1 ERP MODULES All ERP packages contain many modules.

The common modules which are available in almost all ERP software packages are as following: 1. !. $. &. '. *. +. -. inance "anufacturing # Production Planning %uman Resources "arketing (ales # )istribution Plant "aintenance ,uality "anagement "aterial "anagement

FINANCE MODULE 1. A set of processes are [Link] so that they can provide the financial information in the form that is [Link] by the user/ such financial solution is provided by the ERP package. !. The financial application component of the ERP provides us with the information of financial functionality across the different business area. $. The finance business of ERP also provides analysis support to the business. &. The finance module of the most ERP system will have the following subsystems: a. inancial Accounting 01eneral 2edgers/ Accounts Receivable 3 Payable/ i4ed Asset Accounting5 b. 6nvestment "anagement 06nvestment Planning 3 7udgeting 3 8ontrolling5 c. 8ontrolling 08ash "anagement/ Treasury "anagement5 d. Enterprise 8ontrolling 0E6(/ 7usiness Planning and 7udgeting5 [Link] ACCOUNTING 1. The financial accounting system ob9ective is to provide company:wide control and integration of financial information which is [Link] for strategic decision making.

2 !. The inancial Accounting "odule of an ERP system/ gives you the ability to centrally track financial accounting data within an international framework of multiple currencies/ companies and languages. Eg: ;hen raw material moves from inventory into manufacturing/ the system reduces .uantity values in inventory and subtracts value for inventory account in the balance sheet. I. GENERAL LEDGER a. The general ledger is essential to both financial accounting system and to strategic decision making. b. The general ledger supports all the functions which are [Link] in financial accounting system. 6t contains of sub: ledgers. c. The 12 provides document parking/ posting/ reporting/ and an integrated financial calendar for automating periodic activities. d. 6t provides the summary information from the other components at the user defined level of detail. e. According to the company [Link]/ the general ledger is structured in a number of accounts/ according to the [Link]. f. The output generated by the general ledger is the data summary that can be used in planning/ distribution and reporting. g. 6n the general ledger we can also create our own database table and non standard fields as per the [Link] of the business organi<ation.

PURCHASING (QUANTITY AND VALUE)

SALES (ORDER AND BILL)

VENDOR (PAYABLE)

CUSTOMER (RECEIVABLE)

FIXED ASSETS

EMPLOYEES (SALARY AND WAGES)

GENERAL LEDGER

TYPICAL GENERAL LEDGER II. ACCOUNTS RECEIVABLE / PAYABLE a. ERP system provides us a financial overview of business partner relationships by maintaining accounts payable # receivable. b. These accounts are integrated with general ledger and it is associated in sales and distribution # material management. c. They are performed automatically when related processes take place in other modules. d. 6t uses the standard business rules for the data entry and reporting to processing payments and bank transactions. e. The accounts receivable and payable functions include: i. 6nternet 6ntegration ii. )ocument "anagement iii. E)6 processing iv. Automatic 6ntegration with 8ash "anagement 3

4 f. The module also provides/ enterprise wide credit management with workflow integration/ payment automation with E T and check processing etc. III. ASSET ACCOUNTING a. This module manages the company=s fi4ed asset. 6t provides the detailed information on asset related transactions. b. The functions performed by this module are: i. Provides with depreciation charge. ii. (upport throughout the complete lifecycle of the asset. iii. "anagement of capital assets. iv. 6ntegration with Plant "aintenance for management of machinery and [Link]. c. i4ed Assets: 6t does not change. Eg: 2and # 7uilding d. 8urrent Assets: 6t keeps on changing. Eg: 8ash LEGAL CONSOLIDATION a. All the financial statements should be integrated effectively with the operational data. b. The legal consolidation helps in the direct data transfer from individual statements into the consolidated report. c. The legal consolidation helps to create multiple views of consolidated data and thus we can generate separate reports for the different functions of an organi<ation.

IV.

[Link]: a5 This module gathers the functions [Link] for effective internal cost accounting. b5 6t offers a versatile information system/ with standard reports and helps in analysis. I. OVERHEAD COST CONTROLLING:a5 "any organi<ations e4perience a significant increase in the percentage of indirect costs/ which cannot be directly assigned to either the products manufactured or to the services rendered.

