Week 4 ERP - Inventory Management (PDF)

ENTERPRISE RESOURCE PLANNING (INVENTORY AND PROCUREMENT MANAGEMENT) #3 CONTENT Procurement Process Inventory Management Reports in ERP systems. Procurement Process Bid Demand Bidding...

ENTERPRISE RESOURCE PLANNING (INVENTORY AND PROCUREMENT MANAGEMENT) #3 CONTENT Procurement Process Inventory Management Reports in ERP systems. Procurement Process Bid Demand Bidding Assessment Quality Item Delivery Order Control (Waybill) Invoice  Demand Bid Demand Bidding Assessment Quality Item Delivery Order Control (Waybill) Invoice Demand The purchase requests (demands) allows users and employees in the organization to initiate a purchasing process by reporting their needs for specific goods or services. These requests may be the office needs of the departments, as well as the raw materials required for the production as defined by the planning department. The requests entered into the ERP system within the institution and gathered in a pool and subjected to an approval process. In this approval process, users in approval roles decide whether or not the opened requests can be procured. If the requests are approved, other processes of the purchase are passed and if they are rejected, the requests are closed in the system. Users can follow all the stages of their requests on the monitoring screens. An Example of ERP Demand Form Bidding Bid Demand Bidding Assessment Quality Item Delivery Order Control (Waybill) Invoice  Bidding Market inquiries are made for approved procurement demand. More than one company is determined for the supply of related items. Quotation is requested for the requested items from the selected suppliers. The bids of the bidders are recorded in the system under the same "Reference Number". Revisions can be requested on topics such as price, maturity, and delivery time over the offers of the suppliers. Changes made upon request are also revised on the proposed bids Supplementary materials and documents from suppliers can be added to the offers in the system and these documents can be accessed at any time. An Example of ERP Bid to Demand Bid Assessment Bid Demand Bidding Assessment Quality Item Delivery Order Control (Waybill) Invoice  Bid Assessment The bids received are subjected to an evaluation process after they are finalized. Bids collected under the same 'Reference Number' are evaluated according to the set of purchase criteria. These criteria are determined according to the properties of the items to be purchased, such as maturity, price, lead time, quality. Depending on the eligibility of the criteria, all items can be purchased from a single supplier, and some materials in the offer can be purchased from the supplier "A" and some from the "B" supplier. In ERP systems While making these selections, the options of "Automatically Select the Best Price Bids in Total" or "Automatically Select the Price with the Best Price in the Row" can be used. A Example of ERP Bid Assessment Order Bid Demand Bidding Assessment Quality Item Delivery Order Control (Waybill) Invoice Order After the proposal evaluation process is completed, the proposed proposals are converted to orders. The purchase order created in the system is listed in accordance with the institution's order form. This form is sent to the supplier company by mail or fax. This process can be done automatically through the system or users can do this operation manually. An Example of ERP Order Form Item Delivery (Waybill) Bid Demand Bidding Assessment Quality Item Delivery Order Control (Waybill) Inovice Item Delivery (Waybill) Waybill is the official document showing the delivery of the goods, which is used when shipping the sold goods from one place to another. It is also called delivery note. One original and 3 copies are issued by the company selling the items. One original and one copy remain with the buyer, one copy is kept by the carrier and the other copy remains in the seller. Products brought by waybill arranged by the supplier are verified by the warehouse. After the verification process, the purchase order subject to the dispatch is found in the ERP system and the relevant order details are selected. After the selection process, the dispatch information (document date, waybill number) is entered into the system. Along with the waybill, the purchase order is closed in the system and the product is sent to the company's stock. This entry is made to the firm's quality control warehouse defined in ERP system. The order given to the supplier can be received with more than one shipment. An order can have more than one waybills in the system. An Example of ERP Item Delivery (Waybill) Selection Quality Control Bid Demand Bidding Assessment Quality Item Delivery Order Control (Waybill) Invoice  Quality Control Quality control work order is opened in the system for the products entered into the quality control warehouse. Samples are taken for control tests of the products entered into the system. Tests are carried out with the quality processes determined for these examples and these test results are entered into the system and work orders are closed. The result of the test is received or rejected. If rejection is made, the waybill is sent to the company and the material is returned. As a result of the relevant tests, suppliers are scored in the system by the supplier evaluation process.. Invoice Bid Demand Bidding Assessment Quality Item Delivery Order Control (Waybill) Invoice Invoice The invoice is a commercial document