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 implementation Oracle ERP training handouts Shtub, Enterprise Resource Planning

Drivers for Enterprise Integration Enterprise Lower price Lower customer loyalty Shorter time to market / customer Better quality Shorter product life 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 BOMPUR INV EOS POS FINSFC CAD/CAM MRP MRP Ⅱ EIS CIM ERP EDI CALS SCP/SCM Time Extranet EC GL System integration Island system Partially integrated system Individual enterprise integration Supply chain integration

Inter-Enterprise Integration vs. Intra-Enterprise Integration Partnership control system Bank Retailers In-house inventory control Plant X Plant A Plant B In-house manufacturing logistics control inter-enterprise interactions MPR Enterprise 1Enterprise 2 Inter-enterprise integration level Intra-enterprise integration level Local site control 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 Path Enterprise AS-IS State Enterprise TO-BE State Business Objectives Business Constraints Reference Models Modeling Formalism Evaluation Criteria Structured Approach

Your Enterprise Distribution Customer Services Shared Services Order Mgmt AR ProductionPlanningEngineeringProcurement AP Supplier Network Customer Network EDI ERP was the Enabler of Intra-Enterprise Integration The Old ERP World

3PL delivery schedule confirmation Business Process Outsourcing self-service Contract Manufacturing schedules confirmation CRM Portal FulfillmentPlanning Financial Institutions e-invoice e-check confirmation Trading Exchange requisition Financial Institutions e-invoicee-check confirmation requirements feedback Customers Collaborative Design e -ERP Model

e-Business Application Architecture Accounting & Financials Production Logistics Sales & Distribution HumanResources Enterprise Resource Planning e-Supply Chain Management BusinessPartners,SuppliersCustomers,Resellers CRM Employees HRMS/ORMS 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 Chain Strategic Planning Supply Chain Planning Supply Chain Network Planning Finance Project Management Service Management Warehouse Management Demand planning and Forecasting Supply Planning Inventory Planning Sales and Operations Planning Distribution Planning Transportation Planning Shipment Scheduling Manufacturing Forecasting MPS MRP CRP Distribution DRP Inventory Control Purchase Control Transportation Management APS ERP Dispatching Production Unit Product Tracking & Genealogy Shop Floor Operation Scheduling Shop Floor Control Resource Allocation & Status Maintenance Management Performance Analysis Quality Assurance Product Structure, BOM Configuration Management Process Planning Manual Process Control Programmable Logic Controller Supervisory Control and Data Acquisition Distribution Control System Human Machine Interface Engineering Change CAD / CAM MES MCS PDM Quality Management Data Collection Acquisition Labor Management Document Control Process Control

Interactions between ERP/APS and MES Shop Floor Schedule Product Demand BOM / Recipe / Formula / Drawing Resource Routing / Process Labor Characteristics Inventory Status SOP, HEALTH, WORK Instructions Order Status / Completions Resource Status / Usage Labor Status Usage Material Status / Usage Actual BOM / Recipe Actual Routing / Process Product Traceability Scrap / Waste Costing Product Definition Process Definition Human Resources Standard Operation Procedure Inventory Management Purchasing Distribution Production Planning Forecasting Shop Floor Operation Scheduling Resource Allocation Production Dispatching Document Control Data Collection / Acquisition Labor Management WIP Status / Traceability Product Tracking Quality Management Performance Analysis Process Management Maintenance Management ERP/APSMES

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 Primary requirements Demand for outsourced parts Reference units Order for outsourced parts Customer order Invoices P n-1 PnPn P1P1 P2P2 Sales / Marking Production Engineering Purchasing Accounts payable Accounts receivable Production controlling Sales / Marketing information system ．．． Process : Order processing Function-oriented data islands Integrated database FunctionsObjects / Outputs = Products

Enterprise Resource Planning Central Database Human resource management applications Reporting applications Service application Sales and delivery applications Inventory and supply applications Manufacturing applications Financial applications Managers and stakeholders Customers Suppliers Back-office administrators and workers Sales force and customer service 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 Application Scalability Database...

