laboratory for machine tools and production engineering€¦ · erp systems are an advancement of...

Production Management B – Spring Semester 2009 Lecture 01

IT-Systems in Production Management L01 P. 0

Production Management B

Lecture 01IT-Systems in Production Management

Organisation:Dipl.-Ing. M. RittstiegSteinbachstr. 53BRaum 516Tel.: [email protected]

Laboratory for Machine Tools and Production Engineering

Chair of Production EngineeringProf. Dr.-Ing. Dipl.-Wirt. Ing. G. Schuh

Chair of Production ManagementProf. Dr.-Ing. A. Kampker



Index:

Schedule Glossary Page 3Target of this lecture Page 5Lecture

Development of IT-Systems in PM Page 6Enterprise Resource Planning Page 11Supply Chain Management Page 23Customer Relationship Management Page 31Product Lifecycle Management Page 37Final statement Page 42

Bibliography Page 43



Schedule:

No. Date Responsible

L1 27.04.2009 Mr. Rittstieg 0241 80 20396

L2 04.05.2009 Mr. Bartoscheck 0241 80 28203

L3 18.05.2009 Mr. Fuchs 0241 80 26265

L4 25.05.2009 Mr. Reil 0241 80 27964

L5 08.06.2009 Mr. Potente 0241 80 27387

L6 15.06.2009 Mr. Bauhoff (fir) 0241 47705-439

L7 22.06.2009 Mr. Hoeschen 0241 80 27382

L8 29.06.2009 Mr. Jung 0241 80 27392

L9 06.07.2009 Mr. Rauhut 0241 80 28206

L11 13.07.2009 Mr. Koch 0241 80 25321

L12 20.07.2009 Mr. Cuber (fir) 0241 47705-420

Customer Relations Management

Enterprise Ressource Planning I

Enterprise Ressource Planning II

Topic

IT in Production Management

Enterprise Ressource Planning III

Product Lifecycle Management II

Digitale Plant Planning and Simulation

Business Engineering - Method of selecting IT-Systems (Trovarit)

Supply Chain Management I

Supply Chain Management II

Product Lifecycle Management I



Glossary for the lecture (I/II):

Enterprise Resource Planning (ERP):ERP is an holistic, process orientated software solution, which fulfills the tasks of production planning and control. It provides necessary information for all bordered divisions.

Supply Chain Management (SCM): SCM means the communication of all logistic procedures and functions within the supply chain from the supplier to the consumer with the objective to optimize customer service and minimize costs at the same time. SCM systems connect the entire (enterprise internal and external) supply chain from the raw material supplier up to the final customer, by exchanging all relevant data between the members of the chain.

Customer Relationship Management (CRM):CRM means the holistic relationship of an enterprise with its customers. Communication -, distribution- and supply-oriented policy are not further detached from each other. They have to be aligned at the customer needs in order for a higher customer satisfaction, which represents a criterion for the customer loyalty and thus the enterprise value.

Product Lifecycle Management (PLM):PLM covers the administration and controlling of all product data - along the complete life cycle and the extended logistics chain - from the construction and production over the distribution up to the maintenance. The integrated PLM offers access to all product and process data of the entire life cycle of a product.



Glossary for the lecture (II/II):

Product Data Management (PDM):PDM is a system for product data management. The aim is that all involved parties (e.g. suppliers and manufacturer or several construction engineers) work with the current versions and variants of a complex product. PDM is the superior organization instrument, which can be split into data and process management. Process management goes beyond the passive data management. It describes, manages and controls the interaction between actions and data from events. Data management covers the administration of the data of all application systems. In addition it distributes the data to the users and their right of access.

Product planning and control (PPS):Production planning plans the actions during the production for a certain time in advance under given basic conditions and implementation of given aims.

Workflow-Management: The Workflow management organizes and controls the information flow between the involved places and the processes in an enterprise.



Target of this lecture:

The lecture „IT-Systems in Production Management“ gives a broad overview of the most common IT-Systems in production engineering. The historic development as well as the interfaces between the IT-Systems will be addressed in the first part of the lecture. Afterwards an overview regarding definition, goals as well as main criteria of each type of IT-System will be given. Therefore this lecture can be regarded as a general forecast of the topics addressed in detail in the following lectures of PM B.



Seite 6© WZL/Fraunhofer IPT

Development of the business world under the influence of IT-systems

Enterprise Resource Planning

Cost reduction and efficiency by the integration

of business processes

Cooperation between

enterprises

Efficiency increase by cooperation of the

supply chains

Cooperation between virtual

communities

Added value by co-operation in virtual

communities

Notes:

The integration of IT-systems into the commercial world enables the companies not only interior but also cross-company flow of information and data interchange. These are the conditions for cooperation and virtual networks.



Notes:

- Until 1970 there has been only a technological application. An integration in an IT-system did not take place because of the lacking possibilities.

- Until 1985 the first automated processes has been developed for different sections in a company. An export of machine control data and the integration of this data in a process control application has been possible.

- The SCM was able to create the first connection of the automated processes.- PLM and CRM has been the following optimized stages of development.

Total sales: 2002 4,9 (bn. €) 2006 6,1 (bn. €) (Lünendonk)Total sales: 2002 4,9 (bn. €) 2006 6,1 (bn. €) (Lünendonk)Total sales: 2002 4,9 (bn. €) 2006 6,1 (bn. €) (Lünendonk)Total sales: 2002 4,9 (bn. €) 2006 6,1 (bn. €) (Lünendonk)Total sales: 2002 4,9 (bn. €) 2006 6,1 (bn. €) (Lünendonk)


Past and present

2000 1999

Verk

auf

Prod

uktio

n

Entw

ickl

ung

Fina

nz

…..

Customer Relationship Management (CRM)

Supply Chain Management (SCM)

Product Lifecycle Management (PLM)

Zei

Total sales: 2000 9,7 (bn. €) 1999 8,1 (bn. €) (Müller-Merbach 2002)

Sale

s

Prod

uctio

n

Dev

elop

men

tFi

nanc

e

…

Customer Relationship Management (CRM)

Supply Chain Management (SCM)


Tim

e

Development of technical and scientific applications until approx. 1970

Automated until approx. 1985

Currentintegrations and optimizations

Total Sales: 2002 = 4,9 bn. € vs. 2006 = 6,1 bn. € (Source: Lünendonk 2007)

Company results of the 15 largest standard software providers in Germany




Market penetration and achievement of objectives

1.8

2

2.2

2.4

2.6

2.8

3

SCM CRM e- Business ERP

Da ERP bei den meistenAnbietern der Basisbaustein

ist, hat es auch die größteDurchdringung

0%

20%

40%

60%

80%

100%


0%

20%

40%

60%

80%

100%


0%

20%

40%

60%

80%

100%


Market penetration

1.8

2

2.2

2.4

2.6

2.8

3


Achievement of objectives – from individually self defined objectives

1.8

2

2.2

2.4

2.6

2.8

3


1.8

2

2.2

2.4

2.6

2.8

3


ERP schneidet vergleichsweise schlecht ab, da:

1. Viele ERP Systeme seit vielen Jahren imEinsatz und daher weniger benutzerfreundlichals die neuen SCM und CRM Systeme sind

2. Wegen der durchgreifenden und

ERP performance is quite poor because:

1. Many ERP systems are already in use for many years which makes them less user friendly than newer SCM and CRM systems

2. Because of the drastic and regularized effect on nearly all processes, ERP is evaluated particularly critically

Da ERP bei den meistenAnbietern der Basisbaustein

ist, hat es auch die größteDurchdringung

Since ERP is the basic component from many software companies, it

has also the largest penetration

Source: Helbing Management Consulting

Notes:




IT in production management

SCM

ERP

CRM

PLM

Enterprise Cus

tom

ers

Resources

Supp

liers

Products

Notes:

IT-Systems create the interface between:- Companies and products via Product Lifecycle Management (PLM)- Companies and customers via Customer Relationship Management (CRM)- Companies and resources via Enterprise Resource Planning (ERP)- Companies and distributors via Supply Chain Management (SCM)




Interaction: Enterprise, suppliers, customers, products

PLM

CRM

SCM

Production CustomersSuppliers

ERP

Notes:

The ERP-system generates the basic component all further systems rely on. Basic data which other IT-systems make use of are deposited in ERP-systems. ERP only deals with company-interior material flows. SCM expands the viewpoint on supplying industries and it also assimilates the flow of material with the supplying industries to ascertain a frictionless logistic-chain. CRM integrates in addition to ERP the customers processes. CRM tries to merge the customer knowledge into the in-house knowledge management and it also tries to increase the customer satisfaction. PLM puts its focus on the main processes from a cross section point of view and it includes all other processes. It enables all users from the entire life cycle of a product to recall the data.




IT im Produktionsmanagement – Enterprise Resource Planning

ERP is an holistic, process orientated software solution, which manages, controls and evaluates the business activities. ERP systems are an advancement of the production planning & control systems (PPS) and the material requirements planning (MRP).

Main features

Objectives

Definition

• Solutions try to cover and illustrate information flows (capital, production, input/output etc.) in the enterprise as a whole

• Detection of bottlenecks• Optimal workload of all resources - personal, machine, material, capital

• Supports the departments production, distribution, logistic, human resources, administration

• Large quantity of given basic functionality

• Presents the basis for further management programs

Anmerkungen zur Folie:

Top 3 ERP-Softwareanbieter nach umsatzbezogenem Marktanteil in Deutschland im Jahr 2006:- SAP (54,8%)- Infor (5,5%)- Microsoft (3,8%)

Quelle: http://www.computerwoche.de/top_100/software/546025




Influencing variables during the production planning and control

Human resourcesQualification Flexible working hoursShift systemNumber of spare HR

ProductNumber of parts/variants Geometrical similarity of products Number of operationsTime/control of operationsConnection of operationsQuantities/yearProduction list

OrganizationManufacturing organization (group production, shop fabrication, flow production)Structure of the material flowNumber of breakdownsOrganization of the maintenance

TechnologyAutomation levelPortion of manual activitiesNumber of working stationsSubstitution levelNumber of pallets, fixturesNumber of transport units

Determining factors for the design of the production planning and -control

Notes:




Functional overview of an ERP system

Online Service

Online Personali

sierung

Auftrags-ausführung

Online Verkauf/ Katalog

Online service

Online Persona-lisation

Job execution

Online distribution/ Catalogue

Bill/ paymentEmployee Self Service

Finances

Sales & Marketing

KnowledgeMgmt./

Research

CollaborativeApplications

Logistic/ production

StrategicEnterprise

Mgmt.

Human Resource

CollaborativePlanning & Forecasting

Purchase

Bill/ payment

Cus

tom

er

Supp

lier

Employees

Partners

Notes:

This picture shows some exemplary function modules of ERP. You can also see the connection to customers, distributors, employees and business partners.




Fluctuation of requirements

Steering criteria of the ERP

Spreading of cycle time

Delivery time

Delivery-/ cycle time

Shortest delivery time

Medium cycle time

Criterion: Time

Planning tolerance

Cycle time spreading

Criterion: Spreading Cycle time spreading

Cycle time

Planning tolerance

Fluctuation of requirements

Capacity flexibility

Time

Criterion: Amount Maximum capacity

Minimal Capacity

Tolerance requirements

Is the planning tolerance (external view) smaller than the realisable cycle time spreading (internal view)?

Speed requirements

Require heterogeneous delivery times (external view) heterogeneous cycle times (internal view)?

Flexibility requirements

Do the fluctuation of requirements (external view) exceed the capacity flexibility (internal view)?

Source: Wiendahl, IFA

Freq

uenc

yPi

eces

/ day

Freq

uenc

y

Notes:

A main focus of an ERP-system is to optimize speed, flexibility and tolerance. The four basic factors of optimization are: adherence to delivery dates, delivery period, workload and capital commitment.




Ideal business curve

Source: Wiendahl, IFA

Wahl des optimalen Betriebspunktes

?Unterlastbereich

bergangsbereichÜberlastbereich

Umlauf-bestand

DLZ

DLZ

je Leistungseinheit

DLZLow work in progress

Low cycle time

Low cost per manufacturing unit

High adherence to delivery dates

High workload

Wahl des optimalen Betriebspunktes

?Underload range

Transition rangeOverload range

Work in progress

DLZ

DLZ

per manufacturing unit

DLZ

Notes:

The ideal operating characteristic curve is situated in the transition range between an underloadand overload range. The underload range is characterized by the fact that the middle capacity expressed in hours per operating calendar date is low, which is equivalent to an unexploited output potential. The overload range is characterized by the fact that the middle capacity is totally exhausted, whereas the need is still increasing. The cycle time is rising, due to the distinction of the machines efficiency and the fact that unexpected events can not be cushioned.




Tasks of the ERP in the order procedure

Programm-planung

Program-planning

Material requirement

planning

und-

Prognosis

Production planning

Manufacturing orders

Schedule and capacity planning

Incoming orders

Customer ordersJob order

management

Shipped orders

Available stock inventory

Planned incomings and leavings

Planned incomings and leavingsfrom end products

Inventory control

Available stocks

Organisation of machine workload

from components

Purchase ordersPurchase

Stock incomings Stock incomings

Job release Operation scheduling

Feedback

Manufacturing

Notes:

This picture shows the typical controlling of an ERP system. In the following pictures the functions of the individual blocks are described in detail.




Tasks in the order procedure

Programm-planung

Program-planning


planning

und-

Prognosis

Production planning



Incoming orders

Customers ordersJob order

management

Shipped orders


Planed incomings and leavings

Planed incomings and leavingsfrom end products

Inventory control

Available stocks

Purchase orders

Job release

The program planning specifies the production of the product type and quantities in each planning period.

Demand prognosis, customer jobs and capacity load are required.

Planed output of products, spare parts, saleable assembly groups and component parts are results.

No exact capacity adjustment and exact schedules required.

Notes:





Program-planning


planning

Prognosis

Production planning



Incoming orders


management

Shipped orders




Inventory control

Available stocks


From components


Stock incomings Stock

incomings

Job releaseScheduling

Feedback

Manufacturing

Target data: In the production program planning and material requirement planning planed incomings and leavings of the end products and components

Real data: The determined additions to stocks from the manufacturing and purchase

Compare of target data and real data in order to calculate the available stock levels.

Notes:





Program-planning


planning

Prognosis

Production planning



Incoming orders


management

Shipped orders




Inventory control

Available stocks


From components



Job releaseScheduling

Feedback

Manufacturing

MRP (material requirement planning)

Parts lists are evaluated in order to calculate the demand of all intermediate products, raw materials and purchase parts.

Purchase orders for the requirements are created.

Production orders are send to the schedule and capacity planning.

Notes:





Program-planning


planning

Prognosis

Production planning



Incoming orders


management

Shipped orders




Inventory control

Available stocks


From components




Feedback

Manufacturing

Calculation of cycle time:

Backward scheduling:On the basis of the latest required date it is determined, when the individual process steps of an order have to be made at the latest.

Forward scheduling:The earliest start and end dates are determined.

Capacity scheduling:In case of deviations the capacity requirements will be adjusted with the available capacity

Notes:





Program-planning


planning

Prognosis

Production planning



Incoming orders


management

Shipped orders




Inventory control

Available stocks


From components




Feedback

Manufacturing

The execution of the terminated orders on the individual machines are made in the context of the operation scheduling.

The operation scheduling reacts extremely sensitive to data changes and is therefore done very shortly.

Notes:





Program-planning


planning

Prognosis

Production planning



Incoming orders


management

Shipped orders




Inventory control

Available stocks


From components




Feedback

Manufacturing

The organisation of machine workloads as input

Feedback after production to the operation schedule

Feedback after production to the inventory control

Notes:




IT in production management – Supply Chain Management

Main features

Objectives

DefinitionSupply Chain Management is the integral planning and controlling of processes over the whole supply chain. Even the suppliers are integrated to achieve optimal customer satisfaction.

• Optimization of processes and operations in logistics (= all activities which are connected with the allocation, storage and transport of goods)

• Emphasis is on the improvement of the information flow and utilization of resources between all chain links

• Interaction between all in the production involved departments

• Material- and information flows are considered

• Whole value chain is considered (cross-company)







Functional overview SCM (example modules)

Planning &Forecasting

Just in TimecontrolInventory

Logistic

Purchase Supply-termination

Reservation systems

Production order

management Calculation

Supply Chain Management

Notes:

The logistics, i.e. the organization of shipment, the delivery time limitation and the planning and forecasting in connection with the analysis of available resources represents fields of the Supply Chain Management (SCM).




IT-Systems in SCM: Central success factors

„Networked“ SCM =web based, cross-company

cooperation in the supply chain

Aim: Information exchange in real-time to coordinate and synchronise needs and supplies over the whole network

Result: Connection of enterprises to linked, integrated supply chains

Supply Chain Strategic Alignment

Supply Chain Planning

Collaboration

Supply Chain Execution

Collaboration

Supply Chain IT-Support

Supply Chain Information Availability

Supply Chain Communication

Supply Chain Know-

How

Supply Chain Skill

Sharing

Supply Chain (Re-)

Configuration Flexibility

1

34

5

2

CollaborationReactivity

Coordination

Notes:

On the basis of the three central factors of success - collaboration, coordination and reactivity -an intense cross-company cooperation is possible in the Supply Chain:

CollaborationExact coordination of production and transport between the individual levels

CoordinationReal-time and complete communication of demands over the entire delivery chain.

ReactivityPromptly transformation of the incoming orders via internal calculation of requirements, dispatching in production and depending on it the passing on to purchase or distributor.

Networked SCM is a progression of the SCM concept. Essentially it is based on the e-enabled Supply Chain Management (SCM), as well as on the Supplier Relationship Management (SRM). The described requests should be transferred in an IT system referring to SCM.




SCM - Combination options between capacity and competence management

Capacity-management

Competence-management

Multiple CapacityIn-/Outsourcing

MultipleIn-/Outsourcing

Multiple Sourcing

Selective CapacityIn-/Outsourcing

SelectiveIn-/Outsourcing

Selective Sourcing

Non-Sourcing Single-Outsourcing Single-Sourcing

P1 P2 P3 P4 P5

P1 P2 P3 P4 P5

P1 P2 P3 P4 P5

P1 P2 P3 P4 P5 P1 P2 P3 P4 P5

P1 P2 P3 P4 P5 P1 P2 P3 P4 P5

P1 P2 P3 P4 P5

P1 P2 P3 P4 P5

Ui

U1

Ui

U1

Ui

U1

Ui

U1

Ui

U1

Ui

U1

Ui

U1

Ui

U1

Ui

U1

Optimal organization in the conflict between capacity and competence!

Notes:

On the basis of competencies and capacities the optimal sourcing configuration can be determined.

The Supply Chain Management must be adapted regarding this configuration, as well as offering sufficiently flexibility for modifications of these configurations.




Bullwhip-Effect

t tt

Order quantity/

t

End UserRetailer

Orders

t tt

Stocks

t

Wholesaler Manufacturer

Order quantity

Order quantity/Stocks

Order quantity/Stocks

Order quantity

Stocks

Shown for the first time by Jay Forrester (MIT) in the 60's

A small increase of the final customer’s demand leads to a disproportionate and delayed rise of the order quantity of the retailer

Higher demand continues increasing itself along the logistics chain

Notes:

If the final consumers needs increases the retailers stocks are getting smaller. The retailer has to enlarge his order quantity to fill up his stocks again. He has to adapt his order quantity depending on the current demand and thus his future inventory, which is larger than the final consumers needs. This effect is called the Bullwhip-Effect. Along the logistics-chain this effect amplifies itself. A further factor according to this effect is the biased demand, which may be created by offers or some accretion of discount.




Reasons for the bullwhip-effect

Lack of coordination between participants

Various intensifying

factors

Bullwhip

Objective: Exchange of real-time sales data with networked IT-systems in the SC

Objective

Temporally delayed

information flowLocal view of

the participants

Enterprise-relevant sales information is passed delayed and distorted to the next stage of the supply chain

Special offers, quantity discounts and bundle orders distort the current demand

Optimization of individual stages does not optimize inevitably the whole supply chain

Notes:




Process transparency and process optimization via SCM

Spareon schedule

fastcheap

CustomersJobs

Supply Chain

Management

Termintreu?Schnell? Kostengünstig?

Jobs

Spare

Deliveries

When?Cost?

Supplier CustomersSCM for the whole optimum in the

enterprise...Removal of lags and bottlenecksAvoidance of over supplyingAdherence the date of delivery

Storage

Adherence to delivery dates

Cycle time

Return

Productivity

Culture

Source: WASSERMANN AG

Notes:




The Supply Chain Vision

Each partners gets directly the actual market demand

Each partner “brakes” and “accelerates” at the same time during synchronous processes (no Bullwhip)

Sub supplier Supplier

Sub supplier Supplier

Competence-partner

Information flow

Material flow

Supply ChainManagement

+ SC-SimulationCustomer

Customer

Source: WASSERMANN AG

Notes:

An enterprise-spreading system of Supply Chain Management, supplies data in real-time to the suppliers and subcontractors. This enables early planning and reduces negative effects such as the Bullwhip-Effect.




Main features

Objectives

Definition

IT in production management – Customer Relationship Management

CRM is an customer-oriented business philosophy. It tries with the help of modern information and communication technologies to build up long term profitable customer relationships by holistic and differentiated marketing-, sales- and service concepts. (Source: Hettich/Hipper/Wilde 2001)

• Know-How: Understand markets and customers

• Sell: Win new customers

• Target: Develop service offering

• Service: Rise customer loyalty

• „One Face to the Customer“







Objectives of CRM

Know-HowUnderstand markets and

customer

ServiceRise

customer loyalty

Target Develop

service offers

SellWin

customers

CRM

Performance- and customer systemsHow are performance systems build and how fits a customer system to that?

Better attainment of customer needs„How are homogeneous clusters for needs are build?“

Industrial services„How much differentiation offers the product, how much differentiation offers the service?“

Better attainment of customer needs„Which capabilities are worth for the customers?“

Notes:

Know-How: „Understand markets and customers“In the future it is not sufficient anymore to address the basic needs of the customer, moreover it is necessary to satisfy the latent wishes of the customer, which he might not even be able to express.

Sell: „Win customers“The advantages of the economies of scale can be used within homogenous clusters. It is important to notice, that some existing rules for clustering are not valid anymore (e.g. income clusters are less commonly used).

Target: „Development of services“Service systems enables the producer to offer customer focused product packages via the combination of physical products and services.

Service: „Rise customer loyalty“The customer loyalty can be improved by offering services. Furthermore they are a good way to differentiate oneself from competitors.




Profitability of individual customer groups - Concentration on profitable customers

Central objective of the CRM concept is the focusing on customers, who appear profitable on a long-term basis

Share of Wallet (portion of the purchasing power of a customer group) has higher priority than the increase of the market share

Focusing on the right customer groups

Most enterprises obtain a large part of their profit with only few customers. On the other side is a large customer group, which has an small or even negative profit contribution.

Customer Lifetime Value in %

Customer with positive CLV contribution

Customer with negative CLV contribution

100

intended reduction of the customer base

100

Customer in %

Desired situation

Actual situation

Source: Helmke, Dangelmaier 2001

Notes:

The calculation of the Customer Lifetime Value (CLV) seems to be easier or more precise with the quantitative, instead of the qualitative parameters. The reason is the relevance of future events within the customers life cycle. The internal interest rate should correspond to the customer-relationships capital costs. It results from considerations of net return risks for the decrease of the systematic risk of a customer relationship. The in- or out-payment surplus can be determined by the turnovers or costs, which are allocable to the respective customers in this period. The capital value method is important, since it stresses the dynamic view of the CLV and thus the CLV-managements measures. To a company these measures are solely profitable on a middle to long-term basis. According to the CLV management the present value of the Customer relationship represents a suitable control parameter. However an exact calculation of the customer value is not that striking referring to a CLV Management application, but the production of a support in decision making. Therefore the possibility of classification in customer groups with low, middle and high customer value would already be a basis for marketing activities. After all the CLVs qualitative parameters should not be neglected. With consideration of empirical values and respective probabilities of entrance these qualitative parameters should be multiplied.




Targets for costs, customer value/ Value-to-Customer and proficiency level

Expansion ReductionOptimum

Costs

Customer value = Willingness to pay the price

Target profit

Target costs

Diversity,technical proficiency level

Source: Simon Kucher und Partners

Notes:

Product and pricing strategy start with the development. It is not solely about offering technically maximal output, but the level of output should be adjusted to the customers benefit – neither too low nor too high. The integrated customer's benefits and costs are essential referring to technically demanding products. This is possible with e.g. a Target-Value-Costing approach. Due to each accomplished characteristic of capacity target use and target costs should be uniquely derived.




Functional overview CRM (example modules)

Onlineservice

Onlinesales

Customer-data sheet

Service

Sales Marketing Customer

Complaint-management

Call center

Customer Relationsship Management

Notes:

The major tasks of CRM are shown on the represented fields. They improve the comprehension of customer needs and create a competitive advantage.




Emotional profile and customer satisfaction

Win customers with CRM and services

Integrated project management

Integration of services

Services

Range of goods

Product system

Product

Modular enlargement

Periphery, spare parts

Service, maintenance, training

Choice of machine, adapt the machine

Start up management, final approval, Product attendance

Customer-days

Gen

eral

mar

ketin

g

Span

ned

mar

ketin

g

Indi

vidu

al m

arke

ting

Notes:

CRM is a major tool for marketing. Marketing is divided into: general marketing, segmented marketing and individual marketing. The specified tools can be assigned to the marketing forms and they should be covered by the CRM.




Main features

Objectives

DefinitionIT in production management – Product Lifecycle Management

PLM is the management and the controlling of all information concerning the product. It handles and contains information about the product from the development, first tests, production over the total service life and lifetime of a product.

• Information from the whole life cycle• Cost reduction for following products due to collected life cycle information• Elimination of geographical, organizational and technological borders

• The product/ the product life cycle and all connected tasks and processes are tasks of PLM







Potentials of PLM

Release

Product finding

Product realisation Launch Market

growthMaturing

timeMarket

saturation Descent

€

0

Realisation cost

Product profits not cumulated

Product sales

+

-Quality factors,reutilisations factors

Time-to-market-factor

Quality factors

Synergy factors

Sales factors

Course without PLM

Course with PLM

Notes:




Functional overview PLM (example modules)

Quality-management

Demandanalyse

Product-development (EDM/ PDM )

Controlling

Marketing Distribution Construction

Maintenancemanagement

Changemanagement

Product Lifecycle Management

Notes:




Task und structure of EDM/ PDM systemsEDM/ PDMGraphic user interface

Application-oriented functions:• Product data- and document management• Product structure- and configuration management• Classification- and part family management• Process- and workflow management• User management• Project data management

Application-overlapping functions

DBMS Adoption, configuration, administration

Inte

rfac

es

• Management of large data volumes

• Spanning over department and enterprise barriers

• A process control integrated handling

The main tasks of EDM -and PDM-systems is:

Functional modules

Notes:

Engineering Data Management (EDM) and Product Data Management (PDM) generate the basic modules of a PLM system.




Data base for EDM/ PDM systemsEDM/ PDM

Production program planningLong term planning

Commercial DVe.g.

personal accounting

Workshop control

Store Transpor-tation Handling Adaptation Assembling

CAD

PPSOrganisational, planning, jobs, appointments,

capacity

CAP

CAQ

CAM

BDE

DevelopmentConstruction

Technical planningNC-Programming

Technical machine control

Quality manage-

ment

Mainte-nance

Capture of production data

Goods input Shipping

Material flow

Notes:

Data stored in EDM and PDM systems mainly originates from the development, the quality management and the machine control.



Final statement:

Within the lecture „IT-Systems in Production Management“ an overview of the IT-Systems ERP, SCM, CRM, PLM, EDM and PDM has been provided. The systems‘ aims, characteristics and functions were described. Furthermore their interfaces were addressed as well as their individual potentials and limitations. The following lectures will focus these systems in detail.



Bibliography:

Benett: Komplexitätsmanagement in der Investitionsgüterindustrie. Dissertation der Universität St. Gallen; 1999

Busch; Dangelmaier: Integriertes Supply Chain Management. Gabler Verlag; 2002

Eversheim: Prozessorientierte Unternehmensorganisation. Konzepte und Methoden zur Gestaltung „schlanker“ Organisationen. 2. Aufl.; Springer Verlag; 1996

Eversheim et al.: Simultaneous Engineering. Springer Verlag; 1995

Eversheim; Schuh: Betriebshütte – Produktion und Management. Springer Verlag; 1996

Günther; Tempelmeier: Produktion und Logistik. 3. Auflage; Springer Verlag; 1997

Helmke; Dangelmaier: Effektives Customer Relationship Management – Instrumente, Einführungskonzepte, Organisation. 1. Auflage; Gabler Verlag; 2001

Hieber: Supply Chain Management. A Collaborative Performance Measurement Approach. 2. Auflage; vdf Hochschulverlag der ETH Zürich; 2001

Marbacher: Demand & Supply Chain Management. Verlag Paul Haupt; 2001

Porter: Competitive Advantage – Spitzenleistungen erreichen und behaupten. Campus Verlag; 1996

Scheer: Der computergesteuerte Industriebetrieb. Springer Verlag; 1990

Schuh; Schwenk: Produktkomplexität managen – Strategien, Methoden, Tools. HanserVerlag; 2001

Schuh; Wiendahl: Komplexität und Agilität, Steckt die Produktion in der Sackgasse? Springer Verlag, 1997

Production Management B – Spring Semester 2009

Customer Relationship Management L02 P. 0

Lecture 02





Lecture 02Customer Relationship Management (CRM)

Organisation:Dipl.-Ing. Dipl.-Wirt. Ing. Markus BartoschekSteinbachstr. 53BRaum 506Tel.: [email protected]



Lecture 02

Index:

Index page 1Schedule page 2Glossary page 3Target of this lecture page 4Lecture

Highlights and learning targets page 5Markets with asymmetric information page 6Definition and goals of Customer Relationship Management page 7Aims of CRM page 8Customer-oriented corporations – characteristics, determinants page 10CRM as differentiated customer development strategy page 11Context of customer retention and company value page 10Customer Lifetime Value page 13Profitability of individual customer groups page 14Profitability – Focus on profitable customers page 16Six steps for weighting customer requirements page 17Evaluation of customer clusters page 18Homogeneous solutions for homogeneous customer cluster page 19Performance- and customer-systems page 21Design of service systems page 22Method example: Conjoint-Analysis page 23Correlation between service and price page 24Objectives for costs, Customer benefit.... page 25Pricing page 26The look of an effective pricing-process page 27Pricing-Process vs. Cost reduction page 28Realising proximity to the customer with service systems page 30Customer retention with complementary services page 31IT-support for CRM systems page 33Architecture of eCRM systems page 34Final statement page 35Questions page 36

Bibliography page 37



Lecture 02

Schedule:


L1 27.04.2009 Mr. Rittstieg 0241 80 20396

L2 04.05.2009 Mr. Bartoscheck 0241 80 28203

L3 18.05.2009 Mr. Fuchs 0241 80 26265

L4 25.05.2009 Mr. Reil 0241 80 27964

L5 08.06.2009 Mr. Potente 0241 80 27387

L6 15.06.2009 Mr. Bauhoff (fir) 0241 47705-439

L7 22.06.2009 Mr. Hoeschen 0241 80 27382

L8 29.06.2009 Mr. Jung 0241 80 27392

L9 06.07.2009 Mr. Rauhut 0241 80 28206

L11 13.07.2009 Mr. Koch 0241 80 25321

L12 20.07.2009 Mr. Cuber (fir) 0241 47705-420




Topic











Lecture 02

Glossary:

Customer Relationship Management (CRM) is the english expression for the administration of the customer relationships. The main aim of the CRM is the initialisation, the care and if necessary the recovery of customer relations.

The Conjoint-Analysis is a complex, statistically supported method, which enables an optimal alignment of products or product concepts on the market.

Scenarios are future trend schemes for an open or defined point in time.

Earning = revenues – costs

Revenues = all cash receipts of a company that are generated through sales of goods or services.

Stimuli = bundle of attribute characteristics



Lecture 02


Crisis periods are always times, in which organizations concentrate particularly on the important business values. In former times it seemed that the investmentinto new technologies, the development of even smarter products or the additional purchase of different companies alone determined the value of an enterprise. In the meantime companies realized the simple truth that also satisfied and fruitful customers are an important factor of success. Thus the systematic approach to the Customer Relationship Management (CRM) moves into focus of the strategic and integrative management.

For a successful Customer Relationship Management the processes of selling, marketing, services, personnel management, the account system and finances all have to be considered. The operational arrangement of these processes, with a clear focus on the customer, becomes very important for the long-term perspective.

Especially the sales activities – as a connecting element between customers andthe enterprise - are confronted with new challenges such as the increase of profitability of specific customer groups, multi-channel management and strategic account management.

Therefore the sales department should not act isolated. The third customer-orientated function - the service - represents an important instrument for the customer management and the increase of sales and revenues. Concepts, activities and service measures have to be focused again on what they used torepresent in the first way – developing customer benefits.

The target of this lecture is to present methods for the market and customer segmentation and to show how to adjust the product programme to the customer system.



Lecture 02


Highlights and learning targets

How to identify reliable customer- and market segments?

How to adjust the product- and service programme to the determined customer- and market segments?

How to methodically analyse customer demands and how to configure the products on their feature level appropriately to the customer demands afterwards?

How to define and adjust product programmes as well asservice systems?



Lecture 02


Markets with asymmetric information

Nobel price 2001 in economicsGeorge Akerlof, Michael Spence, Joseph Stiglitz

Attitude in the early 70´s: Optimal allocation of goods by symmetric informations due to price mechanism

Effects that appear as a result of an asymmetricinformation of economic units

Adverse Selection (Akerlof)

Overcoming of asymmetric information throughMarket Signalling (Spence)

Screening (Stiglitz)

Composition of reputation

Notes:Adverse Selection (George Akerlof, 1970): The seller usually knows more about the condition of a used car than the buyers do. Those cannot evaluate the quality of the specific carbecause for them all cars of the same type have the same appearance. They merely know the average quality of the car type due to technical press. Thus all cars are dealt at the same price which have the appearance of average quality due to asymmetric information. Hence the seller of a good car only gains the average price because the buyers do not recognize the better quality. So the sellers do not want to offer good cars anymore because the average prices are too low for them. Only the bad cars, the so called “lemons” or “citrons” are dealt. The good cars are swamped out of the market. This phenomenon is named “Adverse Selection”. When the buyers realize, that only bad cars are sold, the willingness to pay higher prices will decrease.Thus less good cars are offered on the market. This effect is amplified and can expire in a total market crash.Market Signaling (Michael Spence, 1973): Entrepreneurs know less about the skills than the employees do themselves. If companies pay a wage which is adequate to the average productivity, the productive employees subsidizes the unproductive ones. In order to inform theentrepreneur of their better skills (to reach higher wages) the productive individual has to send a signal which can not be imitated by the unproductive ones. According to Spence the higher education costs of the unproductive will over-compensate the expected rise of wages and does not pay off. For the productive individuals the education costs are lower in proportion to the expected rise of their wages. They intend continuing an education to show the companies theirabilities. Thus the adverse selection can be decreased by signals from the informed side. Screening (Stiglitz): Screening means that the uninformed party tries to divide the informed ones. An insurance company does not know the willingness of their customers to take risks.The car drivers themselves certainly know their own willingness very well. Insurance companies can divide customers into groups through offering different spreads concerning cost sharing and premiums. A roadhog will rather decide for a comprehensive collision coverage with higher premiums and lower sharing cost. The cautious car driver prefers part collision coverage with lower premiums and higher cost sharing.



Lecture 02


Definition and goals of Customer Relationship Management

Definition CRM

Simply stated, Customer Relationship Management (CRM) deals with identifying, attracting and retaining customers. CRM is part of every customer-focused business strategy and includes the organisation, processes and technology questions associated with marketing, sales, and service.

Goals of Customer Relationship Management (CRM)

Optimisation of customer relationships– Maintaining existing profitable customer relationships– Setting up new profitable customer relationships

Increase of customer loyalty– Increase of Share of Wallet concerning the contingent of total customer demands

(within a special product group) that a company achievesSource: Helmke, Dangelmeier (2001)

Notes:With the holistic perception, it becomes clear, that not only the management is the crucial factor but also the CRM. The CRM is the most significant value of a company. In the past, the introduction of CRM was confined to technologies or detached projects.



Lecture 02


Aims of CRM

Know-How Under-

standing markets and customers

Service To commit customer

TargetDevelopment

of serviceoffers

SellWin

customers

CRM

Services- and customer systems“How should service systems be built up and what are adequate customer systems?”

Seeking customer demands„How are homogeneous ´demand-clusters´generated ?“

Industrial Services„How big is the differentiation potential of the product or service feature?“

Better seeking of customer demand„How much will the customer pay for which service attribute?“

Notes:



Lecture 02


Structure

Know-How: appreciating markets and customers 1

Sell: attracting customers2

Target: developing service offers3

Service: committing customers4

eCRM: supporting systems5



Lecture 02


Customer-oriented corporations – characteristics & determinants

Sensitivity: dimension of systematic comprehension of demand- and problem-changing of customers by company

Reagibility: the “speed of reaction” thatproviders can react or adapt with to new customer demands

Flexibility: Ability of contractors to be responsive to individual service requirements of their customers

Feasibilty: Ability of contractors to convert customer demands in branch-specific and lucrative solutions

Customer-oriented corporations act successfully in the four important dimensions –sensitivity, reagibility, flexibility and feasibility

Proximity to customers

Customer service system

Customer problem solution

Customerintegration

means…

in…to…

avail…

Source: Belz, Schuh et al (1997)

Notes:



Lecture 02


CRM as differentiated customer development strategy

The goal is a consistent focus on selection, commitment and development of the relationship to profitable customers

To offer the customer the best service possible To increase the profitTo assure differentiation adverse to competitionTo avoid obsolescence caused by lost customers

The goal is a consistent focus on selection, commitment and development of the relationship to profitable customers

To offer the customer the best service possible To increase the profitTo assure differentiation adverse to competitionTo avoid obsolescence caused by lost customers

Emphases in the future: customer development

Identification of potential customer requirementsDevelopment of new applications for present customersIdentification of potential within different customer segmentsActive contacting of customers

Emphases in the future: customer development

Identification of potential customer requirementsDevelopment of new applications for present customersIdentification of potential within different customer segmentsActive contacting of customers

Source: Prof. Homburg and Partners

Notes:A dynamic development of customer relationships is essential to assure customer loyalty in the future. Positive appraisal by customers today can be obsolete tomorrow. The so called „learning company“ has to draw the right conclusions for the future out of existing customer relations.

It is an important assumption to use the existing customer relationship. The company is acquainted with the customer and knows his needs and expectations. Based on this knowledge there is the opportunity of a precise and value-orientated relationship to the customer in the face of the development of customer-orientated service tools.



