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"We work with your staff to execute these practices. Internal
are further developed through staff mentoring."
Source : QR Systems
Optimize Internal Supply Chain
Supply Chain is also known as :
Internal Supply Chain,
Business Supply Chain,
Effective Supply Chain Management,
Improve Supply Chain,
Industry Supply Chain,
Integrated Supply Chain,
Lean Supply Chain,
Retail Supply Chain,
Strategic Supply Chain,
Supply Chain Analysis,
Supply Chain Best Practices,
Supply Chain Careers,
Supply Chain Certification,
Supply Chain Collaboration,
Supply Chain Companies,
Supply Chain Cost,
Supply Chain Council,
Supply Chain Definition,
Supply Chain Diagram,
Supply Chain Distribution,
Supply Chain Event Management,
Supply Chain Excellence,
Supply Chain Execution,
Supply Chain Forecasting,
Supply Chain Information,
Supply Chain Innovation,
Supply Chain Integration,
Supply Chain Inventory Management,
Supply Chain Issues,
Supply Chain Logistics,
Supply Chain Management,
Supply Chain Model,
Supply Chain Models,
Supply Chain Network.
Despite all of the effort and investment in global supply chain integration, the majority of corporate world is still struggling with optimization of internal supply chain i.e. what is happening on the shop floor. Very few organizations can locate the status of customer order in their internal supply chain. If for any reason order priority or sequence needs to be changed,
production planners physically have to chase the work orders on the shop floor. Furthermore, state of the art ERP systems do not communicate with state of the art production equipment preventing valuable production machine data into becoming business intelligence to be used both by production staff and the planners.
The new reality for manufacturing CIOs is that budgets are far less than what they use to be and ability to provide business intelligence to front line users in simple and workable format is a new measure of IT performance. So how can
manufacturers manage their internal supply chain with fewer resources? By concentrating their efforts on the areas that will have the biggest impact on their bottom lines. By focusing on specific business problems, companies can deploy cost effective technology solutions that provide concrete ROI.
In this white paper, we will examine those activities that can provide manufacturers immediate help in reducing internal supply chain cost by improving plant efficiencies via streamlining processes without abandoning investment in legacy ERP systems.
- Sales Management
- Order Management
- Resource Planning
- Material Purchasing
- Production Management
- Product Engineering
- Product Management
- Manufacturing Infrastructure
- System Security Infrastructure
- Performance Management
Production/3 system could integrate with your existing legacy ERP system providing you the flexibility and information to create a Lean
Enterprise. If you are embarking on a new production Planning system, Production/3 system could standalone enabling you to achieve benefits of a full scale ERP implementation.
Figure1: Internal Supply Chain
The system’s pure internet architecture allows you to work with the system from any where and from any computer as long
as you have access to internet. Our rapid implementation (in days), continuous and complete training and customer support
enables your organization to achieve return on this investment within first 12 months.
Sales Management module provides a comprehensive and real-time view of the customer’s relationship with the
organization. The aggregated information prepares the sales agent for all eventualities while with the customer.
Through internet architecture the sales team is able to generate and manage quotation from anywhere and anytime
allowing them to spend their time where counts – with the customer. The specific functionality that is included in this
Customer Relationship Management
The customer relationship management enables the sales agent to have focused conversation with customer leading to
the management of entire account in holistic view.
- Current Orders
- Provides the list of all order and their status
- Sales Activity
- Value of all sales activity for the past 8 weeks and for future 8 weeks.
- Customer Service
- Status of all active orders on the shop floor including ability to drill to the task level.
- Account Activity
- Status of customer’s accounts receivable.
The Quotation Development allows the sales agent to quickly and efficiently generate quotation for both
stored/manufactured items and for items that are purchased referred to as flow through items.
Quotation Management allows the sales manager to direct resources on accounts that will yield highest return. The
business strategy may include – focus on customers who produce high margins, high volume and/or inactive accounts.
This allows the sales and general manager to establish weekly business plan that optimizes the cash management.
Order Management provides a comprehensive and collaborative solution to the distribution of your products
worldwide. With order management you can implement shared processing between both internal and external staff in
multiple languages. We match your order processing requirements from rapid, repetitive order entry to complex,
detailed orders with multiple shipping schedules. This is just some of the functionality that will be implemented with
This allows the rapid order entries of both manufactured and flow through products that are already defined in the
Detail orders are for products that do not have one or all of the following defined:
- Product Number
- Bill of Materials
- Product Routing
It is not absolutely required that all of items above be defined prior to order entry; however some of this information is
required by downstream processes such as – Bill Of Materials are required for purchasing raw materials and Product
Routing is required by production cell scheduling etc.