issued by the merchant who sells or conducts the business to show the amount (amount) borrowed by the customers in exchange for the goods sold or the work done. Invoices of accepted dispatches are entered into the system. With the invoice record, the supplier becomes creditor in the system and the relevant accounting record is made automatically by the system. The invoice registration process completes the purchasing process. An Example of ERP Invoice Screen Endorsement Process Use of Message Endorsement Role Definition Template Module Definition Endorsement Endorsement Endorsing Route Rule Definition Definition Endorsement Tracking Use of Endorsement Module Use of Message Endorsement Role Definition Template Module Definition Endorsement Endorsement Endorsing Route Rule Definition Definition Endorsement Tracking Use of Endorsement/Approval Module In the "Process Analysis" of procurement operations, It is decided whether the endorsement/approval system will be used in the company where the ERP system will be applied. After taking the decision to use the approval system, it is determined at which stages of the ERP process the approval system will be used. Endorsement system is activated at this stage in ERP system. This endorsement is set up through the from the "Approval Module Usage" screen in the system. Some examples of ERP systems requiring endorsement/Approval are; Demand Login Screen Offer Screen Order Screen BOM Screen etc. Use of Endorsement Module Role Definition Use of Message Endorsement Role Definition Template Module Definition Endorsement Endorsement Endorsing Route Rule Definition Definition Endorsement Tracking  Role Definition After «Endorsement/Approval Use» activated on screens, roles are defined in approval. Approval roles such as Purchase Demand approval role, Sales department approval role, General Directorate approval role are determined and the users who own these roles are defined to these roles. More than one user can be defined in the roles. Users defined in roles have the same competence in roles. They are users who are alternatives to each other. General Manager and Deputy General Manager can be defined in the approval role of the General Directorate. In this way, if the general manager is not at the company, the other user in the roles can continue the operations. An Example of ERP Role Definition Screen Message Template Definition Use of Message Endorsement Role Definition Template Module Definition Endorsement Endorsement Endorsing Route Rule Definition Definition Endorsement Tracking  Message Template Definition When any record requiring approval is entered to the system, it is sent to the approval system. Message templates are created for each screen where approval will be used so that users in approval roles can filter the records more easily and have an idea about the records. These message templates can be written manually, or a dynamic message template can be created using the fields on the screen. Message Template Definition Endorsement Rule Definition Use of Message Endorsement Role Definition Template Module Definition Endorsement Endorsement Endorsing Route Rule Definition Definition Endorsement Tracking  Endorsement Rule Definition In order for the approval mechanism to work on a particular page, the definition of the Approval Rule must be defined for that page. It is determined in which cases the record on the screen where approval will be used will be sent for approval. In the Approval Rule, the master and / or detail fields to be checked for the registration sent for approval are determined. As an example of the approval rules; Registrations with more than 1000 TL Records with more than 100 Samples such as records that are in production etc. An Example of ERP Endorsement Rule Endorsement Route Definition Use of Message Endorsement Role Definition Template Module Definition Endorsement Endorsement Endorsing Route Rule Definition Definition Endorsement Tracking  Endorsement Route Definition It is where a specific rule of a particular page is associated with approval roles. In which approval roles, the order in which the record on the approval path is to be circulated is determined. Thanks to this process, the record to be endorsed uses the route to which the enrolment rule is associated to. Thus, the record is forwarded to the users in the Approval Roles determined in this route in the order of priority determined. Navigation order is in order of priority calculated on the basis of Route Numbers of Approval Roles. While defining the route, e-mail or sms messages can be provided to the users on the route for information purposes. Endorsement Route Definition Endorsement/Approval Use of Message Endorsement Role Definition Template Module Definition Endorsement Endorsement Endorsing Route Rule Definition Definition Endorsement Tracking Endorsement/Approval The user can list and review the records awaiting approval from the endorsement screen. After listing and selecting the records to be approved, one of the Approval, Reject, and Confirmation Post can be done. Or the user can send this record for evaluation on another confirmation route. Endorsement/Approval Endorsement Tracking Use of Message Endorsement Role Definition Template Module Definition Endorsement Endorsement Endorsing Route Rule Definition Definition Endorsement Tracking Endorsement Tracking Onay İzleme It is the screen where the steps in the approval path are followed by the users. Users can monitor the approval status of