Basic concepts of ERP theory development Sales Management

Development of ERP Theory
Inventory order point
In 1930s, material requirements of enterprises were mainly managed by controlling the inventory quantity. Set the target stock and safety stock for each required item, and determine the order point and order Batch lot size.

Applicability: a) material consumption is relatively stable; B) Material Supply is relatively stable; c) material requirements are independent; d) material prices are not very high (high value materials, to reduce inventory costs, more precise control is required)

MRP-Material Requirements Planning
In 1960s, J. A. Orlicky of IBM proposed to divide material requirements into independent requirements and related requirements. Based on this, the MRP theory was formed.
Independent Requirement: the demand and demand time are determined by external requirements of the enterprise, such as requirements for finished products or semi-finished products used for maintenance or spare parts.
Dependent Requirement, that is, parts, semi-finished products, and raw materials after BOM expansion are required according to independent requirements.
The problem that MRP needs to solve is: a) What items are required? B) How many are required? C) When are they required?
A) and B) can be calculated based on MPS and BOM. c can be obtained based on the process route of production assembly)
MRP outputs are planned order and purchase requisition.

Closed-loop MRP-Closed-loop MRP
The basic MRP is one-way information flow, such as capacity, GIGO (garbage in, garbage out) and other factors, resulting in the feasibility of MPS and MRP. The closed-loop MRP considers that MPS and MRP should be feasible, and the information flow should form a loop, which is output from input and affects input cyclically. Therefore, capacity requirements planning is proposed)

Mrp ii-Manufacturing Resources Planning
In 1977 Oliver W. Wight proposed MRP-II
MRP mainly focuses on logistics, while manufacturing is an organic combination of logistics, information flow, and capital flow. For example, MRP calculates a procurement plan, but it cannot be completed due to a shortage of funds, will affect the execution of the entire production plan

ERP-Enterprise Resource Planning
In 1990s, with the development of enterprises, the demand for highly integrated information technology was getting higher and higher, and the information technology was also developing rapidly. The scale of enterprises was expanding, and the global multi-group and multi-factory systems were required to work closely together and deploy them in a unified manner; with the development of globalization, the management field is not limited to the enterprise, but also expanded to the entire supply chain field. Various modern management ideas and methods emerged, such as JIT (Just In Time instant Production), TQC (Total Quality Control Total Quality management), OPT (Optimized Production Technology Optimize Production Technology), DRP (Distribution Resource Planning Distribution Resource Plan), and the emergence of MES (Manufacturing Execute System Manufacturing Execution System), AMS (Agile Manufacturing System), etc, in this context, mrp ii constantly improves its own theories and develops into ERP, which comprehensively manages the logistics, capital flow, and information flow of enterprises.
ERP expands a lot on the basis of mrp ii, such as multi-factory management and quality management. It integrates the features of discrete production and process-based production. The core of mrp ii is logistics, and the main line is planning. ERP transfers the management focus to finance, and runs through the concept of financial cost control throughout the entire business operation.