Quotation to Orders
This allows the user to convert either an entire quotation or selected items from a quotation into orders.
Manufacturers have long recognized the importance of planning and controlling production and distribution activities.
Yet many of these companies are still relying on technologies and processes developed over thirty years ago. These
outdated systems have number of flaws, often leading to the development of unrealistic plans that have no connection
with the costs and constraints of the organization’s internal supply chain. Poor planning capabilities also leave the
companies inflexible and unable to make quick supply chain changes in order to meet shifting customer demand or
take advantage of new cost saving opportunities. This module enables the organization to - Plan HR Resources, Plan
Capital Resources, Plan Materials, and Release Orders
Plan HR Resources
System computes the workload (in Hours) for all orders by their status and categorizes into weekly buckets. This
enables the planners to move the work around, plan extra time or simply balance the workload at macro scale.
Plan Capital Resources
System computes the workload for all production cells at group level and categorizes into weekly buckets. This allows
the production engineers to optimize the performance of bottleneck production cell groups. This is done by multitude
of techniques including – Quick Changeover, Reduce Downtime, Better Maintenance and Stock Spare Parts etc.
Based on customer requested due dates, system computes all the required materials. First it computes the required
materials based on BOM and then allows the planner to modify and purchase different quantities.
Once the material demand is generated, orders are then released to the shop floor. At planning level, the orders are
planned at the group level and at the released time, orders are released to the production cell level. This further allows
the planner to maintain workload balance in the shop.
Suppliers are playing larger and larger roles in the manufacturer’s supply chain as more and more outsourcing of
production and engineering takes place. Furthermore, market pressures and razor-thin margins are forcing companies
to improve revenue by cutting costs. The key to all of this lies in the sharing of information between suppliers and
customers. The following business functionality could be used by the internal staff and/or could be extended to
customers and suppliers either in part or whole.
Supplier Relationship Management
It allows the organization to look at a supplier as a whole. The planners can review all the items that were purchased
from a give supplier; review existing and new contracts. With information on total purchases, organization is in much better position to
negotiate and manage the negotiated prices in their system for all purchasing agents to follow.
System enables the purchasing agent to aggregate all required materials and place purchase orders with the suppliers.
The final purchase orders could be either printed, emailed or placed in supplier’s queue to the picked up and fulfilled.
Purchasing agent can expedite the materials by – supplier, purchase order, internal work order or purchase order due
Raw materials are received by the purchase order and placed in their respective primary and secondary location. The
system could further be configured to receive advance-shipping notices etc.
Return Material Authorization
In the event, a sold product is defective and the customer would like to return it. The system provides the full
functionality including workflow to effectively manage the incident.
Production Management provides consistent, well-defined control of your manufacturing processes by synchronizing
planning and execution throughout your enterprise, enabling you to respond quickly to customer requests and order
changes. With up-to-the-minute precision you can schedule and dispatch production, and accurately track production
completions as well as work-in-progress. Production/3 plan-to-produce solution includes such powerful core
functionality as – production cell sequencing, bottleneck based production schedules, JIT and serial and lot control
traceability and many more.
This is just some of the functionality that will be implemented with your solution -
Based on released orders and required sequence, system computes completion date for each order. Constraints that are
considered include – bottleneck production cells, production cell and labor availability and overtime opportunities. For
discreet manufacturing, the system uses Push Approach and in flow manufacturing the system uses Pull and
Sequencing Approach. Furthermore, additional Bolt-On logic could be defined to mimic internal production
mechanism without affecting the larger system.
Plan Picking Slips
Includes functions related to the picking and issuance of components for production, such as kit and issue method
picking, visual replenishment in electronic Kanban format, and material release.
This provides a Gantt Chart view of all order on the shop floor along with showing routing and percent completion at
each work center.
Flow through and manufactured items can be shipped using a single interface. Flow through items are directly included
in the packing slip while the made to order items are added as they come of the assembly line. Packing slips provide
complete flexibility including hard copies, emails and advance shipping notices to the customer. Purchasing
department can receive all the paper work electronically while the products physically travel to the customer shop.
Time and Attendance
Production staff can use system interface to enter their daily time and output, allocate their individual and machine
time to respective work orders or use a bolt-on data link to capture as the work order flows from one station to another.
