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ERP in just-in-time production

Andreas Mühlbauer,

Maximum transparency in the supply chain

An automotive supplier uses an industry-specific ERP system to strengthen its supply chain processes and thus its competitive position.

An automotive supplier uses an industry-specific ERP system to strengthen its supply chain processes and thus its competitive position. © Sage

The modern automotive industry is characterized by the call for ever greater flexibility and an ever more efficient supply chain. In this context, car manufacturers demand just-in-time delivery from their suppliers. This is because the punctual arrival of all required components relieves them of costly warehousing in their own production facilities. This avoids tying up capital unnecessarily.

For a medium-sized supplier such as Mürdter Metall- und Kunststoffverarbeitung, based in Mutlangen, this requirement generally resulted in a far-reaching reorganization of processes, including closer integration of order management and production control. For the family-run injection molding manufacturer, leaving everything as it was would have meant ensuring the required delivery flexibility through production on stock. The traditional system of inventory management, including capital commitment, would therefore only have been moved one position further along the supply chain. For competitive reasons alone, this was not an option for the company from the outset.

The long-established company produces various metal and plastic components, some of which have highly complex geometries. Injection molded components from Mutlangen can be found in vehicle interiors, exteriors, engine compartments and on the bodies of various car brands. Mürdter manufactures for system suppliers as well as directly for almost all car manufacturers based in Europe.

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Raw material supply with minimum stock levels

For the Württemberg-based company, just-in-time delivery primarily means being able to supply customers with goods virtually on demand every day. This requires appropriate framework agreements, as the supply of materials and raw materials requires a certain lead time. For various granulates, for example, the average delivery time is up to 18 weeks. The challenge here lies in optimal planning that reconciles different time horizons in such a way that the supply of raw materials is guaranteed at all times despite minimal stock levels. Only on this basis can Mürdter offer its customers largely free planning within the total order quantity agreed in the framework agreement by means of rough and fine call-offs - i.e. monthly or daily orders, depending on the demand situation.

In order to initiate this just-in-time delivery service, the company introduced an ERP system that specializes in the needs of the plastics industry and can map this planning flexibility. Specifically, this is the "Sage Wincarat" solution. Mürdter's customers enter their rough and detailed call-offs directly into the ERP system via electronic data interchange (EDI) - whereby the software automatically subjects each order to a plausibility check. For example, the system checks whether the customer has included all outstanding deliveries in their order and whether they actually need the requested quantity at the moment. From the checked order data, the solution immediately generates a precisely tailored production proposal based on criteria such as stock levels, order situation and capacity utilization. The ERP system also takes into account customer-specific special requests - for example with regard to certain material properties or restrictions in the selection of suppliers.

Seamless BDE and MDE integration into the ERP system

When it comes to the actual implementation of the customer order, a good visualization of the current status compared to the planning status is essential for the transparency of the processes. This is because planning data in the system and the reality in production halls and warehouses often diverge. Whether reordering times for raw materials, staff absences or customer-specific product modifications - even if all this data has been conscientiously entered in the ERP system, this does not mean that all these parameters are actually reflected one-to-one on the store floor in the actual production process. Especially when business and production processes are controlled in a silo-like manner with different, largely isolated systems, the risk is all the greater that system-side assumptions and real conditions do not match.

Mürdter is able to bridge this information gap by seamlessly integrating its production and machine data acquisition (PDA/MDA) into the new ERP system. Specifically, the injection molding manufacturer implements BDE/MDE with a production control station solution from ProSeS that is specially tailored to plastics and metal processors and can be seamlessly connected to the ERP system from Sage.

For production planners, this interplay of solutions means that they can compare the actual and planned status at a glance at any time using meaningful data visualization. All important status variables can be adapted to new conditions using an intuitive graphical user interface. Every change to the status image in the control station also automatically triggers an immediate update of the data stored there in the ERP system. In this way, the production planners in Mutlangen can immediately see the result of their changes using a consistently interactive process and readjust them if necessary.

Once a production order has been completed, quality control immediately follows on the machine. The inspected products are then stowed in containers and their quality-compliant completion is recorded in the system. Packed in pallet cages, they finally reach the outgoing goods warehouse and are now ready for dispatch. Each time such a pallet cage is moved, its ID number and storage location are reported to the system by radio scanner. All stock movements can be tracked here in real time. This also ensures maximum transparency in the outgoing goods warehouse, the basis for reliability and flexibility in the supplier industry.

According to documents from Sage / am

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