“DEMANDS ON MODERN ERP SYSTEMS VIS-À-VIS ORIENTATIONS IN MODERN MANUFACTURING AND OPERATIONS”
ERP has come to stay as a competitive weapon in modern companies that desire to be competitive in the global market. Suddenly , the focus of modern manufacturing is on building systems within the enterprise that self-govern the manufacturing environment into competitive advantage. Every other year the market hears of organizations that are forced into losses in operations for being indifferent to building systems that support manufacturing and operations.
This paper tries to study the modern production environment from a professional stand point and predict the kind of changes that are to be incorporated in the ERP of the future. ERP obsolescence is a rampant phenomena these days and the paper would provide guidelines for future ERP solutions.
ORIENTATIONS IN SUPPLY CHAIN MANAGEMENT
The coming century has been named as the age of knowledge economy. Manufacturing
industry is facing more and more challenges. Though different technical bottlenecks for
modern manufacturing have been or are being investigated, the real bottleneck is,
however, the lack of knowledge. Efficient acquisition and utilization of
knowledge have been considered as the trump to win the competition in the knowledge
The base of the knowledge economy is the knowledge industry that is supported by the
production equipment and modes, science and technology, management philosophy,
etc., produced by the modern manufacturing system and technology.
During the historical development of industry, human society has experienced three
industrial revolutions. Currently, the world is undergoing a Hi-Tech industrial revolution
with information technology as its main feature. The manufacturing industry of the next century will be characterized by intensively
concurrent engineering based on information technologies such as digitalization,
computer network, artificial intelligence and the like. The focus of enterprise production
is shifting from quantity/quality to service including quality, price, and after service.
People are paying more attention to the individualization, involvement and responsive
requirements of product. The management of the enterprise is being transformed from a
centralized and independent model to cooperative and coordinated management, in
which the creativity of people will be given full play. The 21st century’s manufacturing
industry will be green. It does not damage but preserves and beautifies the
environment. It not only utilizes but also saves and renews natural resources. It will
play an important role in the harmonious development of humankind and nature.
Let us try to understand the orientations the evolution pattern of modern industry from the past under various attributes;
Economy pattern Large scale economy to Speed economy to Knowledge economy
Main production mode Large scale production to Integrated production to Intensive production
Main production factor Labor to Capital to Knowledge
Production process Production flowline to Interchangeability Manufacturing to Automatic line to Integrated Manufacturing to Concurrent engineering to Distributed networks to Intelligent manufacturing.
Production features Mechanization to Automation to Digitization & network
Key technology Unit technology to Synthetic technology to Intelligent technology
Big batch to Diversification to Individualization to involvement and rapid response
Focus of Production
Quantity to Quality to Services (quality, price,
after service, etc.)
Management Centralization to Independent to Cooperative to full play of personal creativity
Relationship to natural Resource
Utilization of natural resource to Saving natural resource to Preserve & renew natural resource
Relationship to Environment
Damages environm-ent to Pays attention to environment to Preserves & beautifies environment
The manufacturing systems for the next century should possess the features of agility,
intelligence, rapid response and favor high quality products, small batch sizes,
individualization requirements, consumer involvement, and environmental
consciousness. The manufacturing systems characterized by the above
features have been named as intelligent manufacturing systems on which extensive
studies have been conducted.
v Modern Manufacturing Systems and Production Modes
Over the past one or two decades, a great amount of effort has been invested by the
industrial world and academia to explore the advanced manufacturing system and
technology that will deal with manufacturing complexities originating from
globalization of markets, stringent competition environment and overload of constraints
on the manufacturing environment. And many manufacturing systems and production
modes have been proposed. According to the literature published by CIRP and other
manufacturing periodicals during the latest decade, nearly 34 modern manufacturing
systems and production modes have been proposed. Some of the key systems are listed below
GT (Group Technology)
. TQC (Total Quality Control)
. MRP-I (Material Requisite Planning)
MRP-II (Manufacturing Resource Planning)
. FMS (Flexible Manufacturing System)
. JIT (Just In Time)
. CAPP (Computer Aided Process Planning)
. CIMS (Computer Integrated Manufacturing System)
. CDP (Customer Driven Production)
. BR (Business Reengineering)
. CE (Concurrent Engineering)
EFM (Environment Friendly Manufacturing)
. LP (Lean Production)
. AM (Agile Manufacturing)
MAMS (Multi-Agent Manufacturing System)
. VM (Virtual Manufacturing)
LCE (Life Cycle Engineering)
GM (Green Manufacturing)
. CM (Collaborative Manufacturing)
. RM (Remote Manufacturing)
. TPM (Total Production Maintenance)
. OAMS (Open Architecture Manufacturing System)
. IMS (Intelligent Manufacturing System)
. FE (Fractal Enterprise )
ERP ( Enterprise Resource Planning)
SOPS (Self-Organized Production System)
. RMS (Reconfigurable Manufacturing Systems)
. GM (Global Manufacturing)
. NGMS (Next Generation Manufacturing System)
Some of the above manufacturing systems and production modes have been maturely
applied to practical manufacturing areas and have dramatically reduced the lead time of
products. Some are still undergoing investigation or conceptualization. Behind these
manufacturing systems and production modes lies the continuous pursuit of design
intelligence, manufacturing intelligence and management intelligence, or the enterprise
intelligence as a whole.
v Intelligent Mathematics for Modern Manufacturing System Modeling
In order to model increasingly complex manufacturing systems, numerous mathematical
methods, especially the so-called non-conventional mathematical tools, have been
widely used. Some applications of these mathematical methods in the manufacturing
arena have achieved exciting progress.
