Prelude 7 ERP Distribution Management 6182021 Grard Baglin

Prelude 7 ERP Distribution Management 6/18/2021 © Gérard Baglin, 1998 -2009 1

Example of Distribution Network Distribution Center (DC) DC West DC North Plant DC East DC South 6/18/2021 © Gérard Baglin, 1998 -2009 2

Principe traditional inventory management • Reorder Point system: – For each item managed in a distribution center, an order point is set – When the inventory level falls under the order point, a replenishment order is sent to the plant – The order point level should cover the demand during plant planning time fence + transportation lead time (+ safety stock) • Disadvantage – The plant cannot take into account future requirements of the distribution centers 6/18/2021 © Gérard Baglin, 1998 -2009 3

DRP Distribution Resource Planning • Distribution center net requirements calculation – Same principle as MRP – Starts from sales forecast and sales orders for each distribution center – Calculation of time-phased net requirements • Those planned and firm supply requirements are sent to the plant 6/18/2021 © Gérard Baglin, 1998 -2009 4

Access to Distribution function Tick ‘Distribution’ 6/18/2021 © Gérard Baglin, 1998 -2009 5

The Distribution menu 6/18/2021 © Gérard Baglin, 1998 -2009 6

Distribution Center Table Access: Technical Data menu, Table Maintenance, Distribution Centers tab Transportation Lead Time from plant to DC Distance from plant 6/18/2021 DC Capacity in number of pallets © Gérard Baglin, 1998 -2009 7

Transportation Mode Table Access: Technical Data menu, Table Maintenance, Transportation tab Enables to prepare the shipments Capacity transportation mode in number of pallets Cost per km Maximum weight 6/18/2021 © Gérard Baglin, 1998 -2009 8

Information Visibility DC North DC East Plant DC South DC West 6/18/2021 © Gérard Baglin, 1998 -2009 9

Item Reorder Policy in each Distribution Center Access: Distribution menu, Item Reorder Policy option Same rules as for managing items within the plant 6/18/2021 © Gérard Baglin, 1998 -2009 10

Item Reorder Policies • Inventory Management – Reorder point system – No projected requirements taken into account • Net Requirements – Regrouping (or not) of projected requirements for each item in each distribution center – Generation of requirements for the plant 6/18/2021 © Gérard Baglin, 1998 -2009 11

Specifying which DC delivers a customer Transportation Lead Time from DC to Customer DC delivering the customer 6/18/2021 © Gérard Baglin, 1998 -2009 12

Distribution Management Information Flow 1. Forecast and Sales Orders for each DC 4. Material Requirements Planning 3. Planned Transfer Orders Distribution Centers Plant 5. Conversion Planned to Firm Transfer Orders 6/18/2021 2. Distribution Requirements Planning 6. Shipping / Receiving of Transfer Orders © Gérard Baglin, 1998 -2009 7. Sales Order Shipping 13

Sales Forecast per Distribution Center 6/18/2021 © Gérard Baglin, 1998 -2009 14

Sales Forecast Table per Distribution Center 6/18/2021 © Gérard Baglin, 1998 -2009 15

Sales Forecast Summary for an Item 6/18/2021 © Gérard Baglin, 1998 -2009 16

Sales Orders DC form which the order must be shipped 6/18/2021 © Gérard Baglin, 1998 -2009 17

Item Master Schedule in a Distribution Center Calculated for each item managed in each DC Shows the replenishment requirements which should be covered by deliveries from the plant 6/18/2021 © Gérard Baglin, 1998 -2009 18

Distribution Center Supply Process Distribution Requirements Planning From the plant or each DC Planned Transfer Orders Transfer Order Conversion Firm Transfer Orders From the plant Transfer Order Shipping In-transit Transfer Orders In the Distribution Center Transfer Order Receipt Closed Transfer Orders 6/18/2021 © Gérard Baglin, 1998 -2009 19

Distribution Requirements Planning • Same principle and same rules as for managing manufactured or purchased items at the plan level • Item reorder policy applied for each item in each distribution center • Generation of Planned Transfer Orders • The planning offset is the transportation time from the plant to the distribution center • The planned transfer orders become Internal Requirements for the plant 6/18/2021 © Gérard Baglin, 1998 -2009 20

Planned Transfer Orders are calculated by the DRP function. They generate Planned Internal Requirements for the plant 6/18/2021 The item weight and the number of items per pallet should be specified on the Item window. © Gérard Baglin, 1998 -2009 21

Internal Requirements for the plant Internal Requirements coming from the Transfer Orders The Internal Requirements are taken into account by the MRP function 6/18/2021 © Gérard Baglin, 1998 -2009 22

Planned Transfer Order Management • Adjust dates to take into account transportation departure dates • Possibly modify quantities to take into account transportation constraints (ex: Full Truck Load) • Convert Planned to Firm Transfer Orders – generate firm internal requirements for the plant 6/18/2021 © Gérard Baglin, 1998 -2009 23

Activity Profile Shows the number of pallets or the weight to be shipped 6/18/2021 © Gérard Baglin, 1998 -2009 24

Planned to Firm Transfer Order Conversion • Converts Planned Transfer Orders into Firm Transfer Orders • Not modified by the next DRP function • Converts Planned Internal Requirements into Firm Internal Requirements • Only Firm Transfer Orders can be shipped 6/18/2021 © Gérard Baglin, 1998 -2009 25

Distribution Center Requirements Analysis 6/18/2021 © Gérard Baglin, 1998 -2009 26

Transfer Order Shipping Access: Central site, Distribution menu, Transfer Order Shipping option Validate the shipment Click on the lines (Firm Transfer Orders) to ship Generates an inventory issue from the plant inventory 6/18/2021 © Gérard Baglin, 1998 -2009 27

In-transit Transfer Orders List of Transfer Orders shipped and not yet received (in-transit) 6/18/2021 © Gérard Baglin, 1998 -2009 28

Site Selection Central Site = Plant Distribution Centers 6/18/2021 © Gérard Baglin, 1998 -2009 29

Distribution Center Main Window 6/18/2021 © Gérard Baglin, 1998 -2009 30

Transfer Order Receiving Access: DC site, Distribution menu, Transfer Order Receiving option Validate the receipt Click on the lines receipted Generated an inventory receipt into the DC inventory 6/18/2021 © Gérard Baglin, 1998 -2009 31

Sales Order Preparation Access: DC site, Sales menu, Sales Order Preparation option The DC has received the goods. Sales orders can be prepared and shipped 6/18/2021 © Gérard Baglin, 1998 -2009 32

Sales Order Shipping Access: DC site, Logistics menu, Sales Order Shipping option 6/18/2021 © Gérard Baglin, 1998 -2009 33

S&OP and Distribution • Sales forecast issued by the S&OP disaggregation should be broken down by Distribution Center • To do this, partition coefficients must be entered on the item reorder policy window for the item article and for each distribution center 6/18/2021 © Gérard Baglin, 1998 -2009 34

Partition Coefficients 6/18/2021 © Gérard Baglin, 1998 -2009 35

Sales Forecast generated by S&Op Disaggregation of the Sales Plan by Item and by DC Manual Updates 6/18/2021 © Gérard Baglin, 1998 -2009 36