When planning on producing a new product and/or service, the key factor is the product and service design. Successful designs come down to these basic principles: translate customers' wants and needs, refine existing products and services, develop new products and services, formulate quality goals, formulate cost targets, construct and test prototypes, document specifications, and translate products and service specification into process specifications. The process of design has certain steps that include motivation, ideas for improvement, organizational capabilities, and forecasting. In the product process innovations, research and development play a significant role. Because of the influence a product and service design can have on an organization, the design process is encouraged to be tied in with the organization's strategy and take into account some key considerations. Companies choose various ways to design their products and the type of services they provide. Which include: standardization, mass customization, delayed differentiation, modular design, and robust design deciding which method to use is very important along with deciding the company's target market. Deciding the right method, establishes good productivity and efficient way of operations.

1. Supply Chain
Management
and
MRP & ERP

2. Submitted To,
Md. Asraful Islam Chowdhury
Lecturer
Department of
Business Administration
LEADING UNIVERSITY

3. Ehsan Ahmed Chy.
1201010230
Mahmudul Karim Newaz
1201010205
Masum Hussain
1201010202
Abdul Motin
1201010219
Abu Ahmed Shahib
1201010247

4. What is supply chain?
Supply chain consists of all parties involved,
directly or indirectly, in fulfilling a customer
request. Supply chain includes manufacturer
and suppliers, plus transporters, warehouses,
retailers, and customers themselves.

6. Principles of SCM (contd.)
1. Segment customers based on the service needs of distinct
groups and adapt the supply chain to serve these segments
profitably.
2. Customize the logistics network to the service
requirements and profitability of customer segments.
3. Listen to market signals and align demand planning
accordingly across the supply chain, ensuring consistent
forecasts and optimal resource allocation.
4. Differentiate product closer to the customer and speed
conversion across the supply chain.

7. Principles of SCM
5. Manage sources of supply strategically to reduce the total
cost of owning materials and services.
6. Develop a supply chain-wide technology strategy that
supports multiple levels of decision making and gives a clear
view of the flow of products, services, and information.
7. Adopt channel-spanning performance measures to gauge
collective success in reaching the end-user effectively and
efficiently.

8. Importance of Supply Chain Management
• SCM is Globally Necessary
• Reasons for SCM in Society
– Cyclone Sedor,2007
– Foundation for Economic Growth
• Reasons for SCM in Business
– Boosts Customer Service
– Improves Bottom Line

9. Growing Interest in SCM – Why?
• As manufacturing becomes more efficient (or is
outsourced), companies look for ways to reduce costs
• Several significant success stories:
– Efficient SCM at Wal-Mart, HP, Dell Computer
• SCM considers the broad, integrated, view of materials
management from purchasing through distribution
• The huge growth of interest in the web has spawned
web-based models for supply chains: from “dot com”
retailers to B-2-B business models

10. Focusing on the Distribution Problem
• The Goal is to reduce total transportation costs
throughout the supply chain
• Usually solved with some approach to the
“Transportation Problem”

11. Trends in Supply Chain Management
• Outsourcing of the logistics function (example: Saturn
outsourced their logistics to Ryder Trucks. Outsourcing
of manufacturing is a major trend these days)
• Moving towards more web based transactions systems
• Improving the information flows along the entire chain

12. Global Concerns in SCM
• Moving manufacturing offshore to save direct costs
complicates and adds expense to supply chain
operations, due to:
– increased inventory in the pipeline
– Infrastructure problems
– Political problems
– Fluctuating exchange rates

13. SOCIAL MEDIA:
Now, people can use technology to do it at a scale without
boundaries

14. Material resource planning (MRP)
MRP is a production planning and inventory control
system used to manage manufacturing processes.
Most MRP systems are software-based, while it is
possible to conduct MRP by hand as well.

15. Objectives of MRP
An MRP system is intended to simultaneously meet
three objectives:
Ensure materials are available
for production and products are available for delivery to
customers.
Maintain the lowest possible material and product levels
in store
Plan manufacturing activities, delivery schedules and
purchasing activities.

16. History of MRP
• Prior to MRP, and before computers dominated industry,
reorder-point/reorder-quantity (ROP/ROQ) type methods
like EOQ (Economic Order Quantity) had been used in
manufacturing and inventory management. In 1964, as a
response to the TOYOTA Manufacturing Program, Joseph
Orlicky developed Material Resource Planning (MRP). The
first company to use MRP was Black & Decker in 1964, with
Dick Alban as project leader.