1. Expert System (Knowledge Based System)
2. Pattern Recognition
3. Graph Theory
4. Similarity Theory
5. Optimization Theory
6. Game Theory
7. Time Series Analysis
8. Wavelet Analysis
9. Computer Vision
10. Natural Language Processing
11. Knowledge Representation
12. Heuristic Search
13. Constraint Based Search
14. Confidence Theory
15. Qualitative Reasoning
16. Reasoning Technologies
17. Machine Learning
18. Machine Proving
19. Multiple-Valued Logic
20. Fuzzy Logic
21. Artificial Neural Network
22. Petri Networks
23. Immune Networks
24. Genetic Algorithms
25. Artificial Life
26. Associative Memory
27. Blackboard Architecture
28. Multi-Agent Systems
29. Non-Classical Control Theory
30. Operations Research
31. System Engineering
32. Simulated Annealing
33. Combinatorial Mathematics
34. Fractal Theory
35. Chaos Theory
In the practical applications, these methods are usually combined with each other to deal
with planning, design, process control, and system integration, etc. Research examples
can be frequently found in technical literature. The wide application of these intelligent
mathematical methods or their combinations in manufacturing will definitely promote
the development of manufacturing system modeling and provide new solutions to the
v Agent and Agent-Based Manufacturing
Currently, the open architecture Multi-Agent System (MAS) has become the main
research direction.. Agents are now being widely discussed by researchers in
mainstream computer science . Though there is not a
universally accepted definition of agent, it does not prevent people from expanding the
application space of agent technology. In practical application an agent is usually
considered as a self-directed program object which has its own value system and the
means to solve certain subtasks independently and then communicate its solution to a
greater problem solving process, either on its own initiative or on request from other
Any agent comprises of the following components
• Knowledge processor, a knowledge base system that stores and processes the
necessary knowledge for an agent to play the role the agent society has designed for
• Perception, a channel for an agent to receive information from the external world.
• Effector, an interface for an agent to modify or influence the state of the agent
• Communication, a mechanism for an agent to exchange views with other members
in the agent society.
• Objectives, a list of roles for an agent to play.
The MAS is an open and distributed system that is formed by a group of agents
combined with each other through a network for cooperatively solving a common
problem. The MAS has been applied in many areas. The modern manufacturing system,
which is a highly decentralized system, is one of the typical representatives of MAS
application. A great deal of research effort has been devoted to agent-based
manufacturing. Some leading manufacturers and government agencies in the USA are
claiming that agent-based manufacturing is the future for US manufacturing and agent
technology is the fundamental technology for implementing the agile manufacturing
There is multifold advantage in using an agent-based approach for manufacturing. First,
manufacturing information is stored and processed in a distributed manner as opposed
to being stored in one large program. Second, it makes the incremental improvement of
the manufacturing system possible through the learning and cooperation in agents.
Third, it provides a promising method for enterprise integration.
v MA and Agent-Based Intelligent Manufacturing System Architecture
The application of agent technology in many manufacturing aspects have been
investigated, however, a general agent model suitable for manufacturing applications
still remains to be constructed.
Intelligent Manufacturing Agent
In manufacturing, an agent represents an object with certain intelligence, which is either
a physical object such as a worker, a machine tool, and the like or a logical object such
as an order, a task, etc. In order to establish an agent-based manufacturing system, the
model of the Manufacturing Agent (MA) must first be defined.
Procedure repository, inference mechanism,
knowledge base, and perception processor constitute the knowledge processing unit for
the MA. The self-learning, self-organizing, and self-adapting are the optimizers of the
MA. The simulation expert provides behavior evaluations for the MA. Working
memory stores the temporary data produced by the other parts of the MA. The
communication mechanism manages the message exchanging tasks of the MA with the
other members of the system. The coordinator coordinates the internal functions of the
MA, meanwhile it receives the coordination requests from other MAs
The main features of MA are:
• Self similarity: Every MA has a similar structure.
• Self learning: The MA has coordinated learning ability that contributes to an
emergent improvement of the whole system behavior.
• Self adaptation: The MA has the ability to adjust its behavior intention according
to different rules.
• Self organization: The MA can organize or configure its internal procedures to deal
with different tasks.
