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Sagar Talele- 12 Shalvi Gautam-13 Snehlata Jha-14 Soumillya Chandra-15

 Organization background

 Current system description
 Objective  Problem definition and way ahead  Implementation of Business process  Conclusion and Learning

. New Zealand.Organization Background  EA Cakes Ltd.  It produces over 400 different kinds of fresh and frozen food products . is a successful food manufacturing company  Major share of the market in New Zealand and the Asia-Pacific region.

Types of Products  Shelf stable and frozen food  Products with medium shelf life  Short shelf life products .

Production Planning System .

 The supply of raw and packaging materials required a longer time horizon. .  The time interval for budgeting was too long.Faults in the Present System  The lack of communication between the sales and marketing staff on the one hand. and operations on the other hand.

Ineffectiveness of System  Losses in production  Excessive use of overtime  High labour cost variances  Low machine capacity utilisation  Decline in sales .

Objective Complete redesign of its production planning system. which was an integral part of an ERP system that used SAP software .

and technological issues are related to this case? EA Cakes Ltd. . but it has two benefits:  Increased “speed to market” allows expanding the market share by attracting new customers and by catching unexpected opportunities. The decision to change the strategy from MTO to MTS involves not only company’s decision to invest much more money in accumulation and keeping stocks of finished goods. The MTS strategy costs more in inventory than MTO. it requires a complete redesign of its production planning system.What managerial. organisational. had decided to change its production and sales strategy for long and medium shelf-life products from MTO to MTS. and  Capacity may be utilised more efficiently using the inventory “cushions” instead of capacity cushions.

What is the overall problem(s) in this case? IT specialists were sure that existing SAP software could provide adequate computer support. The authors of the new production planning system. was presented with the following dilemma:  Believing the IT specialists and continuing to implement the existing SAP modules on comparatively low cost. The management of EA Cakes Ltd. but facing all the risks of losses due to planning inefficiency  Believing the planning staff and ordering high cost computer support in addition to existing SAP system . had a rather firm position that their planning processes were the most efficient for EA Cakes Ltd.

That means the plans produced by each level are detailed plans of the top level. there are no significant information links between the company planning and shop floor production planning. Also. Under MTS. there must be feedback continuity: feedback of the top levels is an aggregation of bottom level feedback. for MTS. a forecasting system had to be designed and implemented. so there is no need for stock management. . it is vital that the planning system preserves continuity. an inventory management system for finished goods had to be developed. • Under MTO. MTS is triggered by forecasts.How does the change of strategy affect the information technology applications? There are several major reasons for making significant changes in production planning and IT applications: • MTO is driven by customers’ orders. • There are no significant stocks of finished goods under MTO.

on the other hand. facing the organisation in dealing with the problem(s) related to the case? The management of EA Cakes had two alternatives:  To substitute the business processes of the company for the business processes implemented in SAP. . Standard software (and SAP by definition is standard software). and their pros and cons. and  To create additional special software for providing computer support to production planning.What are the possible alternatives. comprises programmes developed for an anonymous market. The production planning system described in the case carries specific features of production planning of EA Cakes Ltd.

What are some of the emerging technologies that should be considered in solving the problem(s) related to the case? Business Process Implementation  Collection of interrelated Tasks initiated in response to an event that achieves a specific result for the customer of the process  The concept is central to many areas of business systems design. and functions within those areas. specifically to business systems based on modern information technology  Substitution for previous functional design  Business process involves several functional areas. Business Process in EA Cakes ( Production Planning System)  Long-term company level  Medium-term aggregate level  Short-term shop level .


AGGREGATE CAPACITY PLANNING  Sales Budget development  Optimum production strategy or level strategy  Optimum mixed strategy .

.Sales budgeting development  Sales budget is a management tool for control of company performance by BOD.) full budget two versions are than prepared.  Sales budget  aggregate production plan.  Input comes in form of KIP by the board and marketing department.)current rollover budget 2.  2 budgets 1.


Level strategy planning  Planning starts from defining optimum production strategy that follows the demand pattern month by month. .

It combines stock accumulation with overtime. It plans some overtime at peak seasons and decreased resource utilization at the beginning of the year. The planner uses :  Conversion table.Optimum mixed strategy Optimum mixed strategy is converted to ACP. using unit prices  Capacity tables which show the lines capacity (units/hours)  Labor contents tables(labour hours/ machine hours) .


MPS inputs : •Aggregate capacity plan for the next two months •Actual stock level •Short-term demand forecast Main Run-Scheduling performed at the beginning of the planned week Control Run –When the feedback on actual production as available .Master Production Scheduling  MPS gives the ability to ensure that available capacity is allocated with a customer service focus.

Inventory Model Opening stock +Production-Sales Forecast=Closing Stock .

Functions of MPS 1 2 3 • Produce feasible assignments for all product lines • Keep desirable stock levels • Implement a “speed-to-market” principle .

Control Run-When feedback on actual production becomes available.Shop Floor Scheduling  Performs actual scheduling for the week(with  • •  daily subdivision) as specified by production lines. the procedure is run for the rest of the period . planned downtime are known. Main Run-Scheduling performed at the beginning to work out an optimal weekly schedule. Scheduling constraints have been worked out. Set-up time.

Sales staff compares actual sales with long-term forecasts . It needs computer support to relieve sales personnel and to eliminate data . This process will get automated. Then he must agree the changes with the Sales Department and the Production Department. forecasts are prepared manually and then put into the database. Sales figures for individual products have to be provided on a weekly basis for the current month and the next month.  Presently at EA Cakes Ltd.. After implementation to scheduling can be done production level as well.What is the final solution that can be recommended to the management of the organisation described in the case? The final solution is to use SAP.  A reliable method for checking inventory will be available components  The manufacturing process requires an updated short-term forecast each week. Currently. After implementation  The master scheduler has to check the capacity and to change the production volumes according to available capacity. Sales managers must produce the forecast. Actual sales made each week are captured and available for reporting on the following morning. and then it is automatically processed within the Master Production Scheduling. scheduling is only done on finished items.

Thank you .