17. The scope of MRP in manufacturing
The basic functions of an MRP system include: inventory
control, bill of material processing, and elementary
scheduling. MRP helps organizations to maintain low
inventory levels. It is used to plan manufacturing,
purchasing and delivering activities.
Making a bad decision in any of these areas will make the
company lose money. A few examples are given below:
Purchases insufficient quantities of an item.
Purchases excessive quantities of an item.
Beginning production of an order at the wrong time.

18. Problems with MRP systems
• First problem - If there are any errors in the
inventory data then the output data will also be
incorrect ("GIGO": Garbage In, Garbage Out).
• Second problem - systems is the requirement that
the user specify how long it will take for a factory to
make a product from its component parts that’s
mean ‘’lead time’’.

19. Solutions to data integrity issues (contd.)
• Bill of material :- The best practice is to physically
verify the bill of material either at the production
site or by un-assembling the product.
• Cycle count - The best practice is to determine
why a cycle count that increases or decreases
inventory has occurred.
• Scrap reporting - Start with isolating the scrap by
providing scrap bins at the production site and then
record the scrap from the bins on a daily basis.

20. Solutions to data integrity issues
• Receiving errors - The best practice is to
implement the system of receiving by ASN
(Advanced Shipping Notification).
• Shipping Errors - The container labels are printed
from the shipper. The labels are affixed to the
containers in a staging area or when they are
loaded on the transport.

21. Enterprise resource planning (ERP)
• ERP provides an integrated view of core business
processes, often in real-time, using common
databases maintained by a database management
system. ERP systems track business resources—
cash, raw materials, production capacity—and the
status of business commitments: orders, purchase
orders, and payroll.

22. Enterprise resource planning (ERP)
Enterprise resource planning (ERP) is a business
management software—usually a suite of
integrated applications—that a company can use to
collect, store, manage and interpret data from
many business activities, including:-
• Product planning, cost and development
• Manufacturing or service delivery
• Marketing and sales
• Inventory management
• Shipping and payment

23. Origin of "ERP"
• In 1990, Gartner Group first used the acronym ERP as
an extension of material requirements planning (MRP),
later manufacturing resource planning and computer-
integrated manufacturing. Without replacing these
terms, ERP came to represent a larger whole that
reflects the evolution of application integration beyond
manufacturing.
• Not all ERP packages developed from a manufacturing
core. Vendors variously began with accounting,
maintenance, and human resources. By the mid–1990s
ERP systems addressed all core enterprise functions.
Governments and non–profit organizations also began
to use ERP systems.

24. Characteristics of ERP
ERP systems typically include the following
characteristics:
An integrated system that operates in (or near)
real time without relying on periodic updates
A common database that supports all applications
A consistent look and feel across modules
Installation of the system with elaborate
application/data integration by the Information
Technology (IT) department, provided the
implementation is not done in small steps.

25. Advantages of ERP (contd.)
The fundamental advantage of ERP is that
integrating myriad businesses processes saves time
and expense. Management can make decisions
faster and with fewer errors. Data becomes visible
across the organization. Tasks that benefit from this
integration include:
Sales forecasting, which allows inventory
optimization.

26. Advantages of ERP
Chronological history of every transaction through
relevant data compilation in every area of
operation.
Order tracking, from acceptance through fulfillment
Revenue tracking, from invoice through cash receipt
Matching purchase orders (what was ordered),
inventory receipts (what arrived), and costing (what
the vendor invoiced)

27. Disadvantages of ERP Systems (contd.)
Customization is problematic. Compared to the
best-of-breed approach, ERP can be seen as
meeting an organization’s lowest common
denominator needs, forcing the organization to find
work arounds to meet unique demands.
Overcoming resistance to sharing sensitive
information between departments can divert
management attention.
Integration of truly independent businesses can
create unnecessary dependencies.

28. Disadvantages of ERP Systems
Re-engineering business processes to fit the ERP
system may damage competitiveness or divert focus
from other critical activities.
High ERP switching costs can increase the ERP
vendor's negotiating power, which can increase
support, maintenance, and upgrade expenses.
Harmonization of ERP systems can be a mammoth
task (especially for big companies) and requires a
lot of time, planning, and money.

29. Thanks for patient hearing