• Self maintenance: The MA can monitor the state of itself and keep itself in the
most efficient condition.
v Demands on modern ERP
Conventional and ERP at present focuses only on converting an organization into an Enterprise and in the process creating higher collaboration and resource utilization. This is both an advantage and draw-back because the dynamics and orientations of modern manufacturing as discussed above drive systems requirements of organizations far beyond resource utilization. Certain amount of Artificial Intelligence has to be built into the very foundations of the ERP. How then can modern ERP systems be re-oriented. The answer to this question is that the following factors must be incorporated into ERP systems.
1. All ERP must be based on sound synergy of Manufacturing Architecture and System architecture. System architecture must incorporate modern trends in production which reduces Customizing time. This in turn demands that all manufacturing systems be built on some principles like lean manufacturing , Agent based , Virtual Enterprise or Holonic systems.
2. Next Generation ERP systems demand an OPEN ARCITECTURE SYSTEM which is flexible and can be re-oriented as and when the need arises. In an OAS it is easier for few key stake-holders to make changes on the software or even execute updation under an over all framework of procedures. There are several kinds of OAS systems being created in the market and many companies in the US rival SAP and their implementations by advocating the OAS architectures
3. Another demand on ERP is Predictive Analytics and managing Uncertainty : The Software must be able to make MDP (Multi Dimensional Predictions and Co-ordination). This involves quantitative adaptation on the part of the ERP and the ability to see through a maze of data and Information. The utility of an ERP in the production and Operations environment in the future depends on its ability to assimilate this feature in all its operational elements and dimensions and give guidance to production managers on an on-going basis not necessarily on demand as conventional Enterprise solutions do.
4. ERP must support Intuitive Functionality in its operations. Under the open Architecture the ERP becomes open to a wide network of data inputs 40% larger than conventional closed ERP architectures. It must create a collaboration of the enterprise based on intuition for better real time operations. Most managerial situations on a day to day basis leverage on this feature for operational efficiency critical to Modern operations. For example a supply of raw material might have been defaulted due to some reason and the software must communicate to all concerned in the enterprise about the default and also suggest possible remedies.
5. ERP must use Artificial Intelligence tools and procedures : ERP must integrate itself with neural networks and robotics. To make operations procedure lean robotics and other AI related tools are integrated into the manufacturing system. Another key factor is machine learning. ERP acts as an engine supporting the entire process of manufacturing and operations and must necessarily learn from the operations in the future . This learning must be incorporated into the decision making process and process integration processes. ERP must cease to be dumb and must act as an Engine constantly in AI processes like Learning.
6. ERP must provide CPFR and Supply Chain Visibility : Managing uncertainty using probabilistic models is another demand on ERP in the future. The entire supply chain is bound by uncertainty and random processes because of the kind of environment in which it operates. CPFR which stands for Coordinated Planning Forecasting and Replenishment is the onus of the modern ERP in general
7. ERP must be a constant Knowledge Generator and not just an Information processing tool : Conventionally organizations worked in the realm of data with some degree of processing. With advent of computing and Information systems organizations moved towards better understanding of relationships between data leading to Information based Organizations. We are now in the era of knowledge economy and knowledge goes much beyond the precincts of information processing. ERP in modern times must involve itself in knowledge Engineering not only in manufacturing and operation functions but also into all areas of the Supply Chain. ERP must be able to create fresh knowledge and process the knowledge even further entering into the finesse of Knowledge management. This knowledge must be actively used in Production and Operations
8. ERP must have multi-language multi-currency capabilities: With globalization plants are being located around the world. Sometimes plants have to be located in other countries within a very short period of time. Country incompatibility would render an ERP redundant and with many such plant shifts likely to occur the ERP would end up becoming of very little operational use. Modern ERP must be prepared for multi-lingual capabilities of at least some key languages and even with translator software’s. The base could still be the English language or any other language with guest country languages written in the English script. Needless to say all key international currencies must be supported by the ERP and their fluctuations in the international market accounted for automatically by the ERP even on a daily basis.
9. Faster Implementation of ERP and quick Integration : One of the problems with ERP is the long implementation times. 55% of ERP implementations involve cost and time over-run. Even the best of the implementation methodologies under go over-runs. There are many reasons for such occurrences. If ERP implementations take excessive time ERP will become obsolete vis-à-vis business processes. ERP must scale and change itself from one or some reference points of business processes and there after synchronize itself. The production environment is changing at a fast pace in techniques and methodologies to remain competitive. ASAP was one of the techniques developed by SAP for faster implementations. Today there are companies that build Enterprise Spread Sheets that concur with existing IT systems of an organization.
10. Web enabling to Integration : Emerging manufacturing scenarios goes way ahead of what conventional ERP software’s provide- web enabling. This means a ERP system can take advantage of a public system like the internet as and when it requires . There is a time lag faced in such transactions. Web integration on the other hand through a fire-wall systems helps ERP get inflow of internet information as –if internet were an integral part of an ERP. Such enabling is becoming a need of the hour. ERP must go beyond only Internet enabling and must also be amenable to enabling of various Intranets.