Final Project A case study of The Real-Time Supply Chain System in Company I Group 2 Members: 923811 Angela 923824 Ivan 923831 Jimmy

Outline Introduction As-is Model Problems Discussion To-be Model Conclusion

Outline Introduction As-is Model Problems Discussion To-be Model Conclusion

Introduction Company I Challenge Purpose Real-Time Cycle Time 48hr → 24hr

Outline Introduction As-is Model Problems Discussion To-be Model Conclusion

Material Incoming Plan As-is Model Purchaser (Company I) Current Purchasing System SAP ERP Sys. Warehouse Supplier Material Incoming Plan (14D+10W+3M) EDI 830 Sales Dept. RUN MRP (00:00AM) Shortage List Manufacture Key-in SAP (Receiving Qty) Ready to deliver QI Process Warehouse (Qty) Pass

Material Incoming Plan As-is Model Purchaser (Company I) Current Purchasing System SAP ERP Sys. Warehouse Supplier Material Incoming Plan (14D+10W+3M) Sales Dept. RUN MRP (00:00AM) Shortage List Manufacture Key-in SAP (Receiving Qty) Ready to deliver QI Process Warehouse (Qty) Pass

Material Incoming Plan As-is Model Purchaser (Company I) Current Purchasing System SAP ERP Sys. Warehouse Supplier Material Incoming Plan (14D+10W+3M) Sales Dept. RUN MRP (00:00AM) Shortage List Manufacture Key-in SAP (Receiving Qty) Ready to deliver QI Process Warehouse (Qty) Pass

As-is Model Company I Customer PO Priority SAP DB I2 FP DB EDI 850 EDI 830 Customer PO Priority SAP DB I2 FP Company I Web Server EDI 850 EDI 830 DB Oracle, SQL…. Supplier

Outline Introduction As-is Model Problems Discussion To-be Model Conclusion

Problems Discussion Demand Accuracy Supplier Status Visibility Shipment Visibility IQC Status Visibility Two B2B Cycle Gap In the as-is model,we observed some problems about purchasing process and shipment. 珮嘉有無提到資訊的單向傳遞!!

Material Incoming Plan Demand Accuracy Purchaser (Company I) SAP ERP Sys. Current Purchasing System Warehouse Supplier RUN MRP (00:00 AM) Shortage List Material Incoming Plan (14D,10W,3M) Sales Dept. Ready to deliver New Sales Orders Production EDI Variance of Demand Key-in SAP (Receiving Qty) High level inventory QI Process The first is demand accuracy, Inventec runs MRP twice a day and send shortage list to supplier’s sales dept in the morning.But supplier didn’t key the shortage data into their MRP. They still deliver according to SO data. Because the demand is not stable, inventory have to raise up to cope with emergent order. So they has lots risk of inventory. Supplier can’t get PO information simultaneously Warehouse (Qty) Pass Manual communications

Problems Discussion Demand Accuracy Supplier Status Visibility Shipment Visibility IQC Status Visibility Two B2B Cycle Gap

Supplier Status Visibility Purchaser (Company I) SAP ERP Sys. Current Purchasing System Warehouse Supplier RUN MRP (00:00 AM) Shortage List Sales Dept. Material Incoming Plan (14D,10W,3M) Ready to deliver Raw Material Work Order Finish Good Purchaser doesn’t know the inventory and supplier’s production planning Order Inquiry New Sales Orders ? Key-in SAP (Receiving Qty) When Inventec meet customer’s inquiry,they can’t response rapidly, the reason is purchaser can’t handle the information of inventory and supplier’s production planning including raw material,work order and finish goods. The only way to check inventory is manual communication. 英業達是採用貨物寄存方式 consignment QI Process Warehouse (Qty) Pass Check inventory via phone

Problems Discussion Demand Accuracy Supplier Status Visibility Shipment Visibility IQC Status Visibility Two B2B Cycle Gap