Lecture 02


Context of customer relation and company value

By how much does the company value rise, if several positions are improved/ raised up to 10%?

behalten

To inspire

To alter

To keep

Acquisition costs of unique visitors

Rate of increase of unique visitors

Acquisition costs for new customers

Compilation quote visitor/ new customer

Sales increasing rate per new customer

Customer retention costs

Exchange rising rate per patron

Compilation quote customer / patron

loss rate of patrons

0,7

3,1

0,8

2,3

0,7

5,8

9,5

4,6

6,7

Source: Krafft, Bromberger (2001)

Notes:Additional dealings based on existing customer relationships are realised easy. This can be thebasis for a positive and profitable acquisition of more customers with similar profiles.

It has to be the aim to commit own customers at first instead of acquiring new customers . Growth can also be realised with existing customers.



Lecture 02


Customer Lifetime Value

What is the today´s ability of companies to collect and evaluate information about their customer´s earning rate?

„Customer Lifetime Value for a firm is the net profit or loss to the firm from a customer over the entire life of transactions of that customer to the firm.Hence the lifetime value of a customer for a firm is the net of the revenues obtained from that customer over the lifetime of transactions with that customer minus the cost of attracting, selling, and serving that customer, taking into account the time value of money”

Today Future

CLV iTransactionsi Margini Lifetimei

Cross- & Up-Sellingi

x x x=

Customerlifetime valueof customer i

Number of orders / frequency

of customer i

Profit – costs per transaction

of customer i

Forecast periodof customer i( estimated)

Forecast of future buying activityof customer i(estimated)

Source: Jain, Singh

Notes:„A customer relationship has the status of a capital investment.“ This approach of CRM means that there is a payment (acquisition costs) but in the long run there are positive incomesfollowing. Thus the calculation of the CLV is based on the net present value.

The direct added revenues and costs of a customer belong to the quantitative determinants of the CLV. First of all, there are the acquisition costs which are appearing as a sum of all investments of a new customer in the beginning of the customer life cycle.

Hereupon the accounting balance is calculated out of all revenues and costs in the future per customer during the life time.

The costs depend on operating costs caused by customers and service costs.

Qualitative determinants of the CLV are potentials that cannot directly be measured by revenues and customer related costs, e.g. the re-reference potential, lead-customer-potential, up/cross-selling potential and the rising willingness to pay on customer side.

The re-reference potential principally depends on the satisfaction of a customer. The main view is that each satisfied customer recommends the products of the company to other customers. Thus, the amount of potential customers increases.

Cross-Selling means that the demand of a product is assigned to other offers.



Lecture 02


Profitability of individual customer groups

Aim of CRM-concept is the focus on customers who are supposed to be long-term profitable

Share of Wallet (part of buying power of customer group) has higher priority than increase of market share

Focus on the right customer groups necessary

Most companies achieve a large part of their profit with only a few customers. On the other hand there is a large group of customers contributing only a small or even a negative profit.

Customer Lifetime Value in %

Customer with positive CLV

Customer with negative CLV

100

Wanted reduction of customer base

100

Customers in %

Target situation

Current situation

Source: Helmke, Dangelmeier (2001)

Notes:The calculation of the CLV seems to be easier and more exact with the quantitative determinants than with the qualitative determinants. The reason is the relevance of events in the future within the customer lifecycle for the calculation of the current CLV.

The internal rate of returns should match the capital costs of the customer relationship. The outcome of this is the rate of return-risk consideration to decrease systematic risk. The income-respectively payoff balance is calculated by sales or costs which is attributable to each customer during a certain period.

Important are the qualitative determinants of the CLV. These should be multiplied with their incidence rate in consideration of experience values and therefore should be included in the calculation. The importance of the net present value method is based on the dynamic view of the CLV, including the measures of CLV-management, which are profitable concidering mid- till long term.

The cash value of a customer relationship is an adequate control quantity in the line with the CLV-management. But by the employment of CLV-management, a proper calculation of customer value does not come to the fore. It is the extraction of support for a first decision. Hence the disposition of customer groups with low, medium and high customer values could be the basis for constitutive marketing activities.



Lecture 02


Structure








Lecture 02


Profitability – focus on profitable customers

Target market Responder

Voluntarydischarger

Recoveredcustomer

Potential customers Lost customers

Active customers Reactivated customers

Contribution of customer to the companie´s profit

Tasks

Data Mining –support (examples)

Initiation of business relation

Interests management Customer retention management Recovery management

Improvement of relationships

Prevention of cancellation

Abandonment unmeant cancellation

• Targeting• Customer segmentation• ...

• Market basket analysis• Cross- / Up-Selling analysis• Customer evaluation• ...

• Storno-Analysis

• etc.

Low valuecustomer

Consolidation of customer relationship

Forced discharger

New customers

High valuecustomer

High potentialcustomer

Notes:The customer lifetime cycle (relationship cycle) includes the total time frame of a customer-to-company-relationship. Generally it starts with the successful recovery of the new customerduring the acquisition phase and ends with the final retirement of the customer from therelationship.

To predict the duration of a customer relationship, experience values are used, such as theaverage migration, branche loyalties and the dynamics of market segments.



Lecture 02


Six steps for weighting customer requirements

Service package per customer cluster

Integration of customers

Conception phase

Requirementsweighting

Pre-selection/Priorisation

5

Marketsegmenting

Requirementdetection

Customer-evaluation

Define customer cluster

1

2

3

Preparation phase

Analysis phase

4

6

<Black-Box>Customer

Prec

isis

ion

leve

l of i

nfor

mat

ion


Notes:The customer requirements considered in the target-value-management are the source of theweighting process of customer requirements. In order to acquire reasonable information at current customer requirements (kind and weight), one has to structure the buy-decisive requirements in a standardized process which consists of six steps.



Lecture 02


Evaluation of customer clusters

Selection of target groups within the relevant markets for whom different problem solutions have to be provided

Creation of homogeneous customer clusters by using evaluated requirement catalogues

Combination of the customer clusters with adequate offers and services

Two main steps of cluster analysisDetermination of optimal cluster-/ segments quantity (e.g. Ward-Method)Optimal allocation of observations to cluster/ segments (e.g. k-means method)

Customer-evaluation

1unimportant

2less

unimportant

3neutral

4ímportant

5very

important

PowerHandlingGuaranteeDesign

Requirement x

Cluster „A“ Cluster „B“ Cluster „X“


Notes:Furthermore, the WARD procedure is important. Distance measure, distance computation and clustering will be determined whereby the error square sum (variance criterion) as a heterogeneity measure is as low as possible over all groups. For the selection of the suitable procedure, the fusing characteristics have to be considered. The Ward procedure leads to approximately equal large groups, which are appropriate in general.

K-Means algorithm: The K-means algorithm is an algorithm used to cluster objects based on attributes into k partitions. It is a variant of the expectation-maximization algorithm in which the goal is to determine the k means of data generated from gaussian distributions. It assumes that the object attributes form a vector space. The objective it tries to achieve is to minimize total intra-cluster variance. The algorithm starts by partitioning the input points into k initial sets, either randomly or using heuristic data. It then calculates the mean point, or centroid, of each set. It constructs a new partition by associating each point with the closest centroid. Then the centroids are recalculated for the new clusters, and the algorithm is being repeated by an alternate application of these two steps until convergence, which is obtained when the points no longer switch clusters (or alternatively centroids are no longer changed).



Lecture 02


Homogeneous problem solutions for homogeneous customer clusters

Nearly homogeneous requirement profiles within the clusters

Development of adjusted service packages

Revision of evaluated customer requirements to basic (buy-decisive) criteria

Benefit segmentation, allocation/ segmentation of relevant markets based on standardized benefit profiles

Customer cluster

Customer

A

B

C

Service packages(problem solutions)

Service Component

I

II

III

must-be factors

attractive factors

satisfying factors

Customersatisfaction

Degree offulfilled needs


Kano´s model

Notes:Geographical segmentation criteria divide markets into countries, regions, cities and other comprising spaces. A special segmentation approach is the micro-geographical segmentation. The main idea is, that people with a similar lifestyle and akin consumption habits often live concentrated in certain residential zones. For example, you can draw conclusions from looking at the income which correlates with the kind of house type: villa, raw house, tower block. But this criterion is only a first indication for a possible segmentation. Misinterpretation is possible by isolated usage. People living in villas are customers at discounters as well as people living inraw houses or social flats.Criteria of product utilization: It means how and how intensely customers use certain products. This data is not being collected systematically by every company, but they are normally easy accessible. E.g. for a bank it is very easy to divide customers in groups like good-occupants or few-occupants based on the number of transactions. Airlines and masstransit companies are able to partition customers in a short time based on the intensity of the customer´s usage as well. Psychographic segmenting criteria: psychographic rudiments include motives, attitudes and requirements. Examples are the benefit-segmentation or the so-called customer-benefit-segmentation. But the problem is, that the customer benefit is not exactly defined such as age, income or other definable factors. Hence psychographic segmentation is associated with detailed cost- and time-consuming market research projects. Experiences, how customers use certain products are consulted by the customer-benefit-segmentation. Furthermore customer satisfaction interviews are made and the shopping behavior is being analyzed. In addition, former experiences are used by consulting employees from customer service or sales force. These perceptions are very important for the operational marketing. But it has to be considered, that these perceptions are subject to environmental ascendancies and changing requirements and therefore instable in time.



Lecture 02


Structure








Lecture 02


Performance- and customer systems

Customer systems are strongly related to performance systemsPerfomance systems Customer systems

Product Programme Market6 Emotional profile – and customer adventure

5 Integrated project management4 Integration of service

3 Services2 Assortment

1 Product system

0 Product

Customer advantages

Gen

eral

M

arke

ting

Indi

vidu

al

Mar

ketin

g

Span

ned

Mar

ketin

gEnterprise advantages

…

Customer basemarketing

Relationship management

Non time based customermarketing

Peer systems

Key Account Management

Customer system

Product programmesystem


Notes:The starting point of generating performance- and customer-systems is the companie´sdecision what products to provide and what markets to focus on. They solve problems more comprehensively or economic very effectively. Companies do not only offer their plain products and scores of services but also develop integrated solutions for specific customer groups (e.g. major customers). They search for innovative service-/ market combinations in order to achieve advantages for customers and to distinguish themselves from the competitors. How to enlace a product with different shells is shown in the illustration above. The more away from the kernel of a product, the more specific service has to be customized to different customer groups. Packets of problem solutions are usually specific.



Lecture 02


Design of service systemsPrinciple of integration: integration of services for customers – synergy of components is decisive

Principle of billing: billing of the achieved surplus of benefit for the customer

Principle of participation and explanation: identification, realisation and communication of problem solutions – close cooperation with customer

Principle of evolution: dynamic of service systems, e.g. continuing and improving to increasingly differentiate from competitors; overfulfilling customer´s demands

Long-term principle: build up service systems with long-term perspective – quick concessions are not systems

Principle of relevance: aiming activities to customer-relevant fields

Important for the success of customer service systems are not only the design of the service system shells and the service description appropriate to the customers. The way it is realized, closely related to the customer, is much more important. Quality should be the

focus of the whole problem solution package.Source: Belz, Schuh et al (1997)

Notes:



Lecture 02


Method example – Conjoint-Analysis

Definition of considered product attributes and their characteristics

Compilation of defined product attributes to product totality (stimuli)

Ranking of the pre-defined stimuli by test personsMulti attribute judgements

Additive model of partly benefits

Use of algorithm to determine each benefit value

Taking the average of all part benefit values acquired from test persons

Source: Backhaus

1. Definition of product aspects

2. Definition stimuli

3. Evaluation

4. Estimation of value of benefitmodel (partly benefits)

5. Aggregation

Notes:The Conjoint-Analysis, also called multi-attribute compositional models, is a statistical technique that originated in the 70´s in mathematical psychology. Today it is used in many of the social sciences and applied sciences including marketing, product management and operations research. The objective of the Conjoint-Analysis is to determine what combination of a limited number of attributes is most preferred by respondents/ customers. It is used frequently in testing customer acceptance of new product designs and assessing the appeal of advertisements. It has been used in product positioning, but there are some problems with this application of the technique.

Any number of algorithms may be used to estimate utility functions. The original methods were a monotonic analysis of variance or linear programming techniques, but these are largely obsolete in contemporary marketing research practice. Far more popular are hierarchicalbayesian procedures that operate based on choice data. These utility functions indicate the perceived value of the feature and how sensitive consumer perceptions and preferences are to changes in product features.



Lecture 02


Not yet professionally optimized

Possibilities of expansion are limited

Correlation between service and price

There are only three relevantdriver of profit.

Porter’s U-GraphA company, which is neither cost-nor quality-pace maker is „stuck in the middle“.

too large to concentrate on exclusive market segments.

too small in order to profit fromall potentials of cost reduction.

Advantage of service

Advantage of price

Mar

ket s

ucce

ss (R

OI,

Cas

h flo

w)

Strategy of preference

„buy the better product“

Strategy „to sit on the fence“ -

„Negation of buy, because it is

neither cheaper nor better“

Strategy of price-quantity

„buy the cheaper product“

Widely exploited

Profit = Price x Volume - Costsvariable

fix

Source: Porter

Notes:The amount of earnings of a strategic business unit is defined by the relevant market share.

A company that is neither cost- nor quality-pace maker is „stuck in the middle“ as Porter describes. This case often applies to companies that are too large to concentrate on exclusive market segments. On the other hand the companies are too small in order to profit from all potentials of cost reduction.

Pace maker of quality or cost management were the successful options in the past. If one achieves to offer customer individuality associated with an adequate price, the realization of„economies of scale“ and differentiated services, then the middle will become interesting as well.



Lecture 02


Objectives for costs, customer benefit/ value-to-customer and service level

Expansion ReductionOptimum

Costs

Customer benefit = Willingness to pay

Benefit, Costs

Targetcosts

Diversity,technical service level

Source: Simon Kucher and Partners

Notes:Product- and price policy starts with the development. The focus cannot be to achieve the technical maximum of service. The service level has to adapt to the customer benefit – neither too low nor too high. Technically ambitious products require an integrated view of customer benefit and costs. A possible kind of realisation is the target-value-costing approach. Aim benefit and aim costs are derived from each performed service.



Lecture 02


Pricing

Price scenarios

Market behaviour

Quantity

p, Kv

Kv

x

Quantity

p, Kv

Kv

Contribution margin Loss of profit

y

x

y1

y2

2634 36

3942

Beginner model less than € 30.000

Scenario 1

2932 35 38 41

Harmonic tuned price grades

Scenario 2

26 28 30 32 34

Aggressive pricing of whole product line

Scenario 3

Quantity effects Income effects (Index)

Price

Quantity effects

Income effects

Notes:There is the possibility to define different pricing models for a product program or -family.

The aim of differentiated prices/ price grades is to find the adequate price for an offered service package and to consider the price willingness of a customer cluster at the same time.

Furthermore advantages are found in terms of contribution margin and loss of profit by price differentiation. Differentiation of prices enables normally profit maximization.

The coherence of quantity and income effects in the field of pricing is considered by resiliences. Quantity effects are directly influenced by an increase or decrease of the price. Income effects normally follow the characteristical “U-Graph”.



Lecture 02


The design of an effective pricing-process

What do we want? Where

do we go?

How do we make it today?

What is the optimal Price/

Price-structure?

How can the price be

achieved in market?

Which prices were

achieved?

Strategicobjectives

AimsPositioningCompetition

Analysis

Now-situation/-process

Price decisionStructureLevelDifferentiationBundling

ImplementationOrganisation/ StewardshipITIncentives

Controlling/ Monitoring

Increase of benefit

Feedback


Notes:The first rising aspect of profit is the price. There is hardly an area where as much profit potential is lost due to missing systematic analysis. The contribution margin can be raised by an optimized pricing-process in situations of unsystematic pricing like „on a gut level“. Measurable profit potentials could be realised by systematic preparation of decision, explicit rules (for pricing) as well as efficient price monitoring and -controlling.



Lecture 02


Pricing process vs. cost reduction

Quick Wins – Pricing processes have three advantages

Profit/Cash

Time

Cost Reduction/ Cost Cutting1. Investment

advantage1. Investment

advantage

3. Profit advantage3. Profit advantage

2. Time advantage2. Time

advantage

Pricing processimprovement


Notes:Effects are achieved by an optimal adaptation of the price system. Comprehensive measures of reorganisation to the product programme, product processes or structure of organisation normally call for substantial investments. An adaptation of the price table only causes few effort and is quickly realised in contrast. The result of this price adaptation is an effective profit advantage.



Lecture 02


Structure








Lecture 02


Realising proximity to the customer with service systems

Industrial services

„How much differentiation does the product afford, how much does the service afford?“

„Permanent Relationship” -Customer relation is only interrupted by the purchase of the product

Selective service managementCustomer is merely rudimentally integrated in the configuration of the service system

Integrated service managementfrom offer change to the cultural and behavioural change

Tran

scul

tura

tion

Customerintegrator

Black- Box provider

Pure productmanufacturer

Problem solverOffer change

Today

trade-off

selective service management

Integrated service management


Notes:Industrial companies that disregard their services or execute them dilettantishly will have a lot of problems as manufacturers in the future. The change to a contractor with an all-embracing service system (products and services) creates better requirements for proximity to the customer. To have a successful change there are two rudiments described by the determinate of proximity to the customer.

The selective service management supports the company in the change of the offer from a pure product manufacturer to a customer-orientated problem solver. The focus lies on industrial services. These are getting more professional in order to improve the problem solutions of the customer.

The integrated service management is an adaptation of company development. Among the offer change the company takes part of a synchronistical trans-culturation and behavioural changing. The „Black-Box“ provider becomes a customer integrator. His job is to coordinate the external customer requirements with internal possibilities. Different divisions of the companyare integrated in those service processes which are value-raising for the customers.



Lecture 02


Customer retention with complementary servicesHow much service is reasonable?

Increasing part of individual services

Multi-part products with complex structure

Multi-part productswith simple structure

Single partproducts

Increasing part of individual product services

Incr

easi

ng p

art o

f ind

ustr

ial

serv

ices

Mass production

Serial production

Unit-/ Limited-lot production

One-time production

Part supplier

Module contractor

Product manufactorer

Plant manufacturer

Product structure

Production concept

Notes:



Lecture 02


Structure








Lecture 02


IT-support for CRM systems

Communicative CRMControl, support and synchronisation of all communication channels to customer

Operative CRMApplications that have direct contact to customer (Front Office). They support the dialogue with the customer

Analytical CRMSystematic record and analysis of customer contacts and -communication.Response to differentiatedcustomer requirements

Supply Chain Management

Enterprise Resource Planning

CIM ….

Customer Interaction

Center

Closed Loop Architecture

Customer Data Warehouse

and Data Marts

Data Mining OLAP

PersonelContact

InterneteMail

MailingsTelephone

Wap

TV/Radio

Marketing Automation

Sales Automation

Service Automation

Source: Hippner, Wilde (2001)

AnalyticalCRM

CommunicativeCRM

OperativeCRM Front

Office

Back Office

Notes:The dynamic development of customer relationships is realised on the basis of the CRM-approach. This approach provides the strategy and the adequate tools to learn constantly by measurable actions. Thus each customer relationship is more and more improved. By this way CRM enhances the comprehension of the fact that „I can not live without the customer“ to the goal-oriented strategy „to grow with the customer“.

A decisive separation in present CRM systems is brought by the changeover from the communicative to the operational part of the system.

The direct contact to the customer and the admission of the customer-related data occurs in the communicative part. This data is used in the operational part to achieve an adjustment of corporate activities relating to marketing, sales and service. A target-orientated conditioning of customer-related data is coming to the fore in the analytical part of CRM-systems.



Lecture 02


Architecture of eCRM systems

Personalisation systems

Analysis / Reporting

eMarketing eSales eService

Customer profile

On stock Information(FAQs, Newsletter…)

On demand communication(Chat, Call Back….)

Data Ware-house

CRM

ERP

SCM

CIM

Etc.

EnterpriseIT Systems

eSales eServiceInternetCore Systems

Operative CRM

AnalyticalCRM

customer

www

Notes:Present CRM-systems are integrated in the system scenery of companies (ERP, SCM, CIM modules etc.).

With the possibilities of a digital customer-contact based on direct customer contacts, detailed analysises and reports can be created.

Based on this data the reassigned homogeny customer cluster has to be created and customer-equitable service packages have to be developed.



Lecture 02

Final statement:

Getting informed about the aims and fields of action of the CustomerRelationship Management

Presentation of the relationship between customer bonding and enterprisevalue

Presentation of a method for the identification of profitable customers and market clusters

Systematics for the design of customer-oriented products and services

Presentation of a method for the estimation of customer value



Lecture 02

Questions:

What goals does the Customer Relationship Management have?

What are the characteristics of customer-oriented companies?

Which relationship exists between the customer bonding and the value of a company?

What is the Customer Lifetime Value approach good for?

Which relation exists between the creation of customer clusters and the Kano-Model of customer satisfaction?

What are the elements of customer service systems and which principles are relevant for their design?

What advantages does the Conjoint-Analysis have?

What are the advantages of well-structured pricing processes for mostcompanies?



Lecture 02

Bibliography:

Belz, C.; Schuh, G.; et al: Industrie als Dienstleister. Fachbuch für Marketing. St. Gallen: Thexis, 1997

Helmke, Dangelmaier: Effektives Customer Relationship Management –Instrumente, Einführungskonzepe, Organisation. 1. Aufl., Wiesbaden: Gabler,2001

Kalakota, Robinson: E-Business 2.0. Roadmap for success. Boston: Addison Wesley, 2001, p.164

Porter, M. E.: Competitive Advantage – Spitzenleistungen erreichen und behaupten. Frankfurt: Campus, 1996

Backhaus, K., Erichson, B., Plinke, W., Weiber, R.: Conjoint-Measurement, Kapitel 9. In: Backhaus, K.; et al. (Hrsg.): Multivariate Analysemethoden. Eine anwendungsorientierte Vertiefung. 7. Aufl., Berlin: Springer, 1994, S. 498-554

Jain; Singh: Customer Lifetime Value Research in Markteing: a Review and Future Directions, Journal of Interactive Marketing, No. 16 (2), 2002, S. 38

Krafft, M.; Bromberger, J.: Kundenwert und Kundenbindung. In: Albers, S.;Clement, M.; Peters, K.; Skiera, B. (Hrsg.): Marketing mit Interaktiven Medien. Strategien zum Markterfolg. Frankfurt am Main, 2001

Simon Kucher und Partners: unveröffentlichter Vortrag URL: www.simon-kucher.com

Eberling, G.: Kundenwertmanagement. Wiesbaden: Deutscher Universitätsverlag, 2002



Lecture 02


Structure

Know-How: appreciating markets and customers1






Enterprise Resource Planning I L03 P. 0

Lecture 03


Lecture 03- Enterprise Resource Planning I -

Organization:Dipl.-Ing. Sascha FuchsSteinbachstr. 53BRaum 514Phone: [email protected]






Lecture 03

Index:

Index Page 1

Schedule Page 2

Lecture landscape Page 3

Glossary Page 4

Short summary Page 5

Classification of lecture episode in overall lecture context Page 6

Lecture

ERP systems in production planning and scheduling Page 7

Historical development of IT systems in PPS Page 13

Company specific core tasks of ERP systems Page 21


Final statement Page 32

Questions Page 33



Lecture 03

Schedule:


L1 27.04.2009 Mr. Rittstieg 0241 80 20396

L2 04.05.2009 Mr. Bartoscheck 0241 80 28203

L3 18.05.2009 Mr. Fuchs 0241 80 26265

L4 25.05.2009 Mr. Reil 0241 80 27964

L5 08.06.2009 Mr. Potente 0241 80 27387

L6 15.06.2009 Mr. Bauhoff (fir) 0241 47705-439

L7 22.06.2009 Mr. Hoeschen 0241 80 27382

L8 29.06.2009 Mr. Jung 0241 80 27392

L9 06.07.2009 Mr. Rauhut 0241 80 28206

L11 13.07.2009 Mr. Koch 0241 80 25321

L12 20.07.2009 Mr. Cuber (fir) 0241 47705-420




Topic











Lecture 03


Lecture landscape of the Department of Production Engineering

• Integrated management task/job• Product and product program planning• Organization and staff conduct/behavior

L1 IT in Production ManagementL2 Customer Relations ManagementL3 Enterprise Resource Planning IL4 Enterprise Resource Planning IIL5 Enterprise Resource Planning IIIL6 Supply Chain Management IL7 Supply Chain Management IIL8 Product Lifecycle Management IL9 Product Lifecycle Management IIL10 Product Lifecycle Management IIIL11 Digital Production site planning and simulationL12 Methodology for system selection

Quality ManagementTechnical InvestmentPlanning

Cost Management in Workshops

Production Management II

Production Management I Manufacture andAssembly Compatible Construction

Production Site Planning

Innovation Managementwith Dr. Wiedeking

• Basics• Methods and auxiliary means/devices• Process & construction organization

• Construction task in small group• Construction examples• Construction regulations

• Workshop facility planning• Storage & transportation planning• Human resources planning

• Cost accounting• Investment appraisal & evaluation• Balances

• Quality assurance systems• Quality planning• Product liability

• Workshop facility planning• Technology planning• Cost accounting

Notes:



Lecture 03

Glossary:

UtilisationUtilisation describes the level of efficiency. It is the ratio between a maximum and real utilisation factor.

PDA = Production data acquisition PDA is the term for acquisition of different actual data of the production process. (exp. process, job, and machine data).

DispatchingDispatching is the separation on quantity basis to the necessary resources.

EAI = Enterprise Application IntegrationEAI is a concept for integration of different software structures company-wide.

ERP = Enterprise Ressource PlanningERP is a holistic and process orientated software solution with the function for production planning and controlling.

MDA = Machine data acquisitionThe interface between production machines and the information processing.

MES = Manufacturing Execution SystemMES monitors manufacturing processes in real time by direct connection to production.

MRP = Material Requirement PlanningMRP is a task for determination of material requirements, procurement, storage and allocation of raw materials, parts and components which are needed for production.

MRPI = Material Requirement Planning IMRP I was developed as feature for MRP to involve production capacity in planning processes.

MRPII = Material Resource Planning IIMRP II ought to be a feature for MRP I to include strategic and economic aspects of production planning.

Primary requirements Primary requirements define the necessary amount of manufactured goods in a planning period.

Secondary requirements Secondary requirements define the necessary amount of raw material and sub- assembly goods maintaining primary requirements.

Bill explosion In MRP, bill explosion is a separation of different production orders for example parts, components and sub- assembly parts.



Lecture 03

Short summary:

ERP-systems (ERP = Enterprise Resource Planning) are among other things used to support production planning and control (PPC).

In the course of the development of IT-systems the functionality has been extended from a mere quantity planning to a companywide information integration.

Dependent on the type of order processing and company targets the PPS elements has to be adjusted individually.



Lecture 03


Classification of the lecture episode ERP into the context

Custo-mersSuppliers

CRMSCM

PLM

Products

ResourcesER

P

Company

Notes:



Lecture 03


Gliederung

ERP systems for production planning and scheduling 1

Historical development of IT systems in production planning and scheduling2

Typology specific core tasks of ERP systems3

Notes:



Lecture 03


Enterprise Resource Planning for Production Planning and Scheduling

Source: Luczak

Company

Administration and corporate planning

AccountingCalculation

Sales Purchase/Acquisition

Technical order processing

Construction Operations Scheduling

Assembly

Enterprise Ressource Planning(ER

P)

Order

Material Product

Billing

Advanced Planning and Scheduling (APS)

„Classic“definitionof techn. order handling

„Enhanced“ definitionof techn. order handling

PPSControlling

Distribution

Manufacture of Components

Notes:After the classic definition the technical order processing includes every department which participates in the fabrication of the product.

After the enhanced definition the interfaces between customer and company are added (e.g. Sales, Purchase and Distribution). Therefore production planning and scheduling support the entire technical order processing between incoming and outgoing order.

Production planning pre-plans the workflow during the creation of a product for a certain time considering certain general conditions and realizing predetermined objectives.

Production scheduling tries to realize the planning as completely as possible in spite of unavoidable changes concerning the order quantity and the order date as well as disturbances by machine failure or loss of manpower, delays in delivery and scrap.

ERP is a holistic, process oriented software solution, which performs the task of production planning and control. ERP makes the required information available to all related divisions of the company.



Lecture 03


PPS: Allocation of the production in a simplified company

Source: WZL

Development

Sale

Material flow

Information flow

PurchaseProduct creation

Logistics

Administration & Staff

Suppliers

Manufacturing Assembly Customer

Distribution

Notes:The Product creation as center of the value-added chain can be seen in the company‘s heart. Further supporting areas are the sale and administration and staff.



Lecture 03


Task structure of PPS: PPS/ERP-Model from Aachen

Source: Schuh

Production program planning

Production requirements planning

Procurement planning and scheduling

In-plant production

planning and scheduling

Data management

Core tasks Cross-sectional tasks

Ord

er c

oord

inat

ion

ER

P-C

ontro

lling

Sto

rage

Notes:Many enterprises have come to the conclusion, that on time delivery and the delivery time have become important factors of competition. Thus the PPC-model results in a networked task structure.

The PPS-functions are structured by the core tasks in order to promote the order procedure. This includes long-term production program planning, middle-term production requirements planning, short-term in-plant production planning and scheduling and short-term procurement planning and scheduling

The cross-sectional tasks serve for trans-sectoral integration and improvement of the PPS. The data management is part of both, because all tasks of realisation share it.

Concerning the serial production the fulfillment of the core tasks is very important. On the other side the essential for the batch production and the make-to-order production is the order-specific coordination and the project management.



Lecture 03


Task structuring of PPS/ERP (1)

Source: Schuh

Sales planningStock planningPrimary requirement planningResource rough planning (order anonymous)Gross secondary requirement determinationNet secondary requirement determinationClassification of type of procurementThroughput time scheduling Capacity requirement determinationCapacity coordination

Lot size calculationDetailed schedulingDetailed resource planningPlanning of order successionAvailability monitoringOrder releaseOrder controlResource control

Order accountOrder entry/evaluationSelection of supplierOrder releaseOrder control

Core tasks



Procurement planning and scheduling

In-plant production planning and scheduling

Notes:The manufactured products of the production program planning are fixed by nature, batch and provision date for a certain planning period. There are some aims to achieve: Check the sales plan regarding the operability and coordinate the general preliminary planning and the order-specific planning.

The middle-term production requirements planning – based on the production planning as the result of the PPS – includes the planning of the required resources. This covers the material requirements planning as well as the continuous scheduling and the capacity coordination.

The outcome of this are in-plant production orders classified by nature, batch and provision date.



Lecture 03


Task structuring of PPS/ERP (2)

Source: Schuh

Order processingOrder reviewOrder rough planningResource rough planning (customer specific)Order ManagementStock logistics managementStock controlStorage location managementBatch managementStock inspectionStock takingInformation editingInformation evaluationConfigurationWorkpiece managementParts list managementWork plan managementResource managementPlanning data managementOrder managementCustomer managementSupplier management

Order coordination

Storage

Cross-sectional tasks

Data management

PPS Controlling

Notes:The cross-sectional tasks have a central character and are supposed to ensure the efficiency of the complete value chain.

The order coordination serves for the adaptation of all involved divisions of one sales order. It becomes more important by decreasing in-plant production and increasing business venture coordination as an so-called order centre.

The tasks of the storage are the direction, evaluation and estimation of the stock and the stock management.

Within the scope of the commercial control the task of the PPS Controlling is the support of the management of production while it works out transparent and interpretable information and makes them available to the management of production.



Lecture 03


Gliederung




Notes:



Lecture 03


Quantity planning

MR

P

time-phased production plan for final products

primary requirements (manufactures)

gross dependent requirementsexplosion of bill of materials

net dependent requirementsstocks

The initial MRP concept, i.e. the determination of quantity and material requirements, was developed in the fifties and represents the change from a consumption-oriented to a demand-oriented dispatching of material.

MRP: Material Requirement Planning

Source: Scheer 1990

Notes:Tasks of MRP are the determination of material requirements, procurement, storage and allocation of raw materials, parts and components which are needed for the production-line.

Starting point for MRP is a time-phased production plan for final products.

Based on this plan, MRP determines lot sizes for all intermediate products with the help of explosion of bill of materials and forward calculation of order dates in such a way that a feasible overall plan is generated. All materials needed are supplied in the required quantities early enough to guarantee in-time production of final products.

MRP only considers material quantity requirements; therefore, it does not guarantee that sufficient production capacities are available at each point of time to execute all orders planned.

Lecture 3



Lecture 03


MRP I: Material Resource Planning I

Source: Scheer 1990

order initiation and control

capacity scheduling

production program planning

periodic aggregationcalculation of order quantity

production and assembling lots

capacity schedulingavailable capacity

fine scheduling of production orders & sequencing

order initiation

production progress monitoring

MR

P I

Quantity planning

MR

P



gross dependent requirementsexploration of bill of materials


In the middle of the sixties, the MRP I concept was developed as an MRP add-on, which also included the production capacity in planning for the first time. As all information about the exact production flow isn’t always available at the time of dispatching of orders, it is common practice to feed back the results of a planning step to an earlier planning step.

Notes:MRP only deals with the material planning. MRP 1 goes one step further and expand the planning scope, i.e. MRT 1 takes into account the capacity. This way it takes place a detailed planning of all separate production orders.

Starting from the total net requirements manufacture and assembly batches are composed by means of different methods of order quantity. Afterwards they are dispatched regarding the capacity within the scope of the capacity scheduling.

It is the task of the control to implement these production targets. This comprises a fine scheduling of production orders, the origination of working operation oriented workshop orders and the controlling of the production progress.



Lecture 03


MRP II: Management Resource Planning IIIn the eighties, the MRP II concept was finally developed, which also takes into consideration economic and strategic aspects of production planning.

The MRP II concept is still widely used because it is the basis for most current IT-systems in this field.

Source: Scheer 1990

order initiation and control

production program planning


order initiation


sales planning

budgeting

MR

P I

MR

P II

Quantity planning

MR

P



gross dependent requirementsexploration of bill of materials


capacity scheduling

periodic aggregationcalculation of order quantity


capacity schedulingavailable capacity

Notes:MRP II is a technique for the planning of all resources within a manufacturing company.

It integrates monetary budgeting, market-oriented production program planning, capacity and material requirements planning as well as production control, production data acquisition (PDA) and machine data acquisition (MDA). Planning is performed sequentially with a series of feedback loops.

MRP II has evolved from MRP. We speak of MRP II if the results of MRP planning activities are fed back and used for the planning of the production program.

MRP II denotes a higher level of integration of planning, the results of which are used for further steps of corporate planning. MRP II is suitable for well predictable production processes with continuous order entries.

[source: Competence Site / Gabler Wirtschaftslexikon]



Lecture 03


Enlargement of scope from ERP to ERP II

Source: Infor business solutions AG

Learning from MRP II:

„The maximisation of the resources utilisation results in the maximisation of profit.“

ERP / ERP II:

integrated information supply and control, monitoring and coordination of all processes and activities within the company

MR

PII

• Manufacturing control• PDA/MDA/PTA• Dispatching• Distribution• Purchasing• Logistics

• Financial accounting• Asset accounting• Cost calculation• Human resource mgmt.• Controlling/MIS• Project management• Document management

• e-Procurement• SCM• CRM

ER

P

ER

P II

CRM: Custom RelationshipMDA: Machine Data AcquisitionMIS: Management Information System

PDA: Production Data AcquisitionPTA: Process Time AcquisitionSCM: Supply Chain Management

Notes:Differences between ERP and ERP II:The task of the traditional ERP is the internal optimisation of a company. ERP II systems, in contrast, optimise the whole value-added chain by collaboration with all business partners.

Traditional ERP systems focus on production and logistics. ERP II systems are used by companies of all sectors and fields, including service companies, governments and heavy industry.

In contrast to ERP systems, which were only used inside single companies, ERP II systems link all trading partners and thus work across the borders of single companies.

While old ERP systems were designed monolithically and self-sufficiently, ERP II systems are internet based and open for integration with other systems. Their modular design allows users to choose program modules suitable for their needs.



Lecture 03


MES as link between ERP and process level

Source: Infor business solutions AG

Coordination level

Operational level

Process level

• Production control center• Transportation control• Tool administration

• Process control • Quality management• Production data acquisition

• Material administration• Cells order management• Cells order coordination• Tool administration cell

• Machine driver• Robot manager• Robot driver

ERP

Manufacturing Execution System (MES)

Notes:ERP-systems primarily support the rough production planning and control. On deeper company levels more detailed tasks are to be performed, which belong mainly to the autonomous resource administration and control.

Generally, MES are located deeper than the ERP-levels in a software architecture. This means that the production planning is frequently created first on the ERP-level and after this it is transferred on the MES-level. On the other hand the MES-level reports to the ERP-level the operations status of the separate orders so that it could used for the logistic control, e.g. the planning for the next periods.

The different technical and business requirements are the reasons for the separation of ERP and MES. ERP primarily focus on the whole enterprise and is responsible for a logistical optimisation on a aggregated level apart from plants and lines. Mostly you do not need online actuality for it. In contrast, MES particularly execute only one production line. This includes the administration of the required logistic control data as well as e.g. technical parameter, which is not of interest to ERP-systems. In this spirit MES are the executives of ERP.



Lecture 03


As a part of EAI ERP covers all production relevant areas

Source: WZL

Development

Sale

Purchase

Product creation

Logistics

Administration & Staff

Suppliers

Manufacturing Assembly Customer

Distribution

EAI ERP II

ERP

MRP II

MRP MES

MRP I

MES: Manufacturing Execution SystemCAD: Computer Aided Design

EAI: Enterprise Application IntegrationERP II: Enterprise Resource Planning II

ERP: Enterprise Resource PlanningMRP II: Management Resource Planning

MRP I: Material Resource PlanningMRP: Material Requirement Planning

Notes:On the top level Enterprise Application Integration-Systems (EAI) integrate all used subsystems. This covers in addition to IT-systems of the product creation those of the product development and many more.

In contrast to other integration technics, e.g. the operation integration or the data integration, the EAI approach do not modify the implementation of the several business operations. All functional interfaces are prescinded by adapters (interface converter).

(compare to slide 5)



Lecture 03

Notes:SAP R/3 is one of the most established ERP systems.

According to the latest concepts, the open modular structure enables the selection as needed of all required components.


SAP R/3 – Examples of Established ERP-Systems

R/3R/3Client / ServerClient / Server

ABAP/4ABAP/4

FIFIFinancialaccouting

COControlling

COControlling

TRTreasury

TRTreasury

PSProjekt-system

PSProjectsystem

WFWorkflow

WFWorkflow

ISIndustrysolutions

MMMaterials manage-

ment

HRHuman

resources management

SDSaleSDSale

PPPPProduction

planning

itManage-

ment

QMQualitymanage-

ment PMPeriodical

mainte-nance

Integratedtotal

Opensystems

Client / Server

CompanyData model

Multinationality

Comprehensivefunctionality

Industry neutrality

SAPSAPsolutions

architecture

Lecture 3



Lecture 03


Gliederung




Notes:



Lecture 03


Polylemma of Production

Source: Wiendahl, Fertigungsregelung

Positioning area

0 WIPLTmin WIPCmin WIPPlan

Utilization U

Lead Time LT

Costs C

On Time DeliveryMinimum

Minimum

Maximum

Maximum

Work in Progress

Choice of the optimal operating point

on time delivery

high utilization

low work in progress

low lead time

low costs per unit size

WIPUmax

Notes:The characteristics of production systems could be well-described by a couple of management ratios. The run of the curves is a characteristic for all of them.

