Monitoring and evaluation of management objectives

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As we all know, the implementation of ERP is a process of continuous optimization, and in this process of optimization and perfection, it is not enough to rely solely on financial analysis indicators, while planning and production indicators directly affect the performance of enterprise management

in fact, the management of enterprises is realized in a communication process. Accurate communication is the basis of effective management. It is required that the information must be accurate in all links of communication, and the transmission of information must also be accurate. Especially after the implementation of ERP system, whether a large number of parameter settings are reasonable, especially the ever-changing combination of planning parameters, and the reality of planning, production and inventory are changing dynamically. The monitoring and evaluation goal of ERP is to help you improve the efficiency of your system, especially the planning efficiency, and achieve your management goals. ERP is an integrated management system, which communicates business planning, planning, and data results of all users in the system. In order to successfully achieve your goal, the system must analyze the data of each user to see whether it is accurate and effective

fourth shift ERP provides a practical method and tool to monitor your system every month. Track eight key factors, which are the key to achieving system communication efficiency. Five business evaluation criteria are provided to help your system achieve corporate goals, although the general election bill for the executive chair was not passed in the Legislative Council. For example, planners and purchasers communicate through production plans and purchase plans, which include demand (forecast, actual), inventory balance and bill of materials. If there is incorrect inventory and BOM, planners and purchasers will not be able to meet customer order requirements. The communication factors of the feasibility of planning and scheduling information evaluate the setting of your MRP parameters, which affects the efficiency of the system

I. data preparation

1. Regularly run MRP plan

2. Perform ABC analysis on materials

3. Cycle count materials, and automatically calculate inventory accuracy

4. Automatically calculate BOM accuracy

5. Financial data - net income, sales cost, operating expenses

6. Inventory balance

7. Business performance settings - purchaser code/Planner code maintenance, business performance settings

8 Batch order days analysis

II. Monthly analysis

1. Batch order days analysis

2. Monthly business performance analysis

3. System communication and performance analysis diagram: inventory diagram, eight key factors diagram, performance evaluation diagram

III. eight key communication factors

1. Inventory accuracy

it is the basic and most effective method to control the factory and achieve customer service level. Inaccurate inventory will cause out of stock. Disrupt production plans, delay orders and increase WIP inventory

the best way to evaluate inventory accuracy is to continuously implement cycle counting. ERP system provides inventory accuracy report to evaluate the results of cycle counting

2. Accuracy of bill of materials

an inaccurate bill of materials will cause a delay in planning, which will lead to a backlog of work in progress and an excess of unwanted materials

erp system will automatically calculate the accuracy of BOM according to the standard BOM and the actual picking situation

3. Clear material management

each material plan and order must be controlled and assigned to people. If there are materials not assigned to people, there may be material shortages. Establish a valid Planner/Purchaser code to control each material

4. Reasonable lead time

lead time is used to calculate the start and completion dates of planned orders. Too long lead time increases the inventory for the satisfactory completion of subject tasks and overstocks WIP. If the lead time is not allocated to materials and the lead time is too short, material shortage and production delay will be caused

5. Allocation of standard cost

accurate standard cost requires allocation of standard cost to each material, which affects the consistency of inventory quantity and inventory amount. In MRP planning and inventory planning, you also need to consider the priority of materials

6. Feasibility of planning and scheduling information

when making plans, production managers should consider many factors. It is impossible to manually determine all the influencing planning factors to support production plans and inventory plans. ERP provides simulation of key factors and detailed MRP plan parameter impact analysis. For example, it displays out of stock, material turnover, preparation time, and the amount of action information generated by the system

it compares the action information that planners and purchasers can process with the estimated minimum amount of action information generated by the current MRP plan parameter settings. Maintain records of all your buyers and planners with planner/buyer codes. Record the average amount of action information processed per working day

7. The degree of coincidence between the planned order and the demand

when the order is not completed in time as required, delaying the production order and purchase order will hinder the unknown resources and sub item requirements. Giving priority to expired orders will miss all plans. The completion of unplanned orders will cause delays in other orders. As a result, there will be a backlog of work in progress and an extended lead time. As a result, the orders cannot be completed in time

you can set the tolerance of advance and delay of orders

8. The shipping plan based on customer requirements

mrp is driven by customer requirements. If the overdue customer shipment is not rescheduled to a new date in the future, the MRP plan will use inaccurate data. Inaccurate data produces inaccurate plans

you can set the tolerance of calendar days

the above factors, such as inventory accuracy, are familiar indicators. Other factors, such as clear material management, may seem too simple and almost unimportant. However, every factor plays an important role in system communication. Therefore, a comprehensive and profound understanding of the interaction of the eight factors will be conducive to the use of ERP system

the eight key communication factors are based on multiple influences, because they affect each other through a group of people doing some complex work. This phenomenon is the possible result of system communication. It is calculated by eight key communication factors. The results indicate the business performance of your business - possibly, the quality of the entire data. Possible system communication results can also evaluate the degree of maximizing the benefits of ERP system

the possible system communication result is the result of the interaction of eight key communication factors. Focus on evaluating the whole system communication with the lowest percentage of actual factors

