How will processes be done after change in ERP Inventory project? (continue7...)

ERP CHANGE MANAGEMENT

Activity

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F) Procedure of received goods inspection related to function two flow2.

1- For each of the received item waiting for inspection inventory people, the inventory inspector must do the inspection and register the result in the system.

2- For each received goods waiting for inspection which its inspection needs quality control, this inspection must be don by the appropriate quality person based on the quality procedure defined for that item.

3- If it is mentioned in the purchase order that requester needs to check the received material from technical aspects then the received item or some sample of that should be sent physically to the requester. Requester code is written in all purchase orders and receipt notes and requester location is clear on all purchase orders as delivery location.

Concerned position:

inventory inspection position

4- If step 3 happens, the requester must send the result of his inspection to the inventory inspection responsible. This is normally done out side of the system.

5- If step 4 happens, the inventory inspection responsible must register the result in the system.

Pre requirements and necessities:

1- For each item, which is defined as purchasable item the method of receiving inspection, must be determined (visual inspection by inventory inspector or quality inspection by quality inspectors).This must be determined one time when item master attributes are being defined by ICG. Then this determined method will be followed as and when the item is received as it is illustrated in steps 2-3.

2- All catalogues and technical documents, which are required for technical inspection, must be attached to purchase request when raising the request by requestor. It is used when inspection is done to prevent any mistake.

3- For each item, which its receiving inspection method is defined to quality inspection, the quality procedure should have already been figured out.

This procedure, which should include quality elements, criteria's, accepted ranges & tolerances, out of range action, testing methods and responsible position for each one, is part of quality system and procedures. We will focus on that when discussing quality system.

How will processes be done after change in ERP Inventory project? (continue6...)

ERP CHANGE MANAGEMENT

Activity

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E) Procedure of initial Receipt

1-Goods, which are receiving to our organization

Suppliers gradually carry goods to organization and accompanied by a shipment note from which has purchase order number on it. When a party is at the entrance point of our organization the receipt person must check the purchase order number on the shipment note to realize which purchase order is being shipped. Then he must find purchase order number in the system and find its items and control them against the item has been shipped. If it matches (partial matching), the receipt person must permit the goods to be put at receiving location.

2- If the party is carrying some thing different from purchased items the receipt person must refer to non-conformity of received goods procedure, which will describe separately.

3- Receipt person must create a receipt note in the system. This is related to purchase order number and includes quantity of items received. This transaction will only indicate entering part of ordered goods to our plant. The goods in receiving location indeed are not counted as on hand quantity. It does not mean the goods are usable.

Responsible position:

Receipt of goods

Pre requirements & necessities:

1- Purchase order should be printed from the system and sent to supplier

2- An agreement must be agreed between enterprise and among all suppliers to send their goods with a shipment note including purchase order number. This needs a change in communication of our company with its business partners.

3- A receiving location is to be defined physically in the plant to keep received goods before quality check and moving them to store. This location can be a separate location for a big plant but for small plants receiving location can be part of main store which is distinguished via a dedicated locator.

If this is even not possible physically we can separate goods in receiving status instead of separating receiving location. It means you must keep the received goods, which are not controlled with a label indicating status as non usable or not controlled. Then after accomplishing quality checks, the status of passed goods will become "quality passed" or "usable" and status of rejected ones will become "Rejected" or "non usable".

In this case, the principle should be strictly established to prevent using non-controlled goods. This may need more effort in the sense of change management rather than when receiving location is separated physically.

4- The procedure of quality control for each good must be defined before receiving that item. This quality procedure, which must includes quality elements, criteria, accepted ranges testing methods and responsible for control is part of quality system procedures.

How will processes be done after change in ERP Inventory project? (continue5...)

ERP CHANGE MANAGEMENT

Activity

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D) Procedure of Inventory Structure Definition

This procedure is defined to run the process of inventory structure definition and it is aimed to establish a well-organized structure for all warehouses and stores in all areas of the entire organization. This procedure is to be run by a group including the following people:

- Inventory department representative

- Sales department representative

- Purchasing department representative

- Production management representative

Trigger: The procedure must run before lunching the system as it makes the initial master data, which is needed for all inventory processes to run. In addition, each time a new warehouse location is making up in the organization this procedure must run to define it well so that it can get into use.