Analysing the illustration it appears that is not possible to fulfill all targets at the same time as best as possible. Consequently, there is no optimal operating point.

The enterprises could rather position themselves on different operating points depending on their prioritisation of strategic targets and the handling of customers. It stands to reason that targets may be changed by and by. So the chosen operating point is not static but could diversify during the development of an enterprise.



Lecture 03


„Order Penetration Point“ – Influence on PPS and the ERP System

Supp

lier

Cus

tom

er

Procurement Manufacturing Assembly Delivery

Program dependant

stocking point

Customer dependant

Customer Decoupling Point

Logistic targets

… order penetration pointUtilization

Stocks

Throughput timesAdherence to delivery

dates

Before the … Behind the …

Program manufacturer

Variant manufacturer

Order-specific manufacturer

Source: Eversheim Betriebshütte 14.4

Notes:

The manufacturing of the products after the receipt of order shall be aimed at. In case this is impossible due to the product construction, the manufacturing times or the production structure, the products have to be prefabricated to a large extent. But this is not possible with products of a high number of variants or even less with customer specific solutions.



Lecture 03


Classification of the Relevant Characteristics to Describe Company Types

Initial characteristics Type of order release

Product characteristics

Product spectrum

Product structure

Disposition characteristics

Determination of product/ component requirement

Release of secondary requirement

Procurement type

Storage

Manufacturing characteristics

Manufacturing type

Process type in the manufacturing of components

Process type in assembly

Manufacturing structure

Customer change influence during manufacturing

Source: Luczak, Eversheim, 1997

Notes:

By means of the mapped morphological schema order processing families are made. These are groups of enterprises which have – according to this schema - the same characteristics regarding the order processing. However, the products of one order processing family could based upon different technical and physical principles.

(A more detailed description of the several characteristics you can find in Luczak, Eversheim1997, p. 76 et sqq.)



Lecture 03


Typology „Order-specific Manufacturer"Structure sizes Order related producing company

Type of order release

Product spectrum

Product structure

Determination of the product/comp.

requirementRelease of the

secondary requirement

Procurement type

Storage

Manufacturing type

Process type in manufacture



Customer change influences during

manufacture

1

2

3

4

5

6

7

8

9

10

11

12

Production on order with individual orders

Production on order with blanket orders

Customer anonymous precustomer order

related final production

Production on store

Products after customer

specification

Typed products with customer specific

variants

Standard products with variants

Standard productswithout variants


Multi-part products with simple structure Few-part products

According to requirement

on result level

Partly according to expectations, partly according to requirementson comp. level

According to expectations on

components level


product level

Usage orientated on product level

Order orientated partly order orientatedpartly period orientated Period orientated

largeexternal procurement

External procurement in a bigger scale

Little external procurement

No stocking of requirement

positions

Stocking of requirement positions

on lower structure levels


on upper structure levels

Stocking of products

Non-repetitive production

Unit and limited-lot production Series production Mass production

Workshop production Island production Batch production Continuous

production

Construction site assembly Group assembly Batch assembly Continuous flow

assembly

Manufacture with large depth

Manufacture with medium depth

Manufacture with minor depth

Many changing influences

Occasional changing influences

Few changing influences

Source: Eversheim BH 14.63

Notes:The order-specific manufacturer produce on order by individual appointments. The range of products comprises products depending on customers specifications with multipart and complex structures. The type of production unit and limited-lot production distinguishs oneself by no stocking of required positions. The product and components requirements turn out demand-orientated on the product level. The secondary requirements are released order related whereas the external procurement becomes more important. Workshop production is the predominant type of production. The assembly takes place at a fixed workstation with a large manufacture depth. This means that there is a high number of production steps and sequent operations. Furthermore, customers preferences and influences appear during the production to a greater extent.



Lecture 03


Main control loop

Control loop

ERP Configuration „ Order-specific Manufacturer"

Customer order inducementand control

Determination of delivery dateResource planning

Resourcedisposition

Manufacture control(anticipated)

Customer specificproduct development

Customer

Prod

uct

Procurement Product creation

Supply confirmation


Notes:

It followed from the described factors above and their characteristics certain requirements for the PPS. These also influence the use of the several PPS-features to a great extent.

Main production targets

• Adherence to delivery dates

• Short throughput times

• Readiness to provide information

Planning focus

• Coordination of product development and product creation

• Production start without exact specification of the product

• Consideration of insecure order offers

• Insecure capacity requirements and processing times

Control focus

• Order inducement

• Order control/supervision

• Reaction on short-term plan deviations due to Customer’s change preferences



Lecture 03


Typology „Program Manufacturer"Structure sizes Program bound producing company


Product spectrum

Product structure




Procurement type

Storage

Manufacturing type





manufacture

1

2

3

4

5

6

7

8

9

10

11

12





Production on store


specification


variants






on result level



components level


product level







positions









production


assembly








Notes:

Concerning the operative factors the characteristics of program bound types of production are completely different from order orientated types. Besides the order-specific manufacturer the program manufacturer is the other extreme form. In contrast to the order orientated production the product development is not part of the order processing but it is already completed before. There are only standard products without variants, which are produced in store, and few-part products. The production and components requirements are identified on the production level order orientated. Furthermore, the release of secondary requirements is period orientated and the external procurement only plays a subordinate part. The flow assembly and production are the preferred process types, because the lot sizes are very large. The large depth with one production step and few sequent operations are the characteristics of the production. There is no reaction on customer’s change preferences during the production.



Lecture 03


ERP Configuration “Program Manufacturer"


Resourcedisposition

Order inducementOrder control/supervision

Market

Customer

Push control

Finished goods store

Cus

tom

er a

nony

mou

spr

oduc

t dev

elop

men

t

Main control loop

Control loop

Product spectrum

Procurement Product creation

Sales forecast


Notes:

The differences between order-specific and program manufacturer also cause other main focuses concerning the use and specification of several PPS-features.


• High and steady capacity utilization

• Low costs

Planning focus

• No planning of indirect areas

• Permanent material availability

• Minimal control effort in order to save expenses

Control focus

• Fault repair

• Control of efficiency and quality

• Equipment availability (material, tools, devices)



Lecture 03


Typology „Variant Manufacturer"Structure sizes Company producing variants


Product spectrum

Product structure




Procurement type

Storage

Manufacturing type





manufacture

1

2

3

4

5

6

7

8

9

10

11

12





Production on store


specification


variants






on result level



components level


product level







positions









production


assembly







Source: Eversheim 14.80

Notes:

In practice you can basically find specifications as a mixture of both principles. The customer decoupling point of most of the enterprises is located between the two extreme forms. There are also enterprises with a large range of products where the customer penetration point could even be different within an enterprise. During the industrial development the role of the product bound production lost importance. Nowadays you can still find a program orientated production in the consumer goods industry, e.g. domestic appliances. The requirements on PPS are rising independent of the type of enterprise by the increasing variety of products because of the customer’s demands for special solutions. Therefore non-repetitive, unit and limited-lot and series production enterprises increase their product-, chain- and production system complexity. The variety of products concerns the assortment variety as well as the variety on the assembly group and components level. The considerable problems of the PPS result from the rise of part numbers and complexity of the process organisation. Therefore the PPS has to fulfill their tasks concerning capacities, order control and material provision in spite of difficult marginal conditions. These are frequent operation changes and an increasing error rate of automated plants.



Lecture 03


ERP Configuration „Variant Manufacturer"

M Montage

Main control loop

Control loop


Resourcedisposition

Order inducementOrder control/supervision

Order

Push control

Product

Customer

Sale

Procurement Customer specificProduct creation

Sales forecastC

usto

mer

ano

nym

ous

prod

uct d

evel

opm

ent

Product spectrum


Notes:

The special requirements on PPS result from the combination of particulate contrary characteristics. These arise out of the work of the variant manufacturer.


• High utilisation

• Low stocks

• Readiness to provide information

Planning focus

• Program planning

• Quantity planning

• Optimal product succession/order regarding the production system

Control focus

• Fault repair

• Control of efficiency and quality



Lecture 03

Bibliography:

/1/ Infor business solutions AG:

inforMES – Manufacturing Execution System Produktionsinformationsschrift, Friedrichsthal 2003

/2/ Infor business solutions AG:

inforMES – Produktionsbeschreibung Produktionsinformationsschrift, Friedrichsthal 2003

/3/ Eversheim; Schuh :

Betriebshütte – Produktion und Management. Springer-Verlag. Berlin, Heidelberg, New York. ISBN 3-540-59360-8. 1996

/4/ Scheer, A.-W.:

Der computergesteuerte Industriebetrieb, Springer, Berlin/Heidelberg, 1990

/5/ Luczak; Eversheim.:

Produktionsplanung und –steuerung, Springer Verlag, 1997

/6/ Gabler Wirtschaftslexikon, 1997



Lecture 03

Final statement:The lecture overviews the scope of duty in production planning and scheduling. The Aachener PPS model, as a PPS description model with different perspectives, is described by the task view.

Today the IT support plays a great role in production planning and scheduling. Established systems are generally called ERP systems. They are based on the MRP II logic with all ist tasks. The planning process proceeds successively in several loops. One level below several detail solutions can be found. They are called MES systems and fulfill special demands on the shop floor.

Especially during the planning phase it is important to define target values to adjust the production. The polylemma of production describes, that not every target value can be fulfilled equally.

During the configuration of ERP systems the order penetration point is very important. It identifies which logistic target, e.g. utilization or adherence to delivery dates, has primarily to be followed. Depending on the company typology the ERP system has to be configured differently.



Lecture 03

Questions:• Which are the fundamental elements of technical order processing?

• What are the tasks of production planning and scheduling?

• Which concept is the basis for modern ERP systems?

• Why are short throughput times and a high utilization at the same time problematic?

• Which typologies are distinguished and what is their characteristic?

• What are the ERP core tasks in the different typologies?



Lecture 03


Gliederung

ERP systems for production planning and scheduling1




Enterprise Resource Planning II (ERP) L04 P. 0

Lecture 04


Lecture 04Enterprise Resource Planning II (ERP)- Order Clarification and Configuration -

Organisation:Dipl.-Ing. Dipl.-Wirt. Ing. Tobias ReilSteinbachstr. 53BRoom 521Phone: [email protected]






Lecture 04

Index:Index Page 1Schedule Page 2Glossary Page 3Targets of this lecture Page 5Lecture

Introduction and basics Page 6

Tools for the generation of an offer Page 10

Product Configuration Page 16

Example of a product configuration Page 30

Final Statement Page 38

Questions Page 39




Lecture 04

Schedule:


L1 27.04.2009 Mr. Rittstieg 0241 80 20396

L2 04.05.2009 Mr. Bartoscheck 0241 80 28203

L3 18.05.2009 Mr. Fuchs 0241 80 26265

L4 25.05.2009 Mr. Reil 0241 80 27964

L5 08.06.2009 Mr. Potente 0241 80 27387

L6 15.06.2009 Mr. Bauhoff (fir) 0241 47705-439

L7 22.06.2009 Mr. Hoeschen 0241 80 27382

L8 29.06.2009 Mr. Jung 0241 80 27392

L9 06.07.2009 Mr. Rauhut 0241 80 28206

L11 13.07.2009 Mr. Koch 0241 80 25321

L12 20.07.2009 Mr. Cuber (fir) 0241 47705-420




Topic











Lecture 04

Glossary:

Offer Calculation:The offer calculation is the calculation of the offer or quotation price. In order of increasing accuracy, the following methods can be deployed:- Estimation (experience-based)

- Cost-per-kg- or material-cost-method

- Calculation based on cost functions

- Calculation broken down to individual parts

While an estimation may require the least effort, it at the same time provides the lowest accuracy. A calculation broken down to individual components requires a large effort, but generates a quotation price with the maximum accuracy. (Schuh 2005)

Order Clarification:The order clarification is the process of clarifying and specifying the customer requirements as completely as possible. The difficulties in the offering phase are based on the fact that usually not all customer requirements can be entirely specified. Whether or not an offer should be generated and an order should be accepted, can only be estimated based on experiences with similar products.

Based on the information from the order clarification phase, an order selection can be performed under consideration of the profit margin, the demanded and the possible delivery date. (Schuh 2005)

Module:Modules are parts to be attached, that enable a manifold combinability of components and an efficient creation of variety based on separate function, but unified product interfaces. The principle of modularisation is especially well suited to represent a high product variety with only limited effects on the product complexity. (Schuh 2005)



Lecture 04

Module Building Set:Module Building Sets are characterised by one or few base elements, onto which modules of differing variety can be mounted over various assembly steps. This principle is a common basis for bill-of-material structures in the area of plant engineering and construction. The difference to a pure module approach lies in the existence of base elements, but not in the existence of and structuring into different modules as parts to be attached. (Schuh 2005)

Product Configuration:Product configuration means the composition of products or system solutions based on standardised components and on a knowledge base of predefined configuration rules. This composition of products happens according to customer specifications. (Schuh 2005)

Product Structure:A product structure is the structured composition of components to a product. Sub-assembly components and individual parts lead to structure steps by bundling those components and parts on a lower level in the product structure. (Schuh 2005)



Lecture 04

Targets of this Lecture:

Separation of the tasks in the order process particularly in companies with an order-bound production

Explanation and description of appropriate methods and tools to the rationalisation of the order process

Terminisation of the offering phase

Calculation of the offering costs

Configuration of products



Lecture 04


Structure

Introduction and basics1

Tools for the generation of an offer2

Product configuration3

Example of a product configuration4

Notes:



Lecture 04


Relation between Supply and Demand


(build-by-order)


(build-by-order)Variant

manufacturerVariant

manufacturerSeries

manufacturer(build-on-stock)

Series manufacturer

(build-on-stock)

CustomerCustomer

InquiryInquiry

Public authoritiesPublic authorities

Invitation to tender

Invitation to tender

MarketMarket

AnonymousAnonymous

DemandDemand

Assessment of DemandAssessment of Demand

Order processing is dependent on the type of company

Order processing is dependent on the type of company

Offer

Notes:During the series manufacturing no offering or configuration process takes place. Instead series manufacturer build on stock, therefore anonymously to the customers. The products are produced on the base of prediction to meet the markets demands. The array of the products usually contains standardized products in different versions. The series manufacturing is used in a wide array of products.

On the other hand the variant manufacturer, after getting an enquiry, chooses one solution out of many already constructed solutions. The variant manufacturer is anxious to produce as little as possible in advance and to prevent order-specific elements. The manufacturing process starts after the individual order. The array of products contains customer specified products which are usually more complicated than products from the series manufacturer.

The order-specific manufacturer is always confronted with a great number of order-specific elements, which combined with existing technical solutions lead to a significant configuration problem. Partially new constructive solutions have to be developed during the creation of the offer.



Lecture 04


Order Processing

OfferOffer

New compilation of standard components

Unit Construction System

New compilation of standard components

Unit Construction System

Compilation of technical solutions

Compilation of technical solutions

Individual ComponentsIndividual ComponentsStandard componentsStandard components

Product by requirementProduct by

requirement

Variant manufacturerVariant manufacturer Order-specificmanufacturer

Order-specificmanufacturer

Individualtechnical solutionsschedulescalculationsconditions

Product by catalogueProduct by catalogue

Series manufacturerSeries manufacturer

with:specificationtimes of deliveryterms of deliveryprices

WarehouseWarehouse

Notes:Because of the possible compilation of different standard components by connecting individual components, the variant manufacturer is able to satisfy the customer's demand. Hereby it is possible for the variant manufacturer to offer a great number of different products on the market without additional construction efforts. Usually individual customer's wishes which are not part of a standard component are not considered.

However the order-specific manufacturer is able to consider special requests by individual customers. During the creation of the offer, technical solutions, schedules, calculations and conditions are acquired for each specific order.



Lecture 04


The Offer and Offer Preparatory Tasks

Customer requirements

Form of quotation

(technical) feasibility

Order acquisition and evaluation

Declaration of

Supplying/ offering company

Specifies benefits and terms of delivery

Scheudeling

Basis for negotiation

Offer

Text

Graphics

Total price, price of components, fixed price, target price

Delivery date

Validity date

Delivery procedures

Warrenty

Penality clauses

Compilation and documentation of the technical solutions

Calculation and pricing

Determination of times and terms of delivery

Terms of business

Notes:Through the offer the company shows that it has acquired the service and is able to find the right solution to the right conditions and the right schedule. The offer is the declaration of a company to deliver an appointed product to appointed conditions. The offer is temporary and is usually the basis for negotiations.



Lecture 04


Structure





Notes:



Lecture 04


Delivery Scheduling Tools

Rough scheduling proceduresRough scheduling procedures

Bar chart - procedure

Capacity scheduling - procedure

Bottleneck machine - procedure

Critical path planning

Notes:The different methods of critical path planning are very helpful tools to plan, coordinate and control complex processes, their logical links and schedules. The best known methods are Critical Path Planning (CPM), Program Evaluation and Review Technique (PERT) and the Metra-Potential-Method (MPM). (Eversheim 1996)

A good tool for the description of the duration and the chronology of the process is the bar chart procedure. This procedure is especially for smaller projects with a small amount of manufacturing steps and without complicated combinations. It is possible to create a bar chart automatically out of a critical path plan. Bar charts have a high clarity and they are easy to construct.

The capacity scheduling procedure is needed to calculate a theoretical capacity limit, while having a real and given capacity limit in mind. Already accepted orders and the conversion rate have to be considered during this procedure.

Planning principle for the bottleneck machine procedure is the bottleneck machine itself. The machine with the longest process time inside a production chain is characterized as the bottleneck machine.



Lecture 04


Scheduling of Offers Taking the Capacity Requirements of Quotes Previously Submitted into Account

orders accepted

capacity limit

capacity for further offers

theoretical capacity limit for offers (conversion rate 5:1)

quotes submitted

5.000

10.000

15.000

20.000

25.000

capa

city

(h/d

ay)

20 21 22 23 24 25t [calendar

week]

Notes:The shown possibility to schedule offers for companies with a low volume or piece production is called capacity scheduling procedure.Planning principle for this procedure are the capacity requirements of different products, the available manufacturing capacity, the conversion rate and the consumption of resources of already accepted orders.

Based on a given and real capacity limit it is possible to calculate a theoretically capacity limit while considering already accepted orders and the conversion rate.

The theoretically capacity limit is easily calculated by subtracting the fixed capacity and already accepted orders, multiplied by the conversion rate. The conversion rate is an indication for the number of submitted quotes which are averagely converted into concrete orders.

The difference between the theoretically capacity limit and already accepted orders results in the capacity for further orders. New orders are dispatched as soon as possible.

The capacity scheduling procedure guarantees an order process without interruptions.



Lecture 04


Approaches for Cost Determination

Cost-Determination

Differentiated evaluationallocation of costs according to input involved

Analogical approachestimation based on classification

E2B9621

Analyticalcalculation of individual parts

Estimationestimation based on experience

Knowledge-basedartificial intelligence

expert systems

Statisticaldeduce cost function

Parametrical

Cost function

f(x)=ax+bx2+...

Notes:Applied methods and computer-aided tools have to be adjusted to the allowed tolerance and to the probability of the order.

The effort of the cost determination of rough methods (estimation, differentiated evaluation, analogical approach) is compared to methods with a higher accuracy obviously lower.



Lecture 04


Quotation Costing MethodsQuotation costing methods

Determination of similar technical solutions

Production costs

Cost-per-kg-method Material cost method Calculation based on influencing factors

Calculation of individual parts

Basis: price per kg of similar products

Basis: cost structure of similar products

Basis: significant factors influencing the production costs

Basis: time value tables, wage rate, etc. of representative individual parts regarding costs

Determination of the price per kg of similar products

Determination of weight of the product to be calculated

Production costs = weight*price per kg

Determination of the cost structure of similar goods

Determination of material costs of the product to be calculated

Production costs= Σmaterial costs+%wages+%overhead costs

Cost analysis of similar products (determination of significant factors)

Generation of a cost function

Production costs= f(influencing factors)

Determination of representative new parts (regarding costs)

Determination of times, material prices wage rates, etc.

Production costs= Σproportion of material *material price + …

Notes:To generate an offer including the price, the amount of the production costs has to be well known.

If the calculated amount is higher than the actual size of the production costs, competitive prices are inhibited and the danger of fewer orders is high. On the other hand unprofitable orders might be accepted if the calculated production costs are below the actual costs.



Lecture 04


Problems Concerning the Clarification of Orders

Quality of the order clarification is strongly

dependent on the person processing it

High risk of overlooking certain solutions

Customer benefit of certain individual options can not be

emphasised sufficiently

Long cycle times in planning (business) units

Tardy and unspecific planning of the production flow

Customer Sales

Complexity of Products

Discrepancy between the need of explanation of

products and ability to explain of sales

Numerous iteration loops for the order clarification between

order processing unit and customer/sales

Notes:The difficulties of the offering phase partly originate in the imprecise customer's wishes.



Lecture 04


Structure





Notes:



Lecture 04


Potentials of Systematic Order Clarification and Configuration

Concretion of orders

60%

workflow

30-40%

60 - 80%

information deficit

nominal curve

assembly launch

actual curve

Indirect areas of business direct

100%

Notes:The lack of transparency between contractor and customer concerning individual products often results in a paucity of information, which is not resolved until the late phase of the order process.

This means that the production has already started although not all conditions are specified. Interruptions of the production combined with significant costs might be the result.

With the aid of the order configuration the paucity of information is resolved in an earlier point of the order process. This way interruptions can be avoided.

The order configuration assists to reduce the paucity of information. System-aided configuratorssupport an early order clarification.



Lecture 04


Product Configuration

Source: Schuh 2005

„Product configuration denotes the combination of products or system solutions based on standardized component parts and on configuration rules stored in a data base in accordance with specifications of customers.“

Definition

Notes:



Lecture 04


Objectives in Applying a Configuration System for Products

Source: Schuh 2005

Offer Confirmation of Order Technical release ProductionCustomerinquiry

50%

100%

Increase in degree of technical clarification

Increase in degree of technical clarification

Lead time reduction

Lead time reduction

OfferConfirmation

of OrderTechnicalrelease Production

Actual Status

Nominal Status

Notes:The essential benefits of a product configuration system are based on a customer-oriented product presentation, an improvement of the market reaction, a decrease of sales-cycles and a reduction of costs in connection with the acceptance of wrong configurated orders.

The processing time in pre-production areas is shortened by increasing the safety of the configuration and downsizing manual interfaces in the order process.

Introducing a product configurator affords an opportunity to redefine the communication with the customer, to develop a tightened relation to the customer and to improve the customer's satisfaction.



Lecture 04


Functionalities and Fields of Activity of Product Configurators

Source: Dangelmaier 2001; picture: Krauss-Maffei

Distribution-oriented user guidance decision-oriented process flow

selection of standard processes

rapid information transfer

Distribution-oriented user guidance decision-oriented process flow

selection of standard processes

rapid information transfer

Documentation of special requests

Documentation of special requests

Visualisationof products

Visualisationof products

Configuration of products by testing for technical incompatibilities and identification of entries in the bill of materials

Configuration of products by testing for technical incompatibilities and identification of entries in the bill of materials

Interactive Selling System (ISS), sale of complicated high-variety products via the internet

Interactive Selling System (ISS), sale of complicated high-variety products via the internet

Established clientele: customer and Selling Information System interface

Established clientele: customer and Selling Information System interface

On-site offer preparationOn-site offer preparation

Illustration of certain specifications

Illustration of certain specifications

Argumentative help (i.e. competitive products)

Argumentative help (i.e. competitive products)

Graphical user-interface

Graphical user-interface

Interfaces to PPS-, CAD-, CRM-, und ERP-systems

Interfaces to PPS-, CAD-, CRM-, und ERP-systems

Pricing (total price and special equipment price)

Pricing (total price and special equipment price)

Notes:



Lecture 04


Different types of modules

mandatory modulesdiscretionary modules

mixed system

Order-specificfunction

“Non-module”

unpredictable

modular design

fundamental,recurring,universal

conjunctiveoutstanding,

supplementary,expanding

imprecise,determinable

in all parts

Overall functionvariants

Implementationvariants

assembly groupmachine

plant

Basicfunctions

Auxiliaryfunctions

Specialfunctions

Adaptablefunctions

Basicmodules

Auxiliarymodules

Specialmodules

Adaptablemodules

special, only in specific cases, leads to mixed systems

Notes:Modules are the basis on which a product configurator system is build. These modules allow to construct the corresponding product. The modular design allows to combine different modules, whereby a large number of different products can be assembled without the effort of construction.

Assembly groups, machines or plants are build up from basic and auxiliary modules. To extend the functionality of the machines, special and adaptable modules are added.

A random combination of the individual modules among each other is not necessarily possible. Those combinatory prohibitions are stored in the configurator, so that the user can configuratepossible products only.

To build up a configuration the accumulation of modules is required.



Lecture 04


Module Building Set with Standard Products, Standard Variants and Variants to develop

standard module released module

module can be derived by modification new or not released module

variantsm

odul

e

Notes:



Lecture 04


Customer Requirements are Reflected in the Product Structure (e.g. Matrix-Method)

Connections and interdependencies between Functions

Current and future functions

Interdependencies betweenfunctions and modules

(principal/subordinate) module

neutral and non-neutralinterfaces between modules

Notes:In accordance to satisfy a big part of the market with the product varieties, the configurable product structure has to be adjusted to the customer's needs. The Matrix-Method is one possibility to reflect the product structure with the customer's needs.

This methods helps visualizing combinatory prohibitions and combinatory commandments between modules and functions. In addition the matrix-notation allows to combine functions with appropriate modules.



Lecture 04


Module Development and Design in accordance with Different Business Units

Source: Schuh 2005

modular structure Sales-/

customer-perspective

non-order related pre-assembly

optimal lot size

Manufacturing-/purchase perspective

R&D-perspective

Assembly-perspectiveassembly module

customer module

net benefit for

customers

functional complexes

Notes:During the development of the modules several perceptions have to be considered.



Lecture 04


Configuration Process

Source: Schuh 2005

list of customer requirements(completed checklist or specification sheet)

revised list of customer requirements

completed scan

data base of components

dependency rules

varied functional components

with estimated costs

functional components with forecasted costs

selection of optimal functional components

product calculation legend: computer-aided methods

functional componentswith existing costs

selection of optimal functional components, or new configuration

compilation of cost-oriented product configuration

search for conformal functional components within data base

conflict resolution

translation into distinctive scanning features

supplemental and specificationof customer requirements

Notes:The first step in the configuration process is the acquisition of the customer's requirements on the product. Checklists help to receive the necessary details and to fix them in an appropriate form for the order. At the same time the functional configuration-relevant orders has to be minded. After revising and making sure that the customer requirements are technically practicable, the computer-aided configuration process begins.

The effect of the input is a selection of product configuration components which are converted into a list of items-structure by the system. This list is available for the process plan and it's preparation.

This process, automatically accomplished by the configurator, is based on product characteristics as well as connection-functions. Furthermore the configuration process is supported by an early basis configuration and gained experience from knowledge data bases.

If the final product configuration exists, the product calculation based on price tables in the system is going to be accomplished.



Lecture 04


Variants-Configuration Process

Source: Dangelmaier 2001

Corporate activitiesCorporate activitiesCustomer activitiesCustomer activities Product configurationProduct configuration

Evaluation by sales-ID and engineering

If necessary:special design

Confirmation of order

PPS-dispatching based on SLPL

Clarification ofrequirements

Selection of astandard product

Selection of variants and characteristics according to

detailed requirements

Compilation of single level parts list (SLPS) by the

product configurator

Cost analysis

Transformation of SLPS into a technical offer-part

Completion of the offer

Offer to customerOffer

Validation

Notes:



Lecture 04


3 Methodological Approaches of Product Configurators

Source: Schuh 2005

rule-based configurators– body of rules and regulations (complex dependencies, preclusions,

validations and calculations), configuration of customer without help of sales

interaction-based configurators- intermediate stage -– configuration by customer and/ or sales person (complex products

(e.g. machine tools), limited combinatory variety

knowledge-based configurators– sales and engineering knowledge, for cases when configurational

variety is extremely large, extremely complex objects (e.g. planning of industrial plants), illustration in the system is neither realizable nor advisable

Criteria for classification/differentiation: Where is the comprehensive configurational knowledge located?

Notes:



Lecture 04


Procedure for Establishing Configurational Knowledge

Source: Benett 1999

Classification of the range of products in focus

Accumulation of information and structuring

Establishment of an information base

Linkage of assembly groups and specifications

of characteristics

Depositation of combinatorics between

assembly groups

Depositation of non-order-related information

(prices, product information)

Listing of product characteristics and specifications

charact. specifications

1 a2 a

bb c

..

Classification of assembly groups:

basic (B)mandatory (M)discretional (D)special (S)

assembly groups

BG 2 X

M S

XBG 5

BXBG 1

BG 4 X

D

XBG 3

Notes:An adjusted product structure is the basis for the construction of a product configurator. Through an appropriate modularization and standardization an assembly group structure, which variety accomplishes the customer's wishes, has to be found.

It is reasonable to include not only the „technical sensible“ product varieties but also economically speaking the optimal solution. Explicit decision criterions have to be developed.

In order to make the complexity of the product configurators controllable for the user, graphically browser, which display the single objects and object's connections through icons and structure-knots, asserted themselves.



Lecture 04


Order Configuration –from a Non-Order-Related to a Customer-Specific Order Structure

Source: Gross 1990

SP 1SP 2

V2

V3

?

V 1

V4

Stop

4713

MV 4712

V1 V2

SP 1 SP 2 MV 4711

V3 V4

4713

MV 4712

V1 V2

SP 1 SP 2 MV 4711

V3 V4

Non-order- and non-customer-related product structure

Customer-specific order structure

Order clarification

legend:

MV = mandatory variantV = variant

structure chart

SP = single partorder parts list

Notes:A structure chart is an interrogation-logic. All possible combinations of characteristics and specifications, which describe a product type, are deflected. Through the interrogation-logic an order neutral product structure is converted into a customer specified product structure.



Lecture 04


Structure





Notes:



Lecture 04


Configuration Example (1/7)

Source: Audi 2008

model

Notes:



Lecture 04



enginepetrol

4,2 FSI quattro

Source: Audi 2008

Notes:



Lecture 04



Specification of functions from a customer point of view

characteristics specifications

Source: Audi 2008

Notes:



Lecture 04



combinatory prohibitions

Source: Audi 2008

Notes:



Lecture 04



complete configuration

Source: Audi 2008

Notes:



Lecture 04



fuel typecylinder capacity

# cylinders# valves

KW

Nmexhaust gas

gearbox

region

…

Otto4,2832171

450EU3

multitronic

EU

…

…………

191

650EU4

tiptronic

Japan

…

…………

240

440EU2B

…

…

…

…………

257

…D4…

…

…

……………

………

…

…

……………

………

…

…

……………

………

…

…


Engine configuration:

engine type 4711 product line: 4,2l FSI quattro

Notes:



Lecture 04



1 0 6 A 1 0 3 0 1 1 A B Z Y L . K U R B E L G E H A E U S E 11 0 6 A 1 0 3 1 5 4 B S P R I T Z D U E S E 11 0 6 A 1 0 3 1 7 1 B D I C H T F L A N S C H 11 0 3 8 1 0 3 1 7 1 E D I C H T F L A N S C H 11 0 3 8 1 0 3 1 7 1 B D I C H T F L A N S C H 11 0 6 A 1 1 5 1 2 5 R O L L E N K E T T E 11 0 6 A 1 1 5 1 3 0 K E T T E N S P A N N E R 11 0 6 A 1 0 5 0 2 1 F K U R B E L W E L L E 11 0 6 A 1 1 5 1 2 1 K E T T E N R A D 11 0 6 A 1 0 5 2 0 9 K E T T E N R A D 11 0 5 0 1 0 5 1 8 9 B G E B E R R A D 11 0 2 6 1 0 5 6 3 5 A A N L A U F S C H E I B E 11 0 6 B 1 0 5 5 6 1 H A U P T L A G E R 11 0 6 A 1 1 5 1 0 5 B O E L P U M P E 11 0 6 A 1 1 5 2 5 1 S A U G L E I T U N G 11 0 6 B 1 0 3 6 2 3 E S C H W A L L W A N D 11 0 6 A 1 0 3 6 3 4 F U E H R U N G S R O H R 11 0 3 4 1 0 5 7 0 1 P L E U E L L A G E R 11 0 3 4 1 0 5 7 0 1 B P L E U E L L A G E R 11 0 6 A 1 0 7 0 6 5 A B K O L B E N M I T R I N G E 11 0 2 7 1 0 5 4 0 1 C P L E U E L S T A N G E 11 0 2 7 1 0 5 4 0 1 J P L E U E L S T A N G E 11 0 3 8 1 0 3 6 0 1 M O E L W A N N E 11 1 J 0 9 0 7 6 6 0 B S E N S O R 11 0 6 A 9 0 6 4 3 3 L I M P U L S G E B E R 11 0 6 A 9 0 6 4 3 3 G I M P U L S G E B E R 11 0 3 0 9 0 5 3 7 7 C K L O P F S E N S O R 11 0 5 8 1 0 3 3 8 3 K Z Y L I N D E R K O P F D I C H T . 11 0 6 A 1 0 3 3 5 3 P Z Y L I N D E R K O P F 11 1 0 1 0 0 0 0 6 3 A A Z U E N D K E R Z E 11 0 5 0 1 2 1 1 1 3 C T H E R M O S T A T / K U E H L W A S S E R R E G L . 11 0 6 A 1 1 5 4 0 5 A H O E L F I L T E R H A L T E R 11 0 6 A 1 0 3 6 6 3 B E I N F U E H R T R I C H T E R 11 0 6 A 1 0 3 2 2 7 A T E N T L U E F T U N G 11 0 5 8 1 0 3 5 5 5 B A B S C H I R M T E I L 11 0 6 A 1 0 3 4 6 9 S Z Y L I N D E R K O P F H A U B E 11 0 5 8 1 0 3 3 6 5 T R A N S P O R T L A S C H E 11 0 2 6 1 0 3 4 8 5 O E L V E R S C H L U S S D E C K . 11 0 2 6 1 0 3 4 8 5 A O E L V E R S C H L U S S D E C K . 11 0 6 A 9 1 9 0 8 1 A O E L D R U C K S C H A L T E R 11 0 6 A 9 1 9 0 8 1 A O E L D R U C K S C H A L T E R 11 0 2 8 1 1 7 0 2 1 B O E L K U E H L E R 11 0 6 A 1 1 5 5 6 1 B W E C H S E L F I L T E R 11 0 6 B 1 0 9 1 1 1 Z A H N R I E M E N R A D 11 0 6 A 1 0 5 2 6 3 D Z A H N R I E M E N R A D 11 0 5 8 1 0 3 7 2 8 A B E F E S T I G U N G S T E I L 11 0 6 A 1 2 1 1 3 2 D W A S S E R S T U T Z E N 11 0 7 8 9 1 9 5 0 1 C T E M P E R A T U R G E B E R 11 0 6 B 1 0 9 2 4 3 D S P A N N R O L L E 11 0 6 A 1 3 1 0 9 8 M K O M B I V E N T I L 11 0 6 A 1 3 3 0 6 2 C D R O S S E L K L A P P E N S T U . 11 K R A F T S T . S A M M E L L T G . 11 0 6 B 1 0 9 4 7 7 R I E M E N S P A N N E R 11 0 6 B 1 0 9 1 1 9 A Z A H N R I E M E N 11 0 6 B 1 0 9 1 1 9 B Z A H N R I E M E N 1

Z Y L I N D E R K O P F D I CZ Y L I N D E R K O P FZ U E N D K E R Z E

Engine type 4711 Cylinder head

Crank shaft

Oil pump

Parts list motor type 4711

Automatically generated, individually bill of materials

H A U P T L A G E R

K U R B E L W E L L E

fuelcubic capacity

# cylinders# valves

KWHPNm

exhaust gas

gearing

region

…

Otto1,845

110150210EU4

B80

EU

…

…………

115157235EU3

B80q

Japan

…

…………

125170280

EU2B

MQ350

…

…

…………

132180…D4

…

…

…

…………

165225……

…

…

…

……………………

…

…

…

…………

………

…

…

…


Notes:



Lecture 04

Final Statement:

• Basics of the offer preparation

- Order Processing

- Tasks of the offer preparation

• Rough scheduling procedures

- Capacity scheduling procedure

- Bar chart-procedure

- Bottleneck machine-procedure

- Critical path planning

• Methods to calculate the production costs

- Cost-per-kg-method

- Material cost method

- Calculation based on influencing factors

- Calculation of individual parts

• Product-configurators

- Potentials of Systematic Order Clarification an Configuration

- Tasks

- Modular constructions



Lecture 04

Questions:

What are the essential differences between a series manufacturing, a variant manufacturing an a order-specific manufacturer?

What are important tasks at the offer preparation?

How can you calculate the theoretical capacity limit for offers?

What the meaning of the conversion rate?

Please name different methods to calculate the production costs.

Please describe problems concerning the clarification of orders.

How get the potential at the clarification of orders with the help of prduct-configurators release?

Outline or describe the configuration-process!



Lecture 04

Bibliography:

Audi 2007: Audi AG: Online-Produktkonfigurator. URL:http://www.audi.de/audi/de/de2/neuwagen.html [Stand: Januar 2008]

Benett, S.: Komplexitätsmanagement in der Investitionsgüterindustrie. Dissertation der Universität St. Gallen, 1999.

