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Summary Operational Excellence
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Samenvatting 2e bachelor IBM
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Operational Excellence SummaryContents
(1) What is ERP? .............................................................................................................................................................. 4
What is ERP? ............................................................................................................................................................................ 4
Department structure ............................................................................................................................................................. 4
(2. 1) S&OP Process ......................................................................................................................................................... 8
3 Phases of S&OP..................................................................................................................................................................... 8
(2.2) Product Planning ................................................................................................................................................... 12
How to implement the data? ................................................................................................................................................ 12
Step 1: Forecast consumption ........................................................................................................................................... 12
Step 2: Netting ................................................................................................................................................................... 14
Independent vs dependent ................................................................................................................................................... 15
Netting explained at SKU level .............................................................................................................................................. 16
Replenishing the stock at SKU level ...................................................................................................................................... 16
Replenishment system .......................................................................................................................................................... 16
From SKU level to raw material level: MRP .......................................................................................................................... 17
(3) – Sales Process ......................................................................................................................................................... 18
Chapter 1 Sales ...................................................................................................................................................................... 18
Sales order Process ................................................................................................................................................................ 18
A request (Inquiry) ................................................................................................................................................................. 18
Quotation ............................................................................................................................................................................... 19
Credit Check ....................................................................................................................................................................... 19
Generic sales process ............................................................................................................................................................. 19
From Opportunity to Order ............................................................................................................................................... 19
Transaction Process ............................................................................................................................................................... 20
Order to Cash..................................................................................................................................................................... 20
CODP = customer order decoupling point/ customer order lead time ............................................................................. 20
OTC process in MTO and MTS environment ..................................................................................................................... 20
When to start picking/transport ....................................................................................................................................... 21
Check availability ............................................................................................................................................................... 21
Goods leave the WHS ........................................................................................................................................................ 22
Billing ................................................................................................................................................................................. 22
Billing Documents .............................................................................................................................................................. 22
Billing Methods .................................................................................................................................................................. 22
Characteristics of processes – Three sub-processes – 3 way match .................................................................................... 22
1
, Payment............................................................................................................................................................................. 22
Master Data ........................................................................................................................................................................... 23
Definition ........................................................................................................................................................................... 23
In SAP (GBI – Case) ................................................................................................................................................................ 25
(4) Purchase Process ...................................................................................................................................................... 26
Purchase process ................................................................................................................................................................... 26
The requirement/need (Internal) ...................................................................................................................................... 27
Budget check during the selection phase.......................................................................................................................... 27
Choosing the supplier (purchase department).................................................................................................................. 27
Request for quotation........................................................................................................................................................ 28
Purchase order....................................................................................................................................................................... 28
(5) The Production Process ............................................................................................................................................ 28
In depth… ............................................................................................................................................................................... 28
Step 1. Release Production order.......................................................................................................................................... 28
Step 2. Preparation ................................................................................................................................................................ 29
Step 3. Stage and Setup ......................................................................................................................................................... 30
Step 4. Produce...................................................................................................................................................................... 30
Step. 5 Complete ................................................................................................................................................................... 31
PP Master Data ...................................................................................................................................................................... 32
(6) Quality Management 1 ............................................................................................................................................. 32
Introduction: Total Quality Management 1 .......................................................................................................................... 32
Quality in time ....................................................................................................................................................................... 33
Quality vs reliability ............................................................................................................................................................... 33
To reach quality within your organization. There are 3 phases: .......................................................................................... 33
Aspects of TQC ....................................................................................................................................................................... 33
Positioning TQM (total quality management) in an organization ........................................................................................ 33
Quality in all the processes ................................................................................................................................................ 33
Quality Process of Procurement ........................................................................................................................................... 34
Quality Improvement of processes ....................................................................................................................................... 34
New Evolution of JIT .......................................................................................................................................................... 34
Co-Makership .................................................................................................................................................................... 34
Sourcing policy................................................................................................................................................................... 34
Continuous Improvement .................................................................................................................................................. 34
Founders of TQM ................................................................................................................................................................... 35
1920: Hawthorne............................................................................................................................................................... 35
1930: Walter A. Shewhart ................................................................................................................................................. 35
1950: Deming .................................................................................................................................................................... 35
1950: Joseph M. Juran ....................................................................................................................................................... 35
1950: Philip B. Crosby ........................................................................................................................................................ 35
2
, Today…................................................................................................................................................................................... 35
(7) Quality Management 2 ............................................................................................................................................. 35
How to work on quality? ....................................................................................................................................................... 35
How is this End-inspection done? ......................................................................................................................................... 36
Why is this option not the best? ....................................................................................................................................... 36
Process Control ...................................................................................................................................................................... 36
Sales Purchase and Production ......................................................................................................................................... 36
Supply Chain Management ................................................................................................................................................... 36
How is this Process Control done? ........................................................................................................................................ 37
Certification ........................................................................................................................................................................... 39
Types of Certifications ....................................................................................................................................................... 39
(8) Quality Management 3 ............................................................................................................................................. 40
Continuous Improvement of quality ..................................................................................................................................... 40
1) The balances Scorecard (BSC) provides a framework for monitoring KPIs.................................................................. 40
From Critical success factor (CSF) to Key performance indicator (KPI’s) .......................................................................... 41
Link between Balanced scorecard and SAP....................................................................................................................... 41
2) Lean helps eliminate waste and streamline processes. ............................................................................................... 42
How to eliminate waste?................................................................................................................................................... 42
3) Theory of Constraints .................................................................................................................................................... 42
What is a constraint? ........................................................................................................................................................ 42
Goldratt ............................................................................................................................................................................. 43
Six Sigma ................................................................................................................................................................................ 43
EFQM ..................................................................................................................................................................................... 43
Quality in service industry ..................................................................................................................................................... 43
Servqual ............................................................................................................................................................................. 43
Customer Service Assessment scale .................................................................................................................................. 44
Customer service level .......................................................................................................................................................... 44
3 phases ............................................................................................................................................................................. 45
From improvement management to innovation management ........................................................................................... 45
Changing and what you need? .............................................................................................................................................. 46
3
, (1) What is ERP?
What is ERP?
ERP = Enterprise Resource Planning
Main principle of a business → As a company you have limited resources and you want to maximize your profit. You need
to plan the resources so that you can reduce the costs and maximize the profit.
Complete overview of a company: Every circle represents
an operational Cycle.
Ex: You want to buy a bicycle. A the time of buying you are
in NY. The company decides to sell the cargo bike to you.
What will the involved operational cycles do now?
Department structure
Start: Sales department
- What do you want as a
customer? Criteria:
- Black touring bicycle
- Black Helmet
- Knee pads
- …
BQ: Sales person talking to the
customer = presale (front office
process) because there is no contract
yet.
After the front office process, the
customer decided and makes a deal
→ order placed by sales department.
BQ: Question check availability → check inventory + what departments are we going
to need additionally to sell this product.
4
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