Basic Concepts
Materials
The main material file generally contains the following information:
A) Technical materials, material design, process, and other technical materials, such as name, specification, model, Design Modification number, version number, weight unit, unit weight, volume unit, unit volume, etc.
B) inventory information, such as inventory units, sources (manufacturing, procurement, external processing, virtual parts, etc), ABC code, inventory type, batch rule, batch cycle, annual check count, inventory cycle, maximum inventory, safety inventory, inventory quantity, inventory amount, default warehouse, default location, etc.
C) plan management information, such as Plan attributes, production cycle, lead time, and batch production allocation
D) procurement management information, such as daily consumption, order point quantity, order point supplement quantity, primary supplier, supplier code and Related Parameters
E) sales management information, such as sales type, income subject, sales cost subject, and sales unit
F) financial information, such as financial category, Value-Added Tax Code, actual cost, standard cost, plan price, plan price currency, cost accounting method, latest cost unit price, cost standard batch, COST project code
G) Quality management information, such as inspection marks (Y/N), inspection methods (full inspection, spot check, etc.), inspection standard documents, and Storage Period
BOM-Bill of Material
Role: a) generate the basic MRP information; B) can be used to develop the total process route; c) JIT is used in the back-flushing material stock, and must be 100% accurate; d) Production Line ingredients; e) cost calculation; f) sales price calculation basis
Differences between the manufacturing material list and the design material list: the design BOM is a pure technical design document, and the manufacturing BOM is used for management such as manufacturing. The structures are different, and the manufacturing BOM may contain consumables, such as process supplies and agents, the design BOM will not appear; the Manufacturing BOM will be used to reflect the processing sequence, and the design BOM will not;
BOM classification:
A list of common materials, most commonly used, consisting of actual items
A planned bill of materials for product prediction, such as xx series products, is often not an actual product and can be flexibly used for other purposes.
Modular material list, which extracts General sub-structures from BOM (modular concept)
Cost Material List, which describes the Standard Cost composition
Work Center
It can be one or more equipment, one or more staff members, one group or work section, or even one workshop, it is the basic data of MRP and CRP, the basis for formulating the process route, the basic unit of workshop operation arrangement, the completion information and the data collection point of cost accounting.
Critical Work Center: Key Work Center, RCCP capacity plan considerations
Work Center job type: a) parallel jobs. Multiple devices in the Work Center are used to complete a process in parallel; B) Streamline jobs
Lead Time
Lead time for production preparation: the time from the start of the production plan to the completion of preparation (production can be done)
Procurement lead time: the time when the materials are placed into the warehouse under the purchase order
Early Stage of Production and processing: Start of production and end to the time of completion and warehouse receiving
Early Stage of Assembly: time from assembly start to completion
Accumulative lead time: Sum of procurement, processing, and assembly lead time
Overall lead time: the entire production cycle of the product, including the design lead time and various lead time
Routing-process route
Including the actual processing and assembly process sequence of materials, the work center used by each process, the time quota, and the time cost of the outsourced process.
Shop Calendar-Calendar of work
Different factories, workshops, and work centers may have different calendars.

Sales Management
Division of Production types
According to the characteristics of the production process, there is a process type (the processing process is continuous, the process sequence remains unchanged, the production process is relatively stable, such as chemical, refining, papermaking, cement, etc ), processing assembly type (composed of multiple parts, the production process is discrete and finally assembled by parts, such as mechanical manufacturing and electronic manufacturing)
Based on production stability and repeatability, there are mass production, batch production, single-piece small batch production
According to requirements and features: ordering production (design and production according to customer requirements), stock-up production (production plan based on market forecast)
MTS-Make To Stock production and Stock preparation production
Generally, terminal consumer goods are used to organize production according to market forecasts.
MTO-Make To Order production
Organize production according to customer orders and sales contracts to avoid product inventory backlog
ATO-Assemble To Order assembly
According to the existing components in stock, there is a selection of Assembly according to customer order requirements, mainly to arrange the Assembly plan FAS (Final Assembly Schedule ). Its components are organized for production according to the forecast plan, and pre-production and warehouse receiving
ETO-Engineer To Order engineering production
It is also called special production, that is, designing and organizing production according to the requirements of customer orders. The whole process is carried out according to engineering management methods, such as shipbuilding, elevator, special test equipment, and boiler.
Functions of sales management:
A) sales plan and Product Quotation
B) customer information, price policies for customers, etc.
C) Sales prediction, which is based on historical sales data and market research.
D) sales order management, including the order payment method and customer credit limit, and organize delivery according to the delivery plan
E) Issue sales invoices, send sales reminders to the customer, and the Finance Account the sales. Otherwise, open red-letter invoices for the return of goods that can offset the sales revenue.
F) sales and market analysis
Different production types have different sales centers and functions. However, the core functions of sales management are as follows, for example, the customer file and credit management, product sales price management, sales contract order management, sales pick-up, service management and invoice management are basically required