Monday, November 24, 2008

Reinforcement to sustain the change in ERP Inventory

ERP CHANGE MANAGEMENT

Activity

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Reinforcement to sustain the change

Is there any time that can be used as awarding and admiring users?

We can use following times, with attention of system status, for awarding and admiring:

· Cycle count periods

· Fiscal years


what are the measures to check users' usage of the system and their progresses?

Getting report on the data, which have been input into the system by the users in all business areas, is the key tools which shows how much the system is in use. For inventory area, the reports must show the following indicators:

The entire inventory transactions, which have been entered in system, in compare with the actual transactions. This indicates how much the system in use generally.

The accuracy of inventory data in compare with the real data. This accuracy must be measured on quantity and volume. This indicates how much the users are familiar to the system.

The cost results of inventory transactions. As each inventory transaction yields accounting entries, so reporting on accounting transactions sourced from inventory is a very important indicator for the efficient use of the system.

Management reports which are showing total summaries of inventory input, output and value also indicates the system usage performance.

Getting inventory replenishment planning from the system at any given planning period indicates how good the system is in use for planning.

The time that each process of inventory takes is another important indicator. This time intervals should be compared with a target time. In addition, it can be compared over the consequent periods to evaluate the progress of system us

What are the main principles for ERP training?

ERP CHANGE MANAGEMENT

Activity

If you are new with this web log we request you to read preface first.




What are the main principles for training?

Following are some tips that should be considered in training:

  • You have to consider training needs carefully for end used, power (key) users, managers and supervisors regarding to their roles and responsibilities.
  • Try to teach total process to uses and showing them their position in this total process. Users have to know their importance in this chain.
  • It is necessary that users understand specifics of integrated systems. They have to know the importance of correct data entry and its consequences.
  • Do not forget technology transfer in your trainings.
  • Help desk team/ project team should be trained with reporting tools.
  • You have to clearly mention the objectives and expected outputs in test scripts.
  • You have to consider the way procedures work in planning training courses.
  • In training, do not just focus on forms and reports but also try to bring real conditions in picture which users can simulate their real works.
  • Before go live repeat and repeat training till you be confidence with users skills on working with system.
  • Do not interrupt training after go live. You have to continue training for several months after go live. At this time, users have come to picture more seriously and have different views compare to before go live.
  • Training materials and manuals should be prepared in advance.
  • Do not forget managers and supervisors in your trainings.

Ability to implement the change in ERP Inventory

ERP CHANGE MANAGEMENT

Activity

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Ability to implement the change

What are the check points to identify users’ progresses?

1-Plan some practical tests after training is done to be assure of the effectiveness of training.

2-Plan and do some retraining courses for each group of users based on their roles in the system:

The managers should be retrained about how to analyze the system reports and get help from the system for their decision-making.

The planners should be retrained about how to do planning activities via the system.

The inventory input-output users should be retrained about how to best use the system for their daily activities.

3- Design some questionnaire to gather information about the users' opinion about the system. This information can realize how much the users are getting near to the system.

How will processes be done after change in ERP Inventory project? (continue14...)


ERP CHANGE MANAGEMENT

Activity

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R) Procedure of evaluation of availability of requested product

Trigger: After a pick release request comes from sales to finished good warehouse

Tasks:

1-Once a pick release request is notified to supervisor of FG warehouse, he must look at the request items, quantities and specifications and then look for availability of such criteria's in the whole FG warehouse. This search can be done by the help of system very easily.

Note:

If our company is producing based on make-to-order scenario, each item in warehouse is belonging to a specific sales order & customer and it is findable in the system. So the only action that warehouse supervisor must do is to look for items belonging to the sales order number or customer name which is written on the coming request.

Any which way, after seeking the availability, the request should be forwarded to inventory keeper of the warehouse which location items is found. If the availability is there for part of request into two parts, one part will be ready to deliver and should be forwarded to appropriate warehouse location. Second part that contains the non-available quantity is set to batch order, which means waiting for availability.

Concerned role:

Supervisor of FG warehouse

S) Procedure of product reservation to pick release request (sales)

Trigger: When a Move Order (pick release request) for some quantity of some product item is forwarded to a FG warehouse locations.

Tasks:

1- The inventory keeper of the warehouse location that receives the request will register a reservation record that includes the item, quantity, locator; request number allocated for and may be sales order number. Inventory keeper selects locator.

This systematic reservation prevents the reserved quantity to be allocated to or transacted for any other request. This is a very important principle implemented by system and appropriate culture for that must be tuned in the company (systematic).

Concerned role:

Inventory keeper of FG warehouse

2- Reserved items must get ready for picking

This may include shifting item to a specific physical location or packing them depend on the nature of item. (Non-systematic)

Concerned role:

Inventory keeper & worker of FG

3- Picking items

The reserved prepared items are picked from their warehouse location and nominated locators at this step. This picking may be either transferring them to a staging location or directly loading items to vehicles.