5 b5 ;hile cost monitoring and optimi<ation may be .uite advanced in production areas> transparency is often lacking in overhead cost areas. c5 The over head cost controlling system focuses on monitoring and the allocation of overheads. II. COST CENTER ACCOUNTING: a5 6t analyses where the overheads have occurred in the organi<ation. b5 The cost is allocated to various sub areas of the organi<ation and the [Link] are followed so that we can come to know where the e4penses have been incurred. III. OVERHEAD ORDERS: a5 This system collects and analyses costs and also checks and monitors the budget that has been assigned. IV. ACTIVITY BASED COSTING: a5 This module gives a response to the growing need for monitoring and controlling cross:departmental business processes. b5 This system automatically determines the utili<ation of business processes by products/ customers and other cost ob9ects based on the cost drivers taken from the integrated accounting environment. V. PRODUCT COST CONTROLLING: a5 6t determines the cost arising from manufacturing a product or providing a service. VI. COST OBJECT CONTROLLING: a5 This module helps in monitoring the manufacturing orders. b5 6ntegration with the logistics component results in a logistical .uantity flow/ that provides instant information on actual cost ob9ect costs/ allowing ongoing costing calculations at any time. c5 ollow up calculations determine and analyse the variances between actual manufacturing cost/ and the plan cost resulting from product cost planning. VII. PROFITABILITY ANALYSIS: 5

6 a5 Profitability analysis subsystem e4amines the sources of returns. b5 6nformation from profitability analysis/ frames important decisions in areas such as determining prices/ selecting customers/ developing conditions and choosing distribution channels. 3. INVESTMENT MANAGEMENT: a5 6nvestment management process starts from the planning of an organi<ation till the settlement of an organi<ation. b5 The investment programs are carried out in each and every department and it also tells us the up to date information about funds/ plant cost and actual cost from e4ternal and internal activities. c5 The investment program allows to distribute budgets which help us to monitor the budget and avoid over run. d5 6t also helps us to manage and plan capital pro9ects. e5 The investment measures that need to be monitored are done from time to time according to the internal order. [Link] MODULE a5 The organi<ation can gain a significant competitive advantage by efficiently managing the short term/ medium term and long term payment flows and managing the risk. b5 All these operating divisions are linked so that the financial transactions can be planned and these positions in treasury have a significant impact on the organi<ations success. c5 6t also helps in management and control of cash flow. d5 "anages the risk among all the division of organi<ation. e5 The treasury component provides us with the following sub components: 1. 8ash "anagement !. Treasury "anagement $. "arket Risk "anagement &. unds "anagement

[Link] MANAGEMENT 6

7 a. 6t allows us to analy<e financial transaction for a given period of time. b. 6t provides the information on the sources and the uses of funds to secure [Link] so that the payment obligation can be met on time. c. 6t also monitors and controls the incoming and outgoing payment flow and provides the data for managing short term money market investment.

[Link] MANAGEMENT a. The treasurer takes the result of current [Link]/ currency and the risk position on the money and the capital market before taking decision in the form of financial instruments in treasury management. b. The treasury management component offers functions for managing financial deal and position. c. 6t also supports fle4ible reporting and evaluation structure for analy<ing position.

III. MARKET RISK MANAGEMENT a. This plays a vital role within the Treasury/ in ensuring your company=s competitiveness. b. This module provides us with the feedback which consists of data collection risk measurement/ analysis and active planning process for the financial instruments. c. This process deals with the treasury and corporate functions. d. "arket risk management acts as an integrated/ central risk control station with monitoring and management functions. 7

[Link] MANAGEMENT This module supports the subsystems of fund management process from budgeting all the way through payment including monitoring e4penditures/ activities/ resources and revenues. . ENTERPRISE CONTROLLING a. Enterprise controlling comprises of those functions that will optimi<e share:holder value/ while meeting internal ob9ectives for growth and investment. b. This module includes: i. E4ecutive 6nformation (ystems ii. 7usiness Planning and 7udgeting. iii. Profit 8entre Accounting. I. E!ECUTIVE INFORMATION SYSTEMS "EIS# a5 6t provides an overview of the critical information necessary to manage the organi<ation. b5 6t integrates data from other ERP components and non: ERP data sources both inside and outside the enterprise. c5 )rill: down reporting and report portfolio are available to evaluate and present the data. [Link] PLANNING AND BUDGETING a5 7usiness Planning and 7udgeting supports the management team of business units and groups in the calculation of business targets such as return on investment. b5 6t also supports central investment planning/ budget release and tracking. c5 6t automatically transfers data about investment [Link] from transaction applications and provides e4tensive analysis functions for budget monitoring. [Link] CENTRE ACCOUNTING a5 6t analyses the profitability of internal responsibility centres. b5 All business transactions in financial accounting/ material management/ asset management and sales and distribution 8

9 which affects profit are automatically reflected in profit center accounting.

