configuration w/ guided selling

• Global order promising

• Advanced pricing & deals

• Integrated fulfillment

• Tailorable user interface

• Flexible, high volume arch.

OrderManagement

DemandCapture

ConfigurationMgmt.

AdvancedPricing

GlobalATPRelease

Management

FlexibleWorkflow

Object-basedArchitecture

InventoryManagement

Customer Service

Customer Management Define customers, sites and contacts Maintain customer information Define credit limits and limits per order Define customer agreement and

payment

Customer Service Sales Support

Identify service requirement Create sale and service employee

plan Schedule service

Sales Return Determine return materials process Receive and inspect returns Credit to customers

Sales and Marketing

Sale Planning Plan sales quantity for groups of products Evaluate planned sales quantities with data

(sales revenue, rebates, discount) Plan profitability

Forecast Predict future price and demand

Sales and Distribution Information System Gather, condense and evaluate data from

sales

Sales & Marketing

Sales Compensation

Pricing and Discount Management Create pricing list Define currency Change price structure Define discount program

Part II: Production Logistics Production Planning

Sales and operations planning, demand management, master planning (MPS), MRP, capacity planning, scheduling

Inventory Control Inventory, WIP, logistics information system, warehouse management

Shop Floor Control Product & Process Development

Engineering, BOM, routing, materials forecast Quality

Planning, inspection, control, certification, notification. Plant Maintenance

Preventive maintenance, maintenance order management, service management

Part III: Inbound Logistics

Procurement Purchasing Supplier Scheduling Receiving Invoice Certification Vender Management

Part IV: Integrated Logistics

Human Resources Organizational Management, Workforce Planning, T

raining & Event Management, Recruitment, Time Management, Incentive Wages, Payroll, Travel, Personal Development.

Financial Management Investment Management, Cash Management, Depre

ciation Simulation, Capital Measures. Accounting Management

General Ledger, A/P, A/R, Legal Consolidation, Asset Management.

Part IV: Integrated Logistics

Cost Management Overhead Cost Controlling, Product Cost Controlling,

Profitability analysis. IT Related Management

E-commerce (Web employee, Suppliers, Customers), EDI, Workflow, Business Intelligence System (BIS), Exception System (alert).

Project Management Planning, Budgeting, Execution, Costing, Information

System.

ERP Implementation

Six Phases

Definition Operations Analysis Solution Design Build Transition Production

Objective of Six Phases

Definition: Determine current and future business needs.

Analysis: Map business models to applications.

Design: Define solutions and architecture. Build: Code and test solutions. Transition: Train users, convert data,

deploy systems. Production: Maintain and evaluate system.

11 Processes Business Process Architecture Business Requirements Definition Business Requirements Mapping Application & Technical

Architecture Module Design & Build Data Conversion Documentation Business System testing Performance Testing Adoption and Learning Production Migration

電腦化作業管理流程改善

Implementation Strategy

導入規劃導入策略導入專案組織與計劃Kick-Off Meeting

Operation Analysis

作業分析教育訓練 (Training)現行作業分析 (OA)

Solution Design

解決方案規劃解決方案規劃 (BRM)應用系統設定 (Config.)作業流程規劃 (SOP)客製化範圍的定案

Build

解決方案構築Documentation

作業文件製作 作業文件製作 (Documentation)

作業流程試作(SOP Walkthrough)專案小組測試 (CRP)客製化作業

相關操作人員訓練 (End User Training)操作人員操作測試 (End User CRP)上線資料準備 (Data Preparation)

Transition

上線準備

On-Production

正式上線正式上線 (Production)上線後支援 (Post Support)

導入方法論 : AIM ApplicationImplementationMethodology

Roles (38 totally)

Client Executive

Client project manager

Client staff member

IS manager

System administrator

Key users and users

Project manager

System Architect

DBA and DBD

Network Administrator

Developer

Business Analyst

Information Tech Infrastructure Selection Strategy Control: desired control level of corporate Structure : organizational structure and

how tightly integrated should be Database : desired structure and how

accessible Customization: modifications Best Practice: industry practice

Implementation: Generalized Industry Application Determine the goals and expected

deliverables from project Scope of project Budget(20% hardware, 30% software, 10%

education, 30% consulting service, 10% others)

Scheduling time of implementation Figuring out the required resource

Implementation: Generalized Industry Application

Selecting the team members Identifying the roles and leadership Understanding the process Eliminating the waste Change management Hardware and OS installation Attending System Training

Implementation: Generalized Industry Application Exercising the whole system and testing the

users’ understanding Setting up security and permissions Real parts specific pilot Beginning pilot Entering fixed and variable data Documenting policies and procedures Go live

導入成功關鍵因素(Critical Successful Factor)

Commitment

Participation

Change

Education & Training

Project Planning &

Control

高階經營管理者的承諾全責專案經理與專案小組投入

對“改變”之接受性與認同

教育訓練之落實專案之計劃與控管

教育訓練中心

• 產品相關之教育訓練• 縮短客戶學習時間

諮詢顧問中心

• 各種諮詢顧問• 協助規劃系統與績效評估• 發揮產品最大效益

產品、工具之瞭解

In-HouseTraining

On-SiteTraining

應用軟體之使用應用軟體導入

規

劃

建

檔

上

線

ERP 導入專案

導入協助

客戶服務中心

• 電話諮詢• 必要之線上協助• 提供使用問題之解決方案

導入過程協助

選擇合適之軟體與導入顧問Your Company

SoftwareVendor

ConsultingFirm

Project

電腦化專案組織架構圖

軟體商專案委員會 + 客戶專案委員會

財務顧問財務顧問

製造顧問製造顧問

供銷顧問供銷顧問

技術顧問技術顧問

財務小組負責人財務小組負責人

製造小組負責人製造小組負責人

供銷小組負責人供銷小組負責人

技術小組負責人技術小組負責人

Oracle PM 客戶 PM

教育訓練教育訓練

客戶支援客戶支援

預估 ERP 專案效益 無形效益

延用新科技架構整合資訊流 藉更新資訊流 , 激勵企業再造 (Reengineering) 建置智慧管理決策資訊系統

有形效益主目標訂為改善現況績效指標 庫存週轉 現金週轉 應收帳款 成本 / 品質效益指標