Integral Logistics Management — Operations Management and Supply Chain Management Within and Across Companies

Course 5 – The MRP II / ERP Concept: Business Processes and Methods

Intended learning outcomes: Disclose business processes and tasks in planning & control. Explain in detail master planning or long-term planning, Describe detailed planning and execution.


Section 4.5 introduced different concepts of planning & control for logistics systems. This chapter takes a closer look at the first and fundamental concept, the MRP II / ERP concept.

Enterprise resources planning (ERP) is a framework for organizing, defining, and standardi­zing the business processes necessary to effectively plan and control an organization so the organization can use its internal knowledge to seek external advantage ([APIC16]).

Beyond the MRP II concept and other concepts of planning & control for logistics systems, the ERP concept deals with financial management, controlling, and human resource management. In this book, however, these themes are only considered marginally.

Section 5.1 presents definitions of the different tasks within these processes and then derives a reference model for business processes and tasks in planning & control. The chapters in Part C of the book follow the structure of this model.

Section 5.2 shows business objects and business methods in the business process of long-term planning. Long-term planning is a fundamental requirement of long-term business relations in the supply chain. In most cases, long-term planning is rough-cut planning.

Section 5.3 presents an overview of business methods for medium and short-term planning & control in the areas of distribution, production, and sales. These business methods will be examined in more depth in later chapters.

Section 5.4 treats business methods for planning & control in R&D.



Course sections and their intended learning outcomes

  • Course 5 – The MRP II / ERP Concept: Business Processes and Methods

    Intended learning outcomes: Disclose business processes and tasks in planning & control. Explain in detail master planning or long-term planning, Describe detailed planning and execution.

  • 5.1 Business Processes and Tasks in Planning & Control

    Intended learning outcomes: Describe the MRP II concept and its planning hierarchy. Explain the part processes and tasks in long-term, medium-term planning as well as in short-term planning & control. Present the reference model of processes and tasks in planning & control. Produce an overview beyond MRP II: DRP II, integrated resource management, and the “theory of constraints”.

  • 5.2 Master Planning — Long-Term Planning

    Intended learning outcomes: Describe demand management, sales and operations planning as well as resource requirements planning. Explain master scheduling and rough-cut capacity planning. Disclose supplier scheduling: blanket order processing, release, and coordination.

  • 5.3 Introduction to Detailed Planning and Execution

    Intended learning outcomes: Disclose basic principles of materials management, scheduling and capacity management concepts. Produce an overview of materials management, scheduling and capacity management techniques. Differentiate between available-to-promise and capable-to-promise.

  • 5.4 Logistics Business Methods in R&D

    Intended learning outcomes: Produce an overview on integrated order processing and simultaneous engineering. Describe release control and engineering change control. Differentiate between various views of the business object according to task.

  • 5.5 Summary

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  • 5.6 Keywords

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  • 5.7 Scenarios and Exercises

    Intended learning outcomes: Disclose master scheduling for product variants. Calculate the quantity available-to-promise (ATP). Examine an example of the theory of constraints. Elaborate the master planning case.

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