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"Implementing ERP Systems (After the Millennium bug has been exterminated)"


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Conference Room Pilot

The following ERP conference room pilot was designed for an aerospace component manufacturer running an MRP2 system. You can adapt this scenario to create a test plan to suit your company's operations and proposed implementation path, and run it prior to "going live". It does not include some e-commerce characteristics. A conference room pilot is designed to suit your circumstances however and as such this is provided as a guide only. You will need to adapt this one, to reduce your risks. This article should be read in conjunction with "Implementing ERP Systems (After the Millennium bug has been exterminated)" and "25 questions to ask your IT specialist"

Links to related training and further reading on left

Purpose of Conference room Pilot:

  • To see that the computer software can support all the things we need to do. (And many of the things that can go wrong in the business.)
  • To identify operational responsibilities.
  • To identify new procedures needed, and to test draft procedures and policies.
  • To identify training needs.
  • To identify implementation method and issues to be resolved.
  • To test problem management procedures.
  • To confirm data definitions (will the system interpret the data codes devised and be able to use them)
  • To confirm data conversion rules (will the new system use the data converted from the old system properly)
  • To confirm the system testing already carried out, for batch processes and job streams and interfaces, will work in a repetitive production environment.

Who needs to participate?

Task Day 1 Day 2 Day 3 Day 4 Day 5 Day 6
1 ? ? ? ? ? ?
2 ? ? ? ? ? ?
3 ? ? ? ? ? ?
4 ? ? ? ? ? ?


Mode of operation

  1. The routine business processes associated with the complete production planning, execution and financial cycle will be simulated in a room running on compressed time. This will entail resetting the calendar at the end of each simulated days processing.
  2. As far as possible people will play their normal roles, or a person from the function will represent a number of roles from that function.
  3. The IT department will perform the role of system support and paper outputs will be requested from them and distributed by them.
  4. In the event of computer or program problems which cannot be immediately resolved, the session will be abandoned for that half day and resumed when the system problem is resolved.
  5. Problems will be documented at the time, using the problem management system.
  6. Each participant will make notes of all significant problems and issues for discussion at the end of each half-day.
  7. A key requirement is that the data to be processed is as realistic as possible and represents the range of possible data values. I.e. Typical products, order types, typical routes etc. It should also test that data converted from the old system will work in the new environment.
  8. Detailed business scenarios need to be produced in advance, and will form the basis of the detailed proposed detailed procedures.
  9. A key requirement is that the system is operated during the conference room pilot in the same way that it will be operated routinely in operational use. An example would be that Customer names and addresses are held once only and are used by the manufacturing and financial systems by an interface. This interface method must be used in the conference room pilot.
  10. The software supplier or an in-house application expert will be in attendance for the duration of the conference room pilot.
    1. Housekeeping at the end of each half-day will include running a backup representing close of play. (In the event of a problem the pilot can then be replayed). A backup should also be taken at the end of the initial data load, so that the pilot can be replayed from the start if necessary. This will also provide a convenient point to run batch interfaces, and reset the calendar if necessary.
    2. At each stage of the pilot it should be assumed that the actions you have taken were incorrect and later information has now arrived which means that that session's work must be undone. This is to be achieved through transactions in the system and not by recovering the data to the last backup. Notes must therefore be taken of any deviations from the provided scripts.
    3. Disaster recovery is to be tested by assuming a simulated disaster at three critical stages: Immediately before the overnight housekeeping Immediately after the overnight housekeeping Assuming a mid session failure (during the on-line day)
  11. Enquiries should be made on the live data to simulate requesting of current data. At any stage the person acting the role of sales, accounts, planning, purchasing, quality, or General Manager, may ask any question of any other function. E.g.
    1. When can I have my parts?
    2. What is the effect of that latest change?
    3. How much?
  12. System wide parameters should be set as agreed at the outset of the pilot.
  13. Daily, weekly, period end, and annual processing routines can be scheduled at any time but should be scheduled to include part complete, work order purchase orders, receipts and despatches not paid, invoices not processed etc. to represent the real world as far as possible.