the records they request. All stages related to any approval record are included in the approval monitoring screens as separate records. In this way, it is possible to follow up pending, approved, sent back, and rejected records. Endorsement Tracking Quality Control Management Quality control means controlling quality by taking precautions against situations that will decrease the quality efficiency of a process. Quality control takes place in all stages from the entrance of the materials to the operation of the company and the processes are followed under three headings: Input (Entry) quality control: The suitability of the material ordered with the purchase order and the specifications of the incoming material are measured to control the material receipts. Process quality control: Production start-up controls and intermediate controls are carried out to control the ongoing production process. Final quality control: These are the controls performed at the end of the production process and / or during the shipment. Quality Control Management The materials whose quality control process is continuing are kept in the quality control warehouses. Upon successful completion of the control process, the materials are transferred to usable material warehouses. Materials that do not meet the quality specifications are transferred to the quarantine warehouse and directed to processes such as return or re-processing. In order for quality control processes to work, control groups (control plan) must be defined for each material to be checked for quality. With the control groups, the type of control (input / process / end) to which the material will be applied, the control points of the materials and the number of inspection samples (inspection references) are determined. Control points and inspection references must be defined. Quality Control Management Defining Defining Defining Input Quality Inspection Control Points Control Groups Control Order References Process Process Input Quality Final Quality Quality Control Quality Control Control Control Order Approval Order Approval Final Quality Control Approval Defining Quality Control Points Defining Defining Defining Input Quality Inspection Control Points Control Groups Control Order References Process Quality Input Quality Final Quality Process Quality Control Control Control Order Control Order Approval Approval Final Quality Control Approval Defining Quality Control Points Each quality control specification is defined as a control point. Control points are divided into two groups as quantitative and qualitative: Measurement based on quantitative observation. As a result of measurements, numerical results are obtained. Examples such as length, weight, temperature, hardness can be given. These are the measurements made with the sensors without the use of qualitative observations. Document control, color control, packaging control are examples of qualitative control points. An Example of Defining Quality Control Points in ERP Defining Inspection References Defining Defining Defining Input Quality Inspection Control Points Control Groups Control Order References Process Quality Input Quality Final Quality Process Quality Control Control Control Order Control Order Approval Approval Final Quality Control Approval  Defining Inspection References Sampling plans described in the TS 2756 standard are defined as inspection references. Inspection references are divided into 3 inspection types as tight, normal and loose. Sample quantities are determined according to inspection types and lot sizes. In each quality control activity, controls are made by taking samples as much as the sample size. Due to the success in quality control decisions, the examination type for the relevant supplier and stock is passed from tight to loose. Accordingly, sample quantities are also reduced. Defining Inspection References Defining Quality Control Groups Defining Defining Defining Input Quality Inspection Control Points Control Groups Control Order References Process Quality Input Quality Final Quality Process Quality Control Control Control Order Control Order Approval Approval Final Quality Control Approval Defining Quality Control Groups Control plan definitions for products are created in control groups. Definitions to be specified in the control group: – Current and stock / stock group information – Control Type: Input control / Process control / Final control – Operation, station, BOM information – Control Type: 3 types are possible They are; » General: Used when defining a single quality control (check) is needed. » Sample level: It is used where the number of samples will be determined based on the inspection reference table. » All (Total): Describes that a measurement should be made for the entire number of mass (100% control) subject to quality control activity. Defining Quality Control Groups Control points to be measured, Related inspection references, Description of tools / equipment to be used during the control, For quantitative control points; nominal value, tolerances, min value, max value, Qualitative measurement value for qualitative control points An Example of Defining Quality Control Groups in ERP An Example of Defining Quality Control Groups in ERP Input Quality Control Order Defining Defining Defining Input Quality Inspection Control Points Control Groups Control Order References Process Quality Input Quality Final Quality Process Quality Control Control Control Order Control Order Approval