Dangelmaier, W.: Marktspiegel Customer Relationship Management. Anbietervon CRM-Software im Vergleich. Gabler Verlag, 2001

Eversheim, W.; Schuh, .G.: Betriebshütte – Produktion und Management. Teil2, 7., völlig neu bearbeitete Auflage, Springer-Verlag, 1996

Gross, M.: Planung der Auftragsabwicklung komplexer, variantenreicherProdukte. Dissertation an der RWTH Aachen, 1990

Schuh, G.: Produktkomplexität managen – Strategien, Methoden, Tools. 2. überarbeitete und erweiterte Auflage, Hanser-Verlag, 2005

ERP III – Controlling Strategies

Lecture 05Production Management B – Spring Semester 2009

L05 P. 0


Lecture 05ERP III – Controlling Strategies

Organisation:Dipl.-Ing. T. PotenteSteinbachstr. 53BRaum 528Tel.: [email protected]






L05 P. 1

Index:

Schedule Page 2Target of this lecture Page 3Lecture

Production targets Page 4Roles in the production of tomorrow Page 4Target System of the Production Planning and Controlling Page 5Strategy Compliant Positioning of a Production Page 6

Production planning and controlling Page 7Logistic Control Cycle Page 7Production planning Page 8 Selection of Control Methods Page 11Failure/Flaw cycle of the Production Control Page 13Basic Control Principles Page 14

System presentation Page 21Final statement Page 24Bibliography Page 25



L05 P. 2

Schedule:


L1 27.04.2009 Mr. Rittstieg 0241 80 20396

L2 04.05.2009 Mr. Bartoscheck 0241 80 28203

L3 18.05.2009 Mr. Fuchs 0241 80 26265

L4 25.05.2009 Mr. Reil 0241 80 27964

L5 08.06.2009 Mr. Potente 0241 80 27387

L6 15.06.2009 Mr. Bauhoff (fir) 0241 47705-439

L7 22.06.2009 Mr. Hoeschen 0241 80 27382

L8 29.06.2009 Mr. Jung 0241 80 27392

L9 06.07.2009 Mr. Rauhut 0241 80 28206

L11 13.07.2009 Mr. Koch 0241 80 25321

L12 20.07.2009 Mr. Cuber (fir) 0241 47705-420




Topic











L05 P. 3


• connection between strategy and production targets • survey of relevant production control methods• IT-support for production planning and control• weak points of conventional PPS-systems and new approaches

Demonstration: Simulation

• effects of different control strategies on the performance of a production system (Push/Pull)

Exercise:

• Harmonisation of lot sizes and logistic operating curves



L05 P. 4


Roles in the Production of Tomorrow

Different value added tasks need different logistic approaches!

These two areas are closely linked together

Production

15%

55%

30%

Product

Production

today

ZielProduct-supplier

Product related production (e.g.

assembly)

Volume and capacity oriented

production

Production specialists



L05 P. 5


Target System of the Production Planning and Controlling

profitability

high adherence to delivery dates

high utilisation

low stocks

short through

put times

Notes:

The main function of production planning and control is to reach the logistic targets:

• high adherence to delivery dates, • short throughput times, • low inventory and • high efficiency. taking their interdependencies, ability to reach the final target and high profitability into account. A target’s adherence to delivery dates, throughput times, stocks and utilization can be linked to a target system with the dimensions logistic efficiency and costs. The logistic efficiency is defined by the adherence to delivery dates and delivery times as experienced by the customer. The former depends on the adherence to delivery dates in the order processing and the latter on the order throughput times. The logistic costs, which can be influenced by the company, consist of the capital commitment costs and the production costs. The capital commitment costs can be influenced by stock changes.



L05 P. 6


Strategy Compliant Positioning of a Production

Strategy Production Targets

Efficiency/ Utilization

costs

Adherence to delivery dates

…

Strategy compliant target corridor

Strategy compliantlyweighed

Target corridor

Product design/ Product technology

Production/ Processtechnology

Prozessketten-beherschung

Label/ Image/ Market accessDesign

Lateral

Tech

nolo

gy

Leve

rage

Mar

ket l

eade

rInnovation

Leverage

Oligop

oly

Notes:In compliance with the corporate strategy to be implemented (here represented by six reference strategies) the relevant production goals are assessed with respect to their relative importance. Depending on the strategy, the individual goals become more or less important. (see system of targets of production). With the help of this weighting, the optimal individual production range can be determined. The result of this process is the identification of calls for action necessary in order to optimally adjust the production in focus, i.e. to shift the performance of the system in direction of the point derived/the corridor aimed at.



L05 P. 7


Adjusting the Operating Point: The Logistic Control Cycle

Source: according to Wiendahl/Pritschow/Milberg

Control variable

Com

man

d va

riabl

es

Control variable

controllera) Technical

control variable

b) Logisticcontrol variable

Con

trol

varia

ble

Subsidiarycontroller

Closed loop

control-led

system

Productionplanning

ProductioncontrolC

omm

and

varia

bles

Con

trol

varia

ble

Material flow

Notes:The figure a) shows the typical hierarchic control structure of a technical control loop. In analogy, a logistical control cycle has been developed. The analysis of a production system in view of its dynamic behavior over time constitutes the first step in realizing a production control system. This permits the reproduction of the control path, in this case material flow. The identification of control variables represents the next step. Based on the control variables identified, the adjustment characteristic and the disturbance reaction is to be analyzed in view of stability, finally leading to the development of a control system.



L05 P. 8


Production Planning

Theoretical Result: Week, day and shift plans, which are coordinated according to schedule and capacity per capacity area?

1. Throughput scheduling

2. Capacity dispatchingon work station A

3. Capacity adjustment,sequence/order formation(according to set up criteria)

Time/durationStart planningperiod

End planningperiod

A1 A2 A3 A4 A5A6

A3

A2

A1A5

A4 A6

F

CB D

D

F

B

B C

C

A4

A2

A6

A5

A3

A1

F



L05 P. 9


Influencing Factors in the Configuration of Production Planning and Controlling

HumanQualification Labor/Working time flexibilityShift modeNumber of jumpers

ProductNumber of parts/variants Geometric similarity of the productsNumber of process stepsTime/Control of the process stepsLinking of the process stepsNumber of pieces/items/yearManufacturing list

OrganizationManufacturing/Production organization (Group manufacturing/production, garage manufacturing/production, flow production, etc.)Material flow structureMalfunction appearanceOrganization of the maintenance

TechnologyAutomation level Number of manual jobsNumber of work stationsLevel of replacement/supplementNumber of pallets, appliances/devicesNumber of transportation units

Influencing factors in the configuration of production

planning and controlling



L05 P. 10


Oppositional Approaches for the Production Planning and Controlling

Central Planning

Planning Knowledge

Decentralized Planning

Planning Knowledge



L05 P. 11


Selection of Control Methods

Source: according to Zülch

Production structure

Controlling principle

Control strategy

Control method

Process principle

contains a certain

can be controlled through

enable certain

are realized in

Examples:Non-repetitive productionSerial productionProcedural production

Job-shop organizationGroup productionSeries productionContinuous production

Work order controlThroughput controlCompulsion control

Release logicSize of orderSuccession

Order schedulingBurden orientated order releaseEfficiency rate agreementKanban, process control

Notes:The chart illustrates an approach in selecting a suitable control method and exemplifies a generally accepted and approved procedure. Based on advisements of Siemens AG the following procedure can be determined: the production structure and the operation sequence call for a certain control principle. Therefore the control strategy and method is determined. The parameters are generally accepted and are focused on specifying “static” characteristics. These are in particular the product variance and frequency of recurrence (product spectrum with types and numbers of different products and their variants, piece number per variant, distribution of work contents), operating sequence (i.e. flow production and shop fabrication), distribution of cycle times and their ratio to delivery times.



L05 P. 12


Fields of Application of Production Control Methods

KANBAN

Cumulative quantity

CONWIP

MRP I

bottle neck control (OPT)

BOA

lowhigh

Material flow complexity

Num

ber o

f var

iant

s

low

high



L05 P. 13


Failure/Flaw Cycle of the Production Control

The cycle times become longer and

spread/ disperse more Bad adherence

to delivery dates

The planned cycle times

increaseOrders are

released earlier

The work load/ burden at the job increases

The waiting queues become

longer

Notes:In practice most companies react in a unilateral manner and handle the most urgent problem. For instance, overfilled stocks usually lead to actions aiming at reducing of stocks. Yet almost inevitably, problems in delivering certain parts or products occur. Most companies then assume the cause to be too short scheduled cycle times. The according values are then increased, resulting in earlier starting dates of orders. This again induces an increase in stocks in production and assembly. The cycle times then tend to increase due to the longer wait times combined with a greater dispersion. In sum, the adherence to delivery dates deteriorates and only rush-orders and other special actions can guarantee in-time delivery.



L05 P. 14


Basic Control PrinciplesPush / Pull

Source: according to Wiendahl

Customer/stockAS 1

PPC-System

AS 2 AS 3

a) Push-control

Customer/stockAS 1 AS 2 AS 3

b) Pull-control

Variants Material flow Information flow WS – working system

Notes:Two basic job control principles can be distinguished: in the case of the so-called push principle, production lots and dates are determined in a superior planning level and affect production processes beginning with the supply of raw materials and ending with the delivery to customers. Orders are assigned with a job account number and a due date and launched. The main target of production control is managing orders in a way that delivery dates can be met. According to the pull-principle, a customer order triggers a demand affecting preliminary stages in the material flow. For instance: preliminary assembly delivers against an order placed by final assembly, manufacturing receives orders from preliminary assembly and places orders with materials procurement. The primary objective of pull-oriented control systems is therefore the disposition of a agreed lot in an agreed time schedule. Orders in process are neither assigned with a job account number nor a final delivery date.



L05 P. 15


Push-Principles (I/III)MRP II

Source: according to Scheer

MR

P

Feinterminierung der Fertigungsaufträge & Reihenfolgebildung

MR

P I

MR

P II

sales planningbudgeting

production programme planning

quantity planning



gross dependent requirements

explosion of billofmaterials

net dependent requirements

order initiation and control order initiation


capacity schedulingperiodic aggregation


capacity scheduling

stocks

calculation of order quantity

available capacity


Notes:MRP (Material Requirement Planning) = planning of lots

1950ies: requirement-oriented materials disposition supersedes consumption-oriented materials disposition;

MRP I (Manufacturing Resource Planning) = planning of production factorsmid 1960ies: increase in performance of electronic data processing allows taking production capacities into consideration

MRP II (Management Resource Planning)1980ies: economic and strategic aspects are taken into consideration;

With MRP II the level of detail increases with a decreasing planning horizon. Subordinate planning steps can affect and revise guidelines for super-ordinate planning steps.

As the term “Manufacturing Resource Planning” implies, the MRP I concept is a material-oriented approach and strictly discriminates between planning of lots and scheduling.

In spite of a number of weak points, MRP I is deployed for strictly demand-oriented production (i.e. piece and small series production). Complex procedures, as found in the control of shop fabrication, do not allow for long-term and detailed planning.

MRP II is an extension on the MRP I-concept, taking strategic aspects and the control-oriented implementation of planning measures into consideration.

The concept of MRP II (unlike MRP I, MRP II stands for “Management Resource Planning”) incorporates control and planning in a comprehensive logistics supply chain. In this context, the production program planning for instance is seen as a strategic planning level.



L05 P. 16


Push-Principles (II/III)Optimized Production Technology

Inventory Primary requirements

Manufacturing resourcesTask scheduleParts lists

BUILD NET

Network Burden analysis

Critical capacitiesSPLIT

Shop-floor scheduling

CriteriaBackward scheduling

Forwardscheduling

OPT SERVE

Splitting of the net into a “critical” and a “non-critical” part

Analysis of the capacity burden

Backward scheduling of the production steps, that do not burden bottlenecksLot creation/formation for production and transport

Forward scheduling of the production steps, that burden bottlenecks

Lot creation/formation for production and transport

Notes:“Optimized Production Technology - System (OPT)” is a network-based software product for the control of shop fabrication. The system aims at managing and steering production processes, primarily focusing on the overall corporate performance instead of on individual measures. Therefore, the order network is divided into two parts containing critical and noncritical capacities. Critical capacities are mostly bottle necks. OPT-rules on the one hand specify the general production control strategies and on the other hand deal with the relevance of bottle necks for the entire production flow and for the attaining of production goals. The nine OPT-rules:Adjust the production flow, not the capacity. The capacity factor of a noncritical capacity is not determined by the capacity itself, but by some other restriction in the overall operating sequence. Provision and utilization of a capacity is not synonymous.An hour lost in a bottle neck is an hour lost for the entire system.An hour gained in noncritical capacity is a miracle.Bottle necks determine the sequence as well as the stocks.A transport lot is not necessarily equal to a production lot, often this is even prohibited.Production lots must be variable and not fixed.When plans are made, all preconditions necessary must be checked simultaneously. Cycle times are the result of a plan and cannot be pre-determined. The sum of individual optima is not equal to the overall-optimum.



L05 P. 17


Push-Principles (III/III)Cumulative Quantity

lag

advance

Present

advance inquantityunits

advance indays

cumulated plannedlot size =

target cumulative quantity

cumulated achievedlot size =

actual cumulative quantity

Days

Quantity units

Notes:This concept is utilized mainly in series and mass production which is assembly-oriented and common to the automotive industry. A cumulative quantity signifies a cumulative value and can refer to various different parameters. If the cumulative quantity refers to planning-oriented values, we speak about a target(ted) cumulative value. Accordingly, cumulative values referring to actual values are determined as actual cumulative values. By comparing target(ed) and actual cumulative values, different insights can be deduced. If for instance the curve of an actual cumulative value lies above the curve of a target(ed) cumulative value production is taking place in advance. Fore-runnings can be expressed in units of quantity by the vertical distance between the curves, in units of time by the horizontal distance. The available stock is a result of the difference between the cumulative values of inward and outward stock movements. Cumulative quantity system provide an efficient and rapid overview of the production progress of suppliers in a certain defined sections in the material flow. Elaborate inventory maintenance and reservation systems can be omitted. By comparing the actual and the targeted course of the cumulative values, detailed production control measures (order control and release) and planning measures (dates, lots, requirements, …) can be deduced. For instance by determining the fore-runnings or the backlog in the dimensions “time” and “lots”, the “technical” and “temporal” capacity balancing can be prepared. Moreover, order release strategies can be carried out according to the “pull”principal.



L05 P. 18


Pull-Principles (I/III)Kanban

Rawmaterial stock

Rawmachin-ing

Fine machin-ing

Pre-assembly

Final assembly

Finishedgoods store

Card

Material flowInformation flowControl through certain number of emitted “ordering cards” (Jap. KANBAN)Reduce the number of cards until the production just worksCalling principle (Pull)Low capital lockup between intermediate and final stockSuitable for large scale and mass production according to the flow principle (automotive industry)

Card Card Card

Buffer Order

Notes:In terms of lean production, KANBAN is not only a material provision technique but also a philosophy. A perfectly tuned “KANBAN”-system, also referred to as “Just-in-time”, integrates all relevant suppliers and subordinate factories and leads to the entire elimination of stocks. Thus all security networks are systematically eliminated. Hence each member of the comprehensive production process is automatically forced to identify problems in a foresighted manner, before serious trouble occurs. The roots of Kanban-systems can be found in the 50ies, when the Japanese economy wasearmarked by a shortage in space and escalating lack of capital. For these reasons, the enterprisers were forced to make special efforts to reduce their stocks and to rationalize the material flow within the production areas and between different companies. This corporate rethinking lead to the development of Just-in-time (JIT) and of Kanban-systems as a specialized form of JIT.The Kanban-system can primarily be characterized by low control efforts and aims at fulfilling the following logistic goals: reduce material stocks,reduce cycle times,increase transparency of corporate actions and processes,increase productivity,increase flexibility with respect to short-term supply disposition and increase quality assurance.



L05 P. 19


Pull-Principles (II/III)Conwip

Raw material stock

Raw machin-ing

Fine machin-ing

Pre-assembly

Finalassembly

Card

Material flowInformation flow

Buffer Order

Conwip control is an enlargement of the pull-principle through push-componentsUse when higher number of variants and production of more expensive products Conwip-cycle covers several interlaced working systems

Finished Goodsstore

Notes:CONWIP stands for Constant Work in Progress. Production control according to CONWIP is an extension on the pull-principle with push components in order to attain a greater number of variants and meet the requirements of the production of expensive products. In contrast to traditional Kanban, CONWIP control loops incorporate a number of linked work systems. Furthermore a CONWIP-card only regains a start-up position after having passed through the whole chain of work systems together with the order and the finished product as been withdrawn from the buffer.



L05 P. 20


Pull-Principles (III/III)Load Orientated Order Release

Source: according to Wiendahl

customer inventory personalrequirements

stock

knownvolume of orders

urgentvolume of orders

releasedvolume of orders

VH

Stellrad “burden barrier"(Parameter: dispatching percentage)

“date barrier"(Parameter: forward horizon VH)

stock level

plan capacity

Disposition

Notes:The so-called load orientated order release is a procedure, the implementation of which is stochastically oriented. It is applied periodically, using the backlog of orders as a central control value which is calculated continually at the individual work stations (inward and outward movement function). Only those orders, which have to be fulfilled within a defined period are retrieved from the entire order backlog and enter the so-called urgent order backlog. In this case the systems verifies that there are sufficient capacities available, not surmounting a defined load barrier. Indirect load contingents – these only burden a work station after one or several work steps have been processed – are taken into account with a reduced load contingent as they are less likely to occur. If a work step of an order cannot locate a free capacity according to this procedure, the release of the whole order is held back. The main advantage of the procedure is a high flexibility with respect to variations from the consumer point-of-view. The control of orders containing a large number of work steps often leads to problems, this being the main disadvantage of load orientated order release.



L05 P. 21


Untertitel

Production Management II- System Presentation/Demo-


Material flow simulation:The effect of different control strategies on

the efficiency of a production system

(Push/Pull)



L05 P. 22


Interlaced Machine Row without (A) or with (B) Buffer places/spotsUntertitel

Buffer

Machine



L05 P. 23


Job Control of an AssemblyPush versus Pull

Pull control



L05 P. 24

Final statement:The long-term success of manufacturing business enterprises is secured byefficient and flexible production logistics. The strategic orientation is derived from the corporate environment (market dynamics, customer behavior, competitors, suppliers, etc.) and defines the primary production goals relevant for success. The factors mentioned determine the logistic concept/model of the company. In general, five conflicting production goals are pursued: low level of costs, high adherence to delivery dates, short cycle times, small inventory and a high performance level.Production planning and control are an integral factor in configuring and implementing efficient production logistics. The main targets of this lecture are to provide an overview of all control methods which are actually applied in practice and to describe existing software solutions. The main functions of production control are the prompting, controlling and securing of the lead-through and accomplishment of tasks with respect to lots, target dates and costs. Two main control principles can be determined: push and pull control concepts. These two concepts depict the two main characteristics of production control principles: deterministic push-control principles as opposed to user-oriented pull-control principles . Depending on the manufacturing structure, the complexity of material flows and the number of variants, the appropriate control principle can be chosen. In the following, all relevant control procedures will be examined in detail. The PPS system has been used for decades to support the functions of production control and planning mentioned above. These IT-systems are usually based on the MRP-concept developed in the 50ies. Increasing demands with respect the level of reality, precision and rate of work order/job planning and control have lead to new requirements, which traditional systems can no longer adequately fulfill. With the help of new approaches such as Advanced Planning and Scheduling (APS), the application of multi-agent-systems and the support of material flow simulation, the mentioned deficiencies can be remedied.



L05 P. 25

Bibliography:

Cox, J.; Goldratt, E.M.: Das Ziel, Höchstleistung in der Fertigung, McGraw-Hill, 1984

Eversheim, W.; Schuh, G.: Betriebshütte, Produktion und Management, Springer-Verlag, 1996

Eversheim, W.; König, W.; Pfeifer, T.; Weck, M.: Wettbewerbsfaktor Produktionstechnik, (AWK 1996), VDI Verlag, Düsseldorf 1996

Kuhn, Axel: Wege zur innovativen Fabrikorganisation, Band 1, Verlag Praxiswissen, 1998

Nyhuis, P.; Wiendahl, H.-P.: Logistische Kennlinien: Grundlagen, Werkzeuge, Anwendungen, 2. Auflage, Springer-Verlag, Berlin, 2002.

Ortmann, L.: DV Produktion - PPS im Überblick: Strategien und Verfahren zur PPS SYMIX Systems GmbH, Dortmund 2000

Schuh, G.; Wiendahl, H.P.: Komplexität und Agilität, Steckt die Produktion in der Sackgasse, Springer-Verlag, 1997

Günther, H.-O.; Tempelmeier, H.: Produktion und Logistik, 3. Auflage, Springer-Verlag, 1997

Wiendahl, H.-P.: Fertigungsregelung. Logistische Beherrschung von Fertigungsabläufen auf Basis des Trichtermodells Hanser Verlag, München, 1997.

Wiendahl, H.-P.: Erfolgsfaktor Logistikqualität, 2. Auflage, Springer-Verlag, Berlin, 2002

Zahn, E.; Zülch, G.: Systematisierung von Strategien der Fertigungssteuerung; In: Organisationsstrategie und Produktion, gmft Verlag, München, 1990


Supply Chain Management I L06 P. 0

Lecture 06





Lecture 06Supply Chain Management I

Organisation:Dipl.-Wirt.-Ing. Fabian BauhoffPontdriesch 14/16Raum 211Tel.: [email protected]



Lecture 06

Index:

Index Page 1

Schedule Page 2

Glossary Page 3

Target of this lecture Page 4

Lecture/Introduction into Supply Chain Management Page 6

Planning Tasks in Supply Chain Management Page 13

Supply Chain Structures – Problems and Strategies Page 18

Virtual Market Places Page 27


Questions Page 38




Lecture 06

Schedule:


L1 27.04.2009 Mr. Rittstieg 0241 80 20396

L2 04.05.2009 Mr. Bartoscheck 0241 80 28203

L3 18.05.2009 Mr. Fuchs 0241 80 26265

L4 25.05.2009Mr. Reil

0241 80 27964

L5 08.06.2009 Mr. Potente 0241 80 27387

L6 15.06.2009 Mr. Bauhoff (fir) 0241 47705-439

L7 22.06.2009 Mr. Hoeschen 0241 80 27382

L8 29.06.2009 Mr. Jung 0241 80 27392

L9 06.07.2009 Mr. Rauhut 0241 80 28206

L11 13.07.2009Mr. Koch

0241 80 25321

L12 20.07.2009 Mr. Cuber (fir) 0241 47705-420




Topic











Lecture 06

Glossary:

APS – Advanced Planning SystemsAdvanced planning incorporates long-term, mid-term and short-term planning levels. Software products - called Advanced Planning Systems - are available to support these planning tasks. APS do not substitute, but supplement existing Enterprise Resource Planning (ERP) systems. APS now take over the planning tasks, while an ERP system is still required as a transaction and execution system (for orders). (Kilger 2005)

ATP – Available-to-promiseIn most APS - and also ERP-systems - the master plan quantities that form the basis for order promising are called available-to-promise (ATP). ATP is the result of a synchronized supply and capacity plan and represents actual and future availability of supply and capacity that can be used to accept new customer orders on. (Kilger 2005)

CTP – Capable-to-promiseCTP follows ATP and takes additionally capacities within the company and the supply chain into account while calculating the delivery date.

(Alicke 2003)

MRP – Material Requirements PlanningMRP is the transformation of an independent into a dependent demand by using the Bill-of-Material. (Alicke 2003)

MRP II – Manufacturing Resource PlanningMRP II is the completion of the material and quantity related MRP calculation by taking capacities into account. (Schuh 2006)

PPC – Production planning and -controlThe PPC includes the complete order management from order acception to delivery of goods. THe planning and control functions are linked with the enterprise departements sales, construction, purchasing, production, assembly and distribution. (Schuh 2006)



Lecture 06

Objectives of Lecture on SCM:

Overview on structures of Classical Supply Chains and currently predominant Supply Networks

Introduction into different supply chain reference models

Overview of the Supply Chain Management tasks within the different planning levels

Different supply chain structures and their implications

Methods, potentials and obstacles of Supply Chain Management (SCM)

Knowledge about emergence of virtual market places out of SCM needs

Differentiation between different types of virtual market places

Integration of virtual market places into SCM



Lecture 06

Page 5© WZL/FIR

Structure

Introduction in Supply Chain Management1

Planning Tasks in Supply Chain Management2

Supply Chain Structures – Problems and Strategies3

Virtual Market Places4



Lecture 06

Page 6© WZL/FIR

IT at Productions Management

SCM

ER

P

CRM

PLM

Enterprise

Custo-mers

Resources

Sup-pliers

Products

Notes:IT-Systems are the interface between:

- Enterprises and Products via Product Lifecycle Management (PLM)

- Enterprises and Products via Customer Relationship Management (CRM)

- Enterprises and Products via Enterprise Resource Planning (ERP)

- Enterprises and Products via Supply Chain Management (SCM)



Lecture 06

Page 7© WZL/FIR

Supply Chain Management (SCM) from the perspective of …

Production Production Distribution CustomerSupplierEnterpriseSupplier

… direct relationships of an enterprise…

Customer

… to the value creating supply chain.

Definition

Supply Chain Management is the process oriented integration of Planning & Control of the products, Information & Cash flow through the entire value chain from the customer to the supplier‘s supplier with the following goals:

Better fulfillment of the customer demandsSynchronization & Optimization of resources to meet the demand Flexible Manufacturing to fulfill the orders Reduction of Inventory across the supply chain Kuhn, Hellingrath 2002

Notes:



Lecture 06

Page 8© WZL/FIR

Target system of Supply Chain Management

Source: Alicke, K.: Supply Chain Management, 2005

Low costs for Handling / Transportation Low warehousing costsLow Obsolescence costs through minimizing of shortfalls

Product availabilityShort delivery timesDelivery reliabilityProduct qualityExtended benefits

Cost reduction

SCM-Target system

High flexibility

Demand variationProduct changes and Product launchesProducts with short lifecycleExpansion on new marketsTransfer of ProductionAlliances and Fusions

Customer satisfaction

Supply Chains are regarded as one unitThe supply of the end-customer is the strategic goal for all chain linksStocks are uncoupled – Adjustment of variations and interferencesAll functions and systems of the supply chain are integrated activePlanning and control of the supply chain takes place under consideration of effects on all resources

Notes:



Lecture 06

Page 9© WZL/FIR

Classical Material Organization and PPC• Functional differentiated areas of responsibility in the supply

chain e.g. procurement and production

• Each department focusing on its own targets: „throw it over the wall“ - Mentality

• Assets are planned with a high security option right from the beginning

• Organization of interfaces

• Asset changes are running through the complete supply chain and influence all partners involved

• Local planning for single processes without regarding influenceson other partners

Supply Chain Management• Takes all partners from the first supplier to the customer into

account

• Delivery to the customer is the main target for all partners involved

• Assets are only the last chance to react on order changes

• Active integration of different functions and systems within thesupply chain

• Active and direct information and adaptation of all involved partners to demand changes

• Planning for the complied supply chain taking influences on different partner and their resources into account

Supply Chain Management in comparison to the classic material management and PPC

• Reduction of assets• Reduction of lead and supply time• Increase in delivery reliability and velocity• Cost reduction through better resource planning and higher planning efficiency

Targets of SCM

Notes:



Lecture 06

Page 10© WZL/FIR

Modeling the Supply Chain using the SCOR (Supply Chain Operational Reference Model)

Quelle: Supply Chain Council

www.supply-chain.org

Plan

Supplier Customer

DeliverSource Make DeliverMakeSource Source

Intern or extern Intern or externYour Manufacturing Organization

SCOR Model

Return Return Return

Return Return Return Return Return

MakeDeliver DeliverSource

SCOR describes any partner in the supply chain using 5 basic processes – Procurement (Source), Manufacturing (Make), Delivery (Deliver), Planning (Plan) and taking back the defective products (Return).

Notes:

For a consistent description, rating and analysis of logistic chains different reference models were designed. The most established one is the SCOR Model (Supply Chain Operational Reference Model) of the Supply Chain Council. The different processes are defined as:

Source:

Source are all processes, which control the shopping and acquisition, which are needed to meet the actual needs.

Make:

Make are all processes, which are needed to commute the raw materials to finished goods. They have to be construed for that the actual and planned stock is covered.

Deliver:

Deliver are all processes, which bring the products and services to the customer.

Plan:

Plan are all processes, which synchronize the supply and demand. The goal is to achieve the best solutions for all partners.

Return:

Return are the processes, when broken products have to be returned to the manufacturer.



Lecture 06

Page 11© WZL/FIR

Using the SCOR model, enterprises are modelled at different process levels

#

Level

Schematic Comments

1

2

3

4

Configuration Level(Process Categories)

ProcessElement Level(Decompose Processes)

PlanDeliverMakeSource

ImplementationLevel(DecomposeProcess Elements)

Supp

ly C

hain

Ope

ratio

ns R

efer

ence

mod

el

Top Level

(Process Types)

Notin

Scope

Description

Balance Production Resources withProduction Requirements

Establish DetailedProduction Plans

Identify, Prioritize, and AggregateProduction Requirements

Identify, Assess, and AggregateProduction Resources

P3.1

P3.3 P3.4

P3.2

Return

Die Supply Chain eines Unternehmens kann im nächsten Level durch ca. 17 Standardmodule konfiguriert werden. Die Unternehmen implementieren auf Level 2 ihreOperationsstrategie durch eine zugeschnittene Konfiguration.

Level 3 definiert die Möglichkeiten eines Unternehmens in seinen gewählten Märkten zu wirtschaften und besteht aus:• Definitionen der Prozesselemente• Input und Output von Prozesselementinformationen• Leistungsmessung der Prozesse• Best Practices• Potenziale des Systems zur Unterstützung der Best Practices

Level 3 verfeinert die Ebenen des 2. Levels

In diesem Level implementieren Unternehmen speziellzugeschnittene Supply Chain Management ToolsLevel 4 definiert Handlungsalternativen um Wettbewerbsvorteile zu erlangen und flexibel auf veränderteMarktsituationen regieren zu können

Level 1 definiert den Anwendungbereich und den Inhalt des Supply Chain Operations Reference-ModellsBasis für die Wettbewerbsstrategie

Quelle: SCOR Version 7.0 Overview, Supply-Chain Council 2005

#

Level

Schematic Comments

1

2

3

4

Configuration Level(Process Categories)

ProcessElement Level(Decompose Processes)

PlanDeliverMakeSource

ImplementationLevel(DecomposeProcess Elements)

Supp

ly C

hain

Ope

ratio

ns R

efer

ence

mod

el

Top Level

(Process Types)

Notin

Scope

Description

Balance Production Resources withProduction Requirements

Establish DetailedProduction Plans

Identify, Prioritize, and AggregateProduction Requirements

Identify, Assess, and AggregateProduction Resources

P3.1

P3.3 P3.4

P3.2

Return

Die Supply Chain eines Unternehmens kann im nächsten Level durch ca. 17 Standardmodule konfiguriert werden. Die Unternehmen implementieren auf Level 2 ihreOperationsstrategie durch eine zugeschnittene Konfiguration.

Level 3 definiert die Möglichkeiten eines Unternehmens in seinen gewählten Märkten zu wirtschaften und besteht aus:• Definitionen der Prozesselemente• Input und Output von Prozesselementinformationen• Leistungsmessung der Prozesse• Best Practices• Potenziale des Systems zur Unterstützung der Best Practices

Level 3 verfeinert die Ebenen des 2. Levels

In diesem Level implementieren Unternehmen speziellzugeschnittene Supply Chain Management ToolsLevel 4 definiert Handlungsalternativen um Wettbewerbsvorteile zu erlangen und flexibel auf veränderteMarktsituationen regieren zu können

Level 1 definiert den Anwendungbereich und den Inhalt des Supply Chain Operations Reference-ModellsBasis für die Wettbewerbsstrategie

Quelle: SCOR Version 7.0 Overview, Supply-Chain Council 2005

Level 1 defines the scope and content for the Supply chain Operations Reference-model.Here basis of competition performance targets are set.

A company’s supply chain can be “configured-to-order” at Level 2 from core “process categories.”Companies implement their operations strategy through the configuration they choose for their supply chain.

Level 3 defines a company’s ability to compete successfully in its chosen markets, and consists of:

• Process element definitions• Process element information inputs, and outputs• Process performance metrics• Best practices, where applicable• System capabilities required to support best practices• Systems/tools

Companies “fine tune” their Operations Strategy at Level 3.

Companies implement specific supply chain management practices at this level. Level 4 defines practices to achieve competitive advantage and to adapt to changing business conditions.

Source: SCOR Version 7.0 Overview, Supply-Chain Council 2005

Notes:



Lecture 06

Page 12© WZL/FIR

Structure







Lecture 06

Page 13© WZL/FIR

Reference Model for Tasks of Operations Management: The Aachen PPC-Model

(source: Schuh 2006)

In-plant production planning and

control

Procurement planning and

control

Data management



Network configuration

Network marketing

Network requirement planning

Network Tasks Cross-sectional tasksCore tasks

Ord

er c

oord

inat

ion

Inve

ntor

y M

anag

emen

t

PPC

-Con

trol

ling

Notes:

The function of the Production Planning and Control (PPC) is the time, capacity and quantitative planning and scheduling of the production and assembly (Eversheim 1989). Whereas the production planning has to organize the content and the single processes of the production and assembly, production control has to organize the operations in the production within the scope of order processing. The production control takes input from the production planning regarding the process sequence and associated logistics objectives.

The focus is on the company internal planning and control processes. Due to diverse customer demand, globalisation of procurement, sales markets, substitution of goods and the increasing process of globalisation, companies are under immense pressure to strengthen and focus on value adding processes in the whole supply chain. To cater this growing integration in the supply chain, the Aachener PPS Model has introduced in the network to manage the dependence.

The tasks of production planning and control can be divided into core tasks and cross-sectional tasks. While core tasks advance the order processing, cross-sectional tasks aid to integrate and optimise the production planning and control.

Core tasks are long term production programme planning, medium term production requirement planning, short term in-plant production planning and control and short term procurement planning and control. Cross-sectional tasks are order coordination, storage and the controlling of the ERP system itself.



Lecture 06

Page 14© WZL/FIR

• ___• ___• ___

max

• Supply Chain Modeling • Design of Supply Chain Elements (Capacities

for Inventory, Production and Logistics, ....

• ___• ___• ___

• ___• ___• ___

maxmax

Supply Chain Planning Level Description IT-System functions

Planning levels of Supply Chain Management

• Sales planning• Distribution planning• Master planning• Production planning• Machine scheduling• Sales order simulation• Transport planning• Problem management planning• Controlling• ....

• Customer Order Processing• Transport Order Processing• Assembly Order Processing• Production Order Processing• ....

Configuration of Production- and Logistic structures

Planning of Inventories, Planning of Assets and Capacities

Order Management

Supply Chain Configuration



Network configuration

Network marketing andNetwork requirement planning

Notes:



Lecture 06

Page 15© WZL/FIR

Procurement Production Distribution Sales

materials program

supplier selection

cooperation's

plant location

production system

physical distributionstructure

product program

strategic salesplanning

staff planning

materialrequirements

order management

master productionscheduling

capacity planning

distributionplanning

mid-term sales planning

staff planning

ordering materials

lot-sizing

machine scheduling

replenishment

transport planning

short-term salesplanning

Supply Chain Configuration



information flows flow of goodsSource: Stadtler, Kilger: Supply Chain Management and Advanced Planning, 2005

Planning tasks of Supply Chain Management –The Supply Chain Planning Matrix

Notes:The Supply Chain Planning Matrix (SCP) classifies the planning tasks in the two dimensions „planning horizon“ and „supply chain process.“ The figure shows typical tasks which occur in most supply chain types, but with various contents in the particular businesses. The long-term tasks are shown in a single box to illustrate the comprehensive character of strategic planning. The other boxes represent the matrix entries, but do not correspond exactly to the planning modules of an hierarchical Planning System. The latter may contain only parts of a box - e. g. on the short-term level the planning tasks can be decomposed according to further dimensions like factory sites or product groups - or combine tasks of several boxes. The SCP Matrix can also be used to position the software modules of most APS vendors. (Stadtler, Kilger 2005, S. 86ff.)



Lecture 06

Page 16© WZL/FIR

Supply Chains are dependent on Competence & Capacity Management for an enterprise

Cap

acity

Man

agem

ent

Competence Management

Multiple CapacityIn-/Outsourcing

MultipleIn-/Outsourcing

Multiple Sourcing

Selective CapacityIn-/Outsourcing

SelectiveIn-/Outsourcing

Selective Sourcing

Non-Sourcing Single-Outsourcing Single-Sourcing

P1 P2 P3 P4 P5

P1 P2 P3 P4 P5

P1 P2 P3 P4 P5

P1 P2 P3 P4P5 P1 P2 P3 P4 P5

P1 P2 P3P4 P5 P1 P2 P3 P4 P5

P1 P2 P3 P4 P5

P1 P2 P3 P4 P5

Ui

U1

Ui

U1

Ui

U1

Ui

U1

Ui

U1

Ui

U1

Ui

U1

Ui

U1

Ui

U1

Notes:

• The Supply Chain Management is dependent of the Competence- and Capacity management of a company

• The Supply Chain Management has to be adjusted to the company



Lecture 06

Page 17© WZL/FIR

Structure







Lecture 06

Page 18© WZL/FIR

There are several Supply Chain Structures, depended on industrysector, production strategy , products etc.

Project network

Short-term cooperation

Polycentric Network

Hybrid production network

Long-term, but lighter cooperation

Procurement basednetwork

Stable-hierarchical Supply Chain

Stable and long-term cooperation

Dominant Role of the OEM

Source: Schuh 2006

Notes:Project Network• Engineer-to-Order with products with a complex structure• High influence on construction and development by the customer• Temporary and possibly repeatable cooperation• Local but polycentric network• High level of independency of the enterprises• Industry sectors: machine and plant manufacture

Hybrid Production Network• Make-to-Stock Process with less complex products• No significant customer changes within production• Cooperation for longer periods but not highly linked• Coordination of the cooperation via production programmes• Dominated by supplier side• Industry sectors: Electrical industry, Chemistry, Pharm, Metal fabrication

Stable-hierarchical Supply Chain• Make-to-Order or Assemble-to-Order with complex products• Production-, Development- and Logisitcs-Partnerships• Stable long term cooperation• Close Partnership with fixed plans• Dominated by sell side• Industry sectors: Automotive (OEM, Supplier), Consumer goods



Lecture 06

Page 19© WZL/FIR

The network structure depends on the companies structure in an industry sector

Stru

ctur

e of

com

pani

es a

tm

anuf

actu

ring

indu

stry

Pro

ject

net

wor

k

Stru

ctur

e of

com

pani

es a

t A

utom

otiv

e in

dust

ryS

tabl

e-hi

erar

chal

Sup

ply

Cha

in

Notes:



Lecture 06

Page 20© WZL/FIR

For different Supply Chain Structures exist different coordination ConceptsCentral coordinated Supply Chain

Dominated Supply Chain

Supplier RemodelSurface- finish

Final Installation OEM

Supplier Installation-company Packer Distributor Customer

Stocks Production ordersStocks Production ordersStocks Production orders

General Agreement, Deliver Plans, CallsGeneral Agreement, Deliver-Plans,

Calls

General Agreement, Deliver plans, Kanban calls

Product development, Logistic coordinator Customer-Orders

Shipping ordersStock, Arrival of

GoodsProduction-,

Shipping ordersStock, Arrival of

Goods

Production-, Shipping orders

For example: Car Manufacturers

Notes:

Features of Central Coordinated Supply Chain:

• the logistic coordinator is responsible for planning and controlling the supply chain

• only few final product specific components – no close strategic relationship between the members of the supply chain

• logistic coordinator has no own production

Features of a Dominated Supply Chain:

• OEM determines batch sizes and target dates due to basic agreements

• order picking based on kanban

• every supply chain member knows demand data of the OEM

• overview over final needs of costumers allows coordinated storage and delivering with all partners of the SC



Lecture 06

Page 21© WZL/FIR

Producer

Problems within the Supply Chain: The Bullwhip - Effect

± 3%± 70%

Supplier 1 Supplier 2 Customer

Information flow

Material flow

Sto

cks

/ Ord

er

size

t

Sto

cks

/ Ord

er

size

t

Sto

cks

/ Ord

er

size

t

Sto

cks

/ Ord

er

size

t

Stocks Order size

Notes:

Classical planning and design concepts are normally optimizing one partner of the logistics chain after each other. In this case the occurrence of small variations in the order size of the final customer have a huge impact on the order size for products from suppliers at the end of the logistic chain. This effect is called: Bullwhip-Effect

Reasons are :

1. Lack of actual sales forecast

2. Grouping of orders

3. Price variations

4. Bottle neck poker (limited flexibility)

Possible solutions are:

1. Continuous information flow through all levels of the supply chain

2. Introduction of information and communication systems

3. Central organization of orders



Lecture 06

Page 22© WZL/FIR

The Bullwhip Effect – Causes and countermeasures

Transmit information (PoS, actions, etc.)