You may choose to implement the system in a particular way for example to load the static data before the dynamic data using interfaces or migration programmes. Before doing this please read "Implementing ERP systems". In particular you need to test the migration path as follows:

  1. Load the static data
  2. Check to see that all aspects of the system are operable using that data (loading dynamic data next is a non-trivial exercise)
  3. Load the dynamic data
  4. Check to see that all aspects of the system are operable using that data
  5. Start the scenario below

Preparation for the conference room pilot

1. Prepare in advance a scenario for a representative (small) range of products:

  • Existing customers (UK�,$,Euro), with at least one low credit limit and different ship and billing address
  • Existing product / BOM / Batch sizes / safety stocks / lead-times / current stocks and WIP, material costs
  • Existing suppliers (�, $, Euro), with cheque, BACS, Swift, Proforma payment methods.
  • Existing work centres, and cost rates (std, current actual, future)
  • Stock locations for: Goods Inwards Inspection, Raw materials Stores, Finished parts, stores, despatch, sub contractor, Quarantine
  • Existing route(s) / Times / Outwork costs / planned yields

And load above to database in advance. Note if this data is being converted from the existing system, it should be loaded at this time. Initial interfaces must be run to ensure a valid start position with all databases synchronised. (Including finance, tools etc.)

2. All scenario scripts must be completed and individually tested by the appointed team members.

3. Prepare routine management reports, in job streams and ad-hoc reports to be run at suitable points of significance in the process.


Consider both new & existing products in each case:

A. Raise Quotation

(This part of the pilot is different for new products or repeat orders possibly from different customers.)

  1. Qualify
  2. Tech Edit/ Contract review/ reconfiguration / credit limit
  3. Raise new product codes / BOM (run CAD interface)
  4. Raise new routes (run CAPP interface)
  5. Allocate route to product (include alternative method)
  6. Check
  7. Complete cost details
    1. Materials / weights / costs check?
    2. Yields check?
    3. Subcontract costs check?
    4. Cost rates (std, actual, budget)
  8. Calculate ex-works cost
  9. Packaging costs check?
  10. Transport costs check?
  11. Commissions check? Etc.
  12. Calculate total cost (roll up)
  13. Change costs/work centre rates/route/time/yield and repeat
  14. Set selling price
  15. Delivery / Capacity check via MPS/RCCP
  16. Issue quote

B. Raise sales order / schedule

  1. Forecast spares requirements. Convert to sales order
  2. For new order, change Tech edit / Contract review  / credit check
  3. Check for existing valid quote
  4. If not valid raise new quote
  5. Check delivery feasibility (MPS, RCCP)
    1. Create load profile
    2. Update capacity & create new resource
    3. Run MPS
  6. Raise sales order (consume forecast)
    • Within cumulative lead-time
    • Outside cumulative lead-time
    • Beyond MPS horizon
    • Within MPS horizon
  7. Raise acknowledgement to customer
  8. Value order book

C. Take Action on MRP/CRP reports at:

  1. Change batch size, lead time, safety stock
  2. B6,D3,D4,D5,E3,F1,G,H1,H2,H3, I1,I2,J1,J5,J8,J9,J14,J15,J16,J17,J18,J19,K1,K2,K3

D. Raise production / purchase orders/schedules

  1. Raise end product order using MRP
  2. Raise lower level orders using MRP
  3. Create / release shop orders
  4. Repeat through BOM
  5. Raise new supplier (address, terms, item price, special packaging, specs, single /dual source, sourcing rules)
  6. Issue request for quotes
  7. Raise raw material order using MRP
  8. Amend / Cancel PO
  9. EDI
  10. Run purchasing reports

E. Capacity Planning

  1. Check capacity needed on all resources
  2. Assume capacity overloaded
  3. Reschedule order to smooth capacity
  4. Produce work-to lists for all work centres

F. Change sales order due date / quantity (pull forward /push back/cancel orders)

  1. Act on MRP / CRP reports (manufacturing and purchasing)
  2. Re-EDI

G. Change BOM / Route under engineering change

  1. Using CAD/CAPP interface

H. Goods Inwards

  1. Receive purchased parts (partial / full / early / late)
  2. To goods inwards inspection
  3. Sample / full inspection
  4. Direct to stores
  5. To WIP
  6. Reject / return to supplier / debit note / inspection report
  7. Concession / accept locate in stores
  8. Missing C of C
  9. Track-side ("back-flushed") parts

Run accounts payable interface

I. At issuing time prepare kit / prepare tools and issue

  1. Issue with shortages / without shortages
  2. With standard or alternative parts
  3. Issue / Back flush parts to WIP
  4. Shortage clearance (made in, bought out)

J. Booking Process

(This process will follow through from piece-part manufacture to sub-assembly to final assembly)