IV. performance evaluation

the eight key communication factors are not goals in themselves, but factors to achieve enterprise management goals. ERP monitors five performance evaluation results. These five evaluations are the key indicators of the health and profitability of enterprise organizations

1. On time delivery rate

it is to evaluate how to meet customer needs. It compares the last shipment record with the customer's original required date. You can set the tolerance days of advance and delay for on-time shipment

2, inventory turnover times

3, inventory turnover days

these two indicators are the speed of inventory movement through the production process. The goal of general manufacturing enterprises is to improve inventory turnover and reduce inventory days

you must record the cost of sales, the total of the recent year, and accumulate the current inventory balance

4. Cost of sales ratio

cost of sales ratio evaluates the ratio of the cost of sales of your net income. It is a measure of the profitability of an enterprise

you must record the cost of sales and net income for the past 12 months

5. Operating expense ratio

it is the operating expense ratio that evaluates your net income. It assesses your overhead as a percentage of your income

you must record your operating expenses and net income

v. simulation of planning parameters

erp uses a set of tools to improve the effectiveness and Simulation of MRP planning. It can run frequently as needed. There are two key parameters to control the effectiveness of MRP: lot size day and order multiple. The number of days for batch orders is the number of days to meet future needs considered when controlling the calculation of planned orders. The order multiple is the multiple of adjusting the order according to the regulations. It allows you to simulate the impact of these two parameters on MRP. You can see how behavior information, preparation time and material turnover change. You can quickly compare simulated settings with the current settings. Update mass material parameters at any time. Instead of manually modifying its parameters

it includes changing the batch order days and order multiples to improve schedulable planning communication factors. The changed value can automatically update the planning parameters of the material master file

simulate the change of system communication based on the number of days of batch order, and simulate the change with the order multiple. View a comparison of current and recommended values. The result of planning materials shows the system communication details of each material. Your project aims to automatically update the planning parameters of the material master file for each material or all materials according to the development requirements of China's plastic machinery industry

many enterprises are marching towards world-class manufacturing enterprises with TQC total quality management, SPC statistical quality control, JIT and other management methods. First, you may feel that the simulation of planning parameters and schedulable planning communication factors conflict with JIT goals. In fact, increasing the parameters of batch order days and planning more inventory can improve your schedulable planning communication factors

in fact, the goal of planning parameter simulation and JIT goal are not contradictory. It is a feasible way to help you achieve JIT goals. There are many good ways to achieve world-class manufacturing and JIT production. You need to reexamine the methods your company uses. Most organizations implement JIT by simply changing MRP parameters to improve the frequency of placing orders. This change requires huge workload in production control and procurement. In fact, many enterprises have not reached the JIT environment

you can use the following methods to achieve JIT environment

1. First, focus on class a materials. This is the material that reflects the greatest value and can be greatly improved. Class B and C materials are not considered for the time being

you can improve the turnover index of class a materials by reducing the number of days of batch ordering. There are few changes to class C materials, so your annual action information will not increase significantly

2. Use package purchase or non-traditional purchase methods, such as supplier commitment plan, to purchase class C materials. It is not necessary to place orders frequently to purchase materials with low value to achieve JIT production

in short, ERP is a communication integrated system, which helps enterprises understand their business conditions at any time. However, if a communication system cannot realize the communication between personnel and departments with accurate, reliable and practical information, it cannot help enterprises achieve their business objectives with overall efforts. ERP, a monitoring tool, can help enterprises build manufacturing information systems into effective communication systems. Through the monitoring, simulation, control and reporting of eight important communication factors, the system communication was improved and the business operation was improved, with a year-on-year increase of 13%; Completed the management of fixed asset investment of 3.45 billion yuan, bringing profits to the enterprise

about the author:

Caiying - has more than ten years of management experience in manufacturing, material planning, industrial engineering, cost control and ERP projects. He is currently the implementation consultant of fourth shift in South China. (end)

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