Approve Time Sheets
At the end of each day, production supervisors will only have to approve the worker time to insure consistency and
correctness as this data will be used for payroll and order costing.
Create Pay Sheets
For each pay period, Payroll department can create and manage pay sheets for each employee and directly interface to
a third-party internal or external payroll system.
Having the right financial foundation for your organization is key when you need to account for every penny that
comes in or goes out. Production/3 solution helps you easily manage your finances in areas where it matters most -
cost accounting and accounts receivable management. Production/3 system integrates to most tier 1 and tier 2
Production/3 gives you the control and flexibility you need to manage costs throughout your supply chain. With powerful features that support multiple
methods of costing, comprehensive analysis, flexible overhead allocation, and accurate accounting & reporting. The system enables you to model your
business exactly as you need it.
Accounts Receivable system allows the user to convert packing slips into invoices. The system uses the account
receivable information to determine outstanding invoices before releasing any new orders to the shop floor. This
provides single control that insures that shop resources are not consumed by orders from customers who are in arrears.
Payment Processing allows the finance division to allocate payments to accounts and discharge outstanding invoices.
Product Engineering helps you manage the product introduction and change process throughout your enterprise in a
dynamic design-to-deploy business solution model. Powerful features such as engineering change order, engineering
change requests and many more to perform together to optimize your engineering and manufacturing processes.
The following is a brief list of functionality that will be implemented with your solution.
The system allows you to define products in hierarchical order. Products could be defined by function, customer,
geography etc. Each product has many userdefined attributes such as -
There could be many suppliers for each product. But only one supplier could be primary supplier at a give time. The
purchasing agent could change this configuration at any time.
Bill of Materials
Each product could have many layers of bills of materials. The system allows one to define as many layers as your
product engineering requires.
General procedures are those production procedures that apply to all or majority of the products. This allows the
methods engineers to define and calculate their standard times at one time. These standards could be used by the other
product engineers thus reducing product-engineering time.
The system allows the product engineers to define product routes by production cell groups along with their standard
operating procedures and tools and fixtures list. This level of documentation and production controls is required for
ISO quality system.
Product management allows the enterprise to manage each product that includes – demand management, product
activity, cycle counts and product notes. This provides a repository of knowledge on each product that could be used
by the product engineers to refine and improve product from customer feedback.
The main functions included in this module are:
System maintains all activity on a given product allowing precise inventory management.
This allows the inventory management agent to maintain the product demand that includes actual sales and forecast.
The forecast algorithms could be configured to customer requirements.
Maintain product notes including quality reports, customer complaints through simple interface or attachments.
Manufacturing infrastructure includes definition of customers, suppliers and work centers. If these parameters are
already defined in a legacy system, Production/3 will simply extract this data via standard interfaces.
The infrastructure components are –
Customer interface allows the organization to define as many customers as possible. Furthermore, customer could have
status – i.e. active, inactive, on-hold or monitor etc.. System provides ability to search customer by – customer number,
name, email or phone number.
Similarly suppliers are defined as customers.
Work Centers could include individual or clusters of similar production equipment. In some occasions, a workcenter
may include an entire assembly line. The work center hierarchy consists of – work center group and as many work
centers in a given group. This information is particularly important as work orders progresses through the planning,
execution and control phases.
System Security and Access
The system has built in security that allows various stakeholders access to parts of the system that they have
permissions to browse. For example – internal users could have different access and permissions than external
suppliers and customers. Furthermore, each user have different level of permissions. I.e. not every user will have
access to modify the work order, purchase order or in-stock inventory.
Generally privileged to grant access to other staff is limited to system administrator or a super user, due to the fact that
un-authorized users could gain access to secure information. The security features are defined one time and from that
point on it is a very simple task to manage them.
The security features include –
Security roles are generally defined business roles that require similar business functionality. For example – all
production staff will have same role, while production supervisor may require higher level of permissions and access.
Our out of the box security includes major functions within a midsize manufacturing company
Each security role will be limited to what functions of the system the user can access. Furthermore, the access is
controlled by – no access, read only, update create or delete.
The system users are the staff members who will be using the system. Each staff member will have various security
roles, depending on the nature of the tasks the person is expected to do. Each user will also have a user identification
and password, by which they log into the system. As user makes changes to the data, the system keeps track who
changed the data at last.
The system administrator can reset passwords and create new users and security roles etc,
The global parameters are various parameters that are used in the entire system. For example typical parameters would
be – shifts, shift premiums, pay cycle etc.
