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KMO - Samenvatting "ERP & Quality Control"
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Complete summary of the “ERP & Quality Control” course in the 3rd year of SME management at Artevelde University of Applied Sciences.
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Academiejaar 2022-2023ERP & QUALITY CONTROL
H1 – WHAT IS ERP?
ERP
= Entreprise Resource Planning
A story to link the theory with: (ZIE SCHEMA BIJ UITLEG)
I would like a cargo bike and I am going to visit a bicycle shop who is in New York. When you come in a shop
where they also produce bicycles, you will see that they sell more products than only bicycles like helmets,
shoulder pads so everything that is in common with bicycles. It has different departments.
Take the sheet:
You will find 3 big circles → 3 operational processes or 3 main departments of the company
It all starts in the shop, when I come in the shop and I want a cargo bike, I would talk to the sales guy and he
will ask me what do you want? So we discuss and tell what I want.
1. Sales Department = what do you want?
The first step in this process is that I am to talk to the sales person. What do you want? The sales person is
asking me this and we start talking about what it really is what we came to America for. So the sales person
talks to customer = pre-sales
TIP 1: FRONT OFFICE PROCESS = THIS DEPARTMENT IS IN DIRECT CONTACT WITH THE CUSTOMER
Once we have talked, we agreed what I want, he told me the price = we will agree and we will make a
contract. So parties agree: we make a sales order and this is the second step in the process. The contract in
this theory has a specific name, we call this a sales order.
TIP 2: DIFFERENCE BETWEEN STEP 1 & 2 = STEP 1: SELECTION PROCESS EN STEP 2: TRANSACTION PROCESS
The difference between these 2 is quite big because in the selection process I was still able to walk away
without anything, while once we have moved in the transaction process, we have married each other. I have
connected to this company; I have promised to pay for this bicycle as soon as this bicycle is delivered to my
house.
The contract was made, once this is done, a very important process kicks off, because once the contract is in
the system, they realize that I am waiting for my bicycle. The system will need to be checked, my sales prson
will have to go and check the stock, we call this: the check availability. The company has to do this fast.
When we check the stock, they’re 2 different options: the bike Is available in the warehouse or it’s not
available in the warehouse.
1 --- When it’s available in the warehouse, the company will pack the bicycle in a box and ship it to my house.
So they pick and pack the order. Once it’s picked and packed, the next step will be scanned and shipped to
Belgium.
The shipment is called: post goods issue. So, the chance of ownership is happening. After this, the company
will send an invoice and receive a payment from me.
In this department, there are really 3 departments involved: sales, logistics and finance.
TIP 3: 3 SUB PROCESS or 3 WAY MATCH
In the sheet, there are 3 stars, this process contains 3 sub-processes who are important to match, we call it
the 3 way match. What does it mean? → when I make an order with a company (document), the contract
that we made needs to match exactly what was delivered at my house. But it also needs to match the
,Academiejaar 2022-2023
invoice. The 3 way match means that my document (the documentation) needs to match the post goods
issue (fysical delivery) and it needs to match the invoice (financial documents) and only when those 3 match,
I will pay the invoice.
2 --- When it’s NOT available in the warehouse, we don’t have the bicycle. So we need to contstruct or make
a new bicycle. We have to check if we have all the parts to make a new one. There are again 2 options:
YES --- start production! (SO GO TO PP)
NO --- buy parts or raw materials, we must go to the stores/shop. (SO GO TO MM) and then production.
When that is done, the bicycle has to go to the guy who packs it for delivery and then to the one who makes
the invoice. In this situation (where the bike wasn’t in the store) to be shipped to me, we have even more
departments involved: sales, purchase, production, logistics and finance.
We are getting practical problems in this situation. There is a lot of communication that can go wrong. A lot
of waiting time. Solution? We can avoid it by an ERP software. But how?
• Contract in computer
- Customers, bicycle types
• Automatic search in stock
• Automatic calculation delivery date
- Based on availability & production time
• Automatic order parts
- Via system, vendors in system, parts in system
• Automatic start of production steering
• Automatic stock keeping
This software is called ERP:
• Enterprise
- For companies
• Resource
- People + materials
• Planning
- Plan the sequence better
Systematic overview of how an ERP system works: it’s the heart of the company because it’s the software
where all the departments is going to log on to.
People feed the system > Only correct input of data will lead to success !!
,Academiejaar 2022-2023
TIP 4: SOD = SEGREGATION OF DUTIES – EVERYBODY HAS HIS OWN RESPONSIBILITY IN THIS SYSTEM,
EVERYBODY HAS HIS OWN TASK, WE NEED TO MAKE SURE THAT NOT EVERYBODY CAN ACCESS THE DATA
OF ANOTHER DEPARTMENT.
Some implications….
1. SOD is an important principal, also in the frame of the 3-way match. You can also notice in this the SOD,
we need to make sure that each of these 3 steps is performed by someone else, so nobody can do 2
different steps.
2. Master data management (department or team) = a lot of data is implicated in this system. We need to
make sure that the master data is changed by people who know what they are doing. Why?
• To avoid double entries
• Understand significance of every field
• Correct sequence of entrance
3. A lot of data in 1 database; this opens the door for new opportunities like analysis. A lot of tools to
analyze this data.
Software suppliers: SAP, SAGE, JAVA, … - the difference? → we will use SAP because it’s one of the biggest
ones, it’s for all industries, very extended and stable, market leader in enterprise software.
, Academiejaar 2022-2023
H2 – SALES AND OPERATION PLANNING
S&OP
= Sales and Operations Planning
The bird’s eye of view = coordination of all processes, let’s see what’s coming to our company
For example:
- How many products do we need to produce
- for today’s demand?
- For future demand
- What stocks do we need to keep?
- How quickly do we need to buy raw materials?
- How many raw materials do we need in stock?
- …
A story to link the theory with: “The Pea Company”
What:
- We sell 3 types of cans of peas: 200g, 400g, 850g
People working at the company:
- Marketer: Diederick
- Demand planner: Joshua
- Sales manager: Bart
- Purchaser: Peter
- Warehouse manager: Barrie
- Production manager: Nicolas
- Bookkeeper: Anne
- MDM department: Wai Hong
S&OP phase :
How many peas will I sell in the coming months? And to do this exercise you will first of all go back to the
basic article we are selling → PEAS!
In the first stage, you never think about how many of each type → SKU’s – Stock keeping units / but in the
beginning we will (roll-up phase) first go at high level and think in kg of peas we are going to sell and it’s only
in the second phase we will go back down (force-down face) to think in terms of how many of each type
(200-400-850g)
The people who have this job are always the marketeer + demand planner to think about the future and do
the job of the roll-up and the force-down.
Phase 1: Forecasting
What is it what they want to do? → They want to make a forecast of future sales = look into the future
Different ways:
- Put real sales in the system (existing company) & extrapolate for the future
- Own forecasting on basis of research
Who?
- Marketeer (Diederick) + demand planner (Joshua)
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