Vehicles will come from shipping department and are loaded by warehouse workers. Vehicles may belong to shipping department of our company or to customer or shipping agent. (Non-systematic)

Concerned role:

Worker of FG warehouse & inventory keeper

4- Once task 3 is done, a loading document or let us say pick from warehouse should be created and registered in system. This document indicates the items requested are picked from warehouse to be shipped to the customer. All related information like item number, qty, location, locator, lot, serial, date, request number, sales order number, etc must be showed on this document. Once document is saved the inventory will be reduced and shipped quantity will be increased.

Concerned role:

Inventory keeper of FG warehouse

Do ERP Inventory users have any check list for checking daily, weekly or monthly tasks?


ERP CHANGE MANAGEMENT

Activity

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Do ERP Inventory users have any check list for checking daily, weekly or monthly tasks? What are the steps for each task?

Purpose of this checklist is to help user with:

-Know what are his daily, weekly, monthly and yearly tasks in one view

-Steps required to be followed for each task from the system point of view

For this reason regarding to your software capabilities and abilities prepare a table with the following fields. This table should be filled out for each and every group of ERP Inventory users.


  • Tasks( Activities, Running reports...)
  • Period (daily, weekly, monthly and yearly ...)
  • Steps


How will processes be done after change in ERP Inventory project? (continue13...)



ERP CHANGE MANAGEMENT

Activity

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P) Procedure of Available To Promise (ATP) for finished products

Tiger: When sales department wants to book a sales order or wants to finalize it monthly promises to customers.

Tasks:

1- Sales department sends the sales order in not booked status or its monthly demands before approval to the inventory management via system (systematic).

2- Management of FG warehouse after getting this information runs ATP program. This program will calculate how much of the entire demand is available in warehouse. The result of this program is sent to sales department to make it aware that how much of the planned demand can be satisfied by existing availability of inventory.

It is obvious that sales department after getting this info from warehouse will pass it to manufacturing to check whether capable to promise quantity calculated by manufacturing area will be fulfilling the balance of the total planned demand or not (Systematic).

Concerned role:

Warehouse management of FG

Pre requirements & necessities:

Clearly ATP formula for each production should be defined before running the procedure. This is one of the one-time tasks that must be done in part of master items as described already.

Q) Procedure of getting pick release request from sales

Trigger: When scheduled shipped time of a sales order is matured

Tasks:

A pick release request or move order is raised from sales system and is notified to warehouse user. The request may be raised automatically by the system once scheduled shipped date of a sales order is matured or by a user of sales system. It depends on the setup of sales system and will be described in sales system book. Any which way the request will contain product item requested, quantity requested, way of loading … and sales order or sales agreement number. In addition, if any special specification or quality parameters are mentioned in the sales order, these also should be included in the request on the system (systematic).

Concerned role:

Sales orders delivery supervision in sales department

How will processes be done after change in ERP Inventory project? (continue12...)

ERP CHANGE MANAGEMENT

Activity

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O) Procedure Of finished goods (FG) delivery from production plant to warehouse

Trigger: When some quantity of a product is produced and qualified and ready for store in FG warehouse.

Steps:

1- System shows that some quantity of a finished product is ready to store. The quantity can be equal to one batch or on lot size if product is under lot control. Obviously if our company makes to order, the order number & customer number are attached with the product information.

Any way FG warehouse keeper after getting this indication from system must look for empty suitable locations and locators for the product. This is done by the help of system. He must find places which have enough spaces to keep this much quantity and have proper conditions matching the stocking condition of the coming product (if such conditions are there).

If there are some rules for arrangement of stored products in warehouse, these rules also must be considered by warehouse keeper when doing this step.

These rules can be product based rules or customer based rules or rules for simplifying and expediting release process of product for shipment, etc.

Find result of this task is selection of appropriate location and locator to keep coming finished product.

Concerned role:

Finished product warehouse keeper

2- Inventory keeper of FG warehouse orders the workers to transit the specified quantity of the product (specified at task 1) to the selected location and locator of warehouse (non-systematic).

3- Once step2 is done or simultaneously with step2 a document must be created and registered in system which indicates delivery of the product with a specified quantity. It also contains lot or serial number of delivered product (if applicable) as well as the stored location and locator. All of these elements are to be entered by inventory keeper who is receiving the product. It means that it is inventory person that approves delivered product & quantity. Of course, in an ideal factory, industrial automation is established and so all of these data will be automatically transferred in to ERP system but any which way responsibility of this task is on inventory of finished warehouse (systematic).

Concerned role:

Inventory keeper of finished product warehouse


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Pre requirements & necessities:

1- System considers only those quantities of products which quality control for them has been done and quality results has been registered in the system with accepted ranges. This is an optimum practice that its concept is "to prevent any not accepted item of any product to be kept in finished products warehouse and so warehouse contains only those item which can be shipped to customer".

To follow this optimum practice of the ERP systems it is needed that quality control of final product physically be done once it is produced and has passed the final operation of production cycle and it is still in production plant and has not gone out.

This may need a real change in current procedure of final quality in organization and ERP team (implementer as well as process owners) must take care of that.

