Production and Capacity Planning as well as Inventory and Distribution Control in Snack Packaging Companies Using Open Source ERP Simulation

Abstract

PT. XYZ is a company that produces cardboard packaging. The product that is most in demand by customers is snack packaging. Snack packaging products have an erratic demand that affects the production process and ordering of raw materials. Therefore, companies need a more effective improvement proposal design starting from forecasting, inventory, distribution, production planning, and ERP simulation. The data needed to start the research are the raw materials used, data on demand for snack packaging products for the past 1 year, lead times for raw materials, machines used, and other data. Data processing begins with forecasting using the Double Moving Average, Single Moving Average, Weight Moving Average, Double Exponential Smoothing, Single Exponential Smoothing, Cyclic, Linear Regression, and decomposition methods followed by validation and verification of forecasting methods Mean Absolute Deviation, Mean Square Error, Mean Absolute Percent Error, and Standard Error of Estimate. Forecasting results that have been verified are followed by aggregate planning, Rough Cut Capacity Planning with Capacity Planning using Overall Factors, Bill of Labour Approach, Resource Profile Approach, safety stock methods, Material Requirement Planning with the Least Unit Cost, Lot for Lot, Silver Meal, Economic Order Quantity, Period Order Quantity, Capacity Requirement Planning, Distribution Requirement Planning, and Enterprise Resource Planning methods. The proper forecasting method used is the decomposition method which has the least error compared to PT. XYZ methods. The calculation of mixed aggregate planning (overtime and shifts) is the right method because it costs the least total cost, namely ${\$}$ 34023.54. The results of Capacity Requirement Planning and Rough-Cut Capacity Planning calculations do not indicate a lack of capacity to meet the demand for the Master Production Schedule. The proper Material Requirement Planning method is the Period Order Quantity lotsizing method with a 47.6% savings compared to PT. XYZ. Proper distribution planning using the Distribution Requirement Planning method with a savings of 36.3% compared to PT. XYZ methods.