Supplier and customer integration

Reduction of complexity with frame contracts

Reduction of reaction time

Everyday low prices: no promotions etc.

Vendor Managed Inventory: Supplier takes care for stock

Increase network transparency and flexibility– Stock visibility – Increase supplying frequency, reduce

procurement/ production

Supply Chain fitting to functional/innovative products

Information flow

Flow of goods

Local information processing

Local planning at every location

Economies of scale/ Lot-production

Full-Truck-Load, Full Container

Undefined performance indicators

Lack of updating sales forecasts

Orders pooling

Price fluctuations

Quota limitation and bottleneck “poker”

Notes:



Lecture 06

Page 23© WZL/FIR

Problems in the Supply Chain: Causes of delivery delay in the machine and plant manufacture industry –Information deficits

Inner-companyorders progress

Inter-companyorders progress

Inter-companyorders management

Inner-companyorders management

Inadequatemaster data

Capacitymaster dates

Materialmaster dates

Parameter ofdating

Inadequatefeedback

Inconsequentorders management

32%

29%

38%

35%

50%

36%

27%

• Unrealistic delivery dates

• Inadequate delivery reliability

Causes Effect

Source: Study - „Liefertermintreue im Maschinen- und Anlagenbau“ (Schuh u. Westkämper 2006)

Notes:Results of a study with 80 enterprises mainly of the machine and plant manufacture industry.

Key reasons for “unrealistic delivery dates” and “inadequate delivery reliability” are insufficient information flow processes. Companies do not share order progress and order management information with their partners.



Lecture 06

Page 24© WZL/FIR

Supply Chain Management in the machine and plant manufacture industry -Integrated order management with myOpenFactory

Stat

us Q

uo

Relevant data structures of cooperation are standardized

Provides inter-company negotiation functions

Provides inter-company production planning functions

The integrated order management is hindered by the use of a multitude of different ERP systems.

The Implementation of 1:1 connections is expensive.

The most used communication media are still letters and fax

Notes:



Lecture 06

Page 25© WZL/FIR

Potentials of Supply Chain Management

Supplier PhysicalProcess Producer Commerce CustomerPhysical

ProcessPhysicalProcess

Available to promise

Finding bottle necks

Order tracking

Reduction of delivery time

Faster business processes

Planning security

Higher flexibility

Higher cost transparency

Proactive Stock management…

Financial flow

Information flow

Baumgarten, TU Berlin 2001

Planning SCM

Potentials Potentials

Active asset management

Notes:

Beside missing trust between the partners in the value chain the main reason for the bullwhip effect is a lack of suitable and integrated IT-Systems. The occurring problems can not be solved by using partial solutions. A complete solution for the whole supply chain is required to achieve the mentioned benefits/potentials.

As already shown, these concepts can only be realized successful if all partners are involved in the project.

For the designing, planning, controlling and integration the tasks are not only divided in divisions in a company, they are also divided to other partners in different companies.

The cooperation partners are integrated in the Supply Chain to realize a win-win situation. A survey of the Supply Chain Council showed the room of improvement:

• Decreasing of delivery time 10-60%

• Reduction of the planning loop up to 95%

• Reduction of the stocks up to 75%

• Higher Capacity 10-50%



Lecture 06

Page 26© WZL/FIR

Structure







Lecture 06

Page 27© WZL/FIR

The E-Community - Another form of modern customer / supplier relationship

Classical network

E-Community Supply Chain Network

Network

E-Marketplace

bala

nced

one.

-sid

ed

instable stable

Supplier

Supplier

Supplier

Supplier

Supplier

Supplier

Supplier

Supplier

MarketOEM

Supplier

OEM Market

Tier-1Tier-2

Market

Market

Supplier

Supplier

Supplier

Supplier

Supplier

SC Network A

SC Network B

Duration of cooperation

Rel

atio

nshi

p of

Dep

ende

ncy

and

Pow

er in

Te

rms

of P

lann

ing

and

Coo

rdin

atio

n Supplier

Supplier

Supplier

Supplier

SupplierSupplier

Supplier

Supplier

Supplier

Supplier

Supplier

Supplier

Supplier

Supplier

Supplier

Supplier

Supplier

Supplier

Supplier

Notes:

Today a company is not only member of one single type of supply chain. Originated in the traditional costumer-supplier relationship today there are three new types of supply chain networks:

1. E-Community:

Every supplier offers his products on an e-market place, where suppliers as well as final costumers can purchase parts.

2. Strategic Network:

The strategic network is controlled by a OEM who also dominates the whole supply chain. There may be several stages in the supply chain. To keep the competition between the different supply chain alive the OEM run private market places where the suppliers are competitors.

3. Supply Chain Network:

In a supply chain network is no defined structure between the several suppliers. Depending on their actual needs, the members supply each other situation based. Companies often participate on more than one network.



Lecture 06

Page 28© WZL/FIR

Market Places as Connection between Seller and Customer

Virtual Marketplace

A B

C

DE

F

A B

C

DE

F

Real Market Place Virtual Market Place

Combination of traditional market places Integration of electronic market places

Notes:

Electronic market places are platforms where different activities belonging to electronic transactions are combined. The last and most lasting step of a value chain in the E-commerce is the organization of complete transactions via electronic market places. This results in the usage of scale effects in the network and reduction of single interactions between companies. Transactions are not any more organized between two companies. They are organized as the optimum for all integrated partners through the electronic data highway by using centralized agencies.

This allows to make offers and requests public and find the most suitable solution with very limited costs and efforts.



Lecture 06

Page 29© WZL/FIR

Problems with Electronic Market Places

Reaching critical massIncome mainly based on number of transactions

Variable costs

Critical mass

Cos

ts

Number of transactions

Fixed costs:• Rent• Personal costs• Marketing costs• Organization

Variable costs:• Customer care• Administration of database• Transaction specific costs

Fixed costs

Notes:

During the past 2 years a huge number of electronic market places occurred and disappeared even faster.

Regarding recent literature it is common scenes that electronic market places have something like a critical number of transactions which they have to reach before being successful. Often this point is quite high due to the fact that you have high initial efforts which often are underestimated by the operating companies.

To negotiate the critical mass, the financial income of the market place, which is often depending on the chosen concept, has to be higher than the occurring costs. The occurring costs are a combination of fixed costs and variable costs.



Lecture 06

Page 30© WZL/FIR

Purchase Processes

Marktetplace

Supplier

Supplier

Supplier

Supplier

Customer

Supplier

Supplier

CustomerSupplier

Supplier

Supplier

Customer

Customer

Customer

Customer

Customer

Customer

Customer

Internet based B2B MarketInternet based

purchase platform

n:1-Relation

z.B. www.vwgroupsupply.com

n:1:m-Relation

z.B. www.mro.com

1:m-Relation

z.B. www.dell.com

Internet based purchase platform

Notes:

Unilateral relations of transaction always occur when a single costumer purchases goods and services by his own interactive platform. Those supplier platforms are also called procurement platforms as they are used e.g. by the Volkswagen Group (www.vwgroupsupply.com). While there are many suppliers facing one costumer this relations are known as n:1-relations.

Another option of realizing unilateral relations of transaction are plattforms, where a single supplier sells his goods and services to a plurality of different costumers. It as another kind of distribution channel. In this case we talk about 1:m-relations. Well known examples are Cisco (www.cisco.com) and (www.dell.com), using the internet for their electronic commerce.

Uniting the concepts of procurement and disposition platforms leads to electronic market places, where a plurality of costumers meets a plurality of suppliers which both sell and purchase goods and services. A n:1:m-Relation is implemented.



Lecture 06

Page 31© WZL/FIR

Integration of Virtual Market Places in SCM

Supply Chain 1

Supply Chain 2

Supply Chain 3

C1

C1

C1

C2

C2

C2

C3

C3

C3

C4

C4

C4

Vertical electronic market place, additional to SCM

Vertical electronic market place, additional to SCM

horizontal electronic Marketplace, additional to SCMLegend:

C = Company

Notes:

Supply Chain 1, 2 and 3 are build out of four companies each. It is assumed that all Supply Chains belong to different branches.

Horizontal market places offer the opportunity to companies, belonging to different branches, to combine their special skills. This is an supplement to the normal supply chain management. Typical examples for this are logistic oriented marketplaces which are working for companies of different branches.

Vertical market places combine participants from different levels of the value chain within one branch. They can be an add on for the supply chain management (Example: Supply Chain 1) or an additional solution (Example: Supply Chain 3). Vertical Market places are mainly used to integrate small and medium sized enterprises in a supply chain without a high amount of information exchange like it is typically required for the supply chain management.



Lecture 06

Page 32© WZL/FIR

Example for a Market Place within the Supply Chain

• wtransnet is an internet based logistic trading platform (horizontal Marketplace)

• Better usage of trucks

• Reduction of waiting time

• Higher transparency

116.077 requests counted inMarch 2003

Notes:

The most important functions of wtransnet:

The Transport Company – Catalogue is a search machine which allows the customer to find his product during the whole shipping process. Information provided by the search engine are: geographic position, used truck, used route.

Participants – Search engine is a tool which allows members to identify each other and to specify if someone is member of wtransnet. Further on, information like VAT number, social capital, date of foundation or available storage space are available. Also included in this search engine is an information exchange tool to contact companies directly or report incidents to wtransnet.

Emergency delivery database is a database with companies providing storage space and delivery services for goods that have to be stored unplanned due to an accident or other emergencies.



Lecture 06

Page 33© WZL/FIR

Covisint: Market Place for the Automotive IndustryFounders:

DaimlerChrysler,

Ford,

General Motors,

Nissan

and Renault.

Co Connectivity, Collaboration und Communication

Vis derivated from visibility, means presence and transparency , which the Internet intercedesand the vision of the Supply Chain Management of the future

Int pointed to the integrated solutions, which are provide by this risk enterprise and the international exchanges sphere of action.

E.g. DaimlerChrysler‘s Supply Chain Portal

www.covisint.com

Notes:



Lecture 06

Page 34© WZL/FIR

Covisint: Provided Services and Functions

CollaborativeProduct Development

CovisintValue Added Services

Supply Chaine-Procurement Cross Product

Functionality

• Virtual Workspace• Collaborative Design• Secured Knowledge Exchange

• Portal Technology• Secure Single Sign-On• User Personalization

• Electronic Catalogues• Digital Marketplace• Auctions (On Line Bidding) • Quote Management• Asset Control

• Supply Chain Planning• Supply Chain Execution• Supply Chain Connectivity• Supplier Quality

Quality

• Problem Solver• Advanced Quality Planner

Notes:

Value Added ServicesUnternehmen haben zahlreiche e-Business Bedürfnisse. Zu diesen Bedürfnissen zählt unter anderem die optimale Kooperation innerhalb eines Unternehmens oder mit den jeweiligen Handelspartnern. Des Weiteren bestehen Bedürfnisse im Hinblick auf die Optimierung der gemeinsamen Nutzung von Dokumenten, der Prüfung von Revisionen, der Mitteilung elektronischer Informationen, der Integration von Lösungen, der Kommunikation mit den jeweiligen Kunden und den jeweiligen Lieferanten.QualityDie Quality Solution Suite von Covisint umfasst ein Werkzeug zur erweiterten Produktqualitätsplanung durch eine Partnerschaft mit Powerway sowie das von Covisintentwickelte Problem Solver-Werkzeug. Mit Advanced Quality Planner können die Prozessanforderungen an die erweiterte Produktqualitätsplanung sowie die Liefergegenstände verwaltet und die Komplexität der Produktqualitätsplanung verringert werden. Problem Solver löst dauerhaft Probleme, die nicht im Produktqualitätsplanungsprozess behoben werden konnten.e-ProcurementCovisint Procurement bietet folgende Möglichkeiten:

• Senden und Empfangen von RFQs (Angebotsanforderungen) auf elektronischem Wege über Quote Manager.

• Online-Durchführung von Verhandlungen zwischen mehr als zwei Personen; BuyerAuctions ermöglicht Verhandlungen zwischen mehreren Personen innerhalb einer kurzen Zeitspanne.

• Über Online-Custom Catalogs erhalten Sie per Tastendruck elektronischen Zugriff auf Produkte.

• Asset Control ermöglicht Ihnen die Umverteilung von Ressourcen oder deren Kauf oder Verkauf im Rahmen einer größeren Anzahl von Teilnehmern.



Lecture 06

Page 35© WZL/FIR

Future of Virtual Market PlacesCustomization

• My Marketplace

• My Products

• My Service

Customization

• Integrated product development

• Integrated projectsConnectivity

• Open communication with third parties in different marketplaces

Commerce

• Transaction specific information

• Transactions

• Integrated services

Content

• Information archive

• Databases

• News service

• Analyses and comments

Community

• Possibility for discussions

• Expert-Chat

• Career-Center

• Controlling systems

• …

Higher customer loyaltyStandard

Notes:

In this example most of the shown possibilities for the future development for internet based B2B-market places are only mend to give a general overview.

A special allocation of provided services to the different types of market places is not realized in this slide.

In the center of all future activities you will find the initiation and organization of transactions. This main service will be completed by different services with which the interest for the customers can be enlarged.



Lecture 06

Final statement:• SCM increases the scope of traditional PPC. Within the scope of SCM are all

Enterprises of a supply chain.

• There exist different reference models. SCOR is the most known and used one.

• The planning tasks of SCM can be structured with the Aachener PPC Model. There exist three different planning levels with different planning horizons.

• There exist different Supply Chain structures. Different methods are applicable in those structures.

• The most popular problem within Supply Chains is the Bullwhip-effect. There are different counter measures to avoid bullwhip, their core is the improvement of the information flow.

• Virtual market places address the electronic order management.



Lecture 06

Questions:• What are the main targets of Supply Chain Management?

• How does SCM differentiate from the classic material management and PPC?

• How can Supply Chains be modeled?

• What are the core tasks of SCM?

• Which different types of Supply Chains exist? In which industry sectors can they be found?

• What is the Bullwhip effect? Why does it happen and which countermeasures exist?

• What are virtual market places?

• How can virtual market places be differentiated?

• Can you name examples for virtual market places?



Lecture 06

Bibliography:

Supply Chain ManagementSimchi-Levi, D.;Kaminsky, P.; Simchi-Levi, E.: Managing the Supply Chain;;

McGraw-Hill Companies; 2003.

Stadtler, H.; Kilger, C. (Hrsg.): Supply Chain Management and Advanced Planning, 3.Auflage, Springer 2005.

Schuh, G.: Produktionsplanung und -steuerung – Grundlagen, Gestaltung und Konzepte; 3. Auflage; Springer; Berlin Heidelberg; 2006.

Alicke, K.: Planung und Berieb von Logistiknetzwerken: Unternehmensübergreifendes Supply Chain Management; 2. Auflage; Springer; Berlin Heidelberg; 2005.

Kuhn, A.; Hellingrath, B.: Supply Chain Management; Springer; Berlin Heidelberg; 2002.

Milberg, J.; Schuh, G.: Erfolg in Netzwerken; Springer; Berlin Heidelberg; 2002

Marbacher, A.: Demand & Supply Chain Management; Verlag Paul Haupt; Bern, Stuttgart, Wien; 2001

Virtual Market PlacesDingeldein, R.: Entwicklung einer Systematik internetbasierter B2B-Marktplätze;

Digitaler Vervielfältigungs- und Verlagsservice Frankfurt am Main; Juli 2002.

Richter, K.; Nohr, H.: Elektronische Marktplätze, Potentiale, Funktionen und Auswahlstrategien; Die Deutsche Bibliothek - CIP - Einheitsaufnahme; 2002

Heilmann, H.: Elektronische Marktplätze; HMD; 2002

VDI Internet, e-Supply Chain Management und Virtual Reality; VDI-Berichte 1649; VDI-Verlag; 2001

Kaluza, B.; Blecker, T.: Integration von Unternehmung ohne Grenzen und Supply Chain Management; Universität Klagenfurt Nr. 9904; Institut für Wirtschaftswissenschaften; 1999


Supply Chain Management II L07 P. 0

Lecture 07


Lecture 07Supply Chain Management II

Teaching Assistant:Dipl.-Ing. A. [email protected] 53B, room 507Phone: 80-27382



Char of Production ManagementProf. Dr.-Ing. A. Kampker



Lecture 07

Index:

Index Page 1

Schedule Page 2

Glossary Page 3

Targets of this lecture Page 5

LectureClassification Page 6

Deterministic Optimization Page 14

Further Optimization Page 21

Final Statements Page 32

Questions Page 33




Lecture 07

Schedule:No. Date Responsible

L1 27.04.2009 Mr. Rittstieg 0241 80 20396

L2 04.05.2009 Mr. Bartoscheck 0241 80 28203

L3 18.05.2009 Mr. Fuchs 0241 80 26265

L4 25.05.2009 Mr. Reil 0241 80 27964

L5 08.06.2009 Mr. Potente 0241 80 27387

L6 15.06.2009Mr. Bauhoff (fir)

0241 47705-439

L7 22.06.2009 Mr. Hoeschen 0241 80 27382

L8 29.06.2009 Mr. Jung 0241 80 27392

L9 06.07.2009 Mr. Rauhut 0241 80 28206

L11 13.07.2009Mr. Koch

0241 80 25321

L12 20.07.2009 Mr. Cuber (fir) 0241 47705-420




Topic











Lecture 07

Glossary:The bead chain is a metaphor to describe a concept, in which the order of consumption of vendor

parts is determined as early as possible, allowing not only direct suppliers (tier 1) to supply just-in-sequence, but where the this order is also used to align suppliers of the second and third tier. It is one of the most extreme application of the Just-in-time concept and requires for the stability of the production sequence.

Combinatorial optimization is being used for problems, where the set of feasible solutions isdiscrete or can be reduced to a discrete one

Dynamic optimization is a method of solving problems whose parameters change over time.

Evolutionary Algorithms are optimization algorithms which use some mechanics inpired by biological evolution, namely selection, recombination an mutation.

Genetic algorithms are a particular class of evolutionary algorithms wich additionally employ a mechanic of inheritance.

Heurisic algorithms or heurisics are algorithms which are able to produce an acceptablesolution to a problem, but for which there is no formal proof of its correctness or the absolute quality of the outcome.

Linear programming (LP) is a technique for optimization of a linear objective function, which in turn is subject to linear equality and linear inequality constraints. Linear programming determines the way to achieve a mathematical optimum in a given model, in which requirements and constraints are being represented as linear equations.

A metaheuristic is a heuristic optimization method by combining heuristics to approach problems for which there is no satisfactory problem-specific algorithm or heuristic, or for which it is impractical to implement such a specific method.

Nonlinear programming (NLP) is a technique for optimization of an objective function which is subject to constraints, where some of the constraints or the objective function itself may be nonlinear.

Simulated annealing (SA) is a generic metaheuristic inspired by annealing in metallurgy. It is often used when the search space is discrete (e.g., all tours that visit a given set of cities). Simulated annealing may be more effective than complete enumeration, provided that the goal is merely to find a good solution in a given time, rather than the actual optimum.

Stochastic optimization (SO) is a a optimization method, in which algorithms incorporate random elements, either in the objective function, the constraints, in the algorithm itself or a combination the above.

A supply chain is an inter company network, whose links are both customer and supplyer within a given production process. A supply chain may be found in the production process of an automobile, where a company may provide modules for the OEM and buy parts from vendor suppliers, who in turn receive parts themselves. Other examples include supply chains of the textile industry, aeronautics and space industry. are for example the automotive



Lecture 07

Glossar:



Lecture 07

Targets of this Lecture:

• Overview over requirements to IT systems in supply chain management

• Overview over planning methods in supply chain management and over basic operations research methods

• Exemplary presentation of three operations research methods

• Linear optimization

• Evolutionary algorithms

• Simulated Annealing

• Overview over problems and challenges in supply chain management



Lecture 07


Structure

Classification in Context1

Deterministic Optimization2

Further Optimization Methods3



Lecture 07


How does "SCM" fit into the big picture?

CRMSCM

PLM

CustomerSupplier

Products

Resources

ERP

Enterprise



Lecture 07


Evolution of IT Systems in SCM

MRP, MRPII

ERP

Network Resource Planning (NRP) SCM + ERP + CRM

Supply Chain Excellence

Time

SCM Planning & Execution Software

1975 19951985 2005

The development of information technology has contributed substantially to innovation within the area of Supply Chain Management.

Focus on individual processes

Focus on enterprises

Focus on value creation network

MRP, MRP II (Manufacturing Resource Planning) Focus on individual processes: independent single solutions surrounded by an integrated planning environment

ERP (Enterprise Resource Planning)Focus on enterprises: Reduction of some stand-alone solution functionalities in favor of a higher integration

NRP (Network Resource Planning)Focus on value creation network: web-based networks of different

ERP and SCM solutions on all stages value creation



Lecture 07


IT Systems in SCM: Central Success Parameters

Supply Chain strategic alignment

Supply Chain planning

collaboration

Supply Chain execution

collaboration

Supply Chain IT-support

Supply Chain information availability

Supply Chain communication

Supply Chain know-How

Supply Chain skill sharing

Supply Chain (re-)

configuration flexibility

1

34

5

2

„Networked“ SCM =Web-based, enterprise-spanning co-

operation within the Supply Chain

Aim: Information exchange in real time for the coordination and synchronization of demand and supply over the entire network

Consequence: connection of enterprises to networked, integrated Supply Chains

CollaborationReactivity

Coordination

The three central success parameters collaboration, coordination and reactivity build the basis for intensive enterprise-spanning cooperation in the Supply Chain:

CollaborationExact tuning of production and transport between the individual stages

CoordinationReal-time and complete communication of the demand over the entire supply chain

ReactivityFast transformation of incoming orders through internal calculation of requirements, dispatching of production and passing on orders to divisions or suppliers

Networked SCM is an evolution of the SCM concept. It is essentially based on e-enabled Supply Chain Management (eSCM) as well on Suppler Relationship Management (SRM).

The described requirements must be fulfilled by SCM IT systems.



Lecture 07


Example: Bead Chain

Constant, sequential feeding of production lineRealize rationalization potential of 25%

Aims

Proximity of the supplier to the manufacturerFor "pure" bead chain: no buffers at allReplacement of stocks by real time data communicationIncrease of lead times facilitates application of concept

Enabler

TurbulencesTime spreading in linesProcess securityAvailability

Problems

Losses of sequence by errors in production system

corrective by stockStability of sequence

No buffer or variation possibilitiesKeine Puffer - bzw. Variationsmöglichkeiten

A1 A2 A3 A4

T_A4

T_A3

T_A2

M_A2

M_A3

M_A1

M_A4Z_A5

Z_A4 Z_A6

TIER 2

TIER 1

TIER 1JIS

JIS

JIS

Keine Puffer - bzw. Variationsmöglichkeiten

A1 A2 A3 A4A1 A2 A3 A4

T_A4

T_A3

T_A2

T_A4

T_A3

T_A2

M_A2

M_A3

M_A1

M_A4

M_A2

M_A3

M_A1

M_A4Z_A5

Z_A4 Z_A6

Z_A5

Z_A4 Z_A6

TIER 2

TIER 1

TIER 1JIS

JIS

JIS

Concept of the bead chainThe basic concept of the bead chain sounds trivial, the conversion, however, is complicated:

Goal is to get a fixed sequencing of the products as early as possible, all products will then pass through the entire production process like drawn up on a bead chain. During order scheduling, all requirements of all production departments as well as different special processes are considered from the beginning.

However, such a continuous sequential feeding of the production line is very difficult to achieve in practice. Turbulences in the form of quality problems and disturbances appear from time to time so that products must be taken out of the sequence, reworked and finally be reinserted into the production flow. This destroys the bead chain.

Increasing the lead time makes sequencing easier for suppliers.



Lecture 07


Practical Example: Bead Chain: smart

(Source: smart)

After the production sequence the module supplier supplies to the location of assembling

Wrongly supplied modules are installed in any case

Modularity

Supplier are directly settled down beside the assembly hall

Period from 1.5 to 4 hours (for the production of the modules in the demanded variant)

Short ways and times

Smartville - „Automobile factory of the future“Smartville is the first factory in the automobile sector, which follows the vision of the logistics-focused factory and tries to convert the bead chain concept.. This focusing on logistics is characterized by a final assembly, which are answered and accomplished by the car manufacturer, as well as characterized by a gradated supply system for components.

The principles of this type of factory are the modularity, the expandableness, the short ways and the optimization of the flow of material.

The company is located at Hambach in the French Lorraine. The factory has a maximum capacity of 150.000 vehicles per year. A SMART is produced after approximately 4.5 to 5 hours.



Lecture 07


IT-Systems in SCM: Development Needs

There is still a lot to do!

Insufficient consideration of capacities and bottlenecks

Insufficient consideration of current production conditions

No common development of prognosis data

Data distortion by lacking information exchange

Bad quality of feedbacks

Insufficient consideration of changed basic conditions

Increasing dependence on suppliers because of outsourcing

Difficult data exchange because of missing standards



Lecture 07


Planning in SCM: Proceeding & Range of Application

Proceeding

Problem analysis

Determination of aims and options

Formulation of a mathematical model

Procurement of necessary data

Finding a solution

Evaluation of this solution

Range of application (examples)Planning of production networks


Machine scheduling

Determination of lot sizes

Balancing of production tasks in the network

…

Logistics

Stock management

Transport planning

Route planning

Marketing

Financing

Planning in general and hence also OR supported planning in SCM takes place in a complex process with six steps. These steps represent an abstraction of real planning processes with the help of OR.

Between these steps, there are various interdependences and loops. They must be seen as a cycle which has to be passed through several times (completely or partially).



Lecture 07


Structure






Lecture 07


Types of Optimization Problems

Optimization

Stochastic optimization

Combinatorial optimization

Dynamic optimization

Linear programming

Nonlinear programming

We talk of Stochastic optimization if random variables are present in secondary conditions or in the objective function.

Dynamic optimization is needed if optimization problems are regarded over several stages or time periods. According to Bellman's principle of optimization, the problem is fragmented into stages and relevant decisions are only taken inside stages. The aim is the realization of a global total optimum – which depends on all partial solutions. E.g., production might have to be organized in a way that secures minimum supply and fixed maximum stock levels. The determination of shortest ways and the solution of the traveling salesman problem (see below) are other dynamic optimization tasks.Nonlinear programming, if function and restrictive equations are not linear. Solutions with the help of Lagrange’s multiplication procedure or Kuhn-Tucker-Theorem. Solution is highly complex. Few applications.Combinatorial optimization for linear problems which require integer or binary solutions. Solution methods are the cutting plane procedure or the branch and bound methods. Typical tasks: allocation of locations to regions, allocation of persons to tasks, allocation of orders (at optimal costs and time) to machines; route and lot size planning problems. Linear programming if both objective function and restrictions are linear. Solution e.g. with the help of the simplex procedure. Typical application examples: profit-maximizing production under restriction of machining times or workers, cost-minimal mixture of raw material/substances, waste-minimal cutting of products.



Lecture 07


Optimization Methods of Operations Research

Deterministic procedures

Linear optimization

Nonlinear optimization

Heuristics

Meta heuristics

Evolutionary algorithms

E. g., genetic algorithms

Simulated Annealing

Tabu Research

Flood algorithm

Ant algorithms

…

Simulation methods

E. g., simplex algorithm

Constraint programming

…

…

…



Lecture 07


Linear Optimization 1: Basic Solution Principle

Objective function F(x) is linear:

Linear side conditions:

Decision variables xj nonnegative

Linear optimization is the most important and most popular instrument of Operations Research. Linear optimization means the optimization – i. e., the maximization or minimization – of a linear objective function, the variables of which have to fulfill a system of linear inequalities (so called restrictions)

Definition

Example (optimal production program)

n productpj price of productkj direct manufacturing costsm machineaij production coefficientbji capacity of machine i

Legend:

Determine manufactured lot sizes xj (j=1,…,n)so as to maximize the contribution margin:

under the side condition

njxj

,...,mibxa

)xk(pF(x)

n

j

ijij

n

j

jjj

,...,1für 0

1für

max

1

1

=≥

=≤

−=

∑

∑

=

=

∑===

n

1jji cxxcF(x)

∑=−=

n

1jjjiji bxa(x)g

)R(X n+=



Lecture 07


Linear Optimization 2: Procedure (example: graphic solution)

M: machinepc/unit: contribution margin per unit

optimal solution:

contribution margin = 398

(with x1=82, x2=78)

0x,0x 792x7x3 320x2x2 600x3x4

x3x2max

21

21

21

21

21

≥≥≤+≤+≤+

+under the side conditions

contrib. margin/unit

machining time in hours

product

product 2product 1

capacity in hours

mac

hine

(see exercise for sample problem)



Lecture 07


Linear Optimization 3: Application Area of Production Program Planning

Determination of the optimal production program under capacity and other constraints with the goal of minimizing costs or maximizing profit (e.g. optimal manufacturing, smelting, and rolling program):

What has to be produced (which products)?How much has to be produced (in which quantities regarding the limited capacity of machines and workers)?How shall it be produced (which producer, what kind of production process)?

Task

Production and sales volumes are the same for all products. Price and variable costs are constant for each product.Production coefficients are constant.Capacities are constant and are known for the planning period.Sales quantities of product are not correlated.Setup costs and times are not explicitly considered.No co-products exist.Factor prices are constant.

Premises

The underlying premises strongly constrict the procedure in practice.



Lecture 07


Linear Optimization 4: Application Example

The transport net comprises 120 starting points and 5000 targets (transports from suppliers to production facilities and from there to customers)

Daily transport planning per location done by a local planning

Transport planning determines allocation of transport orders to carriers

Agreement with carriers: availability of a certain amount of fixed transport capacity and of a certain amount of variable transport capacity

Central planning of transports in a metal industry enterprise in the U.S.

cij rate of carrier j for transport order i

fi rate of carrier j for fixed transport carnumber of fix and variable carsof carrier j

xij=1 if order is assigned to carrier j,else 0

yi number of unused fix cars

, C C fj

vj

Parameter und variables

jiyx

jCyx

jCCx

ix

yfxc

iij

i

fjiij

fj

i

vjij

j

ij

jjj

i jijij

,,...2,1,0},1,0{

1

min

∀=∈

∀≥+

∀+≤

∀=

+

∑

∑

∑

∑∑∑

Solution:

(Every order has to be allocated)

(Capacity must not be exceeded)

(Defines number of cariable cars)



Lecture 07


Structure






Lecture 07


Linear Optimization 4: Application Example

The transport net comprises 120 starting points and 5000 targets (transports from suppliers to production facilities and from there to customers)

Daily transport planning per location done by a local planning

Transport planning determines allocation of transport orders to carriers

Agreement with carriers: availability of a certain amount of fixed transport capacity and of a certain amount of variable transport capacity

Central planning of transports in a metal industry enterprise in the U.S.

cij rate of carrier j for transport order i

fi rate of carrier j for fixed transport carnumber of fix and variable carsof carrier j

xij=1 if order is assigned to carrier j,else 0

yi number of unused fix cars

, C C fj

vj

Parameter und variables

jiyx

jCyx

jCCx

ix

yfxc

iij

i

fjiij

fj

i

vjij

j

ij

jjj

i jijij

,,...2,1,0},1,0{

1

min

∀=∈

∀≥+

∀+≤

∀=

+

∑

∑

∑

∑∑∑

Solution:

(Every order has to be allocated)

(Capacity must not be exceeded)

(Defines number of cariable cars)



Lecture 07


Heuristics

Greek “heuriskein” means „to find“, „to discover“

Meaning in philosophy: methods for gaining awareness

Meaning in optimization: Set of rules for the derivation and transformation of solutions with the goal of finding good and valid solutions, often deducted from plausibility considerations

Neither the discovery of an optimal solution nor the discovery of valid solutions in guaranteed

Only a small part of the solution space is analyzed

Algorithms that permit a quality guarantee are called approximation algorithms

An example of heuristics are „evolutionary algorithms”.

Heuristic methodsDespite the increasing computation power of modern computers, the exact solution of complex optimization problems is still infeasible today

On the way to finding a good valid solution, many branches of the decision tree have to be investigated that are useless for the determination of the optimal solution. The earlier the uselessness of such a branch is discovered, the more the computing power needed for finding a solution will decrease. It is therefore reasonable to “cut” the branches of a tree if their uselessness is expected with a certain degree of confidence.



Lecture 07


EA 1: Evolutionary algorithms (EA): Overview

„Evolutionary algorithms” (EA) are a class of algorithms that use the natural principle of evolution. EA are hence stochastic search techniques that imitate natural evolution.

EA operate with a number of potential solutions, a “population” of “individuals”. The principle “survival of the fittest“ is apply to these individuals to generate increasingly better individuals.

The most widely known representatives of evolutionary algorithms are:

evolutionary programming (EP; Lawrence Fogel, San Diego)evolutionary strategies (ES; developed in Germany by Ingo Rechenberg und Hans-Paul Schwefel, Berlin), andgenetic algorithms (GA; developed in the USA by John Holland, Ann Arbor, Michigan).

Example: To achieve an optimal solutions, genetic algorithms (GA) use strategies from natural evolution. They operate according to the principle „mutation and selection". This principle as well as GA terminology has been taken from biology. Individuals are the units to be optimized. Multiple individuals that originated at the same time represent one generation. Like nature, one generation contains better and worse solutions. These solutions are called individuals and constitute a population. Individuals in nature proliferate and die; they couple and adjust to the environment. GAs imitate the same procedures; strong individuals survive and maybe mutate; weak individuals die. The total size of the population is normally constant.



Lecture 07


EA 2: The basic principle of genetic algorithms (GAs)

String of information: “chromosome”Parameter, feature: “gene”Value of parameter of feature: ”allele”

Position of parameter in string of information: “locus”Data structure: “genotype”, “genome”Solution alternative: “phenotype”

Terminology of Genetic Algorithms

11011101 2600001010 1500111110 401111011 1100110101 1911100111 1101101000 910000110 5

Generation k Selection Crossover Mutation Generation k+1

0011010111011101011110111101110111011101011010000011010101101000

0001110111010001111110110101110101001101110110000011110001100101

0011110111010101111110110101110101101101110110000011100001100101

Individual Fitness

Selection Crossover MutationGeneration k Generation k+1

SelectionFor reproduction, strings with a high fitness are selected with a higher probability. The search focuses on promising areas of the solution space.

CrossoverTwo strings are combined to new strings that contain information from both parents. Crossover is, together with mutation, important for the global exploration of the solution space.

MutationRandom mutation of a string with a certain, low probability. Mutation ensures diversity of the population and is, together with selection, the local component of the search.



Lecture 07


EA 3: Example from SCM environment

Situation: n orders

order 1order 2

order n-1order n

…

parameter 1 (lot size)parameter 2 (capacity requirements)parameter 3 (cycle time, due date

performance)

Choice and determination of sequence of the optimal order combination for the fulfilment of defined criteria (e.g., maximum capacity utilization, minimum cycle time, etc.)

Determination of „Fitness“of an order combination

Solution: Genetic algorithm

…

parameter m-1parameter m

Goal:

Number of potential combinations (= 2n) is too high for normal processor capacities

Solution set with 2n

solutionsRandom choice of 1st generation

Evaluation of fitness

…

010001011

010010011

011010101

001010011

120

30

45

100

…

Mutation, cross-over, elimination

…010001011

010010011

011010101

001010011

replace

mutate

Crossover

Configuration of the 2nd generation

…

010000011

010011011

11110001

101010011

Evaluation of fitness

70

50

95

160

…

The following steps are conducted by the genetic algorithm until predefined termination criteria are fulfilled:

Choice of a finite, manageable number of alternative solutions (i. e. production programmes)

Evaluation of fitness of the alternatives with respect to known criteria (e. g., cycle time, due date performance, capacity utilization)

Mutation, crossover, elimination of the alternative solutions according to their fitness and replacement of eliminated alternatives by new alternatives

Evaluation of the new generation



Lecture 07


EA 4: Typical application example of heuristics

Travelling Salesman Problem

Solution principle:

Given: n places i N={1,…,n} with distances dij between place i and place j

Sought: Shortest route through all n places

Formal: min {c(p): p permutation of N}

Can be expressed as mixed-integer program, e. g.:

∈

SC:

2

4

3

5

7

61

d25

d12

d13

d24

d14d47

d43

d54

d37

d56

d76

2

4

3

5

7

61

d25

d12

d13

d24

d14d47

d43

d54

d37

d56

d76

NjNix

nUmitNUx

Nix

Njx

xd

ij

Ui UNjij

Nj

ij

Ni

ij

Ni Njijij

∈∀∈∀∈

−≤≤⊂∀≥

∈∀=

∈∀=

∑ ∑

∑

∑

∑∑

∈ ∈

∈

∈

∈ ∈

,}1,0{

221

1

1

min

\

The binary variables xij take the value 1 if an arrow is part of the route. Otherwise they take the value 0.

This first and second side conditions guarantee that a place is reached and left exactly once.

The last side condition guarantees that the route to be found contains all nodes of the graph.

Lecture 7



Lecture 07


EA 5: Challenges, Advantages and Disadvantages

Choice of encoding

Fitness function (especially: degree of detail)

Choice of size of population

Development/choice of crossover operators

Determination of probabilities for change operators

Challenges

Application possible even if no specific (deterministic) method for solution known

Fast finding of good solutions

Hardly ever finds optimal solution. Quality of solution found is unclear

Can “get stuck” in local optima

Advantages and disadvantages+

+

-

-

Lecture 7



Lecture 07


Metaheuristics

Metaheuristics are heuristic concepts and guidelines for controlling the operations of subordinated (problem-oriented) heuristics to solve an optimization problem.

Definition 1

Metaheuristics are iterative methods that use subordinated heuristics. They structure and process information from specific iterations. Objective is the „efficient“ determination of solutions near the optimum.

