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Operational Excellence Summary
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Operational Excellence Summary
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Operational ExcellenceModule 1: ERP
Limited Maximum
Resources Profit
- Time
Use
- Cash
- Raw materials Costs Need to use resourced in most efficient way
- Employees For that you need an ERP system
What is ERP?
ERP= A software that every company uses.
A 3 cycles that bring values to a company:
- Sales
- Purchase
- Production
- Production planning
SAP
SAP: Speaks about sales & distribution (=SD)
- Sales SD
- Production Production planning (plan how to produce something)
- Purchase Materials Management
Where it all starts..
Selection
B Sales department: salesperson talks to customer: “What do you want?” (ex: black
bicycle)
• This is called Front office process
• Going to check if the wanted product is in store = Back office process
A Sales order: There is an agreement between buyer and seller (=committed to buy & sell)
• From the moment of a sales order, you have a TRANSACTION. (transaction number)
1
, Checking availability
1. Check if product is available
2. Check who to involve ( production or purchase)
• Best option from an operational POV: Have the product available
A Customer order lead-time: you want to have it at the minimum
Be able to give product as soon as possible
2 options:
1. Available in warehouse pick & pack
- Post Goods Issue involves physical process (shipping the product) & accounting
- Send invoice & receive payment
• 3 dept. involved: Sales, Logistics & Finance
• Need an ERP to have agreement & good communication among depts
! 3-way match/3 sub process: documentation process should match physical & financial
processes
Customer risk: risk of having unsatisfied customers
Busines risk: risk of delivering a more expensive product than purchased (having a loss)
2. The product is not available
You have the raw materials & just need to assemble (a slight longer leadtime)
You don’t even have the raw materials (long leadtime)
• 5 dept. involved: Sales, Logistics, Finance, Purchase & Production
• Make use of ERP ERP= the central heart of the company
Problems: It can be hacked & if 1 dept makes a mistake, will be affect all other depts.
Solution: Ask each dept to put their own data in the system.
BUT A lot of people are entering data Different depts can adjust the data that is not
theirs. SOD needed
Segregation of duties (SOD)= 3 different persons per transaction (doc, physical & fin)
• Doing a 3 way match is also SOD
2
, How everyone works/needs the system
Parts of a process + process improvement + VSM/BPMN
INPUT from everyone?
People feed the system Only correct input of data will lead to success!! SOD!!
Some implications…
Master Data Management: separate department who is entering data
Having SOD
Downside: EXPENSIVE
A MASTER Data: data that you put in the system ONCE & re-use it for several transactions.
Often done by a separate team!! MDM-department, because:
- No double entries
- Understand significance of every field
- Correct sequence of entrance
3
, • 3. A lot of DATA in 1 database
• Opportunities for analysis
• BIG DATA
• Online Analytical Processing tools (OLAP)
TRANSACTION Data: a combination of different pieces of masterdata
• MDM can only adjust Master data, NEVER transaction data
Different Software suppliers:
Why SAP?
• German = professionalism
• World wide usage
• For all industries
• Advantage for future job opportunities
• Market leader in enterprise software
(Widely used mainly by multimodals, expensive)
Module 2: Sales & Operations Planning
S&OP= Sales and Operations Planning - How many products
do we need to
The bird’s eye view produce?
- for today’s
- Coordination of all processes demand?
- See what is coming - For future
demand
- What stocks do we
need to keep?
Phase 1 of the S&OP: Forecasting - How quickly do we
need to buy raw
materials?
• Try to make a forecast of future sales - How many raw
materials do we
• Different ways: need in stock?
– Put real sales in the system & Extrapolate for the future - …
– Own forecasting on basis of research
– Who should come up with forecast? Marketeer + demand planner
• Marketer: develop new customers, markets, and products; allow the existing ones to
grow. The one who sees opportunities everywhere, but does not consider internal
matters (just looks at the market)
- Demand Planner: create realistic and achievable demand, in such a way that the rest of
the logistical and production can get organised in time. Will question the marketeer (bit
more conservative), will take into account internal market (ex: capacity to produce)
4
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