Enhancing ERP system's functionality with discrete event simulation

Abstract

Purpose-To develop a methodology to augment enterprise resource planning (ERP) systems with the discrete event simulation's inherent ability to handle the uncertainties. Design/methodology/approach-The ERP system still contains and uses the material requirements planning (MRP) logic as its central planning function. As a result, the ERP system inherits a number of shortcomings associated with the MRP system, including unrealistic lead-time determination. The developed methodology employs bi-directional feedback between the non-stochastic ERP system and the discrete event simulation model until a set of converged lead times is determined. Findings-An example of determining realistic production lead-time data in the ERP system is presented to illustrate how such a marriage can be achieved. Research limitations/implications-The research demonstrates that the limited planning functionality of the ERP system can be complemented by external system such as discrete event simulation models. The specific steps developed for this research can be adopted for other enhancements in different but comparable situations. Practical implications-The organizations who have been using the discrete event simulation in their planning and decision-making processes can integrate their simulation models and the ERP system following the steps presented in this paper. The ideas in this paper can be used to look for automatic data collection process to update or build the simulation models. Originality/value-The ERP implementation is a significant investment for any corporation. Once the ERP implementation is completed successfully, the corporations must look for ways to maximally return on their investment. The research results may be used to enhance the implemented ERP systems or to fully utilize the capabilities in a corporation.

Business Process Management: Use of Simulation in the Public Sector

“…They are some kind of extension to the existing information system. This is a similar thesis that has been already confirmed by Moon and Phatak (Moon and Phatak, 2005). They demonstrated that the limited planning functionality of the Enterprise Resource Planning (ERP) system can be complemented by the discrete-event simulation models.…”

“…Greasley and Barlow (Greasley, 2005) analyzed a business process approach to a change in a custody-ofprisoner process. Ozbay and Bartin (Ozbay and Bartin, 2003) studied an incident management situation with the Arena simulation package. Hlupic and de Vreede (Hlupic and de Vreede, 2005) used simulation modelling and analysis to reduce the risk of business process innovation in an outpatient's department.…”

Development of a product design and supply-chain fulfillment system for discontinuous innovation

“…Moon and Phatak (2005) noted that simulations can often capture and describe the complex interactions within a particular manufacturing or supply-chain system where traditional analytical methods fail. On the other hand, mathematical techniques can assist in the development of parameters in a modelling effort, how individual agent characteristics affect a system, and identification of agents to develop an agent-based modelling (ABM) effort (Surana et al 2005).…”

“…One, simulations are developed offline and separate from enterprise software packages (Yoon and Shen 2006), limiting observations to single event analysis. Moon and Phatak (2005) found that traditional simulation models are usually not built for repetitive and continuous usage partially due to the laborious data collection process. Difficulty in automatic collection of data and continuous update of the data for the built simulation model discourages further usage of the initial model.…”

Teaming ERP System Efficiently into an Academic State of Affairs

“…The biggest challenge of teaching the fundamentals of the ERP systems in Universities is to teach it as a whole since the essence of the ERP system is its integrative nature [14]. Institutions are looking for new tools, methodologies and solutions to multifaceted problems.…”