Material Incoming Plan Shipment Visibility Purchaser (Company I) SAP ERP Sys. Current Purchasing System Warehouse Supplier RUN MRP (00:00 AM) Shortage List Sales Dept. Material Incoming Plan (14D,10W,3M) Information flow New sales orders Production EDI ? Where the Material Key-in SAP (Receiving Qty) Ready to deliver QI Process Only the one way to send information 因為資訊是屬於單向流通，所以採購人員無法即時得知貨物的出貨時間預計到達時間等等相關資料， on the web Can’t trade the state of materials in transit Out of control of the Production Planning. Quantity and arrival time Warehouse GR (Qty) Pass Manual communication

Problems Discussion Demand Accuracy Supplier Status Visibility Shipment Visibility IQC Status Visibility Two B2B Cycle Gap

Material Incoming Plan IQC Status Visibility Purchaser (Company I) SAP ERP Sys. Current Purchasing System Warehouse Supplier RUN MRP (00:00 AM) Shortage List Material Incoming Plan (14D,10W,3M) Sales dept. New sales orders QI Process EDI Key-in SAP (Receiving Qty) Ready to deliver Supplier can’t get the result of inspection in the real time QI Process IQC reject When purchaser reject the material, supplier can’t get the result of inspection in real-time.It is able to cause the replenishment Delay. Unknown the rejected quantity Extra replenishment Result in the increasing of lead time Warehouse (Qty) Pass Replenishment Delay Manual communication

Problems Discussion Demand Accuracy Supplier Status Visibility Shipment Visibility IQC Status Visibility Two B2B Cycle Gap

Material Incoming Plan Two B2B Cycle Gap Current Purchasing System SAP ERP Sys. Warehouse Supplier Shortage List Sales dept. RUN MRP (00:00 AM) Material Incoming Plan (14D,10W,3M) RUN MRP (afternoon) Unchanged data Update MRP Data ? Gap Key-in SAP (Receiving Qty) Ready to deliver (In Transit) First receiving Material Incoming Plan (14D, 10W, 3M) Ready to deliver Shortage list (afternoon) Double Count If purchaser did’t key in inspection result to update MRP data at real-time, MRP sys. Runs next time with the unchanged data, so it makes double account. After a long term, the shortage list will be wrong. Let’s reconsider the first problem,the reason that the supplier deliver by PO rather than MRP data is the Gap. 再次補貨時間delay 可能會因為運送時間過長而導致double Second receiving Key-in SAP (Qty)

To-Be Purchasing Process Model (1)Forecast and Forecast Commitment Process (2)Pull Signal Status Process (3)Hub Inventory Status Process Inventec tries to analysis current purchasing process,finds the problems and proposes three directions to improve The first one is Forecast and Forecast Commit process The second one is Pull Signal Status Process The last one is Hub Inventory Status Process construct the Real-Time Supply Chain System for exchanging the information

Data Flow Company I Supplier Forecast PO Status Pull Signal QI Status Real-Time Supply Chain System Company I Supplier Forecast (14D,10W+3M) Forecast Forecast Commit Pull Signal with lot# Order Commit (ETD/ETA) PO Status Actual delivery time PO Status Pull Signal PO Bal Qty / Invoice Price PO Qty / Price Variance QI Status Received qty, rejected qty Product,WIP,raw material Less than Safety inventory Buffer Policy PO status Delivery status

(1)Forecast and Forecast Commitment Process Purchase Dept. Warehouse SAP MRP System Real-Time Supply Chain System Supplier ① Run MRP Consolidate Demand 6 M Forecast (14D,10W,3M) Know whether the supplier can satisfy the future demand or not. New SO ② ERP Feedback how many demands they can commit according to MPS Forecast Commit XML Update MRP Data In the to-be process,Inventec would consolidate the demands and pass this information to supplier’s ERP database directly by XML. This XML format is predefined by both sides.Then, the supplier feed back how much forecasting demand they can commit according to MPS.And this information can let Inventec know whether the supplier can satisfy the future demand or not. If the supplier can’t, find a way to solve the problem in advance.Through sharing forecasting demand,the suppliers can reduce the safety inventories.On the other hand,Inventec can also prevent the material shortage in advance . Prevent the shortage in advance. Reduce the safety inventory