SALES AND DISTRIBUTION MODULE ;ith today=s business environment characteri<ed by growing competition shrinking cycle times and the accelerating pace of technological innovation companies are increasingly being forced to streamline business processes. %ere/ increased efficiency in sales and distribution is a key factor to insure that companies retain a competitive edge and improve both profit margins and customer service. The following are the sales related business transactions: (ales .ueries/ such as [Link] and .uotations (ales orders ?utline agreements/ such as contracts and scheduling agreements )elivery3(hipment 6nvoicing37illing After sales support )uring sales order processing/ the following basic functions are carried out: [Link] handling ,uotation preparation and processing 8ontracts and contract management0order management5 "onitoring the sales transactions 8hecking for availability Transferring [Link] to material planning0"RP5(cheduling the delivery 8alculating pricing and ta4es 8hecking credit limits 6nvoicing37illing 9

10 8reating printed or electronically documents0confirmations and so on5 transmitted

The sales and distribution module very actively interacts with the material management and financial accounting modules for delivery and billing. Typically/ a sales and distribution module will contain the following sub systems: "aster data management ?rder management ;arehouse management (hipping 7illing Pricing (ales support Transportation oreign trade MASTER DATA MANAGEMENT 1. Every company will have products/ customers and will [Link] raw materials and will have suppliers. !. The task of the "aster data management module is to keep information about all these entities/ so that these can be made available to the decision makers and also for the automatic generation of reports/ contracts/ invoices and so on.

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I"$% &'

Q%()a) (" Sales C(")&a*)s O&+e& Sh !! "# Del ,e&' I",( *e MATERIALS MANAGEMENT

B ll "#

FINANCIAL ACCOUNTING

THE SALES AND DISTRIBUTION MODULE. $. &. Automatic sales processing/ using ERP system/ [Link] that the master data has been stored in the system. 6n addition to sales and distribution/ other departments of the company/ such as accounting or materials management access the master data.

ORDER MANAGEMENT

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12 This module usually includes sales order management and purchase order management and supports the entire sales and purchase processes from start to finish. $. S%&'( )*+'* ,%-%.','-/. 1. Applications in sales order management represents a company=s most important point of contact with the customer. !. These applications allow a company to manage sales operations .uickly and efficiently and provide comprehensive solutions for the management of .uotes/ orders/ contracts/ prices/ and customer discounts. Credit chec$ing %ricing and distri&!tion Disco!nting Margin 'nalysis
Materials Management %rod!ction %lanning )areho!se Management (n oicing

(n entory a aila&ility Chec$ing (n entory commitment

Sales Order #ntry

*!otations+Contracts #D(+(nternet

Change order Management Deli ery Stat!s Monitoring "et!rns handling

Order history Statistics

SALES ORDER MANAGEMENT. $$. P0*12%(' )*+'* ,%-%.','-/ 1. Purchase order management is increasingly essential in today=s even more competitive business environment because it enables 12

13 a company to make the correct purchase decisions about .uality and price/ where .uality refers to supply lead:time as well as to the 0to be purchased5 product itself. !. Purchase order management includes online [Link]/ centrali<ed contract management/ 9ust in time schedules and vendor management.

"e,!isitions

Sched!le De-initions

%lanning+Sales+S ho. /loor

So!rcing (n-ormatio n

"e,!est -or ,!otation %!rchase Order %!rchase Sched!le

PURCHASE CONTRACTS

)areho!se Orders

PURCHASE FLO3 Purchase order Analysis enables historical as well as statistical data to be used to assist in the analysis of purchase activities. iii. 3AREHOUSE MANAGEMENT This module provides real time information about inventory levels across the enterprise and tools to manage the daily operational needs of single:site or multiple:site four wall warehouses. 13

14 8omponents of a good warehouse management application include the following:

6nventory

Planning: 8omprises of planned inventory movements/ so that customers receive right order in the right .uantity at the right time. 6nventory handling: Allows for monitoring of all warehouse order scenarios such as the receipt/ issue and transfer of inventory. 6ntelligent location assignment: @sed to create intelligent storage put away lists. 6nventory reporting: This function permits full visibility of inventory at single or multiple sites. 6nventory analysis: This module enables the analysis of information that result from warehousing activities and the use of feedback in process optimi<ation. 2ot control: This facility offers lot tracking and tracing/ so that a company can trace all the raw materials and the finished goods that its products [Link]. )istribution data collection: This is an essential element in paperless warehousing that provides the communication link between storage and shipping systems and warehousing [Link] like bar coding scanners.