Tasks:

Distinguishing all locations through the entire organization, which some goods are kept for holding or even for use like floor sub inventories.

Concerned roles:

All member of the group. Each member is to introduce the locations within his department.

Categorizing the stores

Concerned roles: All

Code generation for each store

Concerned roles: All

Assigning locators and sub locators to each store if necessary

Concerned roles: All

Costing method determination

Concerned roles: All

Pick up method for each store

Concerned roles: All

How will processes be done after change in ERP Inventory project? (continue4...)

ERP CHANGE MANAGEMENT

Activity

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Subgroup2: Raw material item Management

This subgroup must be formed in a manufacturing organization. It is overly responsible for defining all raw materials, which are used in a manufacturing plant, and determining their attributes. In addition, it should take care of changes in the attributes of items as well as new items definitions.

Task1: Raw Material coding

Coding structure must be defined one time for raw materials. Then when a new raw material item is to be used this group must determine its code following the predefined structure.

Task2: General Attribute's definition of each item

Concerned roles:

Manufacturing representative

Inventory representative

Quality representative

Task3: inventory replenishment planning method (Min – Max – MRP...)

Concerned:

Representative of Manufacturing

Representative of inventory

How will processes be done after change in ERP Inventory project? (continue 3...)

ERP CHANGE MANAGEMENT

Activity

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Procedure for Item Definition

This procedure is to define the behavior of item in a specific process or Area. Defining and maintaining items need to be done by a group consisting of variety areas not by a single department. In Addition, as there are different sorts of items in an enterprise so this group it self is composed of sum subgroups. The entire illustration of this group, subgroups and related tasks is as follows.

A very important point about this procedure is that a group of people should run it from different departments, which are in relation with different types of goods as consumers or supplier. So the tasks of this procedure will become as part of the job of all of the people including in the group. These tasks are to be considered in their job description in addition to their duties within their department daily work.

Group: Central Item Group

Subgroup1: finished good Item Management

This subgroup must take care of finished goods definition and managing their attributes changing over the periods.

This subgroup must do the following specific tasks:

Task1: Code generation for each finished good (FG) which are sold by the enterprise.

This Group must define FG coding structure one time and then it should match to any item over the org.

Concerned roles:

Representative of sales

Representative(s) of Manufacturing

Representative(s) of quality

Task2: Definition of general attributes for each finished good item.

These general attributes are UOM, Conversions, descriptions, stock able, make or buy …

Concerned roles:

Representative of inventory

Representative of sales & shipping

Representative of manufacturing

Representative of quality

Task3: Definition of planning method & attributes

Includes replenishment planning Method in warehouse (MPS, MRP, Min, Max …)

Concerned roles:

Sales Representative

Manufacturing Representative

Inventory Representative

Task4: Inventory Attributes Definition.

At least includes: Stockable warehouses, tracking Method while entering and out going from warehouse (lot based, serial based…), safety stock, expire date ….

Concerned roles:

Representative of inventory

Representative of quality

Task5: Definition of sales & shipping attributes.

This at least includes: Sales method, sales price list, customers, Delivery method, shipping method, shipping vehicle, Tax, Vat, Receipt method,….

Concerned roles:

Representative of sales.

Task6: Definition of production Attributes includes: production plant source of production (order or Demand)…

Concerned roles:

Representative of Manufacturing

Applicable: Make items.

Task7: Definition of costing Attributes

Includes: costing method (Standard, Average, Lifo, Fifo…), costing enabled, Fixes Asset enabled

Concerned roles:

Representative of costing Department, Representative of inventory

Applicable: All Finished goods

How will processes be done after change in ERP Inventory project? (continue 2...)

ERP CHANGE MANAGEMENT

Activity

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Procedures and instructions to execute functions of mapped process flows.

The following notations are suggested to be used for documenting procedures in a way that the people are cleared about all what must they do and how they must do.

A .Tasks, which should be followed one by one consequently to accomplish the procedures

B .Concerned roles, responsible for each task

C. Trigger, the event which makes the procedure start

D. Systematic / nonsystematic

E. Related function(s), the function(s) in the process flows, which is accomplished by the procedure.

F. Pre requirements & necessities.

Although procedures are required tasks to accomplish (run) a function of a process, but each procedure itself may have some pre requirements. It means some tasks should have been done and/or some structures should have been already designed and established before the procedure can get started.