(2)Pull Signal Status Process Purchase Dept. Warehouse SAP MRP System Real-Time Supply Chain System Supplier Update MRP System ② Expected Time to Deliver (ETD) Expected Time to Arrive (ETA) Expected delivery quantity Prepare for receiving check Key-in SAP Received QTY ERP Pull Signal Status Warehouse Key-in SAP QI Process Defective items Rejected QTY Quantity of goods and the departing time Prepare shipment Bar Code Prepare replenishment ① In the pull signal status process, ETD and ETA would be passed to Inventec. When the goods are going to being shipped, the information of the goods are sent to ERP database by barcode.And this information would be passed to Inventec to update the data of MRP system.Besides, it also notify to prepare for receiving goods. When the goods arrive,the staffs check the quantity and key the received qty into SAP. Then, inspect the quality of the goods. If there are defective items, this information can pass to supplier.And the supplier can prepare replenishment at the same time.This process make production planning and replenishment more effectively. Inventec can control the in-transit qty. ③ This mechanism makes replenishment more efficient Company I can get the in-transit qty, ETD, ETA and so on.

(3)Hub Inventory Status Process Purchase Dept. Warehouse SAP MRP System Real-Time Supply Chain System Supplier SFC system Warehouse  Company I monitors the inventory to prevent the shortage.  This can also help Inventec response customer’s inquiry quickly. Raw Material WIP, Product Mapping PO# and SO# Mapping Table ERP know the status of appointed key component Product,WIP, Raw Material, and the status of PO Query Product、WIP、Raw Material Hub Inventory Status Firstly,they determine which key component should be included.Through warehouse and SFC system ,collect the data of product,raw material, and WIP.Then,send to ERP database and pass to real-time supply chain system.Inventec can inquire the inventory of appointed key component including final item, raw material and WIP. Besides, use the mapping table,Inventec is also able to trace the status of PO.

The Architecture of Real-Time Supply Chain System Aggregation Server IIS,Mail Server,etc. Hub Server User Xagent Server SAP XAgent Client SAP DB SAP App Server Firewall Proxy Server internet JDBC XAgent Oracle JDBC Oracle Oracle ERP Existing system New system Company I Supplier Integrate non-homogeneous OS and DB XML query Control Xagents to collect data from the DB and update data to the corresponding fields this is the whole architecture of real-time supply chain system.The aggregation server is a commander.It controls the Xagent to collect and update data from Inventec's and the supplier's database.The users inquery from aggregate server to get the information further, the information flow can divide into two parts.One is the regular information flow and the other is irregular information flow.

Information Flow Xagent links to the database and collect the data a. Forecasting Plan b. Actual Demand Plan c. Material # Xagent links to the database and collect the data Xagent XML SAP Xagent sends the data into the supplier’s database directly Agg. Server Xagent Oracle Temp Xagent Analysis Report a. on-hand qty b. WIP qty c. Allocate forecast qty d. Commitment plan e. Item# cross-reference The regular information flow. It mainly contains the forecast and forecast commit. The forecasting demand would be collected by Xagent. Through time trigger, Xagent link to DB, collect data and update data to corresponding fields. Then, pass these information to the aggregation server ,save in the temp database and send into the supplier’s database. the supplier feed back how much forecasting demand they can commit according to MPS. Inventec can review commitment data on web to come out shortage Also, the supplier feedbacks the information by Xagent Time Trigger ex:MRP Event Trigger Pulling (when data change)

Expected Benefit 1. Prevents the shortage in advance 2. Makes replenishment more efficient 3. Gets the in-transit qty, ETD, ETA and so on 4. Decreases cycle time 5. Reduces supplier’s safety inventory 6. Improves customer service

Conclusion In the project, Company I and the supplier try to plan collaboratively ,find out the problem timely, and solve the problem in advance. And they use the real-time supply chain system to exchange the information This project is proceeding now. Success of this project depends on the cooperation of both sides in the managerial and technical aspects. Then, it can make the information system align around business processes.