Exercise:

Read the case below and draw an As Is process map for Anderson Inc.s Raw Material Planning and Goods Receiving Process using process mapping symbols. You do not need Supplier or Driver swimlanes as they are not actively doing something in this process. The phase symbol is required.

Background

Anderson Inc. is a manufacturer of industrial products headquartered in Conway, GA. They work off a production schedule, issuing purchase orders (POs) for raw materials to many different suppliers to meet production schedules. Some of these raw materials are manufactured by the suppliers in batches (production runs). Because of this, production overruns sometimes happen (this is normal in this industry), and the final quantity shipped to Anderson Inc. may not exactly match the quantity ordered. Anderson Inc. has overage tolerances ranging from 5-20% for their suppliers as part of the supplier master data. For Anderson, this means that raw materials shipped by a supplier that are over the tolerance will be scrutinized by Anderson and might not be kept.

Anderson Inc. has a best of breed approach to their enterprise system landscape. The Planning Department uses Fulcrum, a cloud-based production planning, BOM, inventory management, and material requirements planning (MRP) system, which production planners use to manage raw materials levels and determine ordering requirements based upon the production schedule. Warehouse workers use Google Sheets to keep track of where raw materials (and other types of materials such as finished goods) are stored in the warehouse (i.e., the bin locations). The core ERP system is NetSuite, used for purchasing (and supplier master data), financials (and GL), HR/payroll (and employee data), and sales/order fulfillment (and customer data). Batch jobs that run overnight keep Fulcrum and NetSuite transactions and inventory levels in sync. The supplier master is only in NetSuite.

Andersons Raw Material Planning and Goods Receiving Process

The Planning Department (production planners) create the production schedule in Fulcrum and run MRP, which determines the raw materials needed to meet production schedule. If raw materials are not required, then purchasing does not take place, and production can run as planned. If raw materials are required, then purchase requisitions for raw materials required are automatically created in Fulcrum by the MRP runs. The production supervisor will approve the purchase requisition requirements as a double-check. Fulcrum is integrated with NetSuite (through middleware) and these purchase requisitions can be seen in NetSuite by the Purchasing Department, which determines who the supplier will be. After sourcing is complete, the purchase req will then be converted to a purchase order (PO) by the click of a button and emailed to the supplier.

When the goods arrive at the warehouse dock, receiving personnel with compare the PO material/quantity in Fulcrum against what the bill of lading says. They will unload the truck and put the material in a staging area to be put away by warehouse workers. Warehouse workers will put the items in a warehouse bin and record the bin location on the shared Google sheet.

The next day, after the batch job has run from Fulcrum to NetSuite to update receipts against open POs, the Purchasing Department will run a tolerance overage error report which will reveal any receipts of materials the previous day that were over the tolerance for a given supplier. The Purchasing Department will email the report to the Planning Department, which will review the report in concert with the planned production schedule in Fulcrum. If there is enough demand for the extra inventory that the raw material overage can be used within a short-term planning horizon (usually 6 weeks), then the Planning Department will notify the Purchasing Department that the overage can be kept. The Purchasing Department will then increase the quantity on the original PO in NetSuite to match what was received. If the Planning Department determines that the overage is not needed in the short-term planning horizon, then they notify Purchasing, which will in turn notify the supplier that the overage is being returned. Purchasing will also notify warehouse workers to pick the extra goods from the warehouse. The warehouse workers will refer to the Google Sheet for the location (searching by material number), pick the goods, and deliver to the Shipping Department, which will pack and ship the goods to the supplier.