ERP
Enterprise Resource
Planning
What do we mean by-
• ENTERPRISES- The larger business community
covering all the players and
their participation in the
business.
• RESOURCES- A useful or valuable possession
or quality.
• PLANNING- How and when to perform.
2
ERP stand for Enterprise Resource
Planning.
It is a commercial software package that
provides techniques and methodologies
for seamlessly integration and flow of
information within an organization.
It provides operational, tactical and
strategic information for improving
productivity, quality and competitiveness of
a firm.
Introduction
Enterprise Resource Planning systems (ERPs)
integrate (or attempt to integrate) all data and
processes of an organization into a unified
system.
A typical ERP system will use multiple components
of computer software and hardware to achieve
the integration.
A key ingredient of most ERP systems is the use of
a unified database to store data for the various
system modules.
The Components of an ERP System
ERP Software - Module based ERP software is the core of an ERP
system.
Each software module automates business activities of a functional
area within an organization.
Common ERP software modules include product planning, parts
purchasing, inventory control, product distribution, order tracking,
finance, accounting and human resources aspects of an
organization.
Business Processes - Business processes within an organization falls
into three levels
a) Strategic planning
b) Management control
c) Operational control.
3. ERP Users - The users of ERP systems are
employees of the organization at all levels, from
workers, supervisors, mid-level managers to
executives.
[Link] and Operating Systems - Many
large ERP systems are UNIX based.
Windows NT and Linux are other popular
operating systems to run ERP software.
,
Production
Bill
of materials, classification
Work order generation, scheduling
and control.
WIP tracking, valuation
Work station / machine center
management
Materials
Purchasing
Stock management and
valuation
Inventory analysis
Finance
General accounting functions
Ledger, payables and receivables
Cash-flow management
Assets accounting
Tax management
Cost account: order accounting,
product costing
Sales
Order processing
Sales analysis, budgets and controls
Finished goods stores management
Market / Customer / Product analysis
Sales forecasting
Personnel
Personnel attendance system,
time management
Human resources management;
planning, training
Personnel cost, projection and
planning
Quality control
Analysis of quality by process,
material, work center location
Analysis of quality by reasons and
action taken
Building quality assurance data for
equipment / process / technology
selection
Maintenance
Plant maintenance planning
Breakdown,conditional
maintenance
ERP vs. CRM and SCM
CRM (Customer Relationship Management)
and
SCM (Supply Chain Management)
are two other categories of enterprise software that
are widely implemented in :-
a) corporations
b) non-profit organizations.
Continued…
While the primary goal of ERP is to improve
and streamline internal business
processes.
CRM attempts to enhance the relationship
with customers.
SCM aims to facilitate the collaboration
between a) the organization
b) its suppliers
c) the manufacturers
d) the distributors
e) the partners.
General Features
Separation of the programme code and
the data areas
Command language
Screen based flow control
Word processing, text editing
Tuning
Enterprise modeling:
structure/policy/rules/guidelines
Business System
• Business forecasting for products, groups, markets
• Business planning in terms of the resources to execute
• Strategy formulation and implementation
• Information base management for management
application
Advantages
In the absence of an ERP system, a large manufacturer may find itself
with many software applications that do not talk to each other and do
not effectively interface. Tasks that need to interface with one another
may involve:
• design engineering (how to best make the product)
• order tracking from acceptance through fulfillment
• the revenue cycle from invoice through cash receipt
• managing interdependencies of complex Bill of Materials
• tracking the 3-way match between Purchase orders (what was ordered),
Inventory receipts (what arrived), and Costing (what the vendor
invoiced)
• the Accounting for all of these tasks, tracking the Revenue, Cost and
Profit on a granular level.