1. What is ERP?

Answer: What is Enterprise Resource Planning - ERP

Enterprise resource planning (ERP) is a process whereby a company, often a
manufacturer, manages and integrates the important parts of its business. An
ERP management information system integrates areas such as planning,
purchasing, inventory, sales, marketing, finance and human resources.

Examples: ERP is most frequently used in the context of software, with

many large applications having been developed to help companies implement
ERP.

2. How ERP connects the Functional Units?

Answer: A typical ERP system is made up of functionally oriented and tightly

integrated modules. All the modules of the system use a common database that
is updated in real time. Each module has the same user interface, similar to that
of the familiar Microsoft Office products, thus making the use of the different
modules much easier for users trained on the system. ERP systems from various
vendors are organized in different ways, but typically modules are focused on at
least the following four major areas: finance, manufacturing and logistics, sales
and marketing, and human resources.

Examples:

3. How Manufacturing Planning and Control fits within ERP?

Answer: MPC is concerned with planning and controlling all aspects of

manufacturing, including managing materials, scheduling machines and people,
and coordinating suppliers and key customers. The coordination required for
success runs across all functional units in the firm. Consider the following simple
example to illustrate the degree of coordination required.

Example:

4. Discuss the role of master production scheduling in Manufacturing Planning and

Control (MPC).

Answer: The role of MPS in MPC is to drive of all detailed manufacturing

activities need to meet output objectives.

Example:
 5. Explain how the bill of material assist the Master Production Scheduling.

Answer:

Example:

6. Determine how actual Master Production Scheduling (MPS) Performance can be

monitored and controlled.

Answer:

Example:

7. What is the main difference between push and pull systems?

Answer: The original meaning of push and pull, as used in operations

management, logistics and supply chain management. In the pull system production
orders begin upon inventory reaching a certain level, while on the push system
production begins based on demand (forecasted or actual demand). The CONWIP is a
hybrid between a pure push and pure pull system.
The business terms push and pull originated in logistics and supply chain
management, but are also widely used in marketing, and is also a term widely used in
the hotel distribution business.

 Push: As stated by Bonney et al. (1999) control information flow is in the same direction of
goods flow
 Semi push or Push-pull Succeeding node makes order request for preceding node.
Preceding node reacts by replenishing from stock that is rebuilt every fixed period.
 Pull: Succeeding node makes order request for preceding node. Preceding node reacts by
producing the order, which involves all internal operations, and replenishes when finished.
 Semi-pull or pull-push Succeeding node makes order request for preceding node.
Preceding node reacts by replenishing from stock that is rebuilt immediately. There are
several levels of semi-pull systems as a node can have stock at several layers in an
organization.

 Example: Material requirements planning (MRP) is a push system because releases are
made according to a master production schedule without regard to system status. Hence,
no a priori WIP limit exists.
 Classic kanban is a pull system. The number of kanban cards establishes a fixed limit on
WIP.
 The classic base stock system is a push system because there is no limit on the amount of
work in process in the system. This is because backorders can increase beyond the
basestock level.
 Installation stock is also a push system as are echelon stock systems because neither
imposes a limit on the number of orders in the system.
 CONWIP is a pull system because it limits WIP via cards similar to kanban. An important
difference from kanban from an implementation standpoint is that the cards are line specific
rather than part number specific. However, from a push-pull perspective, CONWIP cards
limit WIP in the same manner as kanban cards.
 (K, S) systems (proposed by Liberopoulos and Dallery) are pull systems if K <∞ and are
push systems otherwise.
 POLCA systems proposed by Suri are pull systems because, like kanban and CONWIP,
WIP is limited by cards.
 PAC systems proposed by Buzacott and Shanthikumar are pull systems when the number
of process tags (which serve to limit WIP) is less than infinity.
 MRP with a WIP constraint (as suggested by Axsäter and Rosling) is a pull system.