Definition 2

An example of metaheuristics is „simulated annealing”.

Heuristic searches can “get stuck” in a local optimum. Higher-level strategies are thus used to control heuristics. They are called metaheuristics.

Heuristic Heuristic

Control by metaheuristics

Lecture 7



Lecture 07


Example of metaheuristics: Simulated Annealing (SA) – Basic Concept

Simulated Annealing

Simulated Annealing (SA) is the stochastic variant of local search (iterative upgrade):• SA starts with a plausibility solution of the combinative optimization problem and randomly creates a

surrounding solution.• If this solution is better, it will be made the current solution and the basis for iteration; otherwise, the

new solution is accepted with a certain probability only. This probability decreases with the number of iterations.

• The (infrequent) acceptance of worse states avoids “getting stuck” in a local optimum and thus helps to reach a global optimum.

This method is based on the analogy to the annealing of material. Material is melted and then slowly annealed. Arrangement and movement of molecules is stochastic.

Objective is the extraction of ideal crystals (optimal energetic state, low entropy). The focal point is reached when the material solidifies.

In the state of thermal balance, the probability of energy state E (at temperature T) is P:

(kB: Boltzmann-constant)

Annealing of materials

)TkEexp()T|EX(P

B

−==

Some metaheuristics temporarily accept, besides better solutions, also worse states. It has to be ensured that the search does not get stuck in a loop and create the same sequence of solutions over and over again.

Lecture 7



Lecture 07


Problems and Challenges in SCM

SCM and market place concepts require full transparency of all parties involved

For various reasons, different parties are not interested in transparency

Intransparency and information asymmetries are the basis of our economic system

A lack of fungibility (explainability) of economic goods is often present

Market places: often, only 20 % of all parts of an enterprise are available at market places(target: > 50 %)

Models and methods of OR are often too limited to model practical problems and a turbulent environment with sufficient degree of detail

Lecture 7



Lecture 07

Final Statements

IT-Systems are essential for the Supply Chain ManagementThere are five different methods of optimization, distinguished by the characteristics of the problems the are applied to:

Dynamic optimization,

Linear Programming,

Nonlinear Programming,

Combinatorial Optimization and

Stochastic Optimization.An important optimization method is Linear Programming, applied to find a mathematical solution in a given model.The most important evolutionary algorithms are genetic algorithms, together with simulated annealing, they are part of the group of meta heuristics.Genetic algorithms begin with a group of individual solutions. By engaging selection, crossover and mutation operators, they create new solutions which form new Generations. To avoid loops, all employed operators must contain an element or randomness.



Lecture 07

Questions

Which IT-Systems are being used in supply chain management? What are the main challenges?

What types of problems appear in supply chain management, and what are their main characteristics?

What are heuristics, what are their main characteristics and what examples for heuristic methods used in supply chain management can you name?



Lecture 07

Literaturhinweise:

Burkard, R.: Heuristische Verfahren zur Lösung quadratischer Zuordnungsprobleme. In: Zeitschrift für Operations Research. 19. Jg., 1975

Burkard, R.: Methoden der ganzzahligen Optimierung. Wien: Springer, 1972

Domschke, W.: Taktische Tabus, Tabu Search - Durch Verbote schneller Klein, R.; Optimieren -. In: Magazin für Computertechnik. 1996, Nr. 12 Scholl, A.:

Engele, G.: Simultane Standort- und Tourenplanung. Köln: Heymann Verlag, 1980

Eversheim, W.: Prozessorientierte Unternehmensorganisation. Konzepte und Methoden zur Gestaltung „schlanker“ Organisationen. 2. Aufl. Springer, 1996

Eversheim, W.: Gestaltung von Produktionsbetrieben. (Reihe: Produktion und Schuh, G.: Management, Bd. 3). Springer, 1998

Eversheim, W.: Produktion und Management. Springer, 1999 Schuh, G.:

Gallus, G.: Heuristische Verfahren zur Lösung ganzzahliger linearer Optimierungsprobleme. In: Zeitschrift für Operations Research. 20. Jg., 1976

Grauel, A.: Neuronale Netze, Grundlagen und mathematische Modellierung. Mannheim: 1993

Hieber, R.: Supply Chain Management. A Collaborative Performance Measurement Approach. 2. Aufl. vdf Hochschulverlag der ETH Zürich, 2001

Horst, R.: Nichtlineare Programmierung. München: Hanser Verlag, 1979

Kallrath, J.: Gemischt-ganzzahlige Optimierung: Modellierung in der Praxis. Vieweg, 2002, ISBN 3-528-03141-7



Lecture 07

Literaturhinweise:

Milberg, J.: Erfolg in Netzwerken. 1.Aufl. Springer, 2002 Schuh, G.:

Schöneburg, E.: Heinzmann, F.; Feddersen S.: Genetische Algorithmen und Evolutionsstrategien. Addison-Wesley, 1994

Schönsleben, P.: Integrales Logistikmanagement. Planung und Steuerung von umfassenden Geschäftprozessen. 2. Aufl.: Springer, 2000

Schuh, G.: Produktionskomplexität managen. Hanser Fachbuch, 2001 Schwenk, U.:

Voß, S.: Meta-Heuristics. Advances and Trends in Local search Paradigms for Optimization. Technische Universität Carolo- Wilhelmina zu Braunschweig

Wiendahl, H.-P.: Betriebsorganisation für Ingenieure. München: Hanser Fachbuch, 1989



Lecture 07


Structure





Product Lifecycle Management I L08 P. 0

Lecture 08


Lecture 08Product Lifecycle Management I

Organisation:Dipl.-Ing. Michael JungSteinbachstr. 53BRaum 528Tel.: [email protected]






Lecture 08

Index:

Index Page 1

Schedule Page 2

Glossary Page 3


LectureProduct Lifecycle Management (PLM) Page 6

Important of information flows within CAx-applications Page 9

Differentiation between CAD, PDM and PLM Page 10

Computer-internal display formats of CAD-modelling Page 13

Objectives of CAD-interface applications Page 19

Integration of CAD and FEA Page 25





Lecture 08

Schedule:


L1 27.04.2009 Mr. Rittstieg 0241 80 20396

L2 04.05.2009 Mr. Bartoscheck 0241 80 28203

L3 18.05.2009 Mr. Fuchs 0241 80 26265

L4 25.05.2009Mr. Reil

0241 80 27964

L5 08.06.2009 Mr. Potente 0241 80 27387

L6 15.06.2009 Mr. Bauhoff (fir) 0241 47705-439

L7 22.06.2009 Mr. Hoeschen 0241 80 27382

L8 29.06.2009 Mr. Jung 0241 80 27392

L9 06.07.2009 Mr. Rauhut 0241 80 28206

L11 13.07.2009Mr. Koch

0241 80 25321

L12 20.07.2009 Mr. Cuber (fir) 0241 47705-420




Topic











Lecture 08

Glossary:

CAD (Computer Aided Design, see annotation figure 7, page 11)

CAM (Computer Aided Manufacturing) refers to computer applications for controlling manufacturing. This includes the direct controlling of machine tools, machining centers or assembly lines as well as logistic problems, e.g. controlling of material flow or registration of operating data.

CAE (Computer Aided Engineering) refers to all activities within CAD, CAP*, CAM and CAQ**, i.e. all computer applications in technical divisions of companies.

CAP (Computer Aided Planning) is the computer adoption in process- and production planning, e.g. generation of NC-information, working plans or parts lists.

CAQ (Computer Aided Quality Assurance) is the computer adoption in quality assurance e.g. generation of check programs, plans or statistical analysis of check values.

Product Data Management (PDM) is a technical information management system for manufacturing companies and engineering service providers. It provides an information platform for product development with core competences like system integration, data management, process management, project management and authorization management.

Engineering Data Management (EDM) is another expression (synonym) for PDM.



Lecture 08


The lecture introduces to the topic of Product Lifecycle management and presents current IT tools in the development process. The lecture explains different computer-internal display formats of CAD-Modeling. The lecture shows the importance of information flows within CAx-applications and the objectives and problems of CAD-interface applications.



Lecture 08



… includes management and controlling of product data - during the complete product life cycle along the enhanced logistics supply chain -beginning from design engineering and production beyond sales (distribution) and ending with maintenance.

Integrated PLM offers access to all product and process data of the complete life cycle of a product.

The functionality exceeds the system.Prof. Dr. Stucky, aifb, Karlsruhe

PLM

CSC PLOENZKE AG

ProductLifecycle

Management

Productdevelopment

Manufacturing & assembly

Market

Service &maintenance

Distribution &shipping

Productionpreparation

Product planningDisassembly

& recycling

The Term Product Lifecycle Management is used differently by the literature and by system providers. Generally three different approaches are distinguished:

PLM as a synonym for Product-Data-Management:PLM is a no new systemclass and no new form of PDM-System, but the

consequent transformation to on WEB-technology based location- and companie overlapping application of the PDM-core-competences datamanagement, process management and system integration in all areas and phases of the industrial added value.

PLM as integral integrational platform of different IT-systems:PLM is a engineering-driven PDM system. PDM is supporting every employee

during the whole product life cycle by administration of all related data and processes.

PLM as integral organisational concept of mangament for dataadministration an information availibilty:



Lecture 08


Development of PLM with function integration of CAx and ERP

Figure 2

PLM – horizontal Integration

IntersectionConfigurationParts management Parts lists management

MRP: Material Requirement PlanningMRP I: Material Resource Planning IMRP II: Management Resource Planning IIERP: Enterprise Resource Planning

timetime

2D-CAD1960

MRP1950

Notes:CAD (Computer Aided Design, see annotation figure 7, page 11)

CAM (Computer Aided Manufacturing) refers to computer applications for controlling manufacturing. This includes the direct controlling of machine tools, machining centres or assembly lines as well as logistic problems, e.g. controlling of material flow or registration of operating data.

CAE (Computer Aided Engineering) refers to all activities within CAD, CAP*, CAM and CAQ**, i.e. all computer applications in technical divisions of companies.

*CAP (Computer Aided Planning) is the computer adoption in process- and production planning, e.g. generation of NC-information, working plans or parts lists.

**CAQ (Computer Aided Quality Assurance) is the computer adoption in quality assurance e.g. generation of check programmes, plans or statistical analysis of check values.

Product Data Management (PDM) is a technical information management system for manufacturing companies and engineering service providers. It provides an information platform for product development with core competences like system integration, data management, process management, project management and authorisation management.

Engineering Data Management (EDM) is another expression (synonym) for PDM.



Lecture 08


Product Lifecycle Management is integrating processes, technologies and humans

Attending process

Product appearance

Productfabrication

Productdevelopment

Marketing Acquisition Salereal

product

Real Produktlife

Produkt-nutzung

Produkt-entsorgung

PLM-System Integrational platformIntegrational platform

Information generatingTools

Modeling Tools(CAD/CAM/CAP)

Calculation- andSimulation Tools (CAE)

Visualising Tools(DMU, VR, AR)

Information andCollaborationmanagement

Product Data Management

Supply Chain Mangement

Customer RelationshipMangement

Anmerkungen zur Folie:Product development process from product life cycle viewThe product life cycle consists of the main phases

Product appearance (planning, development)Product development (process planning, operative production) and the real Product life (Use and disposal)

The main process phases are supplemented by attending processes

Term plurality in context with PLMReasons for the term plurality:

Chronological further development of the systems (e.g. Enhancement of functions)Different Marketing strategies of the software-producersAs well used nowadays terms are EDM and PDM

Classification „PLM – PDM“:Traditional PDM-Approach: PDM is acting as interface between technical and commercialinformation processing, that means between CAx-systems on the one hand and acquisitionand production on the other hand. Therefore these systems were limited to the development.PLM-Approach: PLM is expanding the PDM-functionalities and has the ability to provideprocess integrating data and information. In addition it is separating the detachement of intern and extern users along the supply chain. PLM supports cooperative forms of collaborationbeyond company boundaries.



Lecture 08


Beispiel für einen digitalen Produktentstehungsprozess

ConstructionStyling Coverage & Clearing Check Production-

planning

Generating Ideas and creation ogLösungsvarianten für das Autodesign3D-Visualisierung z.B. durch VR-Sketchingoder Virtual Clay ModellingComparison and choiceof a design

3D-Creation of singlecomponents like e.g. a crankshaft with CAD-ToolsJoining singlecomponents to assembliesCreation of parts lists

CAE-Analyse: Calculation and interpretation of components, e.g. verification, if a crank isfatigue endurableCollision-analyses of componentsFitting- and demountingtestingBuildability testing

Compilation of streamdynamic simulationsstreamsimulation witha DMU (Digital Mock-Up)FEM (Finite Element Method) for static loadtestCrash-TestsErgonomic analyses

Planing and Simulation of production processChoice of the machineOrder of productionstepsParallelisation of production stepsProcess optimisation




Lecture 08


Supporting IT-systems for PLM

CAD

CAM

CAD: Computer Aided DesignCAE: Computer Aided EngineeringCAM: Computer Aided Manufacturing

CAP: Computer Aided PlanningCAQ: Computer Aided QualityCRM: Custom Relationship Management

ERP: Enterprise Ressource PlanningPDM: Product Data ManagementPLM: Product Lifecycle Management

SCM: Supply Chain Management

ERP

nach EDM-Report Nr.1, 2003

PLM reference process

CRM

CAQ

PDM

CAQ

SCMCAP

CAE

CAQ

CRM

Market DevelopmentOperations

scheduling &process planning

Productionplanning

Manufacturing & assembly Sales Service &

maintenanceDisassembly & recycling

Notes:It is not that the PLM-IT-systems lead to the idea of PLM but the other way round: PLM-IT-systems represent the functionalities and processes behind the idea of PLM.

The use of a combined basis of PLM-data for development, order processing, configuration etc. implies a new application process routine among the entire product lifecycle.

By realising the simultaneous data access of all persons involved in the product and the process, PLM supports resp. operationalises the idea of Simultaneous Engineering resp. Concurrent Engineering.

PLM reduces redundancies of data within the product life cycle.



Lecture 08


Important of information flows within CAx-applications

CAD: Computer Aided DesignCAP: Computer Aided PlanningNC: Numerical ControlERP: Enterprise Resource

PlanningPPS: Production Planning

SystemCAM: Computer Aided

ManufacturingCAQ: Computer Aided

Quality Assurance

EDM/PDM

CAP CAQ

ERP(PPS)

CAD

NC-Programm-ing system

Working plan &Operation plan

Quotationprocessing

Finaldispatch

NC-Programme

Feedback Operations

CAMcontrol centre

Production

customerOrder

Quotation

Dra

win

g

Parts list &drawing

Workingplan

Parts list

Order

Shop-order

Audit-operation

control variable

Measuringdata

Notes:For handling orders respectively manufacturing products an information exchange between different divisions of a company is necessary.

Among other things it deals with drawings, parts lists, working plans etc.. Thus huge amounts of data and complex information contents like geometry data are transferred.



Lecture 08


Differentiation between CAD, PDM and PLMIntegration depth

Product structure

Documents

Change and configuration management

Collaboration

Project planningand calculation

CAD

PDM

Projection BasicEngineering

Maintenance& service

Processplanning

Production &assembly

PLMProject management

CollaborativeEngineering Change

management

As-built

Knowledgemanagement

DetailEngineering

Configurationmanagement

Visualization

Constructionchange

Structures

Documentmanagement

Variant configuration

Legende:PLM=Product Lifecycle ManagementPDM=Produkt DatenmanagementCAD=Computer Aided Design

Integration breadth

Anmerkungen zur Folie:The lifecycle of a product from product emergence in the development to acquisition and production up to service is significantly characterized by a stronginternal dissection and a heterogeneous system landscape.

The Product Lifecycle Management(PLM), with the idea of integration, depth of integration as well as integration threshold, points out that the focus on areas of the individual system do not represent the standard anymore and only is a integral view on the whole Life Cycle of the different processes.

Reckoning the PLM as an Management Concept it includes the administrationand controlling of all product data along the whole Life Cycle of the advancedlogistic chain, from Construction and Production up to the Sale and Maintenance.

The integrated PLM offers acces to all product and process data of the Lice Cyleof a Product. (Prof. Dr. Stucky, Karlsruhe)

Hence the drawings and documents, compiled with CAD, are part of the Product-Management which coevally is responsible to supply the PLM-System with dataduring the whole Lice Cycle.



Lecture 08


History of development of workplaces for design engineering

l1 w1 l2 w2

d3

d4d1

d5

l1

b

d2

d5d5

d5

Abi

lity

for f

urth

erpr

oces

sing

of d

ata

2D-CADsystem

3D-CADsystem Virtual Reality

InteractionImmersion

Intuitional presentation

Digitalprototype

Electronicdrawing boardDrawing board

till 50‘s 60‘s 80‘s 21. century time

Notes:CAD stands for „Computer Aided Design“. The term appeared in 1957 when a NC*- (Numerical Control) system was developed by Douglas T. Roos in the United States.

CAD is a collective term for all activities where EDP (Electronic Data Processing) is directly or indirectly applied within the scope of construction and design. This can refer to common technical calculations with or without graphical output, the adoption of technical information systems and the two dimensional (2D) drawing display as well as to the three dimensional (3D) designing.

*NC (Numerical Control) is the numerical control of machine tools. The distance- and operate-information is binary-coded and inserted into machine tools by storage media like floppy disks or CD-ROMs or directly by a control computer (DNC: Direct Numerical Control) respectively by an integrated freely programmable computer (CNC: Computer Numerical Control).

VR (Virtual Reality) is a method for visualising and manipulating product models in a 3D-environment. With a VR-application one is integrated into a 3D-environment that is close to reality in order to display product models (digital prototypes) including all demanded functions during its life cycle.



Lecture 08


Examples of CAD-application

examples

CAD-

applications

CAD: Computer Aided Design

l1 w1 l2 w2

d3

d4d1

d5

l1

b

d2

d5d5

d5

Quotation processing

Machinedesign

DetailingElectronicdesign

Manufacturing resources

design



Lecture 08


Computer-internal display formats of CAD-modelling

-+ =

Translation vectordrillingnotdescribable

2D - line model:point, line

2 ½ D - profile line model:point, line, vector

3D - wire-frame model:point, line

3D - surface model:point, line, surface

3D- CSG-volume model(Constructive Solids Geometry): volume

3D-B-Rep model(Boundary Representation):point, line, surface, volume

Hybrid model:(3D-CSG volume model + 3D-B-Rep model)

Notes:The most important differentiating factors of CAD-systems are the internal data structures for geometry-processing. They are also called computer internal displays.

In the following, computer internal displays (representations) that are important in practice are explained.



Lecture 08


Application-suitability of computer-internal representations3D

B-Rep2D 21

2 D3D

Wireframe

3DArea

3DCSG

3DHybrid

appropriate

partially appropriate

not appropriate

CSG: Constructive Solid Geometry

B-Rep: Boundary Representation

Drawings, blueprints, electricalengineering, circuit boards

Preparation of drawings

Rotationally symmetricalcomponents

Profile -shaped components

Components with regulargeometry (hydraulic block)

Direct NC -programming

Kinematics, animated simulation

Finite elements analysis (FEA)

Photorealistic illustration

Components with sculptured geometry (medical equipments,mould and die making)

high calculating performance(higher investment volume)

low calculating performance(lower investment volume)



Lecture 08


2D-CAD systemsSystem-specific advantages

Low complexity

Low investment volume (hardware, software)

Good drawing functions

Point- and line functions (e.g. circle on two tangents and one point)

Dimensioning and hatching functions

Line types and thickness, colours

Typical functions

Making drawings with different views and cuttings

Electronic construction and circuit board layout

Design drafts and layouts

Factory planning and plant construction

Application areas

Gear drawing

Fact

ory

layo

ut

Notes:For 2D-CAD-systems the investment volume is low and the working technique is similar to making drawings.

2D-CAD-systems though require a certain amount of abilities of abstraction regarding to the implementation from 3D-conception to 2D representation.

Important demand in many companies is the compilation of drawings conforming to standards. That is why most CAD-systems have modules that assist the preparation of drawings.



Lecture 08


System-specific advantagesRelative small data volume

Specific orientation to surface design

Easy link up with NC-programming

Curvatures, surface intersections

Stretching slant and sloping surface

Specific functions for surface description(e.g. guidelines processing)

Typical functions

Description of sculptured surfaces

Mould and die making

Design

Application areas

3D-CAD systems based on surface models

Sculptured surface

Mold and die design

Notes:For the description of sculptured surfaces that cannot be characterised analytically, special 3D-CAD-systems based on surface models have been developed. A typical example of application is the description of forging blanks.



Lecture 08


3D-CAD systems based on CSG-modelsSystem-specific advantages

Volume information available

Quick generation of simple geometries

History of development available

Intersection of volume bodies

Volume calculation

Translation- and rotation functions

Typical functions

Animated simulation

Plant engineering and construction

Regular geometries

Application areas

FactoryA

nim

ated

sim

ulat

ion

Valve

Cams

Valvehead

Lever

Notes:For generating of analytically describable geometries, CAD-systems based on CSG-models (Constructive Solids Geometry) are suitable.

Thereby work pieces are described by volume bodies that are combined by Boolean Operations (addition, subtraction and deviation).

Sculptured surfaces cannot be created by this means. The connection to NC-programmes is difficult because of missing surface information.



Lecture 08


3D-CAD systems based on B-Rep-modelsSystem-specific advantages

Complete geometry model(Points, lines, surfaces, volume)

Suitable for any design and construction

Usable for direct NC-machining

Surface- and volume functions

Almost all advantages of surfaces- and CSG-models

Typical functions

Any design and construction

Complex products and geometries

Application areas

Gear

Generator

Notes:CAD-models that are based on B-Rep-models (Boundary Representation) manage all geometrical basic elements, beginning with a point and ending with the volume in a consistent data structure.

Thus all advantages of other computer internal displays are available. But these CAD-systems (hybrid-model also) require high-end hardware and that causes a high investment volume.



Lecture 08


Objectives of CAD-interface applications

Objects of CAD-interface applications

Transfer of CAD-data

Avoidance of multiple inputs

Reduction of cycle times

Prevention of data inconsistencies and redundancies

CADCAD

Rapid prototyping Numerical controlled machine tools

Finite Element Analysis

Virtual Reality

Digital Mock-Up

Engineering data management

Notes:The cost-intensive adoption of CAD-systems is only effective and economical if the produced data can be used by different divisions within the company and by customers respectively distributors.

Interfaces for exchanging data are necessary because normally different CAD-configurations are used by sender and receiver.

In connection with simultaneous engineering and design cooperation the importance of high-end data and information interfaces is very high.



Lecture 08


Data exchange with standard interfaces in the field of CAxCAD

Computer AidedDesign

CADComputer Aided

Design

CAPComputer Aided

Planning

CAMComputer AidedManufacturing

ERPEnterprise

Resource Planning

IGES, EDIFVDAFS, VDAPS

STEPSTEP SQL

IGES, VDAFS, STEP

CLDATA,IRDATA, STEP

CAQComputer Aided

Quality Assurance

ApplikationsspezifischesKopplungsprogramm

IGES: Initial Graphics Exchange Specification

EDIF: Electronic Design Interchange FormatVDAFS: Verband der Automobilindustrie –

Flächenschnittstelle(Association of automotive industry

– surface interface)VDAPS: Verband der Automobilindustrie –

Programmschnittstelle(Association of automotive industry – program interface)

STEP: Standard for the Exchange of Product Data

CLDATA: Cutter Location Data IRDATA: Industrial Robot DataSQL: Structured Query Language

Ope

ratin

g da

ta

Geometry data

Operating data

Operating data

Notes:For the exchange of data between different divisions of the company some standard interfaces are available whose complexity is not sufficient to transfer all necessary information.

Because of using different pre- and post-processors information loss is a result of inexact interface definitions. An example is the exchange of drawing data between two different CAD-systems with the standard interface IGES. (Loss of information because of downsizing the 3D-Volume-Model to a 3D-Surface-Model, especially problematic at model-edges)



Lecture 08


Development of standards for product data exchange

1996 1997 1998 1999

Stückliste

STEP AP 214

Welle

STEP: Standard for the Exchange of Product DataAP: Application ProtocolVDAFS: Verband der Automobilindustrie – FlächenschnittstelleIGES: Initial Graphics Exchange Specification

VDAFS IGES

ProSTEP AG

0,02

Product data model

Technology data

Calculation data

Volume model

Surface model

Wire-frame model

Technical drawing

Organisation data/Parts list

Increasingindustrialutilisation

Notes:STEP (Standard for the Exchange of Product Data) is an international standard for describing physical and functional characteristics of product data.

The standard (standardisation) is formally known as ISO 10303 „Industrial automation systems and integration product data representation and exchange“. Many countries were involved in developing, e.g. Germany, England, France, Italy, Japan and USA.

STEP is based on the specification of standard information models for product defining data. This model covers all data during the product’s entire life cycle that refers to the product and its production.

STEP allows the computer-interpretable representation and the exchange of product model data of the entire product life cycle and it supports the integration of production chains, web-based teamwork, the management of product life cycles and the re-use of concept, planning and production data.

For consistent and explicit description of the product model the formal description language EXPRESS has been defined. EXPRESS is not a programming but a specification language that unites different concepts.

The significant advantage of STEP over IGES is in the additional transfer of organisation data, calculation data, etc., like for example assembly-strucures. STEP is steadily developed further and is also nowadays one of the most prominent standards.



Lecture 08


Product data exchange with STEP

ProSTEP AG

Usage within application areas with STEP

Computer Aided Design (CAD)

Computer Aided Manufacturing (CAM)

Engineering analysis (e.g. FEA)

Process planning

Product Data Management (PDM)

…

Product data

04 Material spezifizieren DGK

05 ggf. Langläuferteile spezifizieren DGK

06 Baustruktur, Verantwortlichkeiten festlegen DGK CDM

M1 Internes Design Review durchführen DGK Abstimmungsgespräch

07 Einzelteile festlegen DGK

08 Make-or-Buy Entscheidung treffen DGK, MET

09 ggf. Laufdynamik berechnen LD

10 ggf. statisches/dynamisches Verhalten berechnen STA

M2 QFD-Methode anwenden DGK „House of Quality“

M3 Konstruktions-FMEA durchführen DGK FMEA-Formblatt

M4 Ergebnisse der Morphologie überprüfen DGK Morphologischer Kasten

11 Einzelteile grob gestalten DGK CATIA Exact Solids, Sheet Metal Designer

12 Anbindung an Drehgestell grob gestalten DGK CATIA Exact Solids, Sheet Metal Designer

M5 Informationsweitergabe und –rückführung oder Abstimmung mit Statik, Laufdynamik

DGK, STA, LD

Datenaustausch oder Abstimmungsgespräch

M6 Digital Mock Up (DMU) aufbauen DGK 4D-Navigator

M7 Internes Design Freeze durchführen DGK, STA, LD

CATIA Exact Solids, 4D-Navigator

M8 Bauteilbeanspruchung überschlägig prüfen DGK Generative Part Stress

spe zi fiz i e re n

*

*

Design Geometry Parts lists Production plans Kinematicssimulation

Quality control plans,measuring data

Manufacturing resources &method plansProduction dataNC-ProgrammingProduct-

documentationFinite Element

Analysis



Lecture 08


Possibilities of realising interfaces within the field of CAx

Man

ufac

ture

r-sp

ecifi

cA

pplic

atio

n-sp

ecifi

cN

eutra

lLinking based on a standard data format

CADPre-

processorStandard

data format(e.g. IGES)

Post-processor NC

CAD Linking-programme NC

CAD/CAM(CAD-module)

Computer-internal model

CAD/CAM(NC-module)

Linking based on an application-specific linking-programme

Linking based on a shared computer-internal model representation CAD: Computer Aided Design

CAM: Computer Aided Manufacturing

IGES: Initial GraphicsExchange Specification

NC: Numerical Control

Notes:The example of linking CAD and NC shows how data exchange between two systems with different data formats is handled:

Exchange with standard data format and implementation into the system-specific format

Exchange with an application-specific linking programme

Exchange of data by using a standard computer-internal model. That is why no formatimplementation is necessary.



Lecture 08


Problems with CAD-data exchange in IGES-formatDispatching system

Utilisation of non IGES-compliant elements and attributes (e.g. colouring)

Pre-processorIncomplete implementation of IGES-elementsFailure within IGES-format (e.g. manufacturer-designed syntax)

Post-processorIncomplete analyses of allIGES-elements

Target systemHigher mathematical accuracy than within the dispatching systemNo adequate system element for some IGES-elements

CAD System

CAxSystem

Data exchange inIGES-format

Notes:In spite of standard interface formats a data exchange is normally not exact. As shown in the picture, every other interface has similar difficulties. Within the STEP-development these error causes should be avoided.



Lecture 08


Integration of CAD and FEACAD Model: Initial solution

Min. weight

Min. parts tension

Min. deformation

Optimised calculation geometryCAD Model: optimised alternative

Reverse transformationof optimised geometry

Automatic model transformation and

integration

FEM Model

Targets of optimisation: Parameter:

Wall thickness

Form

Topology

Notes:Besides actual CAD-systems additional supplementing EDP-modules contribute to a rationalisation in design.

Special calculating-modules based on FEA (Finite Element Analysis) assist a strain-related optimisation of parts geometries.

FEA is a calculation method that divides the physical structure of an object into finite mechanical/ mathematical defined elements. These elements are linked by discreet cross points. The state of an object under load is calculated by numerical approximation procedures in stepwise transmission of state variables at cross points.



Lecture 08


Digital Mock-Up – Production technical integrationDigital Mock-Up for usage simulation:

Dynamic on-/off-construction analysis withcollision testing

Review of available construction and assembly space

Involvement of humans into model world

Example: Changing lamp

Lamp

Human

Notes:Besides simulating and evaluating product characteristics Digital Mock-ups (DMU)* can verify process flows and production systems. By involving humans into the model world ergonomic aspects can be analysed, too.

*Digital Mock-Up (DMU) is an early calibration, simulating, verifying and rating of development results based on digital prototypes respectively virtual products.



Lecture 08


Potential of Digital Mock-Up

Development time and costs can be reduced with the help of DMU!Examples: Automotive industry up to 30% *

Aircraft industry up to 40% **

time

Trial

PMU Process

DMU process100 %

construction

DMU Check HW Check

Source:* Koytek ** US Air ForceSource: von Praun

Legend:DMU: Digital Mock-UpPMU: Physical Mock-UpHW: Hardware

time

Changing-costs

Product-quality

Costsper failure

DesignDevelopment

Process planningManufacturing Customer

Final inspection

Source: PfeiferBenchmark deficit



Lecture 08


Quantification for increase of productivity

CAD/CAM capable time share tf

Reduced time share tr = tf / R

Additional capacity tz = tf – tr

Working time reduced by CAD/CAM tmr = tm – tz

Factor of increase of productivity Cp = tm / tmr

Additional capacity tz

Reduction factor RTotal time tm

CAD/CAM capable time share tf Not influence-able by CAD/CAM

Design

Calcula

tion

Drawing

Chang

ing

Contro

lling

Seco

ndar

y

proc

essin

g

timesPr

ovidi

ng

infor

mation

Repea

ted

parts

sear

ch

Parts

list

creati

on

Notes:The calculation of the economic efficiency of CAD-systems is difficult. By considering all individual activities the total benefit based on time and costs is quantified in design.



Lecture 08

Final statement:PLM comprises the management and control of the complete product data of the whole lifecycle along the enhanced logistics supply chain.

CAD is a generic term for all activities that use EDP directly or indirectly within construction and development activities.

The use of 3D CAD models allows an easy linking to NC-programming and FEM-analysis.

Digital Mock-Up (DMU) supports early simulation and check of development results based on digital prototypes resp. Virtual products.

The calculation of efficiency of CAD-systems is difficult. The overall benefit regarding time and costs in construction is quantified through the mediation of single activities.



Lecture 08

Bibliography:

M. Grieves, Product Lifecycle Management: Driving the Next Generation of Lean Thinking, New York: McGraw-Hill, 2006

G. Susman, Product Life Cycle Management, Hamilton, Ont.: Society of Management Accountants of Canada, 1994

G. Hartmann, mySAP Product Lifecycle Mangement: Strategien –Technologie - Implementierung, Bonn, Galileo Press, 2004

J. Stark, Product Lifecycle Management: 21st Century Paradigm forProduct Realisation, London, Springer, 2006


Lecture 09

L09 P. 0



Lecture 09Product Life-Cycle Management II

Organisation:Dipl.-Phys. Oec. Marcus RauhutSteinbachstr. 53BRaum 521Tel.: [email protected]





Lecture 09

L09 P. 1


IndexIndex Page 1

Schedule Page 2

Glossary Page 3


Summary of the lecture Page 4

Lecture

1. Distinction CAD, PDM and PLM Page 5

2. History of development of PDM systems Page 6

3. Relevance of PDM-Systems Page 7

4. General function overview of PDM-Systems Page 8

4.1 Product oriented functions

Product structure management 1/2 Page 9/10

Document management Page 11

Configuration management Page 12

Classification / feature strip Page 13

View management Page 14

4.2 Process oriented functions

Workflow management Page 15

Revions management Page 16

Access management Page 17

5. Interfaces and integration of systems Page 18

Technical Risks during introduction/use of PDM-Systems Page 19

6. Potential of product life cycle managements Page 20

PLM reduces expenditure of engineering time Page 21

PLM lowers quality caused production and consequential costs Page 22

PLM raises the level of carry-over of assembly groups and product periphery Page 23

Usability of all factors effects superproportional growth of market share Page 24

7. Usability of PLM, SCM and CRM systems Page 25

8. Conclusion Page 26


Excercise Page 28-39


Lecture 09

L09 P. 2


Schedule:


L1 27.04.2009 Mr. Rittstieg 0241 80 20396

L2 04.05.2009 Mr. Bartoscheck 0241 80 28203

L3 18.05.2009 Mr. Fuchs 0241 80 26265

L4 25.05.2009 Mr. Reil 0241 80 27964

L5 08.06.2009 Mr. Potente 0241 80 27387

L6 15.06.2009 Mr. Bauhoff (fir) 0241 47705-439

L7 22.06.2009 Mr. Hoeschen 0241 80 27382

L8 29.06.2009 Mr. Jung 0241 80 27392

L9 06.07.2009 Mr. Rauhut 0241 80 28206

L11 13.07.2009 Mr. Koch 0241 80 25321

L12 20.07.2009 Mr. Cuber (fir) 0241 47705-420




Topic










Lecture 09

L09 P. 3


Glossary:


Lecture 09

L09 P. 4



Objective of the lecture:Overview of Product Data Management systemsEvolution of PDM systemsProduct and process oriented functions of PDM systemsBenefit of PDM systems

ExerciseCase study for a product structureDocuments during the product lifecycle

Summary of lecture 9:

Product Lifecycle Management (PLM) gains more and more importance through the increasing number of different single systems in the economical scenery and the complex requirements on today‘s products. Therefore PLM gets increasingly into management‘s focus. After the PLM-introduction and the consideration of CAD within the scope of PLM in Lecture PM II L8 the Product Data Management (PDM) with its different functionalities and potentials will now be described.

PDM is an essential basis for today‘s engineering processes. This technology‘s propagation increased during the last years and it is used throughout the whole product lifecycle.

Requirements on the IT-systems of manufacturing enterprises have increased enormously in quality and quantity. Examples of topics modern IT-strategies have to deal with lean production, business process oriented structures, shorter product lifecycles and times of delivery, decreasing vertical range of manufacture combined with decentral customer-supplier cooperation, pressure of costs and quality management.

In this environment is where product data management gains an essential role. Through a product data management system information can be recorded or using so called originator systems such as CAD-, CAE-, CAM- and Office Systems adopted automatically, edited individually, retrieved, administrated and forwarded. These systems are adjusted to each particular enterprise‘s date and process model through flexible customization.


Lecture 09

L09 P. 5



Vertical level of integration

Productstructures

Documents

Modification and configurationmanagement

Collaboration

Project planningand calculation

CAD

PDM

Project Planning

BasicEngineering

Maintenance& Service

Job Preparation

Production &Mounting

PLMProjectManagement

CollaborativeEngineering Modification Service

for ProductionOrders

As-built

KnowledgeManagement

DetailEngineering

Configurationmanagement

Visualisation

Production Revision

Structures

DocumentManagement

VariantConfiguration

Legend:PLM=Product Lifecycle ManagementPDM=Product Data ManagementCAD=Computer Aided Design Source: Hartmann, Schmidt 2004

Horizontal level of integration

Distinction CAD, PDM und PLM

Notes on figure:

Today the lifecycle of a product from the product origin in the development through the procurement and production up to the service is marked by a strong in-plant decomposition and a heterogeneous system scenery. The Product Lifecycle Management (PLM), with the integrating idea in integration depth as well as in integration width, points out to the fact, that focusing on areas and single systems is no more enough for the today's requirements, and offers a comprehensive consideration about the whole lifecycle of the different processes. If one considers PLM as a management concept, PLM encloses the management and control of all product data along the complete lifecycle of the construction and production across the marketing up to service. For this reason the integrated PLM enables access to all product and process data of the whole lifecycle of a product. (Prof. Dr. Stucky, Karlsruhe)Therefore, the drawings and documents which have been provided with CAD are a part of the product data management, that at the same time supplies the PLM systems with the required data.


Lecture 09

L09 P. 6



Evolution of PDM Systems

1980 1985 1990 1995 2000Source: itm2005

2D/3D-CAD-Systems

CAD AddOns: drawing administration, bill of structure characteristics, standard parts,..

1st GenerationIsolated PDM Systems

DocumentManagement

StructureManagement

2nd GenerationVertical Integration

StructureManagement

DocumentManagement

3rd GenerationHorizontal Integration

ERPPDMProduct Lifecycle-

Management

Notes on figure:

At the beginning of the 80's the first product data management systems were characterised by managing technical documents. In the 1st generation of the PDM systems the different individual systems were still isolated, where as during the 2nd generation the vertical integration was in the forefront. At the end of the 90's, PDM systems with existing ERP systems were then further developed into PLM systems in terms of horizontal integration. For the data processing and procurement by different providers, advancements of PDM systems were developed depending upon application extent.

PDM² = Product and Process Development ManagementCPC = Collaborative Product CommercecPDM = Collaborative Product Data ManagementVPDM = Virtual Product Definition ManagementPDC = Product Definition and CommercePKM = Product Knowledge Management


Lecture 09

L09 P. 7



The relevance of PDM systems is growing, but there is a lack of control of the systems

VR systems will get more important in the future, but the control of these systems is very low

The control of 2D-CAD systems is the highest of all, but the importance will decrease in future

Source: WZL-Study 2003

no low middle high

no

low

middle

high

Today´s relevance

Futu

re re

leva

nce

VR

3D-CAD

2D-CAD

EDM/PDM

Relevance of PDM Systems

Size = Degree of mastery

Legend:

Notes on figure:

A study, performed by the WZL, asked 32 different companies about today's and future importance of IT-systems in the field of product engineering. Additional the grade of control of these IT-systems was analysed.


