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Bolt-On/Middleware Examples

Bolt-On/Middleware Examples. Kellogg Company Brown et al. [2001] Dow Corning Teresko [1999]. Kellogg Company Bolt-On. Kellogg developed their own ERP Forecast demand Take customer orders Coordinate raw material purchasing Coordinate production of over 100 food products

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Bolt-On/Middleware Examples

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  1. Bolt-On/Middleware Examples Kellogg Company Brown et al. [2001] Dow Corning Teresko [1999]

  2. Kellogg Company Bolt-On • Kellogg developed their own ERP • Forecast demand • Take customer orders • Coordinate raw material purchasing • Coordinate production of over 100 food products • Coordinate distribution • Added linear programming Kellogg Planning System (KPS) • Production, inventory, distribution planning • Budgeting & capacity expansion

  3. History • Long user of MRP, DRP (distribution resource planning) • 1987 realized product line growth, international expansion led to need for more computer support • Developed KPS in 1989, modified over time • By 1994 strong cost system in place • Saved $4.5 million in 1995

  4. Kellogg LP • Minimized total cost • Purchasing, manufacturing, inventory, distribution • Variables: product, package size, case size • 30 week planning horizon • Constraints: • Line, packaging capacities, flow constraints, inventories, safety stocks • 700,000 variables, 100,000 constraints, 4 million non-zero coefficients

  5. Kellogg LP • Continuous model took several hours to run • Generated starting solution for managers • Probabilistic features dealt with through safety stock • Example of bolt-on to ERP • Linear programming generated better plans

  6. Dow Corning System Integration • 1995 adopted SAP R/3 to integrate global business practices • Also adopted SAP data warehouse • Consolidated information generated internally, externally • Internal: plant-floor data, patent information, benchmarking • Allowed deeper data analysis

  7. Dow Corning System • Over 4,000 users had access • Integration & data compatibility problems dealt with by data warehouse • Added automated data collection system • Required middleware • Middleware allowed expansion into supply chain management

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