Approval Final Quality Control Approval Input Quality Control Order Input quality control is applied to the materials that enters the facility. Automatic input quality control orders are created based on the purchase waybill / invoice, import materials and manual inventory entries. Controls are carried out according to the information defined in the control groups, and as many of the required samples, the measurement results are entered into the input control order. The suitability of each measurement is compared to the defined specification and determined by the system. After all measurements are entered, the measurements are completed and the quality order is then sent to the approval stage. Input Quality Control Order An Example of Input Control Order and Measured Values in ERP Input Quality Control Order Approval Defining Defining Defining Input Quality Inspection Control Points Control Groups Control Order References Process Quality Input Quality Final Quality Process Quality Control Control Control Order Control Order Approval Approval Final Quality Control Approval Input Quality Control Order Approval The results of the entry quality control order are analysed by the authorized person and the quality control activity is to be decided by the approval or rejection status. Approval/Rejection Status: Decision codes such as acceptance, conditional acceptance, rejection are created. Warehouse Code: As a result of the approval process, the warehouse where the related products will be shipped is defined. In line with the decision made, the materials waiting in the quality control warehouse are automatically transferred to the relevant warehouse. Input Quality Control Order Approval  Process Quality Control Order Defining Defining Defining Input Quality Inspection Control Points Control Groups Control Order References Process Quality Input Quality Final Quality Process Quality Control Control Control Order Control Order Approval Approval Final Quality Control Approval  Process Quality Control Order In the production processes; production start control, production intermediate controls and final part controls are followed through process quality orders. Process control orders are created based on open (ongoing) production work orders. Controls are carried out according to the information defined in the control groups, and as many of the required samples are measured, the process results are entered into the process control order. The suitability of each measurement entered is determined by the system by comparing it with the defined specification. After all measurements are entered, the measurements are completed and the quality order is sent to the approval stage. Process Quality Control Order Process Quality Control Order – Measured Values  Process Quality Control Approval Defining Defining Defining Input Quality Inspection Control Points Control Groups Control Order References Process Quality Input Quality Final Quality Process Quality Control Control Control Order Control Order Approval Approval Final Quality Control Approval  Process Quality Control Approval The results of the process quality control order are examined by the authorized person and the quality control status is determined as the approval or rejection. Approval /Rejection Status: Decision codes such as acceptance, conditional acceptance, rejection are created. During the process control, since there is no stock entered into the warehouse yet, no stock transfer takes place with the approval process. The approval given here relates to the determination of whether the process meets the quality requirements. Example of Process Quality Control Approval in ERP  Final Quality Control Order Defining Defining Defining Input Quality Inspection Control Points Control Groups Control Order References Process Quality Input Quality Final Quality Process Quality Control Control Control Order Control Order Approval Approval Final Quality Control Approval  Final Quality Control Order Product controls at the end of production or at the stage of shipment are followed through the final quality control orders. Final control orders can be created depending on production entry records or sales waybills. Controls are carried out according to the information defined in the control groups, and as many of the required samples are measured, the results are recorded in the final control order. The suitability of each measurement is observed by the system one by one. After all measurements are entered, the measurements are completed and the quality order is sent to the approval stage. An Example of Final Quality Control Order in ERP An Example of Final Quality Control Order in ERP- Measured Values  Final Quality Control Approval Defining Defining Defining Input Quality Inspection Control Points Control Groups Control Order References Process Quality Input Quality Final Quality Process Quality Control Control Control Order Control Order Approval Approval Final Quality Control Approval  Final Quality Control Approval The results of the final quality control order are analyzed by the authorized person, and the quality control status is determined as the approval or rejection. Approval/Rejection Status: Decision codes such as acceptance, conditional acceptance, rejection are created. Warehouse Code: The warehouse where the relevant products will be shipped is defined as a result of the approval process. In line with the decision made, the products waiting in the quality control warehouse are