Lecture 09

L09 P. 8



product oriented functions

product structure managementdocument managementconfiguration managementclassificationclass lists of characteristics

view managementrevision managementfile administrationstoragevaulting

process oriented functions

lifecycle managementprocess/activity managementworkflow managementproject managementstatus managementinterface managementviewing und redlining

clearence sequencesrevision managementaccess authorisation administrationauditingcommunication managementhistory

General Overview of Functions of PDM Systems

Notes on figure:

The functions of PDM-systems can be divided into two main categories. These are the product oriented and process oriented group of functions. The product oriented functions are used for generation of product data and the administration of product data. The use of process oriented functions is focused on collaboration in- and outside of the enterprise.


Lecture 09

L09 P. 9



Product structure means the structured composition of the product by its components. Assembly groups and single parts lead to structure levels by combining components on a lower level of the product.

Bills of material (Data structures of products) are used to transform the product structure into a “machine-readable“ form.

Structure level 0

Structure level1

Structure level 2

Structure level 3

Legend:P = ProductAG = Assembly GroupPP = Purchased Parts

P

AG AG AG

AG PP

PPPP

PP PP

Product structure

Source: Schuh, Schwenk 2001

Product Structure Management (1/2)

Notes on figure:

Products often are very complex objects. To comprehends, modify or design them, a certain transparence is to be created. The illustration of the product complexity takes place in the product structure.


Lecture 09

L09 P. 10



Building up and Administration of:

basic BOM und part usage– quantities BOM– structure BOM– single-level BOM

variant BOM– structure variants:

variation of BOM at different dates– part variants:

variants of single parts (e.g. colour)

No. Name Pieces2457 Screw 362458 Screw 142549 Flange 32550 Screw nut 20

Quantities BOM

Single-level BOM

Structure BOMNo. Name Pieces2457 Screw 362458 Screw 142549 Flange 32550 Screw nut 20

1No. Name Pieces2 Upper part 13 Bottom part 1

Body

3No. Name Pieces4 Side panel 15 Bottom 16 Floor panel 1

Bottom part

5No. Name Pieces

7 Floor panel 18 Foot 4

Bottom

No. Non-variable part P1 P2 P3B1 1B2 2B3 1B4 2E1 1 -1E6 1

Manufactured item type P

No. Non-variable part P1 P2 P3B1 1B2 1 E1 1 -1 -1E2 1 E3 1E6 1

Manufactured item type P

Product Structure Management (2/2)

Notes on figure:

Product structures are often called bills of materials (BOM), they describe the assignments of product components (material, semi-finished products, parts, assembly groups, products) to each other.The assignment is based on the use of components (“belongs to”) and the breaking up into components (“is made of”). The relation has information about quantity, assembly location, etc. The building up of several different structures is leading to different views. The structures are displayed text based or graphically based in a web-browser. The graphical display is more used then the text based illustration.


Lecture 09

L09 P. 11



Source: Hartmann, Schmidt, 2004

PLM Applikation Server

Frontend Computer Frontend Computer

Filing(Check-in)

Getting(Check-out)

For each document file a seperate document info record is saved

The document file contains the document information (e.g. an engineering drawing)

The document info record contains metadata of a document (e.g. identification, status, version, author, date, validity)

System Structure

Version management

Status management

Document structure

Classification

Search of documents

Document distribution

Web access

Functions

Electronic Vault (Safe)

PLM Database

Document FileDocument Info Record

Document Management

Notes on figure:The document management serves the administration of all technical documents created during the whole life cycle of a product. Till this day there has been a change-over in the companies from manual editing of documents to the usability of personal computers for editing and exchanging information. Thereby the amount of data has increased considerably and still is rising constantly. For this reason the usability of PDM systems gains more importance, because such systems are adapted to administrate huge amounts of documents and their dedicated describing meta data. Meta data like document number, document description or author describe and identify a document. Reduction of costs and improvement of quality are direct stimulations. Such systems are characterized by following potential benefits:

• Efficient search and locating of certain documents• Quick and direct transmission of information and associated modifications• Access to knowledge of existing products and of former projects• Encouragement of trans-sectoral collaboration in the engineering


Lecture 09

L09 P. 12



Source: Eigner, Stelzer 2001

past

E1

today

future

Product structure

Document structure

Effectivity

= revision proposal

Legend:

The configuration management applies technical and administrative rules to the product life cycle of a configuration unit from the development across manufacturing till service and support.

= no modificationB2 is compatible to B1

F1 is incompatible to B2

Configuration Management

A2

C2 D2 E1

F1

A1

C1 D2 E1

B2

A1

C1

B1

D1

Notes on figure:

The activities in connection with configuration management are used to inform about a product´s construction level (=configuration) at any state of its lifecycle. In addition there is information about the measures that leaded to the current construction level. This verification management is very important in the course of product liability.Changes of customer requirements are leading to configurations. These configurations have two different variants. The compatible configuration changes one part only, the incompatible configuration changes connecting parts either, because of different connection dimensions.The following questions are relevant to configuration management:• Where and when the part was mounted?• Who produced, delivered and mounted the part?• Who initialized and effected revisions?• Which single parts or assembly groups (versions and mutations) does the part

consist of?• In which version the part/assembly group is applied?


Lecture 09

L09 P. 13



Demand of Search

Saved Specification

ExcistingObjects

Result

Classification Feature Strip

98

A

0-49 100-19950-99

50 100 50 100

A B~~ A C~~

100 2000

Classification / Feature Strip

B C B C

Notes on figure:

Classification means the arrangement of similar and standard parts by common attributes to support carry-over. Examples for attributes are descriptions of functions, shape, material, release date, version, editor, project, etc.Classified objects can be identified by a search through attributes or by browsing the classification hierarchy. Examples for classification hierarchies are public (e.g. DIN) standards, factory standards, etc..Within the scope of classification things and facts are organized by certain considerations. Thereby a classification system describes objects based on properties independent of the product.The feature strip is a principle for direct transformation of characteristic attributes and data into a form able to be machined by search algorithms. The system of feature strips is based on the fact that parts can be combined in groups of maximum similarity and that the properties are listed as characteristics in a schedular form. Feature strips are used especially for description and classification of geometrically similar components.


Lecture 09

L09 P. 14



Distribution View

Which sellable units are

available?

Engineering ViewWhich functions are

to be complied?

Manufacturing View

How to manufacture the

single parts? Mounting ViewIn which order the

parts are mounted?

Shipping ViewWhich units are

dispatched together?

Marketing Engineering ProcessPlanning Production Mounting &

Assembly Shipping

Picture: Gallus

View Management

Notes on figure:

During the manufacturing and production process there are different views of the product through the different departments. These perspectives are distinguished in dependence to order, difference in structure, amount of information and modification status. An engineering BOM (bill of material) is not-order-related, composed functionally and modified manually by the designing engineer, if necessary. This perspective informs the designing engineer about the history of development and the required functions of the product.The assembly BOM is linked to a particular customer order and provides detailed manufacturing and assembly orientated information concerning the product structure. Potential revisions are operated systematically by the revision management.


Lecture 09

L09 P. 15



The Workflow Managementorganizes and controlls the information flow between the involved places and processes of the company.

Concerning workflow management the distribution of documents guarantees that at certain moments or milestones the documents are automatically passed to the relevant person.

Source: PDM-Portal 2005

ConceptEnvironment

CAD A

CAD B

CAD A

Tools

CAP

Check/ release of drawing

Elaboration of single parts

create/change of construction

BOM

Create flow chart

WorkflowManagement

DocumentManagement

Product DataManagement

Project structure

Product structure

CAD drawing

BOM

Flow chart

Workflow Management

Notes on figure:

The procession of business processes are displayed in the workflow management. For all possible results of a process the corresponding successors are defined.


Lecture 09

L09 P. 16



Phases of clearance and revision processes

EngineeringChanges Request 2

EngineeringChange Request 1

EngineeringRelease Request 2

...

...

EngineeringRelease Request 1

ImplementationEngineeringChange/ReleaseNotification

EngineeringChange/ReleaseOrder

Verification and Approval

Release

Revision Request

functional improvementrationalisation of manufacturingcustomer requirements, market needsremovel of errors in the technical documentation eliminate the cause of producing scraplegal requirements

Engineering Change Order

stop concering productsrevision of documents, BOM, master dataupdating revision indeximplementation of collected data in the revision notedefinition of mailing list

Verification and Approval

adding of missin datadefine department for revision approvaldepartments verificate, agree or disagree with statementpreparation of revision job

Distribution of Information

clearence of the partcopying of documentsdistribution according to mailing listrevision fulfilled

Source: Eigner 2001

Revisions Management

Notes on figure:

The revisions management systemises the revision process to avoid inconsistencies in the product data. A revision request is set, verified and approved by every concerned department. If a request is declined a statement is needed to justify the refusal.If all departments agreed the revision proposal the old version is locked by the change order. The new version is elaborated and the new one replaces the old one and is released. With the revision in the PDM-system all departments have the current version and all participants know about the latest revision.


Lecture 09

L09 P. 17



The access management controls which user can generate, access or change documents or product information at a certain moment.

The kind of access to documents is controled by the so called „Access Control List“.

Engel

RethbergBrendler

Müller

SchulzMeier

Group 1

Group 2

47114712

4713

Documents/Product informations

Object Identification User authorization

Document 4711 Engel d

Document 4711 Rethberg -

Document 4711 Schulz w

Document 4711 Meier d

Access Control List (ACL)

Legend:- access deniedr read accessw write accessd deleting allowed

Source: Eigner, Stelzer 2001

Access Management

Notes on figure:

PDM systems allow collective access to stored data for different users. Therefore articles, documents or projects as well as user and their access authorization to objects and functions must be managed. The user administration is in charge of administration of system users, generation of user groups, distribution of rights and data security. So exists an access control to information units as well as the functions of the PDM system.


Lecture 09

L09 P. 18



CADComputer Aided

Design

CADComputer Aided

Design

CAPComputer Aided

Planning

CAMComputer AidedManufacturing

ERPEnterprise

Resource Planning

IGES, EDIFVDAFS, VDAPS

STEPSTEP SQL

IGES, VDAFS, STEP

CLDATA,IRDATA, STEP

CAQComputer Aided

Quality Assurance

Application specificlinking program

Ope

ratin

g da

ta

Legend:IGES: Initial Graphics Exchange SpecificationEDIF: Electronic Design Interchange FormatVDAFS: Verband der Automobilindustrie –

Flächenschnittstelle(Association of automotive industry – surface interface)

VDAPS: Verband der Automobilindustrie –Programmschnittstelle(Association of automotive industry – program interface)

STEP: Standard for the Exchange of Product Data

CLDATA: Cutter Location Data IRDATA: Industrial Robot DataSQL: Structured Query Language Geometry data

Operating data

Operating data

Data exchange with standard interfaces in the field of CAx

Notes on figure:For the exchange of data between different divisions of the company some standard interfaces are available whose complexity is not sufficient to transfer all necessary information.

Because of using different pre- and post-processors information loss is a result of inexact interface definitions. An example is the exchange of drawing data between two different CAD-systems with the standard interface IGES.


Lecture 09

L09 P. 19



Source: Océ2001/M. Wendenburg

AutoCADSolid

Works

?+ ?

CAD =

PDM

⇒PDM≠ERP

Departments and business partners in networks do not work with the same integrable CAD/CAM systems

system providers do not open their systems⇒ interface and standards implementation is difficult

same provider of CAD- and PDM-Systems ⇒ shifting the problem to PDM/ERP-integration

quality of the interface depends on transfer and administration of non-geometric data

PDM/PPS connection problem of software und organisation (e.g. which BOM will be maintained with which system, etc.)

different CAD systems depend on different structure information

process flows are difficult to map ⇒ implementation is very difficult

Technical Risks during Integration of Systems

Notes on figure:


Lecture 09

L09 P. 20



€

0

Source: Betriebshütte

Approval

ProductDetermination

ProductRealisation Launch Growth Adolescence Saturation of

the Market Descent

Realisation Costs

Product Profit

+

-

Time-to-market Factor

Quality Factor Sales FactorTrend without PLM

Trend with PLM

Timeline of the phases without PLM

Potential of PLMSynergy Factor

Product Sales

Quality Factor,Reusability Factor

Notes on figure:

According to the typical volume and profit of every product seven phases of a lifecycle are distinguished. To define each phase the graph of product sales and profit is used. Requirement for a successful product determination is a strong orientation to the market. That means that customer orientation starts with the first phases of the lifecycle and a efficient product engineering process is needed. Each approval of a product realisation is an extensive financial exposure. The product determination has to be executed carefully and adequately ensured.


Lecture 09

L09 P. 21



Progression without PLM Progression with PLM

Functions

Product orientedDocument managementIllustration of product structureConfiguration management

Process orientedWorkflow Management

Sinking Time-to-market Sinking effort of searchLess database interfacesLess effort for maintenanceIncreasing turnover through higher market share (Sales factor)

Chronical Progression of Product Lifecycle

DescentProductDetermination

ProductRealisation

MarketLaunch Growth Ado-

lescenceSaturation of

the Market

Realisation Costs

Product Profit

Product Sales

Quality Factor &Reusability Factor


Quality Factor

Sales Factor

Synergy Factor

+

€

0t

-

Source: PLM-Seminar of WZL 2004

PLM reduces expenditure of engineering time

Notes on figure:


Lecture 09

L09 P. 22



Functions

Product orientedDocument managementFile and storage management

Prozess orientedAccess managementLifecycle management

Early identification of bugsLess manufacturing errorsLess warranty and consequential costsHigher market share throughincreased quality

PLM lowers quality caused production and consequential costs




ProductRealisation



the Market

Realisation Costs

Product Profit

Product Sales



Quality Factor

Sales Factor

Synergy Factor

+

€

0t

-


Notes on figure:


Lecture 09

L09 P. 23



Functions

Product orientedDocument managementIllustration of product structureConfiguration management

Process orientedProcess/operation management

Sinking time of creation of parts lists, data sets, drawings etc.Stock reduction of identical data Less effort for maintenance


PLM raises the level of carry over of assembly groups and product periphery



ProductRealisation



the Market

Realisation Costs

Product Profit

Product Sales



Quality Factor

Sales Factor

Synergy Factor

+

€

0t

-


Notes on figure:


Lecture 09

L09 P. 24



Functions

Product orientedDocument managementFile and storage management

Process orientedProcess/operation managementRevision management

Improved support of decisionsLess revisionsSuperproportional growth of market share through concurrent use of Time-to-market factor and quality factor Transparent information and web based cooperation for each participant


Usability of all factors effects superproportional growth of market share



ProductRealisation



the Market

Realisation Costs

Product Profit

Product Sales



Quality Factor

Sales Factor

Synergy Factor

+

€

0t

-


Notes on figure:


Lecture 09

L09 P. 25



ProductConception

Start of Production

End of Production

End of Product Lifecycle

Source: CIM Data 2001

PLM

SCM

CRM

Engineering Manufacturing Aftersales, Service

Time

Relevance/ Usability of

the Systems

Legend:PLM=Product Lifecycle ManagementSCM=Supply Chain ManagementCRM=Customer Relationship Management

Usability of PLM, SCM, and CRM Systems

Notes on figure:

PLM, SCM and CRM are the most important systems of supporting operational processes of manufacturing companies. During the lifecycle of a product the different systems have different levels of relevance and usability. During the phase of development/engineering a PLM system is used more frequently than a SCM system, while a SCM system is often used during the phase ofmanufacturing.


Lecture 09

L09 P. 26



The PDM system is a central component of PLM.

PLM provides access to all product and prozess data during the whole lifecycle of a product

PLM implicates a new operation sequence routine during the whole lifecycle of a product

PLM-IT systems represent the functions and processes beeing behind the PLM idea

PLM opens up quality, costs, time and synergy potentials

PLM is more than an IT system

Conclusion

Notes on figure:


Lecture 09

L09 P. 27



Bibliography lecture 9:

Hartmann, G. mySAP Product Lifecycle Management – Strategie, Technologie, Schmidt, U. Implementierung

2., aktualisierte und erweiterte AuflageGalileo Press, Bonn, 2004

Schichtel, M. Produktdatenmodellierung in der PraxisCarl Hanser Verlag, München, Wien, 2002

Eigner, M. Produktdatenmanagement-Systeme,Stelzer, R. Ein Leitfaden für Product Development und Life Cycle Management

Springer Verlag, Berlin, 2001

Schuh, G. Produktkomplexität managenSchwenk, U. - Strategien, Methode, Tools

Carl Hanser Verlag, München, Wien , 2001

Eversheim, W. Betriebshütte, Produktion und Management, Schuh, G. Springer-Verlag, 1996

Eversheim, W. Wettbewerbsfaktor Produktionstechnik,König, W. (AWK 1996)Pfeifer, T. VDI Verlag, Düsseldorf 1996Weck, M.

N.N. PDM-Marktstudie 2000 in Deutschland,Beitrag in Zeitschrift eDM REPORT Nr. 2/2001S. 26 ff., Dressler-Verlag, Heidelberg, 2001

Assmus, D. FE – Tomorrow Studie 2003Pfeifer, T. Unveröffentlichte Studie des Laboratorium für

Werkzeugmaschinen und Betriebslehre (WZL) derRWTH Aachen

Wendenburg, M. Guten Ideen schneller zum Durchbruch verhelfenBeitrag im CAD/CAM-Report 2001 Heft 11 S.48 – 50Dressler – Verlag. Heidelberg, 2001

Production Management II – Spring Semester 2009

Digital Factory Planning and Simulation L11 P. 0

Lecture 11





Lecture 11Digital Factory Planning and Simulation

Organisation:Dipl. Wirt. -Ing. Sven KochSteinbachstr. 53BRaum 528Tel.: 0241- [email protected]



Lecture 11

Index:

Index Page 1

Schedule Page 2

Glossary Page 3


Short summary Page 4

Introduction Page 5

Fundamental principles of digital Factory Planning Page 9

Overview

Data Management

Virtual Reality

Simulation

Generic tool use

Tools for Factory Planning Page 18

Tools for production structuring

Tools for layout planning

Tools for laying out area and workspace

Tools for process simulation

Conclusion Page 29



Lecture 11

Schedule:


L1 27.04.2009 Mr. Rittstieg 0241 80 20396

L2 04.05.2009 Mr. Bartoscheck 0241 80 28203

L3 18.05.2009 Mr. Fuchs 0241 80 26265

L4 25.05.2009 Mr. Reil 0241 80 27964

L5 08.06.2009 Mr. Potente 0241 80 27387

L6 15.06.2009 Mr. Bauhoff (fir) 0241 47705-439

L7 22.06.2009 Mr. Hoeschen 0241 80 27382

L8 29.06.2009 Mr. Jung 0241 80 27392

L9 06.07.2009 Mr. Rauhut 0241 80 28206

L11 13.07.2009 Mr. Koch 0241 80 25321

L12 20.07.2009 Mr. Cuber (fir) 0241 47705-420




Topic











Lecture 11

Glossary:

Digital factory:

The idea of the term digital factory is the planning activity that builds an image of a factory-mapping or production system to demonstrate an maximum realisticillustration of the production flow on a computer, before the building begins. Therefore software tools like for the geometric design of layouts of every product, machine, plant, conveying system etc. as well as simulation systems for picturing the dynamic production effects are used.

Simulation:

In VDI 3633 simulation is defined as copy of a system with all dynamic processes in a model that lends itself well to experimentation to get transferable knowledge for reality. The point is to run an with theoretic prospects qualified experiment on a model under controlled risk of failure. Necessary are:

- a model

- a methodical procedure to create intended effects as well as

- valuable data

(This text is a translation of the German version of VDI 3633)

Workflow:

Workflow is the organization of operational procedures by descriptions and specifications of defined and dividable processes that must be proceed in a parallel or sequential defined order. The target of workflow-management-systems is to ensure that every work step is made at the right time by the right worker and who has therefore the necessary information available.



Lecture 11


• Overview of IT supported Factory Planning

• Understanding the fundamental principles of digital Factory Planning

• Knowledge of important IT tools for digital planning and overview of areas of application

Summary:The use of IT assistance has become a fundamental requirement for success in most functions of

business. In the area of planning and layout of production systems and factories, rapid changes are taking place better known as Digital Factory and Digital Factory Planning.

Shortened product lifecycles, and therefore resulting shortened planning phases, and the increasing diversification of products and product processes lead to an increase in the frequency and complexity of factory planning tasks. The growing demand for better planning efficiency and safety meets Digital Factory Planning with it‘s numerous IT tools surpassing the actual factory planning process. Potential for improvement lies with computer-aided planning, especially when working with extensive masses of data, and provides the possibility of making the resulting plans both visible and assessable. Digital Planning can be characterized by three fundamental elements: data management as an underlying task, virtual reality as an interface for the user and simulation as an instrument for evaluation.

The data required in factory planning for the product, the production program, process, resources, etc. are generated, adapted or provided at different points during the planning process. The task “data management” is to provide a continual and up to date data structure during as well as after the planning process.

The application of virtual reality, as a means of graphic representation, for example, and as a user interface, has caught on as capabilities of computers have expanded. It is possible to follow through and view planning steps in this reality-based and computer generated environment known as virtual reality. Simulation, on the other hand, can reconstruct the behavior of complex systems. This is what provides the factory planner with the opportunity to check and correct the dimensions of production plants and the process layout already in the planning phase. A three-dimensional sequence of events, like the investigation of a collision for robot programming or the layout of an assembly line can be simulated.

The IT tools of Digital Factory Planning available on the market are differentiable as to functionality in application of product structuring, layout planning, area and workspace layout, and process simulation. The trend in programs has been moving towards modular and universal functionality in the last few years.

The technological and organizational potential of Digital Factory Planning is not yet exhausted by the tools presently available. The fact that automobile manufacturers have announced that no more plants will be built nor production processes run until they have been detailed and digitally reconstructed and evaluated, shows the importance of Digital Factory Planning.



Lecture 11


L11: Digital Factory Planning & Simulation

Motivation and introduction1

Fundamental principles of digital Planning2

Tools for factory planning3

Conclusion4

Picture Notes:



Lecture 11

Picture Notes:The basic steps involved in planning a production system are shown in the above picture.Future demands on a production system, with respect to manufactured products, are determined during the phase “strategic planning of a production schedule”. Then, organization and production principles of the future production system are decided upon.Planning of the arrangement of resources follows the layout planning.There is a close connection between determining the layout and determining the type and number of resources needed.


Process planning

• Processes

Strategic planningof production

schedule

Factory Planning

Establishment ofproductionprincipals

• Documents

• Single and small series production vs. batch series production

• Shop vs. group vs. belt production

• Product types

• Quantity

Layoutplanning

• Rough layout

• Refined layout

Resourceplanning

• Resources

• Capacity

Process Sheet

Factory Planning



Lecture 11


• Shorter product lifecycles Planning frequency• Short „Time to Market“ Planning duration• Planning costs Planning safety• Increasing alteration costs Planning flexibility• Increasing variance Planning complexity

Planning

SOP

Pilot lot

Computer-aided planning process

Challenges in Factory Planning

Digital Factory Planning

Enabler technology developmentComputer capacity based on Example of transistors per chip

20001980

4 Mio.

0.1 Mio.

Challenges in Digital Factory Planning

Picture notes:

The increasing need for improved efficiency and security of planning projects suggests what challenges are faced in Factory Planning. Carrying out planning steps aided by a computer can be extremely helpful to this end.

Technological developments have afforded Digital Factory Planning with the opportunity of creating IT tools with respect to the use of intricate graphic user interfaces, for example.

The occurance of rapid technological advancements is supported by a thesis written in 1965 by Gordon E. Moore, one of the founders of Intel. Moore claimed that computer capability and transistor density doubles every 18 months – „Moore‘s Law“. His thesis still applies today.



Lecture 11

Picture notes:

The Factory Planning process can be divided into four simple phases: Program Planning, Process Planning, Structure and Implementation Planning. These planning processes are supported by Digital Factory Planning in the form of various IT tools.

CAx systems are primarily used in Program Planning, like CAD, for generating a bill of materials or planning systems (CAP/CAPP) for the structuring and measurement of manufacturing tasks.

Systems for process structuring, meaning the determination of necessary processing steps and resources, as well as systems for measuring capacity and flow of materials are used in planning the production process.

Layout creating systems help with resource arrangement and planning.

In order to create manufacturing processes in the Structure Planning phase, tools for process simulation are used.

3D CAD and engineering systems are used in the detailed creation of workspaces and manufacturing areas, because it is possible to create simulations of manufacturing environments that are true to reality.

In Implementation Planning, engineering tools (CAE) are used with which it is possible to see how systems crucial to operation are constructed.

There are three continual elements in Digital Factory Planning, aside from the planning process, which will be discussed later in the lecture: Data Management, Virtual Reality and Simulation.


Process Planning Structure PlanningProgram Planning ImplementationPlanning

Layout planningLayout planningsystems

Logistic &Material Flow PlanningSimulation of processes

Product program planningCAx Systems

Workspace &Ergonometrically correctformation3D Simulation

Planning CapacitySimulation of processesInfrastructure planning

Process PlanningStructuring systemsDatabank systems

Area layout3D CAD Systems3D Engineering Systems

Digital Factory Planning is the IT supported implementation of Factory Planning tasks:

Set upCAE Systems

Data management

Simulation

Virtual Reality

Continuous Tasks

In Anl. an: Joos

Digital Factory Planning



Lecture 11






Conclusion4

Picture Notes:



Lecture 11


Tasks of Data Management:Comprehensive data handling Databank systemData transfer Standardized intersectionData preparation Data structure/ Workflow systems

Productdata

Processdata

Resourcedata

Machine & tool data

Stock andtransport data

ProductionProgram

1996 1998 2000

Type

Year

Process Sheet

1001

EXT.PHONE

NAME

ADDRESSS

BILLING ADDRESS:

EXT.PHONE

NAME

ADDRESSS

SHIPPING ADDRESS:

CASH C.O.D.CHARGE

DESCRIPTION

SHIP VIAPAID OUT F.O.B. POINT

TAX

TOTALRECEIVED BY

Arbeitsplan1001

EXT.PHONE

NAME

ADDRESSS

BILLING ADDRESS:

EXT.PHONE

NAME

ADDRESSS

SHIPPING ADDRESS:

CASH C.O.D.CHARGE

DESCRIPTION

SHIP VIAPAID OUT F.O.B. POINT

TAX

TOTALRECEIVED BY

Arbeitsplan

Resource availability & qualification

VI

IIIIX

XII

Flow of Material &Control Regulation

Factory Layout

Data Management in Factory PlanningConstruction data

D l

L

g1

Picture notes:

Data Management consists of the storage, correlation and availability of various data important to the digital planning process. The data used in Factory Planning is especially associated with the product to be manufactured, with the production resources and with the manufacturing process.

The difficulty in Data Management has to do with the variety of different data types and the vast number of interactive groups in business involved in storing and preparing the data and making in available. Data Management must have a data structure at their disposal to prevent redundancy of records. This data structure has to keep all data vital to the planning process readily available and has to keep track of the results of each planning step which in turn serves as input for the next step.

The fundamental tasks of Data Management can be summarized accordingly as: comprehensive data handling, the taking over (transferring) of data from one planning step to the next and the preparation of data in the form needed.

Folie 11

g1 Sücklisten & Konstruktionszeichnunggot_h1; 16.05.2003



Lecture 11


VirtualReality

virtualreal

Real Visible

ExtendedContent

Area of representation

Reality

AugmentedReality

Contextsensitive

Implemen-tation of VR

Contents ofRepresentation

Source: IFA

ex.: Simulation of energy and

temperature in a VR model of a

manufacturing hall

ex.: Digital planningenvironment for Factory Planning

ex.:Illustration of a manufacturing area

Source: MPA

Virtual Reality in Factory Planning

Vorlesung 11

Picture notes:

Virtual Reality (VR) has become the most important user interface in Digital Factory Planning. Aside from the pure representation of planning results, VR systems are also used in development where the planner can make changes directly to virtual objects.

The various forms of Virtual Reality used in Factory Planning can be differentiated in terms of representation area and content. In the most widespread form of VR, the context sensitive form, the planner moves in a virtual (digital) environment and gains information on relativity, like the specifications of resources, possible planning configurations or clues about possible repercussions of planning decisions.

Typical ways of using Virtual Reality are, for example, on a normal computer screen - as desktop VR, with data helmets or in VR rooms (Cave).



Lecture 11


simulare [lat]: imitate, mimic, copySimulation is used in:

F

FEM SimulationGraphic 3D-Simulation

• Decision making• Evaluation of alternatives• Determination of planning data• Understanding the system• System optimization

Multiple Part SimulationProcess Simulation

Simulation in Factory Planning

Source: Bosch

Picture Notes:

The interaction of complex systems under certain conditions can be examined in a simulation, for example, for evaluation purposes or to gain an understanding of how the systems works.

Simulation is not limited to any one academic discipline and can be used on a physical or purely theoretical model. Actually, simulation is not even computer bound.

As applied to Digital Factory Planning, graphic 3D simulations and process simulations are among the most important. Graphic simulations can be used for laying out the workspaces of machines or ergonomic investigations, for example. Flow of materials, regulation of controls or resource capacity is investigated using process simulations.



Lecture 11


In Anl. an: VDI-Richtlinie 3633

Modeling

Interpretation

Analysis

Problem

Production Data

Case 1 Case 2

real System

Model

1

Results

• Enlarge buffer

• Capacity raised

Improvement

Reality

Model

Implementation

Steps of a Simulation Test

On the basis of VDI 3633

2 3 4

567

Picture notes:

The course of action in simulation tests can be described in four steps:

First, a model is made of the actual system. Making a model of a system basically means that correlations are symbolized/coded (in shortened form). Therefore, it is extremely important to keep a model‘s purpose and function in mind when introducing symbolization. Algorithms are used to describe a model in IT-aided simulation.

Tests done on a model lead to theories about how a system interacts under special circumstances. The numerous results of a simulation are gathered, organized and interpreted using graphs or characteristic values, for example. The analysis and interpretation of key data lead to conclusions on whether or not a system needs to be changed.

Changes on a model are undergone during optimization where any influence can be determined based on the results.

New findings need to be evaluated realistically and cost/utilization factors checked before any major changes are implemented on the real system.



Lecture 11


ModelInput Output

???

Modeling

ModelInput Output???

Simulation

ModelInput Output???

Optimization

Mod

elin

gSi

mul

atin

gIm

prov

ing

Modeling of production resources

Representation of production processes

Identification of relevant performance data

Deduction of action to take

Independence of individual actions

Evaluation of result of action

Creation of scenarios

Performance of a system

Sensitivity to changes (flexibility)

Sensitivity to disturbances

Partial Steps of a Simulation Test

Picture notes:

Of central importance to simulation tests is the model which, together with input and output data, should successfully represent the characteristics of a real system.

The basic steps of a simulation test are building a model with it‘s input and output variables (modeling), the investigation of the model‘s behavior based on output data (simulation) and the improvement of the system by optimizing input variables.

The input data of a model corresponds to the variables assigned to the model, like the situation concerning orders, characteristics of machines, control regulation, etc. The output data to be analyzed is production data such as machine leading, machine time for orders, etc.



Lecture 11


Modeling of time variables

Static

Dynamic

Discrete

Continuous

Continual Simulation:

Permanent examination of

conditions

ex.:Process simulation in the chemical industry

Discrete incidence-oriented sequence

simulation:Examination of

occurrence of incidence

ex.: Flow of Materialssimulation

time

depe

nden

t va

riabl

e

Continual Simulation with discrete time intervals:

Examination of the condition at discrete time

intervals

ex.:Simulation of

market progress

time

depe

nden

t va

riabl

e

Time SequenceIncidence-oriented Sequence

Static Simulation:

Examination of a condition

(time independent)

ex.:Modeling of condition

variables

depe

nden

t va

riabl

e

time

depe

nden

t va

riabl

e

Simulation Models

Source: ASIM

Picture notes:

Simulation models can be differentiated by one fundamental characteristic: time variables and their determination, which is dependent on the type and flow of the process. Time variables show how often changes occur and become visible.

The typical form of a model in process simulation is the discreet incidence-oriented time model. The times are not pictured at constant intervals, but when particular incidences occur. For example, when a tool arrives at a machining station.



Lecture 11


Relevant time of the runti Arrival time of the i-th partAi Arrival intervals of the partsSi Machining time per part

A1 A2 A3 A4

We2

S1 S2Ws

S3

timet1 t2 t3

e1 e2 e3

Wei Waiting time of the i-th partWs Waiting time of the Workstationei End of machining time of the i-th part

Cueing TheoryModeling of a process at a workstation:discrete, incidence-oriented simulation in the cueing theory

Picture notes:

The discrete incidence-oriented simulation of production processes is based on the principle of the cueing theory.

Points are marked on the time axis that show a discreet change in conditions of a system. Distribution functions deliver the time intervals of the items and their machining time. The machining process starts when the first item arrives at a station and the station is in use. Following items are placed in the cue until the machining time of the first item has been completed. If the cue is empty and the previous item has already undergone the machining process, the machining station waits until the next item arrives.

Extreme and average values of machining and cueing times can be described and calculated using this relatively simple representation of manufacturing processes. Downtime and malfunction times can be accounted for using deterministic or stochastic time portions and are used to improve the nearly real behavior of production times. This is how availability and efficiency factors of various linked production items of a production system can be simulated.



Lecture 11


DevelopmentProduction

layout

Ergonomics

Simulation

Process Planning

Digital Factory data model

Digital Factoryis the complete digital representation of the layout details of a factory as a model

Use of a universal data modelStandardized interfacesContinual support of all planning tasks (Workflow)

ModularityGenerizitätIntegrationTransparency

ModularityGenerizitätIntegrationTransparency

Complete Digital Factory Representation

Picture notes:

The trend in the development of Digital Factory Planning is a completely functional virtual safeguard of the planning phase and a continual digital synchronization of product representation and production representation. This is made possible by using a consistent data model, which determines and unites different data types, standardizes interfaces between user groups and planning phases and which allows the consistent use of tools in all planning phases.

The characteristics of a model are described as follows.

Modularity:For reducing complexity. The connection between objects and sub-systems are understood under Modularization. Modules are independent.

Generizität:Generic building blocks are universally valid and independent of the specifications of an object to be modeled. Specific data is derived from general, generic data.

Transparency:The model makes the interesting correlations and aspects of the object to be modeled apparent.

Integration:The individual building blocks are not isolated but are related to one another and build a whole.



Lecture 11






Conclusion4

Picture Notes:



Lecture 11


Area of use of the software toolsBuilding product and part familiesAssigning product and part families to resource groupsBuilding production areas, making block layoutsArea structure and assignment optimizing, ex. According to material and information flow pointsDetailing layouts, deciding on machine positioning

Examples of suitable software toolsFactoryCADFastdesign

Visualization of flow of materialsBlock layout

CAD

Process plan, production program, resource

capacity

Resource library

Modularity ex. Resource libraryGenerizität ex. StructuringIntegration ex. Product, process and

resource dataTransparency ex. Representation

Tools of Production Structuring

Picture notes:

Tool for production structuring help in the planning and formulation of production tasks. The emphasis in that case is on the assignment of product and parts family to resource groups as well as building block layouts out of existing process plans and production schedules. The tools used in structuring help to formulate the production process, to guarantee a useful layout for the flow of materials, for example, or to identify and disperse useful resources.



Lecture 11


Range of applicationIndustrial Facility Management (IFM)Flow of materials analysis and logistic planningLayout planning and draft creationProject administration for managing all relevant documentsOrder administration for controlling internal and external maintenance tasks

FActorySTructure - DesignUsed in data collection, layout creation and concept formation

FunctionsOutline and layout creation (2D or 3D)Resource libraryProduction structuring with formation of parts families and manufacturing groups

Auswertungen

Datenverwaltung

3D-Modell

Example Fast Design

Picture notes:

Fast Design consists of two modules. The module FASTPLAN is used to structure manufacturing areas and includes the functional groups: formation of parts families, capacity calculation, formation of manufacturing groups and calculation of flow of materials. The module FASTGRAF is an interactive, graphical user surface and is made up of the following functions: CAD-aided layout construction, editing and planning functions and ability to represent a flow of materials using Sankey diagrams. The task of data administration is taken over by an integrated data bank application which supports the preparation of basic data consisting of part, process plan, parts list and machine data. FASTDESIGN assists the planner from data collection to the creation of various layouts to the evaluation of concepts based on diagrams and tables.



Lecture 11


Area of use of the software toolsProduction structuring/ area formationDetermination of space needs/ formation of block layout Layout formation based on standard CAD software (2D/ 3D)

Examples of suitable software toolsFactory CADFastdesign

Factory planning table „Build-It“

ex.: Electronic production

Modularity ex. Resource libraryGenerizität ex. Any area of useIntegration ex. Configuration

of resources Transparency ex. Visualization

Planning

Tools for Layout Planning

Picture notes:

Layout planning has the task of organizing preliminary considerations and the individual results of structure and system planning in an outline form based on the flow of materials and defined 3-dimensionally. It is primarily oriented on the given geometry and the standards set by the production schedule. The roughly estimated plans are the main source of information.



Lecture 11


A D

B

C

3D-View

2D-View

Range of applicationElaboration of block layoutsPositioning machinesLayout of workplace

FunctionsTable: 2D-ProjectionWall: 3D-ProjectionResource libraryArrangement of resources in the layout with „Bricks“

Interactive layout planning in a team with simultaneous visualization

ex.: planning of parts production

Example: Factory Planning Table „Build-It“

Picture notes:

The Build-it planning table is an intuitively usable factory planning system which supports participative group-oriented factory planning.

The people involved sit together at a conference table on which an outline of the factory to be built and set up is projected. In addition, a user-defined view is projected on a screen behind the table. This way the planners get a feel for the 3-dimensionality of that which they are planning 2-dimensionally.

Interaction with the digital model occurs through so called „bricks“- small cubic building blocks for placing planning objects - similar to the usage of a graphic tray. A special software that recognizes pictures is used to record the position and orientation of the layout on the table.

A 3D model is produced with a 3D CAD system which is read by the proper VR software so that the factory model produced by the team can also be seen on the big projector.



Lecture 11


Area of use of the software toolsCreating area layoutFlow of materials, Fördertechnik and AustaktungArrangement of machines and workplacesWorkspace layout and ergonomicsAssembly layoutGraphic simulation und collision examination

Examples of suitable software toolsDelmia Process EngineerTecnomatix eM Power

Ergonomic experiments

Area layout

Workspace layout

Modularity ex. Functional moduleGenerizität ex. Method orientation Integration ex. Product and process planningTransparency ex. Graphic simulation

Tools for Area and Workspace Layout

Picture notes:

Tools for producing area and workspace layout use the details of production. When creating a layout for a workspace, questions with respect to automatic manufacturing machines as well as ergonomics come up depending on what area is being looked at.



