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.
   • Key performance indicator (KPI). (1) A metric that an enterprise uses to measure its progress against to determine whether this enterprise is meeting its goals. The results are reported in the form of a dashboard or a scorecard report that enables executives, managers, and employees to assess performance, and whether a given goal (or metric) is being met, exceeded, or missed; (2) 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. Key performance indicators can be, and often are, applied at every level of the enterprise.
2. ERP software system.
   • Transactional database.
   • Management dashboard.
   • ERP module.
   • Enterprise middleware.
3. Enterprise finance management. general ledger, , payables including vouchering, matching and payment, receivables Cash Management and collections, cash management, Financial Consolidation
   • Fixed asset. Assets that are necessary for production, but that are not going to generate cash within a year. These include assets such as equipment, vehicles, buildings, and more.
   • Aging. Assets' organizing and sorting according to how long they have existed.
   • Return merchandise authorization (RMA). A unique document with an identifying number that grants a customer permission to return goods to a manufacturer.
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 production management. Engineering, capacity, workflow management, quality control, manufacturing process, manufacturing projects, manufacturing flow, product life cycle management
   • Work order. A request that specifies the quantity and type of a material to be manufactured, as well as the date that it needs to be manufactured by. A Work Order also defines all component material and labor operations required to complete production of the manufactured item.
   • Bill of material. A list of the type and quantity of components needed to build a part.
   • Mixed mode manufacturer. In discrete manufacturing, the requirement to produce make to stock, make to order, configure to order, and engine to order products. In order to accomplish this an ERP application must provide robust functionality for all modes simultaneously which can prove to be extremely challenging, and often requires creativity in configuration as well as flexibility on the business processes.
   • Lean manufacturing. A manufacturing method that focuses on the elimination of waste within a manufacturing system. This approach helps determine the right combination of value for the customer needs, and producing that value in the most efficient and effective manner possible.
   • Allocation. Distribution of cost in a manufacturing process.
   • Master production schedule. The schedule that a company uses to plan how many items need to be produced within a given timeframe. This time-phased production plan is comprised of forecasts, actual demand and supply and attempts to balance these components taking into account all resources.
   • Assemble to order (ATO). A manufacturing strategy that allows users to combine a limited number of sub-assemblies into a large number of possible finished items. This strategy is designed to allow a wide variety of customization options, shorter lead times, and low inventory risk.
   • Engineer to order. A production approach where components are designed, engineered and built to specifications after the order has already been received.
   • Make-to-order. A manufacturing process where manufacturing starts after receiving a customer's order.
   • Capacity requirements planning (CRP). The process of calculating the production capacity that a business requires to meet planned and actual demand.
   • Job shop. A manufacturing facility that produces discrete, specialized, and fairly small manufacturing runs of products that are usually not repeated.
7. Enterprise order processing. Order to cash, order entry, credit checking, pricing, available to promise, inventory, shipping, sales analysis and reporting, sales commissioning.
   • Order management. The process of fulfilling and tracking customer orders.
   • Build to stock. A build-ahead approach to production, where items are built ahead of time according to sales forecasts or historical demand.
8. Supply chain management. Supply chain planning, supplier scheduling, product configurator, order to cash, purchasing, inventory, claim processing, warehousing (receiving, putaway, picking and packing).
   • Routing. A description of the sequence of steps that materials need to go through in order to produce a fabricated part, sub-assembly, or finished product.
   • Material control management. Associated primarily with moving, storing, and assessing materials used or consumed in manufacturing. Inventory management, quality assurance, production reporting, and cycle counting. Most material master data and inventory movements all fall within the scope of materials management.
   • Material requirements planning (MRP). A system used to plan production, scheduling and inventory. An MRP system ensures that enough materials are available for production, enough finished products are available to deliver to customers, and that the lowest amount of materials and products needed are on hand. MRP also plans manufacturing activities, delivery schedules and purchasing activities.
   • Materials management. Activities involved with transporting, storing, and evaluating materials used during the manufacturing process.
   • Purchase requisition. A request for approval to purchase a material or service.
9. Enterprise project management. Project planning, resource planning, project costing, work breakdown structure, billing, time and expense, performance units, activity management
   • Job cost. A method in which all costs associated with a project are recorded over time, totaled at the end, and where the actual and planned costs are compared to generate variances that can be fed to accounting systems.
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
12. 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.

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

• 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.
• 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.
• 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.
• Part number. Unique identifiers that identify every SKU.
• 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
• 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!