This illustration captures the automated flow of information and materials between Pharmacia Puurs and Belgian corrugated vendor VPK. Every Monday, Pharmacia’s ERP software automatically sends a 13-week Manufacturing Resource Plan (MRP) over the Internet to VPK. Visual Basic software programmed internally at Pharmacia confirms that the file has been sent and that VPK has received it. VPK calculates how much stock-to-deliver corrugated—which it produces for Pharmacia in advance and holds in inventory—is required at Pharmacia that week. VPK also calculates how much high-volume corrugated it must produce to stock in order to replenish the inventory it holds for Pharmacia. And finally, VPK calculates how much low-volume make-to-order corrugated is required. VPK sends its replenishment calculation back to Pharmacia via the Internet and through Pharmacia’s Visual Basic software. Pharmacia’s ERP system automatically generates a purchase order according to VPK’s calculations. This order is sent via an EDI connection (one-to-one Electronic Data Interface). In the future it, too, will likely be sent via the Internet. By Thursday of that week, Pharmacia’s corrugated shipment is on its way to Pharmacia with no intervention or involvement from Pharmacia’s procurement group.
See the story that goes with this sidebar: Supply chain experts see change a comin'
