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A New Approach to Supply Chain Management Based on Pooling ITIL and APICS Principles and Practices

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A New Approach to Supply Chain Management Based on Pooling ITIL and APICS Principles and Practices IJCSI International Journal of Computer Science Issues, Vol. 8, Issue 4, No 2, July 2011 ISSN (Online): 1694-0814 www.IJCSI.org 355 A new approach to supply chain management based on pooling ITIL and APICS Principles and Practices Abdelaali Himi1, Mustapha El Masbahi2, Samir Bahsani3 and Alami Semma4 1 Department of Mathematics and Computer Science, Faculty of Science and Techniques, Hassan 1 University Settat, Morocco 2 Department of Mathematics and Computer Science, Faculty of Science and Techniques, Hassan 1 University Settat, Morocco 3 Department of Mathematics and Computer Science, Faculty of Science and Techniques, Hassan 1 University Settat, Morocco 4 Department of Mathematics and Computer Science, Faculty of Science and Techniques, Hassan 1 University Settat, Morocco According to our experience in the implementation of Abstract ERP-based supply chain management and information APICS (Advanced Productivity, Innovation and Competitive systems, we have noted that there is a similarity between Success - The Association for Operations Management) is known the ITIL framework and the APICS repository. Indeed as the repository providing a set of best practices in Supply Chain ITIL can provide more precise answers to questions of Management. The ITIL (Information Technology Infrastructure monitoring supply chain processes and measuring their Library) also provides best practices for IT service management. performance. Noting the existence of a similarity between these two standards, this paper identifies the ITIL concepts used in the supply chain context and describe their contributions. The purpose of this paper is to identify ITIL concepts and processes that can be applied to the supply chain context, Keywords: Best Practices, ITIL, Availability, Service Level, by insisting on their possible contribution. Incident, Problem, APICS, Process, Supply Chain, MRP, MPS, Forecasting, Planning, Manufacturing 2. Supply Chain Management Process according to 1. Introduction APICS reference Faced with the competition experienced by today's industrial companies, the need to master the management 2.1 Introduction of the supply chain is becoming a crucial strategic factor. Manufacturing is basically the process of converting raw materials into finished products. This process consists of a The APICS repository, considered as a world reference in set of operations each of which consumes resources Supply Chain Management, offers a set of best practices, (labour, machinery and materials). drawn primarily from the return of the experience of major practitioners. To manage the process means the planning and control of resources: setting goals and deciding on the use of The ITIL framework also provides good practices for IT resources to achieve these goals. service management that have contributed to improving the services provided by computer companies to their The materials flow controls process performance, it can be clients. classified as: IJCSI International Journal of Computer Science Issues, Vol. 8, Issue 4, No 2, July 2011 ISSN (Online): 1694-0814 www.IJCSI.org 356 Establishing the link between the production plan Planning and Production Control: and what is actually being manufactured; o Production Planning Forming the basis for calculating the capacity and o Implementation and Control the necessary resources o Inventory Management Piloting MRP by MPS; Physical Supply et Distribution : Keeping the priorities valid. o Transportation o Stock distribution The functions carried out through MPS between Sales and Warehousing Production are: o Shipping MPS informs Production and Sales when goods o will be available for delivery o Handling MPS is a co ntract between Marketing and o Demand Entry Production Supplier Manufacturer Distribution Client The Production Plan relates to families of products whilst MPS is concerned with finished products (The Production Physical Manufacturing Physical Distribution Supply Planning Plan controls the MPS). and Control To develop an MPS, the information required is: Materials flow A production plan; A forecast of finished products; A record of received sales orders; Demand (information) An inventory levels of finished products; It is recommended to have a department responsible for There are three steps to preparing an MPS: the materials flow: planning and control of flow. Develop a preliminary MPS; Test the Preliminary MPS with the available The objective of this entity is to maximize resources capacity; utilization and provide the required level of customer Resolve any differences between them. service. 