SHIPPING The shipping module supports the following functions: "onitoring dates of orders due for delivery 8reating and processing deliveries Planning and monitoring work lists for shipping activities "onitoring material availability and processing outstanding orders Picking0can be linked to the warehouse management system5 Packing deliveries 6nformation support for transportation planning. (upport for foreign trade [Link] Printing and sending shipping output )ata update in goods issue. 14

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BILLING A business transaction is completed for sales and distribution once it has been billed. The ERP systems support billing functions like issue of invoices on the basic of goods and services/ issuing f debit and credit memos. PRICING 1. The term pricing is used broadly to describe the calculation of prices 0for e4ternal use by customers or vendors5 and costs 0for internal purposes such as cost accounting5. !. The pricing module keeps the information about the prices of the various items/ the details about the .uantity discounts/ the discounts to the different customer categories and so on and enables the organi<ation to generate documents like .uotations/ delivery notes/ invoices and so on. $. Also/ since this information is available to all the sales people/ they can make better decisions thus improving the sales performance. SALES SUPPORT 1. The sales support component helps the sales and marketing department to support your e4isting customers and/ at the same time/ to develop new business. !. (ales support provides an environment where all sales personnel:both the field sales people and the staff in the sales office:can contribute to and access valuable information about customers/ sales prospects/ competitors and their products and contact people. $. The sales support component functions/ both as a source of information for all other areas of sales and distribution and as an initiating force for [Link] business. TRANSPORTATION 1. Transportation is an essential element of the logistics chain. !. 6t effects both inward and outward movement of goods. $. Effective transportation planning is [Link] to ensure that shipments are dispatched without delay and that they arrive on schedule. 15

16 &. '. Transportation costs play a considerable role in determining the price of a product. 6t is important that these transportation costs are kept to a minimum in order to keep the price of the product competitive.

FOREIGN TRADE 1. The entire logistics chain/ from the import of raw materials/ finished and unfinished goods/ to the sale of goods and the transfer of data to materials management and financial accounts/ is significantly influenced by foreign trade activities. !. These main tasks in foreign trade processing can be carried out using the foreign trade system.

HUMAN RESOURCE MODULE %uman resource management is an essential factor of any successful business. The various subsystems under %R module are:

Personnel

management: 0%R master data/ Personnel administration/ information systems/ recruitment/ travel management/ benefits administration/ salary administration5 ?rgani<ational management: 0?rgani<ational structure/ staffing/ schedules/ 9ob descriptions/ planning scenarios/ personnel cost planning5 Payroll Accounting: 01ross3net accounting/ history function dialogue capability/ multi currency capability/ international solutions5 Time management: 0(hift planning/ work schedules/ time recording/ absence determination5

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Personnel development: 8areer and succession planning/

profile comparisons/ .ualifications assessments/ additional training determination. Training and event management.5 PERSONNEL MANAGEMENT Personnel management includes numerous software components/ which allow you to deal with human resources tasks more .uickly/ accurately and efficiently. Aou can use these components not only as part of the company wide ERP solution but also as stand alone systems. $. P'*()--'& A+,$-$(/*%/$)6nformation is no longer owned by specific departments/ but is shared by multiple entities across an organi<ation. This eliminates duplicate entries reduces the chance for error and improves data accuracy. $$.E,4&)5'' ,%(/'* +%/% 1. %uman resource module has a centrali<ed database with integration to multiple components for processing employee information. !. The system provides tools to save time and help you tailor the system to fit your needs. $. The %R module contains features for storing any desired information about your employees. &. "ost systems have the facility to scan the original documents for optical (torage. '. The %R 6nformation system displays graphical information such as organi<ation charts or employee data. *. The system can produce charts and reports:both standard and customer defined.

iii.R'1*0$/,'-/ ,%-%.','-/ 1. This function helps in hiring the right people with the right skills.

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!. Reducing the cost of recruiting and hiring new employees is a

challenge for the %R professional/ who is responsible for placing people in the right 9ob/ at the right time/ and with the right skills and education. $. These [Link] are fulfilled only through effective automation of the entire recruitment process. &. The recruitment component is designed to help meet every facet of this challenge. '. This component includes processes for managing open [Link]/ applicant screening/ selection and hiring/ correspondence/ reporting and cost analysis. $6.T*%6'& M%-%.','-/ 1. This module helps you in processing the travel e4penses effortlessly/ in several currencies and formants. !. %R Travel management allows you to process a business trip from start to finish:from the initial travel [Link] right through to posting in financial accounting and controlling. $. This includes any [Link] corrections and all retroactive accounting [Link]. &. Travel management automatically calculates the ta4. '. 6t automatically processes credit card transactions for a particular trip. *. Aou reimburse costs incurred during a trip through a payroll accounting/ accounts payable accounting or by data medium e4change. +. 6n addition/ Travel management provides multiple report formats. -. Aou can enter receipts in any currency and then print reports in your native currency. B'-'7$/( A+,$-$(/*%/$)1. @sing the benefits administration component/ you can define eligibility groups and rules based on a wide range of factors. !. Aou can determine the variables/ rules and costs formulas for each benefits plan.