ERP Market Size in Data source: Gartner Group, 2002/10 YearMarket Size(Million) , , , , , ,051

Global ERP Information Service in Data source: Gartner Group, 2002/10 (in million) Software support2,8603,2673,6534,1534,6675,172 Consulting4,1543,6483,8164,0714,2554,602 Training Development & Integration 15,94613,82714,55615,62416,58518,122 Outsourcing Management 2,3462,5392,6312,8713,3223,700 Total26,12023,96525,36327,46429,66132,419

Global ERP Information Service Market Growth Rate in Data source: Gartner Group, 2002/ CAGR Software support14%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% 9%7.85%

Global ERP Information Service Regional Market Growth Rate in Data source: Gartner Group, 2002/10 Total4.42% Eastern Europe5.51% Japan9.74% Rest of the world0.3% Pacific Asia9.58% Western Europe4.29% Northern America3.43% Latin America4.97%

Global ERP Software Market Data source: Gartner Group, 2002/10 (in million) Manufacturing Management 3,1922,1471,9311,7571,7741,824 Personnel Management 1,1481, Financial Management 3,1592,3181,9471,8031,8201,885 Total7,4995,4984,8404,4534,4964,632

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

年台灣 ERP 市場規模分析 單位：新台幣十億元

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 FI Financial Accounting CO Controlling IM Investment Mgmt. IS Industry Solutions WF Workflow PS Project System PM Plant Mainten. HR Human Resources SD Sales& Distribution QM Quality Management PP Production Planning MM Materials Mgmt.

Oracle ERP System Planning Oracle Supply Chain Planning 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 Warehouse 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 & Expense Human Resources Oracle Human Resources Oracle Payroll Oracle Training Admin. Oracle Time Management Oracle Web Employees Process Manufacturing Oracle GEMMS

Oracle ERP Solutions 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 採購作業 收料作業 生產指示 Discrete Repetitive Flow Project 生產指示 Discrete Repetitive Flow Project 生產發料 生產控制 製程移轉 生產控制 製程移轉 生產入庫 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 應收帳款 立帳 應收帳款 立帳 收款作業 票據管理 成本管理 主需求排程 MDS 主需求排程 MDS 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 Orders Processing Orders DB Warehousing DB Warehousing Management Transportation Management Orders Delivery Customer Service Distribution Management ATP Available to Promise Master Production Schedule Demand Planning Sales & Distribution Supply Planning Procurement Purchase DB Parts DB Inventory Management Shop Floor Control Manufacturing Execution Equipment Control Operations Scheduling WIP DB SPC DB Quality Management Plant Maintenance Customer Finance Control Administration EIS / DSS HR Development Personnel DB Acc. DB Product Data Management CAD / CAE / CAx Production Engineering Process Design BOM DB Facility DB Supplier Materials Planning Production Planing & Scheduling Logistics Supporting Product/Process Development 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 Orders Processing ERP Orders DB Warehousing DB Warehousing Management Transportation Management Orders Delivery ERP Customer Service ERP Distribution Management ATP ERP SCP / MPS ERP Demand Planning ERP Supply Planning Procurement ERP Purchase DB Parts DB Inventory Management ERP Shop Floor Control MES ERP Equipment Control Operations Scheduling WIP DB SPC DB QM ERP PM ERP Customer FI & CO ERP Administration ERP EIS / DSS ERP HR ERP Personnel DB Acc. DB PDM ERP CAD / CAE / CAx Production Engineering Process Design BOM DB Facility DB Supplier MPR ERP Factory Planning Sales & Distribution Logistics Supporting Product/Process Development 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-Business Goal: 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. Order Management Demand Capture Configuration Mgmt. Advanced Pricing Global ATP Release Management Flexible Workflow Object-based Architecture Inventory Management

Oracle Order Entry Oracle Receivables Oracle Inventory Oracle Inventory Reservations Available to Promise Order Fulfillment / Inventory Update Automated Bill Structures Invoices Credit Memos How It Fits In - Manufacturing and Distribution Internal Requisitions / Drop Shipment Customers Credit Profiles Oracle Work in Process Oracle Bills of Material Oracle Bills of Material Oracle Order Entry Oracle Order Entry Discrete Work Orders Demand Oracle Master Scheduling Oracle Master Scheduling Oracle Purchasing ATO Configured Items

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, Training & Event Management, Recruitment, Time Management, Incentive Wages, Payroll, Travel, Personal Development. Financial Management Investment Management, Cash Management, Depreciation 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 (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 Application Implementation Methodology

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

資訊系統專案成功比率 Source: Standish Group International, Inc

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-House Training On-Site Training 應用軟體之使用 應用軟體導入 規劃規劃 建檔建檔 上線上線 ERP 導入專案 導入協助導入協助 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 Software Vendor Consulting Firm 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 製造顧問 供銷顧問 技術顧問 財務小組負責人 製造小組負責人 供銷小組負責人 技術小組負責人 Oracle PM 客戶 PM 教育訓練 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