  1. Book 1st order to first milestone (include back flush op) (Report: yield & actual progress, time, etc.)
  2. Book 1st operation on second order
  3. Produce updated work-to list for 2nd operation
  4. Book 2nd operation out of sequence
  5. Report excessive scrap / loss / find
  6. Re-plan to overcome shortage, expedite, and then clear shortage early
  7. Change supplier with different costs
  8. Change route / work centre/ route part (for this order only / permanent route change but include existing orders)
  9. Reject work
  10. Schedule and book rework operation
    1. Extra operation
    2. Rework order
    3. Whole route sub-contract
    4. One operation rework
    5. Add extra material
  11. Send to subcontractor (routed sub-contract and un-routed (abnormal)
  12. Receive back from subcontractor (sample / full inspection)
  13. Reject to subcontractor from WIP and Goods in
  14. Receive back again (good material and concession)
  15. Split batch and send ahead
  16. Partial receive to stores
  17. Receive / lose / find / despatch free issue material / line feed material
  18. Mismatched assembly part
  19. Complete orders / raise release note / C of C
  20. Check for credit hold
  21. Despatch both orders (full and partial ship, normal address, alternative address. Drop ship, Bill of lading / export documents)
  22. Customer return / credit / strip down / replacement of faulty part / repair. Supply of free issue material
  23. Run accounts receivable interface
  24. Intrastats (To / from EEC)
  25. Invoice Euro / � / $
  26. Review:
    1. Costs verses estimate / std
    2. Delivery performance
    3. Utilisation
    4. Sales forecast
    5. Purchase commitments

K. Stock Adjustments

  1. Unplanned receipt / issue
  2. Adjustment
  3. Stock take / perpetual auditing

L. Product recall

  1. The concession we made earlier has caused an aircraft crash!
  2. What other batches are affected and which products must we recall, (include at least one other raw material batch.)

M. Consumables

  1. Raise / authorise purchase requisitions
  2. Run reorder report based on consumables stock status
  3. Buy / receive consumable items
  4. Run accounts payable interface

N. Accounts Payable

  1. Reconcile manufacturing view and ledger view
  2. Suspense accounts
  3. Match & Pass
  4. Post
  5. Price variance
  6. Invoice and GI reserves
  7. Pay (Cheque, BACS, Swift, pro forma), (normal, abnormal)
  8. Debits / credits
  9. Currency requirements
  10. Aged creditors / balances
  11. Bank reconciliation
  12. Pay the electric bill (no purchase order or goods receipts)

O. Cost of Sales

  1. Std
  2. Actual / margin

P. Accounts Receivable

  1. Reconcile manufacturing view and ledger view
  2. Suspense accounts
  3. Post invoices
  4. Post payments (Cheque, BACS, Swift, pro forma), (normal, abnormal)
  5. Debits / credits
  6. Currency conversion
  7. Aged debtors / balances (credit control)
  8. Bank reconciliation
  9. Forecast sales income

Q. General Ledger / inventory accounting

  1. Reconcile manufacturing view and ledger view ( stock, bookings)
  2. Suspense accounts
  3. Utilisation (std hours)
  4. Stock / WIP valuation (std, actual, movements, variances, scrap analysis
  5. Overhead analysis

R. Period end + Year end

  1. Can we despatch / receive on 1st of month?
  2. What goods-out are invoiced?
  3. What goods-in are not invoiced by supplier, or paid by us?
  4. Calculate reserves
  5. Run ledger interfaces
  6. Run P & L, Balance sheet
  7. VAT return

S. Year-end std cost changes

  1. Period end plus
  2. Roll work centre cost rates and recalculate (cost roll up)

T. Archive


  1. Old parts
  2. Old routes
  3. Old stock movements
  4. Old bookings

U. Retrieve from archive, product recall data etc.

  1. Old system data
  2. New system data
  3. Mixture of old and new system data


Bookmarks for this topic above:

Our full range of training

Relevant Training / Workshops

Expert Systems / Tools

Relevant Further Reading


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Home Page Public Training Course Schedules Over 150 Best Practice Articles Expert Systems / Tools This Month's Features / News About Us Your Question / Contact Us

Think Differently!

Whilst great care has been taken to provide relevant, accurate, practical, advice based on our considerable process design and development experience, this will almost certainly require interpretation into the context of your unique business. Please be careful in doing so and if in doubt seek expert advice. We would welcome your feedback!

SM Thacker & Associates 2010

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