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19 S%&%*5 A+,$-$(/*%/$)1. This function helps you in simplifying the process of rewarding your employees. !. Administration of salaries is an ongoing process within your human resource department. $. 6t is particularly important during the review processes/ when your goal is to 9ustify reward good performance. &. The salary administration module assists you in the salary review process by taking into account standard salary changes within the company as well as individual competition e4ceptions. ORGANI8ATIONAL MANAGEMENT This module will assist you in maintaining an accurate picture of your organi<ations structure/ no matter how fast it changes. 6n many cases/ graphical environments make it easy to review any moves/ additions/ or changes in employee positions. PAYROLL ACCOUNTING 1. The payroll accounting system can fulfill the payroll [Link] and provide you with the fle4ibility to respond to your changing needs. !. Payroll accounting should address payroll functions from a global point of view. $. Aou should be able to centrali<e your payroll processing/ or decentrali<e the data based on country or legal entities. &. "ost payroll accounting systems give you the options and capabilities to establish business rules without modifying the e4isting payroll. '. "any systems have the features to remind you when transactions are due for processing. *. ;ith payroll accounting/ you have the ability to tailor the system to your organi<ation [Link]. +. ;ith country specific versions of payroll accounting/ you can fulfill language/ currency and regulatory [Link].

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20 TIME MANAGEMENT 1. 6t is a fle4ible tool designed to handle complicated evaluation rules to fulfill regulatory [Link] and determine overtime and other time related data. !. The time evaluation component stores your organi<ations business rules and automatically validates hours worked and wage types. i. S2$7/ P&%--$-. 1. (hift planning module helps you to plan your workforce [Link] .uickly and accurately. !. Aou can plan your shifts according to your [Link] taking into consideration all criteria/ including absences due to leave or sickness/ and employee [Link] for time off. $. (hift planning keeps you informed at all times of any staff e4cess or deficit. &. Another advantage of shift planning is that it enables you to temporarily assign an employee or employees to another organi<ational unit where they are needed/ allowing for a temporary change of cost centre. PERSONNEL DEVELOPMENT Effective personnel development planning ensures that the goals of the organi<ation and the goals of the employee are in harmony. The benefits of such planning include improvements in employee performance/ employee potential/ staff .uality/ working climate and employee morale. $. T*%$-$-. %-+ E6'-/ M%-%.','-/ 1. A good %R system will have scheduled seminars/ training courses and business events. !. ?n completion of a training course/ appraisal forms can be automatically issued. $. Appraisals can be carried out for instructors/ attendees/ business events and training courses.

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21 PLANT MAINTAINENCE MODULE 1. The achievement of world class performance demands delivery of .uality products e4peditiously and economically. !. ?rgani<ations simply cannot achieve e4cellence with unreliable [Link]. $. "achine breakdown and idle time for repair was once an accepted practice. Times have changed. &. Today when a machine breaks down/ it can shut down the production line and the customerBs entire plant. '. The Preventive "aintenance module provides an integrated solution for supporting the operational needs of an enterprise wide system. *. The Plant maintenance module includes an entire family of product covering all aspects of plant3 [Link] maintenance and becomes/ integral to the achievement of process improvement. +. The ma9or subsystems of a maintenance module are : 1. Preventive "aintenance 8ontrol. !. [Link] Tracking. $. 8omponent Tracking. &. Plant "aintenance 8alibration Tracking. '. Plant "aintenance ;arranty 8laims Tracking. PREVENTIVE MAINTENANCE CONTROL 1. Preventive "aintenance 8ontrol provides planning/ scheduling and control of facilities and [Link]. !. Preventive "aintenance 8ontrol enables organi<ations to lower repair costs by avoiding downtime/ machine breakage and process variability. $. 8ompanies achieve higher machine utilisation and improved machine reliability and tolerance control/ along with higher production yields. E9UIPMENT TRACKING 1. [Link] is an asset that needs to be monitored and protected.

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!. 6n many situations/ [Link] maintenance costs constitute the $. &. '. *.

single largest controllable e4penditure of an organi<ation. All facets of plant location history and utili<ation history are described and tracked. This history includes [Link] and disposition information and associations between different pieces of [Link] to pinpoint operational dependencies. Each piece of [Link] is defined by a model and a serial number. All of this information can be used to create [Link] specifications/ which provide detailed information for technical specialists working in [Link] operations/ maintenance and transportation control.