Because knowledge is power, Production/3 performance module gives you the power to turn information from your
system into actionable knowledge. The performance module can help you make better decisions faster without getting
lost in trivial details.
The performance module provides up to date information with historical data to review trends and measure the
effectiveness of your Production/3 system’s implementation. The measures are developed with customer service and
lean enterprise focus.
Work in Process and Throughput
Work in process is calculated as the total shippable value of an order that is released to the shop floor. This measure
allows the shop management to focus on just in time practices, which improves the shop floor resource utilization.
Throughput is calculated based on value of shipments against the labor and equipment hours worked. In order to
reduce the daily fluctuation, a 6-week rolling average is analyzed.
The delivery efficiency allows the shop manager to compare the order delivery date against the order-planned date.
Trend analysis allows the shop manager to measure the effectiveness of continuous improvement initiatives.
Human and Capital Resource Efficiency
This measure incorporates three very significant components of production system – actual time spent by the
production staff and equipment, standard times on which the product was quoted and items shipped. The cycle for this
measure coincides with payroll cycle hence a performance bonus could be easily instituted.
Production/3 system includes a comprehensive list of reports. These reports could be viewed on line in pdf format or
printed on any line printer.
QuickResposne provides a full data dictionary of systems relational database; hence additional reports could be
developed either during the implementation or by the internal staff using any standard report-writing tool. Here is a
brief summary of all the reports:
Tying It All Together
Any of the modules and tools described in this paper can go a long way in improving manufacturers’ supply chain, but
its their ability to work together, to exchange information in support of the flow of goods through the internal supply
chain itself that is key to true effectiveness – as demand informs production which in turn informs supply, so too does
the information flow that supports all these processes. Applications that enable collaboration must be tightly integrated
in order to be successful.
Production/3 System and our implementation methodology enables organizations to create Lean Manufacturing. It is
instituted through continuous improvement that is entrenched with information and knowledge that is provided by the
About QR Systems Inc.
QR Systems Inc., based in Toronto, Ontario is a premier solution provider to manufacturing and distribution industries. We
provide business and technology strategy, systems architecture and design, application implementation, networks, systems
and production work cell integration and related services. We help clients capitalize on information technology to achieve
their business objectives and build real-time enterprises.
QR Systems has an experienced team of professionals with expertise in Quick Response techniques and information
technology. Our enterprise solutions consist of four interrelated components. Together these components address many of
the challenges that companies face when implementing enterprise solutions. The components are:
- Architecture: QR Systems primary focus is to help customers set a long – term strategic vision and help to achieve more
immediate short-term goals. We have developed an architectural framework to help customers understand their current
situation, define their long-term vision, identify the gap between the two and then develop the appropriate solutions to
achieve that vision.
- Solutions: QR Systems has a set of enterprise solutions that includes: Production Planning, Execution and Control System,
Demand Forecast, Engineered Industrial Standards, Quick Response Techniques and Continuous Improvement Systems.
- Implementation: Enterprise Value Development is a systematic approach that identifies and prioritizes changes in process
and technology to meet specific strategic and tactical enterprise goals critical to most companies as they balance their
technology investment against cost and risk.
- Implementation Tools: QR Systems provides enterprise solutions that includes tools such as SCRUM solution development
methodology and KMProject www.kmproject.com that have been developed to improve the efficiency and speed of
implementation that insures Return On Investment.
QR Systems Inc.,
35 Panorama Crescent
Woodbridge, Ontario, L4H 1J8
Table of contents
- Sales Management
- Customer Relationship Management
- Quotation Development
- Quotation Management
- Business Plan
- Express Orders
- Detail Orders
- Quotation to Orders
- Plan HR Resources
- Plan Capital Resources
- Plan Materials
- Release Orders
- Supplier Relationship Management
- Purchase Orders
- Expedite Orders
- Receive Materials
- Return Material Authorization
- Production Schedule
- Plan Picking Slips
- Order Status
- Ship Orders
- Time and Attendance
- Approve Time Sheets
- Create Pay Sheets
- Cost Accounting
- Accounts Receivable
- Payment Processing
- Define Products
- Product Suppliers
- Bill of Materials
- General Procedures
- Product Routing
- Product Activity
- Product Demand
- Product Notes
- Work Centers
System Security and Access
- Security Roles
- System Permissions
- System Users
- Manage Passwords
- Global Parameters
Tying It All Together