2- A close communication and cooperation between inventory keeper of FG warehouse and quality control people and manufacturing production control people.


How will processes be done after change in ERP Inventory project? (continue 10...)

ERP CHANGE MANAGEMENT

Activity

If you are new with this web log we request you to read preface first.


K) Procedure of spare part delivery to maintenance requester fulfilling spar part requests

Trigger: when a request for spare part is forwarded to spares inventory location in main store.

Steps:

Steps will be same as steps for procedure J. Only different is on concerned positions. In fact, all raw material inventory keepers should be replaced with spare part inventory keepers. In addition, whenever manufacturing plant inventory controller is written maintenance person should be replaced.

L) Procedure of delivery of consumables requested to the requesting department or user or fulfilling requests for consumables.

Trigger: when a request for some consumables coming from a department it is forwarded to consumables location in main store (after passing the evaluation process).

Steps:

1- Inventory keeper finds the locator which the requested goods are stored. This is done via the help of query in system.

2- Inventory keeper must make the nominated goods ready for delivery. It means packing or transferring to staging (Non-systematic).

Concerned role:

Inventory keeper of consumables location of main store

3- Goods are transferred to the requesting department and delivered directly to requester (Non-systematic).

Concerned role:

Worker

4- A delivery note or inventory outgoing document is created in system by inventory person. This document indicates delivery of requested quantity goods to the requester and reduction of inventory and adding up used quantity. The document must include source location, locator, item, quantity delivered and destination. It also includes the original request number for integration.

Concerned role:

Inventory keeper

5- The requester must sign electronically the delivery.

Concerned role:

Any employee in any department

How will processes be done after change in ERP Inventory project? (continue11...)

ERP CHANGE MANAGEMENT

Activity

If you are new with this web log we request you to read preface first.


M) Procedure of delivery general goods of fixed Asset type to the requesting department or full filing the requests for Asset type of general goods

Trigger: When a request for general goods of fixed Asset type coming from a user is forwarded to a fixed asset location in main store.

Steps:

Steps to be done are same as steps for consumables described in procedure L. The only different point is as follows:

Note: When doing step 4 which is registering outgoing document, it is very necessary to enter the recipient of each good. Because fixed assets are not consumed during usage, but they are depreciated. Therefore, after delivery to user it is recorded as liability of user. Therefore account of the employee using it will be debited. It will remain as this by the time that fixed Asset is returned to store.

Note: In some of organizations, there are some roles (positions) for fixed Assets management in each department. It means when a fixed Asset is delivered to an employee in a department, from financial point of view, it is the fixed Asset manager of that department which has received the fixed Asset. In the other word, his account is debited and he is responsible to give it back or compensate.

N) Procedure of accounting entries generation for all inventory transactions.

Trigger: Whenever a transaction of any type happens in any warehouse

Steps:

There are no tasks to be done for any body over enterprise for running function of inventory accounting records generation because this function is automatically done once an inventory transaction of any type happens. The exact description of accounts, which will be affected as debit or credit, is coming in the next topic. We have to remember that correct generation of account entries needs some pre steps. These are described in the following as pre requirements and & necessities of procedure.

Procedures for running the function of process flow 4 which is concerned to finished goods warehouse.

How will processes be done after change in ERP Inventory project? (continue 9...)

ERP CHANGE MANAGEMENT

Activity

If you are new with this web log we request you to read preface first.


J) Procedure of item delivery to manufacturing plant

Trigger: A request is forwarded from inventory controlling section to manufacturing raw materials store location.

Steps:

1- Raw materials inventory keeper should look at the requested items on the system and find locators which items are stored (Systematic).

Concerned positions:

Raw material inventory keeper

2- Material reservation should be done for the specified items and nominated locators. (And also lot & serial if applicable).This will be done by reservation form in system. So that the quantity of item stored in the reserved location and locator will not be transact able for any other request. It also is not counted in available on hand quantity calculations. (Systematic)

Concerned position:

Raw material inv keep

3- Inventory keeper must make materials ready for transaction physically. It means if materials are to be packed for movement, packing must be done. If they must move to staging location for outgoing, it should be done. (Non-systematic)

Concerned position:

Raw material inventory keeper & material warehouse worker

4- Reserved prepared materials will be delivered to the requesting plant. This physically may be done via an automated transferring mechanism like conveyers either the inventory responsible of the plant will transfer the materials by means of some vehicle like truck or loader and so on. (Non-systematic)

5- Once step 2 is done, an issue should not be registered in the system. This indicates delivery of materials to the requesting department and should include request number for integration purposes. It will also contain source location, locator, lot and serial as well as destination. Once this is done, quantity of material in the specified location and locator (lot and serial if applicable) is decreased and quantity of material in floor stock sub inventory of the plant is increased.

Concerned positions:

Raw material inventory keeper of main stores

Note: If manufacturing is running on JIT system, no floor stock sub inventory will be existed. It means the issued materials are directly used in the plant. Therefore, issue note in the system indicates decreasing main store quantity against increasing used materials in plant.