COMPONENT TRACKING 1. 8omponents are typically subsets of larger [Link] and deserve the same amount of cost controlling scrunity. !. 8omponent tracking enables [Link] managers to identify components with chronic repair problems. $. They can determine whether a repair or replacement should be covered by warranty. &. Planning component replacements/ rather then waiting for components failures to occur/ reduces unscheduled [Link] downtime. '. 8omponent tracking includes repair3e4change history and component service life. PLANT MAINTENANCE CALIBRATION TRACKING Plant "aintenance 8alibration Tracking allows organi<ation to leverage their investment in the Plant maintenance module by providing for the tracking of [Link] calibration in support of 6(?CDD1 [Link]. PLANT MAINTENANCE 3ARRANTY CLAIMS TRACKING

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1. Plant

"aintenance ;arranty 8laims Tracking is an administrative system/ designed to provide control of all items covered by manufacturer and vendor warranties. !. 6t enables plant management to recover all of the warranty> reimbursements to which they are entitled but have not been able to recover in the past. $. eatures include the ability to/ establish the type:and length of warranty/ for e4ample/ elapsed day/ months: mileage stipulation/ or operating units. &. A complete history is performed fur each item covered by the warranty/ and information regarding the warranty service provider is generated. 9UALITY MANAGEMENT MODULE 1. The .uality management module supports the essential elements of a system. !. 6t penetrates all processes within an organi<ation. $. The task priorities/ according to the .uality loop/ shift from production 0implementation phase5 to production planning and product development 0planning phase5/ to procurement and sales and distribution/ as well as through the entire usage phase. &. 6t handles the traditional tasks of .uality planning/ .uality inspection and .uality control. '. The .uality management module=s internal functions do not directly interact with the data or processes of other modules. 9UALITY MANAGEMENT MODULE : FUNCTIONS: The .uality management module fulfills the following functions: 1. ,@A26TA P2AEE6E1: "anagement of basic data for .uality planning and inspection planning/ material specifications/ etc. !. ,@A26TA 6E(PE8T6?E : Trigger inspections/ inspection processing with inspection plan selection and sample calculation etc. $. ,@A26TA 8?ETR?2.: )ynamic sample determination on the basis of the .uality level history/ .uality management information system for inspections and inspection results and .uality notifications/ etc. 23

24 COMPUTER INTEGRATED 9UALITY MANAGEMENT "CI9# 1. The integration of ,uality management in the ERP system provides considerable advantages because only an integrated system can support all the elements of .uality mgmt system. !. This integration allows the .uality mgmt to influence all processes within a company/ thereby affecting all phases of a products life:cycle. $. The .uality management module is integrated with the master data and processes of the following applications: i. "ATER6A2 "AEA1E"EET: Purchasing/ 6nventory mgmt/ ;arehouse mgmt/ "aterial [Link] Planning. ii. PR?)@8T6?E: ;ork scheduling/ shop floor control. iii. (A2E( AE) )6(TR67@T6?E: )elivery/ creation of .uality certificates. &. The .uality management module supports the e4change of data with the other applications in order to prevent related data from being recorded and stored redundantly. '. or e4ample/ the information provided by a goods receipt posting relating to the material/ vendor and lot si<e is automatically transferred to the inspection lot data record when an inspection is triggered.

MATERIAL MANAGEMENT MODULE: The material management module optimi<es all purchasing processes with workflow:driven processing functions/ enables automated supplier evaluation/ lowers procurement and warehousing costs with accurate inventory and warehouse management and integrates invoice verification. The main module of material management are as follows: i. Pre: Purchasing Activity. ii. Purchasing. iii. Fendor Evaluation. iv. 6nventory management. v. 6nvoice verification and material inspection. I. PRE-PURCHASING ACTIVITIES: 24

25 1. This system supports the complete cycle of bid invitation/ award of contract and acceptance of services and also include maintaining a service master database/ in which the descriptions of all services that are to be procured can be stored. !. The system also keeps separate sets of service specifications that can be created for each concrete procurement pro9ect or proposed procurement in the purchasing documents. $. (et of service specifications may include both items with services and items with materials. &. The steps that are followed in the pre:purchasing activity are shown in the diagram that follows:
"#*0("#M#12S C'3C03'2(O1

"#*0S(S2(O1 /O" *0O2'2(O1S 4#1DO" "'2(15S *0O2'2(O1 #4'30'2(O1

4#1DO" S#3#C2(O1

CO12"'C2S

THE PRE-PURCHASING ACTIVITIES MODULE

II. PURCHASING: 1. Purchasing is a very important component of the material management module.

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26 !. 6t supports all the phases of material management/ material planning and control/ purchasing/ goods receiving/ inventory management and invoice verification. $. 1ood communication between all parties in the procurement process is necessary for purchasing to function smoothly. &. Purchasing communicates with other modules in the system to ensure a constant flow of information. '. or e4ample it works side:by:side with the following modules : 8ost Accounting (ystem / inancial Accounting/ (ales and distribution
PURCHASING