automatically transferred to the relevant warehouse (shipment / scrap). Example of Final Quality Control Approval in ERP Inventory Management Reports in ERP Systems Inventory Management Procurement Reports Management Reports Inventory Management Reports Inventory is the determination and demonstration of the precise amounts and assets that are the result of counting and valuing the assets and debts of any enterprise on a specific date. In the narrow sense, inventory refers to the valuation of only the stock of goods, finished and semi-finished products, or raw materials and materials. There are two main issues of inventory management. These are monitoring continuous inventory and account the inventory at the end of counting cycle. ERP systems can support 6 reports in general. Inventory Management Reports Physical Inventory list: It is the report that shows the quantitative value of the stocks owned by the enterprise. The warehouse or shelf based reports ara produced. It is calculated from the beginning of the period determined for the stock to the current inventory date. It shows the instantaneous stock amount in the warehouse. Financial Inventory List: It shows the amount of the stocks owned by the business in terms of warehouse or shelf based stocking. It requires stock costs and production costs to be consistent. In addition, the total amount obtained in this report must be the same as the balance of the reserve accounts in Trial. General Movement List: It is the report that shows the beginning, entry and exit values of the inventories and the end of a certain period. These values are displayed both physical and value based quantities. The results in this report should be consistent with the physical inventory and financial inventory lists. Example of an ERP Physical Inventory List An example of ERP Financial Inventory List An example of ERP General Movement List Inventory Management Reports Stock Statement: It is the report chronologically listing the incoming and outgoing movements of the stocks in the warehouses of the enterprise. Thanks to this report, all warehouse-based movements of stocks can be tracked. In addition, the source information that constitutes the stock movement is reported. Stock Turnover Rate: It refers to the number of times a firm's stocks have been sold for a year and replaced by a new one. It is calculated by dividing the company's total annual sales volume to the average stock amount. Stock Level Report: It is the report where stocks obtained by purchasing method are compared with minimum order levels. For this, minimum order level amount must be entered on the inventory card. By collecting the warehouse stock amount and open purchase amounts, the Order Level is compared with the Quantity and the requirement amount is calculated. An example of ERP Stok Statement An example of stock turnover rate An Example of a ERP Stock Level Report Procurement Management Reports These are reports that are based on demand or periodically external analysis of goods and services for business activities. They ensure that procurement activities are evaluated as suppliers, inventories and financially. Purchase Demand Status Report: It is a report listing the details of the requests from the departments of the business. This report includes details such as requested material information, approval status, purchase order status and delivery information. Required Procurement Items List: It is the report that lists the bids received from the suppliers for the procurement activities of the business. It includes details such as material information, price information and discount amounts stated in the offers. An example of ERP Purchase Demand Status Report An example of ERP Required Procurement Item List Procurement Management Reports Purchase Order Items List: It is the report listing the bids of the company from the suppliers for the purchasing activities. It includes details such as material information, price information and discount amounts stated in the offers. Waybill Items List: It is the report listing the details of the purchase dispatches of the goods and services received from the suppliers. This report contains material information, quantity information, and warehouse information entered. Invoice Items List: It is the report listing the details of the purchase invoices of the goods and services received from the suppliers. This report includes material information, quantity information, price information, maturity information, discount information details. An example of ERP Purchase Order Items List An Example of ERP Waybill Item List An example of ERP Invoice Item List Procurement Management Reports Product Based Periodic Purchase Report: It is the report where the inventories and quantities are analyzed on a monthly basis and on a weekly basis. Periodic Current Purchase Report: It is the report where the stocks of the purchased inventories are analyzed on a monthly and weekly basis. Payment List: It is the report listing the remaining balance the suppliers according to FIFO and closing dates The purpose of this report is to enable the analysis of unpaid debts together with their terms. Payment Aging Report: It is the report that shows the distribution of the maturity dates of the documents in the Payment List in monthly periods. An example of ERP Product Based Periodic Purchase Report An Example of ERP Periodic Current Purchase Report An example of ERP Payment List An Example of ERP Payment Aging Report QUESTIONS?