Lecture 11


Range of ApplicationConcept developmentSimulation of manufacturing processesResource and capacity planning Set up and surveillance of operational manufacturing

Digital Enterprise Lean Manufacturing Interactive Applications

Typical Functional ModuleLayout planningQuality planningErgonomicsRobot simulationNC-SimulationProcess planningCost calculation Process simulation (Quest)

Example: Delmia Process Engineer

Picture notes:Delmia Process Engineer is one of the most extensive factory planning tools in existence. The focus of the Process Engineer is on the detailed production planning and area layouts. Various modules cover the tasks and steps of factory planning.The Process Engineer brings the processes within product development, production planning and manufacturing into harmony. Processes within development, planning and production can be combined and their synergetic effect exploited. With successful integration, changes and delays are realized at once and planning tasks can be pushed further along the process chain towards construction and development (concurrent engineering).Another software available similar in capability to the Process Engineer is the eM Power software package from Tecnomatix.

.



Lecture 11


FunctionsWorkplace configurationTime analysis, ex. MTM Ergonomic analysis, ex. body posture and energy useField-of-vision analysisAdvanced kinematic and movement resourcesMacros for Fast Task ModelingDocumentation (ex. ergonomic reports and animated work directions)

Range of ApplicationRough and refined planning of manual workplacesTime abtaktungExamination of the convertibility of tasksErgonomic Analysis

Examples of suitable software toolsDelmia Process Engineer (ErgoMas)Tecnomatix eM Human

ex. Automobile assembly

Example: Ergonomic Formation

Source: Audi

Picture notes:The layout of workspaces, manufacturing and assembling tasks according to ergonomically correct methods is an important theme in Area and Workspace Layout.Ergonomic experiments suggest an improvement in the productivity of work systems and a reduction in the burden/pressure on working employees.Simulation programs help in developing safe workspace layouts quickly by providing anatomical information, like correct range of visibility for example. Grasping room might, for example, lead to increased upper body movement which in turn could lead to an increase in cycle times.



Lecture 11


FunctionsData transfer with CAD/ CAM system3D visualizationStatic and dynamic collision recognition Robot and workpiece libraryAutomatic robot programmingResource and kinematic representation

Range of ApplicationPlanning and optimization of robot useAttainability and collision examination Simulation of manufacturing processesBi-directional conversion between a sequence of movements and control specific programs (ex. eM-OLP)

Source:Tecnomatix

Source: BMW

Examples of suitable software tools eMOLDeMSpot

ex. Weld-robot simulation

ex. Offline programmingof robots

Example: Plant Simulation

Picture notes:

Machine simulation is a big help in creating the layout of automatic manufacturing areas. Machine simulations are used to plan ergonomically correct and collision-free robot workstations in order to curb expensive positioning times and test runs. Critical factors such as space restrictions, geometric restrictions and robot cycle times are examined. It is therefore necessary to refer to robot and work piece literature.

Software programs offer the direct application of parameters onto the control programs of robots and machines.



Lecture 11


Area of use of the software toolsRepresentation and examination of flow of materials and process chainsDetermination of production characteristic values ex. For capacity and buffer formation Optimization of existing production systems and planning of new production systems Development and evaluation of control strategies

Examples of suitable software toolseM Plant (ehem. Simple ++)TaylorArenaQuest Characteristic production values

Case 1Case 2

Real System

Modeling, Simulation

Interpretation, Analysis, Conversion

Modularity ex. Modular programmingGenerizität ex. Modeling Integration ex. Combination of resources in the

production process Transparency ex. Graphic evaluation

Tools for Process Simulation

Picture notes:

Process simulation is used to evaluate the efficiency of planned processes.



Lecture 11


FunctionsObject oriented, graphic or integrated work environmentObject oriented libraries ex.:

– „Assembly“ for assembly processes

– „Carbody“ for pipe building processes

– „Paint“ for painting processes

Range of ApplicationModeling, simulation and optimization of complex systems and business processesExamination of the convertibility of tasks Selection and arrangement of resources

Example: eM Plant

Picture notes:eM-Plant optimizes complex systems and business processes using graphic modeling and realistic simulations. Concepts such as building block, language and list programming are all part of eM-Plant.Specific objects and production systems are preconfigured in predefined libraries containing flow of materials, control regulation and implemented variables of simulated runs. eM-Plant can be used as an integrating simulation component, part of an extensive information system, because of it‘s ability to keep up real-time communication with numerous other software. The differences between business, strategy, system and process simulation have been overcome.



Lecture 11






Conclusion4

Picture Notes:



Lecture 11


Continual planning workflow Avoidance of interface and efficiency loss and of complete support of all planning steps

Concurrent Engineering Decreasing preparation times and preparation planning: parallel product and process planning

Complete Representation Planning of critical plant phase and representation of unstable system behavior, ex. Virtual ramp-up

Integration in the business Integration of all interactive groups of a business: development, planning, buying, selling, etc.

Integration of the supply chain General supply chain processes:ex. Digital product model as a service

Current Developments in Digital Planning

Picture notes:In the future, fully functional and virtual safe guards of general processes will have an increasing impact on factory planning.This means that the system functionality of tools need to be further developed, the performance of hardware increased and data formats standardized.What has become apparent in Digital Factory Planning over the last few years, is the necessity of conforming business processes to the needs and possibilities of digital planning besides the development of IT hardware and software.The organizational changes that come along with Digital Planning in view of general process chains show the challenges that are still faced in Factory Planning.



Lecture 11


VisionLayout and planning of all mechanical systems on a

digital basis

Approaching correlations that

cannot be modeled

Maturity of hardware and software

Standardization and compatibility of planning

tools

Reorganization of business processes congruent to Digital

Planning

Conclusion

Picture notes:

There are different hurtles to overcome on the way to a complete layout plan of production systems.

This picture shows four areas of development.



Lecture 11






Conclusion4

Picture Notes:


Business Engineering & Software Selection L12 P. 0

Lecture 12





Lecture 12Business Engineering & Software Selection

Organisation:Dipl.-Kfm. Stefan CuberPontdriesch 14/16Room 214 Phone: [email protected]



Lecture 12

Index:

Index Page 1

Schedule Page 2


LectureIntroduction into Business Engineering Page 4

Web-based ERP-Selection Process in Comparison to Page 17

tradition methods

Summary and Conclusion Page 34

Questions Page 36




Lecture 12

Schedule:


L1 27.04.2009 Mr. Rittstieg 0241 80 20396

L2 04.05.2009 Mr. Bartoscheck 0241 80 28203

L3 18.05.2009 Mr. Fuchs 0241 80 26265

L4 25.05.2009 Mr. Reil 0241 80 27964

L5 08.06.2009 Mr. Potente 0241 80 27387

L6 15.06.2009 Mr. Bauhoff (fir) 0241 47705-439

L7 22.06.2009 Mr. Hoeschen 0241 80 27382

L8 29.06.2009 Mr. Jung 0241 80 27392

L9 06.07.2009 Mr. Rauhut 0241 80 28206

L11 13.07.2009 Mr. Koch 0241 80 25321

L12 20.07.2009 Mr. Cuber (fir) 0241 47705-420




Topic











Lecture 12

Summary lecture 12:

Today’s economy is undergoing a transformation from the industrial to the information age. This transformation allows one to move the focus of transformation from its original area to the entire network of value selection.

Isolated IT-applications as a result of the tayloristic approach of functional fragmentation of the entire production process can be found prevalently. But, a continuous flow of information both within and far beyond the company is an existential premise for the company‘s future success. Hence, the introduction of IT-systems is being complicated by a huge number of interfaces, which in parts can be very complex. Communication is being alleviated through standards on the levels of business, process and application as well as adequate software-solutions.

“Business Engineering“ characterizes as the design for companies of the information-age. Since transformation applies to complex man-machine-systems, a limitation to the technical aspect of change is not sufficient. Introducing an IT-system is more likely an organizational than a technical problem.

Making the transformation fast and safe as well as minimizing expenses is the approach in Business Engineering. Hereby transformation becomes directable: It strips transformation down to projects, a project down to a professional outline and to the direction of change. In turn the professional outline is stripped down to the levels strategy, process and system. Small, handable project-activities with clearly defined results in form of documents are generated.

During the selection and implementation of standard ERP systems three phases can be distinguished:

• Reorganisation: Project Initiation, Process and Structure Analysis, Process and Structure Optimization

• System Selection: Pre-selection, Final Selection, Final Contract Negotiation

• Realization: Realization Preparations, System Implementation, Setting System into Service.

The selection of an ERP System is expediently supported by the internet platform “IT-Matchmaker”.

Professional Change Management and consequent controlling of implementation are elementary premises for a successful implementation IT-systems.



Lecture 12

Page 4© WZL/FIR

Agenda

Introduction into Business Engineering1

Web-based ERP Selection Process in comparison to traditional methods2

Summary and Conclusion3



Lecture 12

Page 5© WZL/FIR

new companies

IT-Innovations force companies of the industrial age to change

Bild 1

Business Engineering

IT-innovationsinformation technique

construction technique

applications electronic services

preparation, structuring and

use of information

business-knowledge

methods of Change Management

business architecture of the information age

companies of the industrial

age

understand

transformation

understand support

restructured companies

make possible

represents overall concept

Notes:

Today’s economy is undergoing a transformation from the industrial to the information age. Especially innovations from the sector ‘information- and communication-technology’ („IT-innovations“) allow new business-solutions, new services, products, processes, companies and branches. New forms of leadership and coordination replace conventional forms of organization.

The transformation with its technical and socio-economic aspects is by far too eminent and complex to be intuitively and uncoordinatedly created by a single isolated person on basis of minor basic rules.

In order to open up business potentials of IT-innovations, teams, which are based on a division of labor, must look into technologies, strategies, processes and applications minutiously and professionally. Such proceedings and the existence and usage of appropriate procedure models, methods and tools characterize disciplines in the field of engineering.

“Business Engineering” characterizes as the design of companies of the information-age. As the transformation concerns complex man-machine-systems, it is essential not just to focus on the technical and professional aspects of change. Knowledge of business and IT are being brought together and connected to all aspects of the transformation, leading from means of representation to procedure models and cultural as well as political aspects.



Lecture 12

Page 6© WZL/FIR

IT-Systems in the field of production management

marketing development workpreparation

productionplanning

productionassembly sales service

maintenancedisassembly

recycling

CAD

CAM

CRM

SCMCAP

CAE

PLM meta-data basis

CAO

CAD: Computer Aided DesignCAE: Computer Aided EngineeringCAM: Computer Aided Manufacturing

CAO: Computer Aided OfficeCAQ: Computer Aided QualityCAP: Computer Aided Planning

CAQ

CRM: Custom Relationship ManagementERP: Enterprise Ressource PlanningPLM: Product Lifecycle Management

SCM: Supply Chain Management

ERP

Bild 2

Notes:

Nowadays one will not find companies operating without computer support. Since the 50s computer-based information processing has become a determined part in producing companies.Today complete process chains of producing companies are being supported by information technologies. There are appropriate IT-systems for nearly each task: Beginning design and development supported by several CAD-systems and simulation tools, to the administration department and services, which e. g. may offer long-range services for products or telemetric services. Masses of data are stored and maintained in complex data- and transaction-systems.



Lecture 12

Page 7© WZL/FIR

Integrating IT-Systems into a company‘s process network

Bild 3

Pictures: SAP AG, Hasso Plattner, Technologie integrierter Informationssysteme, 2001

1.Integration into processes within the company

2.Integration into processesexceeding the borders ofthe company

CollaborativeMarketplace

Notes

In the past the organization of data processing ensued the organization of the production. Thereby it accorded to the tayloristic approach of functional separation of the entire producing processes.

One result is an infrastructure of optimized functional subareas, which can still be found today in sub-optimum processes of the entire company. Isolated applications only allow a certain effort in maintaining competitive ability. A continuous flow of information is an existential premise for a company‘s success.

Therefore IT-systems need to be integrated into the company’s processes. In advance these processes are to be optimized, as systematization comes before automization to ensure the company’s success. A large number of new systems, such as SCM-systems, optimize workflows far beyond the borders of departments or processes.

Due to today‘s tight networking among companies, the next step is to integrate IT-systems into processes exceeding the borders of the company. Very often this interconnection cannot just be found among twocompanies. A variety of internet platforms allow an automatic process-flow on a basis of so-called „Collaborative Marketplaces“



Lecture 12

Page 8© WZL/FIR

IT-Systems require a maximum in data exchange

Bild 4

RAO = Raw material, auxiliary material, operating material, subassemblies

purchasing

merchandise planning

-

sales planning

production

product concept

-

ex stock

processing of orders

-

cost accounting

-

Human Ressources

auditing

financial accounting

-

billing

bill order

intakeorder intake

stock value

working hours

plan orderproduction order

work plansbill of materials

calculation

accountinggoods issue

costs

delivery date

customer-specificqualities

requ

est f

or d

eliv

ery

plan

bre

ak

capa

citie

s

orde

r

orde

r

avai

labl

e qu

antit

y

with

draw

al R

AO

approved job

cash

sal

es

-

outstanding money

liabi

litie

s

finan

cial

-stat

emen

t

production planning

-

Notes:

A large exchange of data can be found between the separate elements of a process. This needs to be beard in mind while integrating the information technology into processes.

Each source of information needs to be kept in mind, data-structures are to be created accordingly and interfaces need to be defined and implemented. Data, wich is generated within single processes, must be accessible to other areas and systems.

The realization of interfaces during implementation of IT-systems is highly complex and laborious – whether adjustments of standard systems or individual solutions are concerned. In many cases a main part of the software investment is needed here.

Defining standards of communication drastically eases this challenge. Especially among inter-companies-exchange it initializes a cost-effective linking of processes.



Lecture 12

Page 9© WZL/FIR

Example: Balancing bills supported by using the Business-Bus

Bild 7

Business Bus

distribution

sales

planning

offsetting

supplier customer

auditing

-online billing

payment and liquidation

eService

Bill Presentment & Payment-Processes

distribution

negotiation

information

payment(2)

(3)

(4)

(5)

(1)

Notes:

The payment of a service is electronically monitored by a neutral instance. The advantage is maximum security both for customer and supplier: paying in advance a customer can be sure to get his money back, if he is not satisfied with the product delivered. The supplier has the guarantee to be paid as long as his delivery is correct.

For example, this service is offered by eBay.



Lecture 12

Page 10© WZL/FIR

IT-architectures: today‘s systems have a flexible structure

Bild 8

presentation & - logic logic of usage data

presentation & - logic logic of usage

Core System

Client / Server - SystemClient Server

data

Tripartite system architecture

presentatationWebclient

presentation logicWebserver

presentation presentation logicClient

applicationsserver (ORB)

logic of usage

CORBA JAVA .NET

data

data

Server

Server

Software

IT-technologies:

Notes:

Basically IT-systems consist of four core-components:

- Presentation: Graphic output of the software-surface, e. g. windows, buttons, etc.

- Presentation logic: Data preparation for the presentation, e. g. calculation of diagrams

- Logic of usage: Functionality, e. g. interpretation of total turnover

- Data: Storing information, e. g. figures, texts, etc.

Most of today‘s IT-systems used in producing companies are client server based. Innovative software solutions have a tripartite structure and enable a dynamic exchange of software components.

The tripartite system architecture practically is the technical basis for the Business Collaboration Infrastructure. At the same time, it is the most flexible solution for networks, as old core components can be separated to several servers. Future dominating IT-technologies to realize this architecture are Corba, Java and Microsoft‘s upcoming .NET initiative.

Application Service Provider (ASP) use this architecture as well. These service providers have application logic and data servers in their computer-pools, while the customer is remotely accessing data from the distance and uses and pays functions simply by needs.



Lecture 12

Page 11© WZL/FIR

Chances and risks during implementation of IT-systems

Bild 9

+ Chances - Risks

Accelerated processesIncreased flexibilityIncreased qualityImproved productsGeneral access to knowledgeStandardized, where applicable automated data transferCost saving

IT-implementation is more an organizational than a technical challenge!

Remodeling of processesIncreased need of trainingIncreased burden on employees Unpredictable interfacesLoss of customized solutions along with implementation of standard softwareEnsured “capacity to act” of the company during implementationDependency on external partnersOversized startup costs

What is being implemented and when? Standard software or individual development?Are goals and potentials as a matter of fact achieved?

Notes:

The transformation from the industrial to the information age is a gigantic challenge for industry and society. Thousands of projects a year bring up new or improved business solutions. But not every project is succesful. According to an analysis carried out by Cambridge Technology Partners, 95% of more than 600 IT-projects did not work to their satisfaction.

IT-systems promise to open up a wide range of new potential within companies. But very often chances face risks, which are hardly planable in advance. Implementation does not only mean implementation of a software system: Processes and structures need to be optimized and oppositions and fears need to be reduced.

Mostly things cannot be done at once. Graduated schemes have to be developed in analogy to priorities and possibilities. A decision between customizing a standard software or implementing an individual solution is to be made: Guaranteed quality and functionality of standard software are facing the expenses to customize the product and limited possibilities.

Thus introducing an IT-system is more an organizational than a technical problem since processes need to be customized and systems chosen – based on the fact that priorities are set by the company‘s main strategy. A professional Change Management becomes necessary as a result of the reconfiguration of processes along with direct and intensive involvement of employees.

Furthermore controlling has a decisive role in every project to guarantee a prompt achievement of the company‘s objectives.



Lecture 12

Page 12© WZL/FIR

Business Engineering Map

Bild 10

information- and communication systems

management

behavior

power

informationtechnology

transformation of the company

business strategy

business processes

Notes:

What leads a project to success? Project Management, Know-how, Technology, Change Management? Restriction of the project‘s complexity, splitting it into manageable parts and a systematic proceeding, which connects the single results, eminently raise a project‘s chances of success.

Main views of change processes are the professional dimension and the politic-cultural dimension. The professional dimension focuses on methods and models of the technological observation, which include developments of strategy, process and system. So-called “human factors“, such as motivation and management, behavior, communication or proportions of power are objectives of the politic-cultural dimension.

Business Engineering splits transformation into projects (within the project portfolio), a project into the professional concept and the management of change. The professional concept then is split into the levels ‘strategy’, ‘process’ and ‘system’. Doing so, Business Engineering creates small, hand able results in form of documents. Finally a procedure model connects these activities to an appropriate order within the project‘s plan.

Business Engineering aims at making the transformation fast and safe and minimizes the effort needed. It makes the transformation guidable.



Lecture 12

Page 13© WZL/FIR

Integration as a premise to realize Business Networking strategies

Process level

Information-systems level

Strategic level

customersupplier

customersupplier

Business CollaborationInfrastructure

customersupplier


Strategy-specific elements:• customer segments• customer covered processes• positioning within the value chain

Process-specific elements:• customer process• cooperation processes• internal processes• portal efforts

IS-specific elements:• portal applications• BCI-applications• EAI-applications• standards• internal applications


BCI = Business Collaboration Infrastructure

EAI = Enterprise Application Infrastructure

Bild 11

Notes:

The Business Engineering Model shown is meant to be a framework. Its aim is to help the Business Engineer understand single projects and project activities in the entire context.

Most of the time the process of Business Engineering is initiated by IT-innovations, sometimes as well by changes of the general framework, branches, markets, customer behavior and the change of values. As a consequence the process is based on methods and models of the IT- and technology-managements in their early stages.

At the level of strategy the business architectures, models and strategies are therefore monitored. This part of Business Engineering is based on methods and models of strategic management (see lectures PM I L11 and L12).

Having formulated appropriate strategies and specification of the business model, appropriate business processes and finally appropriate information- and communication-systems for systematically supportable parts of the process are developed in a next step (see lectures PM I L9 and L10 for the modeling of companies and processes).

The complexity of transformation requires an engineering-, method- and model-based procedure. Networked business architectures and the possibility to direct business models either to production processes or to customer processes mark this complexity. Innovations only become effective when being implemented within strategy-, process- or system-levels. Doing so, the information und communication techniques bring along restrictions, which need to be beard in mind at all levels.



Lecture 12

Page 14© WZL/FIR

Principles of Business Engineering

Meta-Model of Business Engineering

Strategie

System

StrategischesGeschäftsfeld

Markt Marktleistungbeeinflusst

produziert /konsumiert

bietet an

Aufgabe Prozessbesteht

aus

Leistung

Funktion Applikationführt aus

Datensammlunggreift zu auf

IT-Komponente

läuft auf

strategy

process

system

business unitmarket market serviceaffects

can be

produces / requires

uses

offers

task processconsists of

service

function

supports

applicationcarries out

data poolaccesses

IT-components

uses

resultwhat?

activitywhereby?

roleswho?

techniquehow?

stakeholderfor whom?

Meta-model

prob

lem

-au

tono

mou

spr

oble

m-s

peci

fic

concretion

Notes:

Basic principles of the Method Engineering help making projects more stringent. The figure above shows the meta-model of Business Engineering. It contains essential objects and their connections.

Business Engineering acts on the assumption of the problem-independent meta-model, which then is specifically being adapted to the problem. Methods consist of five elements: meta-model, results, techniques, activities and roles.

The question of Stakeholder Value come to the foreground at the same time, which is a criterion for a business solution. On the strategy-level business logic defines factors for success, which are to be consulted on all levels for measurement of the project- and business-successes. An important part of this is the consideration of cost effectiveness, for example in form of Return on Investment (ROI).



Lecture 12

Page 15© WZL/FIR

Stages of a change project

cultural changeat a minority

denial

obligation/ support

creativity

return

taking the challenge

pressure to change

moral

timecrisis / disorientation

1 32 54

prelude: getting into the process

Roll-Out: empowering the system-

process of steadiness: obtaining the monumentum

consolidation: finding back to a steady state

1 32 54

activity niveau

de-stabilization

time

stabilization3-5 years

sentitization: preparing the change

-

effort

time

Notes:

At the changeover from one epoch to the other fundamental alteration occurs. Withal the intensities of the activities and the moral within a company act differently.

Five stages, which cause different activities, can be distinguished in the design of change. The entire cycle describes a perennial process:

Sensitization: An early cultural change among a minority, which considers its own form of management as not contemporary, initiates the process. At first stakeholders are identified and a gross concept is developed.

Prelude: The change process is being discussed and the adequacy is justified. A climate of priority is created and the organization of change is established.

Roll-Out: First euphoria has faded, rejection comes up and requires an active debate. It is aimed at bundling energies to realize the change. The determination to the intention needs to be demonstrated and the employees concerned need to adapt the change and become an active part of it („issue ownership“).

Process of steadiness: At first, laborious success must not be wasted, but needs to be saved sustain ably and its cultural consolidation needs to be pushed. As moral is on a low it needs to be forced to change by the highest effort. Due to a multitude of parallel projects the change has to be sustained by several key personalities. It is shown, whether the change has been successful or not.

Consolidation: The process needs to be entirely concluded, experiences need to be evaluated and the organization of the project needs to be dissolved. Everyday life arises from the special program.



Lecture 12

Page 16© WZL/FIR

Controlling of realization

audit BalancedScorecard

financial controlling

concept realization result

managementwork

feedback

tproject

Bild 19

Notes:

Often the consistence of implementation is crucial for success or failure of an IT-introduction. In many cases only a small part of all possible potentials is achieved with the start of the new IT-solution. It is not until a continuous optimization of the new processes and the new systems that an IT-solution unfolds its complete range of possibilities.

Blind activism harms the project. Therefore the management needs to concentrate on goals with the highest benefit and must fully activate its employees. In order to realize this, goals need to be set consequently and lastingly realized in a sustainable way.

This can be achieved by appropriate methods within the different stages of a project:

Methods of resolution for the given tasks are rated in an audit by the management. A solution is selected and the appropriate realization is initiated.

A Balanced Scorecard helps tracking the course of realization (cp. PM I lecture 1). It even helps tracking down the strategy and goals to single areas and employees. In terms of selected key figures and corresponding methods each employee is pointed up his role in and contributions to the process of realization with individual aims.

By means of the controlling of finance values (cp. PM I, lecture 1) the prosperousness of the IT-project for the company can be judged retroactively.



Lecture 12

Page 18© WZL/FIR

Overview of the different procedures for the software selection

Functionsorientedselection

Process orientedselection

Strategyorientedselection

Provider orientedselection

Benefit orientedselection

Limitedselection

Internalselection

„Irrational“selection

-+ A B

Notes:



Lecture 12

Page 19© WZL/FIR

Procedure of 3PhaseConcept

The 3PhaseConcept combines the advantages of the different procedures throughindividual configuration and emphasis.

PhaseConcept

Functionsorientedselection

Processorientedselection

Strategyorientedselection

Provider orientedselection

Benefit orientedselection

Limitedselection

Internalselection

„Irrational“selection

-+ A B

Notes:



Lecture 12

Page 20© WZL/FIR

The 3PhaseConcept for ERP-/PPS-Software-selection

©FI

R20

05w

ww

.fir.d

e

20

Project InitiationProcess and Structure AnalysisProcess and Structure Optimisation

1.11.21.3

Pre SelectionFinal Selection Final Contract Negotiation

2.12.22.3

Realisation PreparationsSystem Implementation Setting System into Service

3.13.23.3

Re-Organisation

System Selection

Realisation

Notes:



Lecture 12

Page 21© WZL/FIR

Example for Business-Process-Modelling

Erstellung derArbeitsplan-

konzepte

AV- Arbeitsplankonzept

mit Auftragsdatenund Fertigungszeiten

22

20

EDV-Erfassung derArbeitsplan-

konzepte

FS- Laufkarte

(Arbeitsplänemit Materialdatenund Terminen)

- Lohnscheine- Rückmeldescheine

- Strukturplan (aus TP)

Zusammenführung der Zeichnungen

und Arbeitspapiere

FS

- Zeichnungen- Laufkarte (immer an der

Zeichnung/Werkstück)(Arbeitsplänemit Materialdatenund Terminen)

- Terminkarte (Kopie der Laufkarte; Verbleibin der Meisterei)

- Lohnscheine- Rückmeldescheine

- Hängeordner fürdie Fertigung(Terminkarte, Lohn-scheine, Rückmelde-scheine, Laufkartemit Zeichnung)

Fehlende zeitliche Abhängigkeitzwischen den Arbeitsplänen

AV

Kalkulationsdateneingehalten?

21

- Kalkulationsdaten

Ggf. Korrektur derStücklisten und

Zeichnung

AV, KS- Geänderte Stückliste

an EDV- Geänderte Zeichnung

- Stücklisten- Zeichnung

ja

nein

Laufkarte in Neuenkirchengleich Entnahmekarte

WT: ReferenzierungBaugruppenliste zu

Kurz-LV fehlt teilweise

2 - 6Wo.

DLZ Output EDVBemerkung InputThroughput-

time

Nescad

Dakoda

InformationFlow

IT-Support

Weeknesses

Department

Task

additionalinformation

Manuelle Erstellungder Arbeitsplankonzepte

- Erstellung der komplettenFertigungsunterlagen fürden Vorrichtungsbau(Rheine)

Fehlende Kopplung mit dem Strukturplan

Fehlende Prüfung aufvollständige Vorgaben

Guter Zugriffauf archivierteArbeitspläne

Arbeitstechnische Opti-mierung der Stücklisteund Zeichnung zu spät

Notes:

The analyses of processes and information flows is the starting point in the reorganisation phase. Theuse of modelling software is recommended (e.g. Visio, Bonapart, ARIS or Powerpoint).

Cross-departmental processes should also be taken into account. In the example, first the involvedorganisational units as well as the process steps are documented.

In parallel, weak points and lead times are analysed. Subsequently,improvement measures can bedetermined.



Lecture 12

Page 22© WZL/FIR


©FI

R20

05w

ww

.fir.d

e

22


1.11.21.3


2.12.22.3


3.13.23.3

Re-Organisation

System Selection

Realisation

Notes:



Lecture 12

Page 23© WZL/FIR

Analysis and Evaluation of the ERP-Market

Control

Periodical testing of the collected dataon site by FIR-engineersPeriodical testing of the collected dataon site by FIR-engineers

Quarterly conducted marketresearch to collect generaldata from 230 ERP-System suppliers

Quarterly conducted marketresearch to collect generaldata from 230 ERP-System suppliers Evaluation of the grade of

functionality of ERP-SystemsEvaluation of the grade offunctionality of ERP-Systems

Validation Completeness

Data Collection Data Usage

Actuality Indepen-dency

TROVARIT AG:

Technology-Provider

TROVARIT AG:TROVARIT AG:

Technology-Provider

ITIT--MatchmakerMatchmaker

Notes:

The market for ERP systems is observed and analyzed for over 20 years by FIR. Since May 2000, market survey is published by the IT Matchmaker (www.it matchmaker.com) the Trovarit AG, a spin off of the FIR.

The IT Matchmaker is an internet platform which supports an online, web-based selection of enterprise software solutions (e.g. ERP systems).

Up to 1.500 respectively 2,200 characteristics are seized in a standard catalog for each system. The processes of data acquisition, control/data examination as well as data use are arranged in such a manner that the topicality, the validity and the completeness of the collected data are ensured.



Lecture 12

Page 24© WZL/FIR

Scope of ERP Systems – Overview of Functionalities

Organisational Structure Bill of Materiall Resource Mgt. Order ProcessingProduction Planning Purchasing Inventory Mgt. Controlling

Fulfi

llmen

t

0

200

400

600

800

1000

1200

1400

1600

100% 1 4 13 25 28 37 34 49 31 43 61 67 73 79Systems (anonymous)

Source: www.it-matchmaker.com, 11/2002

23

Notes:

Depicted is a standard evaluation done with the IT-Matchmaker (ranking).



Lecture 12

Page 25© WZL/FIR

Efficient Software Selection Through a Ranking Procedure

Produkt- und Produktstrukturverwaltung+Allgemeine Fragen0Materialstammverwaltung0Stücklistenverwaltung+Identifizierung/ Klassifizierung++

Arbeitsplanung+Arbeitsplanverwaltung++Ressourcenverwaltung+

Auftragskoordination++Angebotsbearbeitung+Auftragsklärung+Auftragsgrobterminierung++Auftragsführung++Preisfindung0Versand+Retouren-Servicemanagement++

Kapitel

Unter-kapitel

Kapitel

Unter-kapitel

KapitelUnter-kapitel

VeryImportant Important Not so

important

270 442 0

Kritische Merkmale

Critical

34

Weighting of chapters of the criteria catalogue

++ + 0 - - -

3,0 1,5 -1 0,5

82,2

83,1

84,0

84,3

84,6

85,8

86,1

90,6

92,6

95,0

0 10 20 30 40 50 60 70 80 90 100

m

S

S

5

S

A

S

1

2

3

Narrowing down the selection to 3 preferred systems!

24

Notes:

The characteristics that are collected in the standard catalog can be assigned individual chapters and subchpaters depending on the topic.

The weighting of the importance of individual characteristics, sub chapter or chapters leads to a rankingof systems subscibed to the IT Matchmaker.



Lecture 12

Page 26© WZL/FIR

Future Trends -System Functionalities in ERP-Systems

FutureTrendsE-Business-

Functionalities

Web-Shop, Content managementSpare part ordering and associated services via Inter-Front-end...

Mapping of ComplexOrganisation Structures

Item Data Management in Multi-Site Production CompaniesMaterials Management in Multi-Site Production CompaniesSales Planning in Decentralised Sales Organisations...

Advanced Planning & Scheduling (APS)-Functionality

Constraint-based Delivery Date Calculation (Available to Promise)Simultaneous Production Planning in Real-Time...

Workflow undEvent Control

Workflow Support for indirect Departments (e.g. Engineering)Integration of E-Mail in the Workflow...

Notes:

The increasing requirements on the part of the enterprises regarding the optimization of the enterprise-internal and external business processes led to new trends with ERP systems.

The illustration of complex organisational structures supports the job execution over several production sites, up to complex distribution structures. APS (Advanced Planning) functionalities improve current, MRP–based ERP systems.

A Workflow possible and an event support makes the inclusion and co-ordination of all coworkers concerned by a business transaction within shortest time.

E-Business-functionalities make an efficient completion possible of business processes including the Internets as communication medium.



Lecture 12

Page 27© WZL/FIR

Decision Support: Current Types of Standard-ERP-Systems

Incr

ease

of

inst

alla

tions

Product life cycle

techno-logicalinnovation

functional features

B

C

A

Features : systems with a balanced ratio of technical innovation andextensive functionality

Type of choice : balanced ratio ofsecurity, risk and potential

Features : extensive functionality on cost of technological innovation

Type of choice : high security at lowpotential

B

C

Features : high grade of innovative systemswith limited functionality

Type of choice : high risk and highpotential

A

= System n time

B CA

relevant area of selection

Notes:



Lecture 12

Page 28© WZL/FIR

IT consultancies and Sales partners – Additional Dimension to ERP Selection and Implementation

ERP Systems(approx. 100 Standard-ERP-Systems on the

German market)

IT consultancy(approx 5000 different IT consultanciesand Sales partners for ERP systems)

Industry

Examples: ERP Software Providers and number of IT consultancies

SAP: approx. 100 (only Germany)ABAS: 27 (Europe)

NAVISION: 97 (only Germany)

27

Notes

In the context of a selective procedure not only the software providers have to be considered, but additionally a multiplicity of associated system implementation partners or IT consultancies. The IT consultancies differ e.g. by a different industry experience, by different pre-setting of the ERP system (pre-customized).



Lecture 12

Page 29© WZL/FIR

Summary – Selection Criteria in ERP-Projects

Focus

„System“

Focus

„System Vendor“

Performance-based Selection Criteria

Strategic Selection Criteria

Implementation Concept

Quality and Availability of Professional Consultants

Quality und Responsiveness of Support

...

Market Position and Stability of System Vendor

Management Board of the System Vendor

R&D PotentialStrategy of the System Vendor (e.g. Industry focus)...

Match of “System Philosophy” and Corporate PhilosophyModernity of System TechnologySystem Flexibility Previous System Implementations with other Clients...

Aachen Model of PPC

Notes:



Lecture 12

Page 30© WZL/FIR


©FI

R20

05w

ww

.fir.d

e

30


1.11.21.3


2.12.22.3


3.13.23.3

Re-Organisation

System Selection

Realisation

Notes:



Lecture 12

Page 31© WZL/FIR

2-Day Workshops with Software Providers (System Demonstration)

Create Checklist- Requirements, Questions- Sample Data

„Script“ for the Test

Grade Significance Characteristic

The system offers a better solution to the requirement as expected.

The requirement posed is fully fulfilled. Functionality is suitable

The fulfilment of the requirements is acceptable. However weaknesses exist

The requirement posed is fulfilled insufficient. Crucial points of the requirement can be not sufficiently covered by the system.

The requirement posed is not fulfilled. The system does not offer any support

1

2

3

4

5

The system fulfills demanded functionality in the standard

The system will offer functionality at the time of the introduction in the standard.

Functionality can be covered after slight adjustment

Functionality can be provided, however major programmingrequired

A system adjustment to the requirements is not possible

A

B

C

D

E

Graded by User Company Graded by Software Vendor

30

Grade

Notes:At the beginning of the test, an agenda is established containing some introductory information.

The agenda for the system test is organized around two parts:

1) Total „screenplay“/“script“

This includes the core processes e.g. from purchasing, production to sales. For each core process the company or team evaluates:

• Which information must be available in the system?

• How many graphical user interfaces have to be called in order to obtain the necessary information?

• which information must be entered into the system, e.g. selection lists, plausibility checks, assistance during the input etc.,

2) Individual „screenplay“/“script“

This part includes specific and detailed requirements and questions that have to be answered in the system test.

A final section contains question about previous experiences of the software provider in implementation projects or necessary adjustments of the software.



Lecture 12

Page 32© WZL/FIR

Evaluation of the Final Selection

insufficient

System test

ABCD

StandardAt Implementation Standard1/2 MD Programmingx MD Programming

Functional Spectrum (What?)Su

pplie

r1234

outstandinggoodsatisfactorysufficient

Performance (How?)

Proj

ectte

am

1

2

3

2

3

Consultancy

Programming

1

2

3

XX

X

XA B C D Approvement of fulfilment

of Requirements 500,- 1000,- 1500,-

500,- 1000,- 1500,-Critical Requirements

Preparation EvaluationProcess optimisationBAPSY-Preselection

++ - Criteria

TestdataCompany data

Test guideOverall test guideSpecific test guide

Functional Spectrumbefore after Programming

1 2 3

One-time/on-going costs

1 2 3 1 2 3

Daily Rate 1

System System

costs costs

System

Fulfilment

IndividualRequirements

TOP-Systems1

2 3

5

Notes:

The system test offers the project members the possibility of grading the ERP system according to theirrequirements. These requirements are demonstrated during the system test by the software provider.

The evaluation follows a uniform evaluation guideline (see also previous slide).

The total ranks of the systems are determined by taking into consideration different criteria, i.e. functionality, cost, ease of use etc.

The results of the system test are consolidated in a requirement specification document, which forms thebasis for contract negotiations with the software provider.



Lecture 12

Page 33© WZL/FIR

Adjustment of / Fine-Tuning ERP Systems

Standard SoftwareStandard Software Means of AdjustmentMeans of Adjustment AreaArea

Parametrization • System Parameters

Modularisation • Functional Building Blocks, e.g. Sales, Purchasing, Production

List and Report Generator • Lists, Reports

Maskengenerator • Adjustment of Graphical User Interfaces (GUI)

Rule Based Heuristics • Product Configuration• Material Requirements Planning

Code Generator • Program Development

35

Notes:



Lecture 12

Page 35© WZL/FIR

Summary and ConclusionThe market situation for ERP systems is characterized by a large heterogeneity. More than 150 standard ERP systems exist in Germany

Differences in software functionality are significant

Not only the right system, but the also the adequate implementation partner is a criteria in the selection process

– In Germany, around 5.000 of these implementation partners exist!

Internet platforms can support the software selection process

Particularly private platforms offer the possibility also to streamline the selection process by providing a standard workflow and standardized communication between potential customers and software providers



Lecture 12

Questions:• What are the central elements to be taken into account in a it-system

selection process?

• Who should be involved in a software system selection process?

• Which points should be clarified before a ERP-system selection?



Lecture 12

Bibliography:

Martin, R; Lempp, P.; Mauterer, H.: Wie Software wirklich Nutzen bringt. Harvard Business Manager, Juni 2003, S. 71ff

Müller-Stewens, G.; Lechner, C.: Strategisches Management. Stuttgart: Schäffer-Poeschel Verlag , 2. Auflage, 2003

Österle, H.; Winter, R.: Business Engineering. Berlin: Springer Verlag , 2000

Österle, H.: Business Engineering – Prozeß- und Systementwicklung. Berlin: Springer Verlag, 1995

VDI-Gem.ausschuß CIM: CIM-Management. Rechnerintegrierte Konstruktion und Produktion Band 1. Düsseldorf: VDI-Verlag, 1990

VDI-Gem.ausschuß CIM: Kommunikation und Datenbanktechnik. Rechnerintegrierte Konstruktion und Produktion Band 6. Düsseldorf: VDI-Verlag, 1991