COST ACCOUNTING SYSTEM

FINANACIAL ACCOUNTING

SALES AND DISTRIBUTION

III. VENDOR EVALUATION: 1. The vendor evaluation system supports the optimi<ation of the procurement process in the case of both material and service. !. 7y evaluating vendors/ you can improve your enterprises competitive:ness. $. "ost of the vendor evaluation systems offer you a point:based evaluation system/ based on certain selection criteria. "ost systems have their own pre:defined set of criteria/ but will allow the user:defined set of criteria also. &. @sing these criteria/ the performance of the vendors is measured and points are given. '. The main criteria that are usually used are price/ .uality/ delivery/ service and support/ replacement of returns/ lead time and so on. *. The vendor evaluation system ensures that evaluation of vendors is ob9ective/ since all vendors are assessed according to uniform criteria and the scores are computed automatically. 26

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IV. INVENTORY MANAGEMENT: 1. 6nventory management systems allow you to manage your stocks on a .uantity and value basis/ plan/ enter and check any goods movements and carry out physical inventory. !. 6n the inventory management system the physical stocks reflect all transactions resulting in a change in stock and thus in updated inventory levels. $. The user can easily obtain an overview of the current stocks of any given material. &. or each material not only are the stocks in the warehouse shown / but also the stocks ordered but not yet delivered/ reserved for production or for customer/ and the stocks in .uality inspection can be monitored. '. (pecial stocks from the vendor or from the customer are managed separately from the company=s own stock. *. "ost inventory management systems support inventory methods like periodic inventory/ continuous inventory/ inventory sampling and cycle counting. V. INVOICE VERIFICATION AND MATERIAL INSPECTION. The invoice verification component is part of the material management system. 6t provides the link between materials management components and the financial accounting/ controlling and asset accounting components. 6nvoice verification material management serves the following purposes: i. 6t completes the materials procurement process: which starts with the purchase [Link]/ continues with purchasing and goods receipt and ends with the invoice receipt. ii. 6t allows invoices that do not originate in materials procurement 0services/ e4penses/ etc5 to be processed. iii. 6t allows credit memos to be processed/ either as invoice cancellations or discounts. 6nvoice verification does not handle the payment or the analysis of invoices. The information [Link] for these processes is passed on to other departments.

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28 MANUFACTURING MODULE: 1. A good manufacturing system should provide for multi mode manufacturing applications that encompass full integration of resource management. !. These manufacturing applications should allow an easier e4change of information throughout the entire global enterprise/ or at a single site within a company. $. The manufacturing module should enable an enterprise to marry technology with business processes to create an integrated solution. &. 6t must provide the information base upon which the entire operation should be run. '. 6t should contain the necessary business rules to manage the entire supply chain process whether within a facility/ btwn facilities or across the entire supply chain. HO3 DOES MANUFACTURING RESPOND TO THE CUSTOMER; 1. The manufactures must respond .uickly and effectively to customer demands. !. ;hile agility is desirable/ agility without an effective enterprise manufacturing system results in speed without purpose. $. Effective e4ecution provides short cycle tem/ .uality assurance/ continuous improvement #.uick response to process variability. &. All three elements contribute to a management decision to install an enterprise:wide manufacturing management system. '. (ome of the ma9or subsystem of the manufacturing module is: I. M%/'*$%&( %-+ 1%4%1$/5 4&%--$-. II. S2)4 7&))* 1)-/*)& III. 90%&$/5 ,%-%.','-/ IV. JIT/*'4'/$/$6' ,%-07%1/0*$-. V. C)(/ ,%-%.','-/ VI. E-.$-''*$-. 12%-.' 1)-/*)& VII. E-.$-''*$-. +%/% ,%-%.','-/ VIII. C)-7$.0*%/$)- ,%-%.','-/ IX. T))&$-. X. S'*$%&$<%/$)-/&)/ 1)-/*)& MATERIAL AND CAPACITY PLANNING 28