2.4 Material Planning Requirements 2.2 Production Planning System MRP establishes a Priority Plan showing the components Manufacturing Planning and Control System is an required for each level of assembly and calculates the time information system that includes: that these components will be needed. Planning functions (SOP, MPS, MRP). Executive functions (control of load flow, The MPS controls the MRP. The inputs to the MRP are: scheduling, launching). MPS; Priority, established by the Marketing and Manufacturing, Stock records: is responsible to combine plans to meet it. o Planning factors (order quantity, lead- times, stock safety, scrap); Capacity is the ability of a production facility to produce o Status of each article (available, finished products; it depends on the resources provided by reserved, available for future demand); the company and the materials availability. Bill of materials. 2.5 Production Activity Control (PAC) Capacity Management is the process that calculates the capacity required to accomplish the priority and finding PAC is responsible for implementing MPS and MRP methods for making the capacity available for producing through initiating and controlling the work orders. finished products. The activities of the PAC can be classified as following functions: 2.3 Master Scheduling Planning: The four functions required to execute an MPS (Master ◦ Plan the workflow at each work centre (to Production Schedule) in any Production Planning System ensure that adequate material and labour are are: available); IJCSI International Journal of Computer Science Issues, Vol. 8, Issue 4, No 2, July 2011 ISSN (Online): 1694-0814 www.IJCSI.org 357 ◦ Plan the start and end date for each order by developing the load profile for each work centre. Implementation: PAC collects information 3. Information System Management Process according necessary for the workshop to manufacture the to ITIL reference product and then issues work orders to the workshop, as authorised by MRP; 3.1 Introduction Control: once the orders have been started, the process must be controlled to compare the actual To define ITIL, one must position oneself in a context of progress with the planned. continuous IT service improvement, and referrals to internal and external customer needs. IT is the 2.6 Inventory concentration of efforts on the customer value that will contribute to a strategic alignment of IT services within The stock can be classified: business enterprises. According to the flow of: Raw materials; ITIL is defined as a set of best practices structured as o multiple processes communicating with each other. Each Work in process; o of these processes fulfils its dual role; to meet and care o Finished goods. about the continuous improvement and customer According to the function: satisfaction. o Anticipation inventory: to anticipate future demand, it reduces the cost of Best practice organizations provide a structure, approved changing the rate of production; by years of experience in large global companies, o Fluctuation inventory : to cover the recognized for their professionalism and thoroughness, to random fluctuations in supply and formalize their processes and optimize IT service demand, to avoid disruptions in management. production or delivery; o Lot-size inventory: to take advantage of 3.2 ITIL principles that are closer to the Supply Chain volume discounts and reduce context administrative costs and set-up; 3.2.1 Management demand Inventory Management must establish decisions and rules about stock items in order to permit the staff responsible • Purpose for controlling stock to do their job effectively. These rules The management demand is a cr itical aspect of service are: management. A poorly managed application is a source of What are the most important items; risk to service providers because of the demand uncertainty. Excess capacity generates costs without How are items controlled; creating value that provides a basis for cost recovery. How to order each time; When to place an order. Inventory Management is designed to achieve the required service level and reduce total cost, which provides the answers to two questions: How should we order at all times: o Lot for lot (MPS and MRP); o Fixed-order quantity; o Min-max system; o Economic order quantity; When an order should be placed: Independent demand; o • Concepts . Order point system; Demand Management Activity (activity- . Periodic replacement model; ► based demand management) o Dependent demand : . MRP. IJCSI International Journal of Computer Science Issues, Vol. 8, Issue 4, No 2, July 2011 ISSN (Online): 1694-0814 www.IJCSI.org 358 This means predicting demand for services 3.2.2 Supplier Management by analyzing and following the habits and behaviors of the client's business processes. • Purpose ► Diagram of business activity (PBA - Managing subcontractors and suppliers, and the Pattern of Business Activity) services they
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