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Enterprise Profitability
Part 7 of 8


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Lean Manufacturing, Basics, Principles, Techniques

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Advanced Planning
Capitalizing on the availability of very powerful computers and very inexpensive computer technology, APS systems use linear program­ming and other advanced mathematics to optimize schedules at vary­ing levels in an organization. The simplest level is the local plant, in which the APS maximizes management's choice of one or more objec­tives, including on-time customer deliveries, profits, and labor force stability. Such a system becomes the heart of the customer support and material planning systems, replacing the old MPS, rough-cut planning, MRP, and CRP systems. An APS integrates with forecasting, customer order promising, purchasing, costing, shipping, and the shop floor.
A more advanced type of APS system, called a supply chain execu­tion system, integrates several plants and warehouses, determining which plant should make which products to maximize customer ser­vice and profitability. It integrates fully with the logistics and distribu­tion systems (and possibly directly with selected carriers).
Even more advanced APS systems integrate not only the manufacturer's plants, but also suppliers and customers directly. Be­cause of their extreme complexity, they are just now starting to appear.
Quality Management Systems
MRP II systems generally ignored quality data. TEI and some ERP sys­tems integrate quality management systems. Laboratory data and shop floor SPC data are key quality data elements that should fully integrate to the rest of a TEI/ERP system. Quality systems should also be inte­grated with field service to receive actual data on field failures. Quality systems and laboratory systems must also integrate with maintenance.
Maintenance
Virtually all maintenance systems include both preventive and reac­tive capabilities, tracking actual labor and material against predeter­mined standards. They also include stock and tool controls.
In "reactive" mode, maintenance systems create a repair order to fix a broken piece of equipment. Repair history is then available for
future analysis to determine the major reasons for equipment failures, and the total cost of ownership for each piece of equipment.
In "predictive" and "preventive" modes, the equipment is scheduled in advance to be down, and all necessary materials and personnel are scheduled to be available. Preventive maintenance is prescheduled based on certain operating data. Predictive maintenance requires data that can predict an upcoming failure (such as the line on an SPC chart moving toward a control limit, or vibration setting off a vibration sensor).
Supplier Integration
Just as a manufacturer's own plants must be continually rescheduled to accommodate changes in customer demand, material availability, equipment availability, and worker availability, suppliers must also receive continually updated schedules so that they can meet the changed needs. However, virtually all MRP II systems and many ERP systems assume that suppliers can meet all demands, sometimes in extremely compressed lead times.
A fully integrated TEI system does not need to take supplier capac­ity or materials for granted, but can instead verify that information with the supplier's computer before computing its own optimum sched­ule. This type of system is the most advanced APS, discussed earlier.
Other points of integration with supplier systems include EDI or e-commerce, which transmits material release notices directly to the supplier's computer to eliminate the traditional manual steps of print­ing out the requirements from the manufacturer's computer, mailing or faxing, and keying the data into the supplier's computer.
SUPPORT SERVICE INTEGRATION
Support services are those functions that do not directly touch the manu­factured items or meet with the customer, but that are required for a company to operate, such as
• accounting
• costing (standard and advanced)
• human resources
• environmental.
Accounting Integration
In virtually all ERP and TEI systems, accounts payable, accounts re­ceivable, and the general ledger are fully integrated into the system. Additionally, most ERP and TEI systems have the ability to feed third-party payroll; some have their own payroll module. Most have a fixed assets module.

To Be Continued


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