29 1. The planning systems of ERP packages are designed to provide the responsiveness your company needs to meet those customer [Link]. !. ;ith these systems/ planners can stimulate alternative plans> gaining the information they need to determine which parts and assemblies to make/ which to buy and when to manufacture or purchase. $. "aterial plans can be developed from a wide variety of sources that include the master schedule/ sales forecasts and dependant and independent demand. &. The company can customi<e planning processes because input is described by system parameters that are easily changed. '. To reduce effort and accelerate communication across the supply chain/ planned orders can be confirmed and converted automatically 0or manually5 into production and purchase orders. *. 1raphical reporting makes potential material and capacity problems easy to identify. +. )epending on the [Link] of the company=s product and processes/ production can be scheduled using work orders or repetitive build schedules. -. @sing the shop floor control facility/ the company has the visibility necessary for managing lead:times and for carefully controlling the amount of work:in:process and the timely release of production orders. SHOP FLOOR CONTROL 1. Process reengineering efforts and the elimination of waste have necessitated greater reliance upon powerful/ user friendly/ fle4ible shop floor planning and control systems. !. "anagement needs timely/ accurate information and the ability to manage the shop floor by e4ception. $. A shop order can be reprinted at any time with user selection of weather to relocate material &. This reprinting gives a shop foreman fle4ibility to print a duplicate copy when an order is split between operators. '. This feature also gives the shop scheduler/ the ability to reprint the shop packet and to reflect new material allocations that correct previous shortages. 29

30 *. Every shop order can be maintained throughout its life. +. All systems provide a full function shop order maintenance capability/ allowing the user to evaluate and ad9ust operation steps and components. -. ?rders can be re scheduled either backward or forward. 9UALITY MANAGEMENT 1. All manufacturing modules track .uality control activities. These systems allow a wide variety of characteristics and parameters to be specified in a test and inspection operations and maintain an e4tensive history to improve product .uality and identify recurring problems. !. The .uality management systems usually support the bench marking on optimal product design/ process engineering and .uality assurance data by all functional departments within the manufacturing enterprise thereby facilitating definitions of repeatable processes/ route cause analysis and a continuous improvement of manufacturing methods. $. This documentation supports the 9ob functions of .uality assurance and production managers in validating the manufacturer=s conformance to 6(? CDDD/ good manufacturing practices 1"P world wide/ "62:,:C-'- in the @nited (tates and a variety specific industry standards of .uality assurance. &. "any systems not only provide high volumes repetitive manufacturing functionality/ but also provide for the transition to rate based production by allowing the use of repetitive scheduling/ even for the products are not rate based. '. This allows a production facility to transition products from the discreet manufacture into a G6T3repetitive focus. or eg. ;hen the demand pattern for an item begins to stabili<e and shown a repeatable3 predictable pattern/ then a productive schedule can be initiative even though the item may not be designated as rate based. *. ?vertime/ as the items demand pattern grows/ the item can be switched to full rate based production scheduling. +. This transition capability enables production facility to adopt process reengineering/ set up production/ single minute e4change of die0("E)5programs employee empowerment

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31 work teams etc. with the confidence of knowing that the planning and control system will effectively support the efforts. -. 16T3repetitive includes strong analytic capabilities. C)(/ ,%-%.','-/ 1. ERP packages provide e4tensive cost information at several levels that have businesses identify drivers and reduce product cost. Aou can choose the costing method that best reflects your company=s business. !. 62? 02ast in irst out5 6 ? 0 irst in first out5/ moving average unit or lot costing methods can be assigned by items. $. "any vendors all support A8T6F6TA 7A(E) 8?(T6E1 0A785 with activities visibility by cost ob9ect as well as cost for user defined groupings such as departments. &. "anufacturing system provides e4tensive information about production costs at several levels/ which gives you the visibility that you need to identify costs drives and reduce product costs. E-.$-''*$-. +%/% ,%-%.','-/ 1. The 1st step to shorter product development activities. Engineering )ata "anagement is designed to help your company trim data transfer time/ reduce errors # increase design productivity an automated link bwtn engineering and production information. !. "ost packages allow a smooth integration/ with popular 8A) packages/ to simplify the e4change of information abt drawings/ items 7?"s and routings. E-.$-''*$-. C2%-.' C)-/*)& 1. 7y using Engineering 8hange control/ business can give effective control over engineering change orders. !. Aour company can define the authori<ation steps for improving and implementing an engineering 8hange ?rders. $. ;hen these steps are completed/ the system automatically the change in the production database. C)-7$.0*%/$)- M%-%.','-/ 1. The 8onfiguration management dramatically reduce order cycle time by eliminating the lengthy engineering review/ typically 31

32 associated with determining feasibility and the costs associated with the configured end item. !. This reduction is achieved by creating a fle4ible user:defined knowledge base that is accessed by a powerful analytic engine. S'*$%&$<%/$)- / L)/ C)-/*)& 1. The lot control system provides for the pre:allocation of lot numbers. !. This eature is available throughout the product offerings and includes "RP/ shop floor control/ order processing and G6T. T))&$-. 1. or many manufacturers/ ensuring that proper tooling is available is 9ust as critical to production schedules as the availability of material. !. The ERP system e4tends capacity and inventory management to include these valuable resources. $. These systems help to ensure that tools and materials arrive together at scheduled operations by storing tools in inventory and planning and allocating the [Link] tools as part of the production order.

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