Enterprise Resource Planning - Answer the questions - Essay Example

Enterprise Resource Planning How the concept of Postponement reduces the complexity of forecasting and reducesinventory requirements. Postponement concept can be of benefit to a company’s supply activities. Because of its beneficial nature, companies have been using this strategy at some point. In a situation where the period of production time further lengthen through future, forecast mistake develop, leading to bigger disparities in prediction of inventory needs. Postponement comes in to intervene to ensure inventory prediction for goods is more exact.

The strategy of postponement facilitates postponing the final assembly and the packaging of goods, giving the manufacturer more time to personalize, alter or organize finished goods according to the order of customer demand. A well-known example is HP’s printer postponement strategy. HP’s in the mid-90s was able to sell many types of the similar printer model. These types differed only in the electrical capacity voltage they used and the state they were destined. To achieve demand, HP had to stock and produce states specific types of each printer model, requiring high inventory levels.

Eventually, when HP utilized the postponement concept, they had ample time to redesign printers sorting out the base printer from the power module. HP attained the similar service level of with lower inventory (Sumner 67). 2. The difference in how finished goods are used between level scheduling and traditional MRP scheduling. A. Finished goods according to levelled scheduling: it works to form an even and uninterrupted finished goods production within a period of time. The main function of level scheduling is to reduce any stoppages that may occur in case demand levels of the good experience variations.

In order to realise the aim of levelled scheduling, the production and sales units need to coordinate their individual activities. It is by making sure that there is a set volume level of output within a time period so that the customer future demands are fulfilled without any interruptions. B. Finished goods according to the MRP system: Material Requirements Planning (MRP) system works to maintain the processes of producing finished products. The system manages inventory so as to facilitate production managers in orders placing or products scheduling of demand that is independent.

It retains the lowest levels of products already existing in the stocks (Sumner 33). 3. How the use of common components for finished assemblies reduces purchasing costs and reduces the risk of poor forecasting. A firm using universal common components is in a better and an informed position to reduce the cost of for example buying raw materials. It is because these common components are easily accessible and in addition reducing the amount of time used to assemble them. A firm is able to predict for example these common components prices and thus plan for the future with ease.

A firm can minimise storing materials that can be readily accessed while stocking components whose availability is speculative (Sumner 74). 4. How Standard Work shortens the time required to become proficient at a task. Firms that exercise standard work benefits them reduce the time and finances used to make employees skilled enough in their production duties. It enables efficient management of operations since production work will be performed skilfully. Employees become aware of the quality of human resource service demanded from them since their duties are clearly spelt out.

The employees will utilise less time in production while achieving the desired company objectives because of the use of the set standard time to complete tasks. In addition, it helps do away with wastes which would otherwise be costly to a company (Sumner 104). Works Cited Sumner, Mary. Enterprise Resource Planning. Upper Saddle River, N, J.: Prentice Hall, 2005. Print.