Resource Planning Quarter

Resource Planning Quarter (hereinafter, the Quarter) is the first of four lectures of Operations Quadrivium (hereinafter, the Quadrivium):

• The Quarter is designed to introduce its learners to enterprise discovery, or, in other words, to concepts related to obtaining data needed to administer the enterprise effort; and
• The Quadrivium examines concepts of administering various types of enterprises known as enterprise administration as a whole.

The Quadrivium is the first of seven modules of Septem Artes Administrativi, which is a course designed to introduce its learners to general concepts in business administration, management, and organizational behavior.

Outline

The predecessor lecture is Organizational Structure Quarter.

Concepts

1. Enterprise resource planning (ERP). The integrated management of core business processes, often in real-time and mediated by ERP software and other technology connected to ERP software.
2. ERP software system.
   • Transactional database.
   • Management dashboard.
   • ERP module.
   • Enterprise middleware.
3. Enterprise finance management. General Ledger, Fixed Assets, payables including vouchering, matching and payment, receivables Cash Management and collections, cash management, Financial Consolidation
4. Enterprise budget management. Budgeting, Costing, cost management, activity based costing
   • Budgeting. The process of allocating resources to pay for designated future costs.
   • Zero-balance budgeting. Process starting with an established point of zero rather than using the current budget as the basis for adding, modifying, or subtracting resources.
   • Incremental budgeting. Process starting with the current budget from which managers decide whether they need additional resources and the justification for requesting it.
5. Enterprise people management. Human resources: Recruiting, training, rostering, payroll, benefits, retirement and pension plans, diversity management, retirement, separation
6. Enterprise manufacturing management. Engineering, bill of materials, work orders, scheduling, capacity, workflow management, quality control, manufacturing process, manufacturing projects, manufacturing flow, product life cycle management
   • Cost of quality. The costs incurred to ensure quality. The cost of quality includes quality planning, quality control, quality assurance, and rework.
   • Rework. Action taken to bring a defective or nonconforming item into compliance with requirements or specifications.
   • Total quality management (TQM). A philosophy of management that is driven by continuous improvement and responsiveness to customer needs and expectations.
7. Enterprise order processing. Order to cash, order entry, credit checking, pricing, available to promise, inventory, shipping, sales analysis and reporting, sales commissioning.
8. Supply chain management. Supply chain planning, supplier scheduling, product configurator, order to cash, purchasing, inventory, claim processing, warehousing (receiving, putaway, picking and packing).
9. Enterprise project management. Project planning, resource planning, project costing, work breakdown structure, billing, time and expense, performance units, activity management
10. Customer relationship management. Sales and marketing, commissions, service, customer contact, call center support — CRM systems are not always considered part of ERP systems but rather Business Support systems (BSS).
11. Data service management. Various "self–service" interfaces for customers, suppliers and/or employees

Roles

1. Top manager. A manager at or near the upper levels of the organizational structure who are responsible for making organization-wide decisions and establishing the goals and plans that affect the entire organization.
2. Board of directors. A group of influential individuals, elected by stockholders, chosen to over see the affairs of a company. A board typically includes investors and mentors. Not all startups have a board, but investors typically require a board seat in exchange for an investment in a company.

Instruments

1. ERP software. An integrated software system that integrates all software applications related to business processes such as customer relationship management, order processing, supply chain management, manufacturing, human resource management, project management, and accounting. ERP software operates in or near real time; its common or interrelated database supports all the applications. ERP software usually provides a consistent look and feel across various applications.
   • Integrated software. Two or more software functions within the overall ERP application that share data and combine functions, such as order processing and inventory control, or invoicing and accounts receivable.
   • 3rd party application. Software that has been developed by an outside company and is sold through a vendor.
   • ERP implementation. The process of installing and configuring ERP software. This process involves installing, configuring, testing, training and preparing an organization for the change.

Results

1. Budget. The financial plan for allocating resources to specific activities. An enterprise uses its budget to establish its estimates for earnings ahead and its decisions on what those estimated earnings will be spent. A budget is used to control the actual financial data against this plan.
2. Enterprise performance. The accumulated results of all the enterprise's work activities.
   • Performance. The end result of an activity.
   • Capability. An organization's skill and ability in doing the work activities needed in its business.
   • Efficiency. The degree to which an enterprise gets the most outputs from the least amount of inputs.
   • Effectiveness. The degree to which an enterprise does those activities that result in achieving its goals. In other words, effectiveness is the measure of how an enterprise meets the needs of its clientele or customers.

     Efficiency is doing things right; effectiveness is doing the right things. -- Peter Drucker, management consultant

Practices

• Bottleneck. A machine or workstation through which many production items must flow and which when overloaded causes a delay in the production process.
• Build to stock. A build-ahead approach to production, where items are built ahead of time according to sales forecasts or historical demand.
• Cloud computing. A process whereby users are connected to their ERP software via the internet rather than to computer equipment at their location thus eliminating the cost and need to have the hardware infrastructure located and maintained at their site.
• Electronic data interchange (EDI). EDI replaces paper mail, fax and email by electronically exchanging order and fulfillment/billing information in a standard format between trading partners.
• Kaizen. In Japanese, the word means "improvement". This is the philosophy of continuous process improvement using analytical tools and methods.
• Kanban. A communication system that controls the flow of the shop, and synchronizes the level of production to customer demand, and normally uses standardized quantities and movement tickets which travel with the production pieces from operation station to operation station.
• Key performance indicator (KPI). An approach to helping a business achieve its goals through the development of agreed upon critical performance targets and the measurement of progress towards those targets. It can be, and often is, applied at every level of the business.
• Liquidity. The degree to which capital can be turned into cash quickly.
• Lot number. A number that is used to identify a specific quantity or lot of material from a manufacturer.
• Mobile data collection. A suite of mobile transactions designed for hand-held devices. This allows users to selectively deploy bar-code enabled, hand-held mobile devices.
• Network administrator. The person who is responsible for managing the computer network of a business, including its security and performance.
• Order management. The process of fulfilling and tracking customer orders.
• Part number. Unique identifiers that identify every SKU.
• Scheduling. The process of planning and arranging orders to maximize productivity, cost, and delivery times.
• Six sigma. An approach that is designed to improve quality and lower the number of defects. This approach aims for six standard deviations between the mean and the nearest specification limit in any process.
• Stock keeping unit (SKU). A unique identifier for each distinct product and service that can be purchased in business
• Total quality management (TQM). A manufacturing philosophy focused on improving quality across the operation.
• Software upgrade. The replacement of a software product with a newer, improved version.
• User interface (UI). The way in which a software user is able to interact with a computer system.
• Value stream mapping (VSM). A tool that helps businesses understand how their flows currently operate and helps them figure out ways to improve them in the future. This is achieved by creating a process map that is used to streamline processes across the entire supply chain. A Value Stream Map (VSM) is a process map that identifies all the steps and data streams required to produce a particular product or service while adding value to each step that results in improved customer satisfaction.
• Value-added reseller (VAR). A reseller that adds value to an existing software product through the addition of features or services, then resells it to end users.
• Visual scheduling. A real–time database of shop floor activity including new work, current work–in–progress, and completions. As work moves through the plant and operations are completed, the user receives instant feedback and is able to make adjustments to both the load (work orders) and the capacity to achieve a do-able schedule.

No successor lecture exists in the Course. Happy implementations of the learned concepts, methods, instruments, and practices on the fields!