Page 128 - DMGT523_LOGISTICS_AND_SUPPLY_CHAIN_MANAGEMENT

Unit 6: Information Technology Framework

and manufacturing requirements plan (MRP). The MPS defines weekly or daily production Notes
and machine schedules. Given the MPS, the MRP coordinates the purchase and arrival of
materials and components to support the desired manufacturing plan. Although this
discussion presents logistics requirements and manufacturing requirements serially, they
actually must operate in parallel. This is particularly true for enterprises utilizing demand
flow or market paced manufacturing strategies. These strategies coordinate production
schedules directly with market demands or orders and reduce the need to forecast or plan.
In a sense, demand flow or market-paced manufacturing strategies design all production
as “make to order” and thus totally integrate logistics and manufacturing requirements.

5. Procurement Requirements: Procurement requirements schedule material releases,
shipments, and receipts. Procurement requirements build on capacity constraints, logistics
requirements, and manufacturing requirements to demonstrate long-term material
requirements and release schedules. The requirement and release schedule is then used
for purchasing negotiation and contracting.
Self Assessment

Fill in the blanks:
5. The …………………… includes both the information base to maintain the data warehouse
and the execution components.

6. …………………… orders control finished good movement between manufacturing and
distribution facilities.

6.4 Comprehensive Information System Integration

A comprehensive information system initiates, monitors, assists in decision making, and reports
on activities required to complete logistics operations and planning. There are many components
that must be combined to form an integrated information system, and there are many ways to
organize and illustrate the combined components. The major system components include: (1)
Enterprise Resource Planning (ERP) or legacy systems, (2) communication systems, (3) execution
systems, and (4) planning systems.

6.4.1 ERP or Legacy Systems

The ERP or legacy systems are the backbone of most firms’ supply chain information systems.
This backbone maintains current and historical data and processes transactions to initiate and
track performance. Legacy systems refer to the mainframe applications that were developed
prior to 1990 to automate transactions such as order entry, order processing, warehouse
operations, inventory management, transportation, and related financial transactions.

Example: Systems related to customer orders were often labelled Order Management
Systems (OMS) since they managed the order fulfilment process. In addition to order information,
legacy systems typically maintain information regarding customers, products, inventory status,
and facility operations.
In many cases, these legacy systems represent independently developed software modules that
lack integration and consistency; consequently, problems with data reliability and integrity
abound. These problems are further complicated by the fact that multidivisional firms often use
different legacy systems for each division or country.

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