Introduction to ERP

System Made2Manage

Authored by Sudharshan.P

Definition of ERP:
Enterprise resource planning application is enterprise business operations management
software which aids in making business decisions with real time data.
ERP applications available in market SAP, Oracle, Made2Manage, Infor, Epicor, Ramco ERP,
QAD, Microsoft Dynamics, PeopleSoft, Ross ERP, Axis, Intuitive, etc.
The business processes that are carried in a typical Organization will be built as function
modules in full-fledged ERP application.
Function modules in ERP are Sales, Purchasing, Manufacturing, Finance, HR, Asset
Management, Distribution, CRP, MRP, Forecasting, Production Planning and Scheduling,
Transportation Management, Quality Management, after sales & service etc.
Which applications are ERP applications?
A business process management application can be termed as an ERP application only if it
contains minimum requisite modules such as OTC (sales), STP (purchasing), Manufacturing
and Finance.
ERP system landscape can also contain multiple discrete business process management
systems with inter application data-bridges so as to execute end to end business process
seamlessly.
Eg: SAP for Purchasing and Sales, Peoplesoft for Finance and HRM, MES system for
manufacturing. These systems will be interlinked with data bridges to exchange the relevant
data.
Technology Requirements to Build an ERP is as below,
-

RDBMS.

UI Design.

Codes for desired Updation, Manipulation and Display of data.

An ERP application to be effective and successful depends on the below parameters,

-

Design, Structure and Optimization of the Relational Database tables.

User flexibility to execute the process in the system with accurate updation of data.

User friendly interface with good look and feel.

Seamless Integration capabilities with interfacing systems (if any).

Overview of M2M system:

Made to Manage (M2M) is an ERP application built with SQL database and .Net technology
with Graphical User Interface.
M2M is very popular and widely used ERP application in Make to Order and Make to
Stock business scenario with many industry verticals taking full advantage of M2M ERP
capabilities.
M2M comprises of main function modules such as Sales, Financial, Purchasing,
Manufacturing and multiple sub-modules.

Organization Structure in M2M:

Company is a legally defined unit of an organization which publishes annual financial

statements to the Government/Public.
Facility is sub-division of the Company, which is used to plan and manage the inventory. A
company can have multiple Facility defined in the system.
Location is sub division in the Facility where the inventory is located. A facility can have
multiple Locations defined in the system.
BIN is sub-division of location where the inventory is physically placed. BIN is the smallest
possible unit in the Company.

Data Types:
Datas are classified in an ERP system as below,

Control Data The source of this data is system control setup in any ERP
application. These data setup controls data attributes and the way data functions in
business process flow in the system.
Eg: GL calendar, Company setup, Document number ranges, Module Control setup,
etc.

Master Data This kind of data are defined in master screens in the ERP application
and are used for executing transactions in the system.
Eg: Item master, Account codes, Vendor master, Customer master, Currency codes,
Unit of Measure, Standard BOM, Work Center, Standard Routing, etc.

Interlinking Master Data This kind of data is used to link two master datas.
Eg: Product Class interlinks Account codes and Item master. Department
interlinks account codes and Work center. Jurisdiction interlinks Tax and Vendor.

Transaction Data These are the datas which get generated during process
transaction execution of function modules in the system.
Eg: Sales Orders, Purchase Order, Job Order, Purchase Receipts, Shipper, Cost,
Labour entry, etc.

Transaction data are further classified into Static Data and Dynamic Data.

Static Data: These are fixed data in the system which does not change from
transaction to transaction.
Eg: Item code, Vendor code, Customer code, etc. All the master datas
are Static data.

Dynamic Data: These are arbitrary data in the system which varies from
transaction to transaction based on user input.
Eg: SO Quantity, PO Quantity, Extended Cost, Actual cost of an Order,
JO Quantity, etc.

Data Hierarchy:
In an ERP system, data flow is hierarchical as per application design. The different hierarchy
level for data setup is as below,
1. Company Level Data: These datas are setup at Company level which are
applicable for all the facilities.
Eg: Currency, Unit of Measure, Vendor, Customer, GL account codes, Payment terms,
AP account codes, AR account codes, control setups, etc.
2. Facility Level Data: These datas are setup at Facility level and are applicable only
for that particular Facility.

Eg: Item Master, BOM, Routing, Product class, Location, BIN, etc.
3. Transaction Level data: These data are user input data during transaction
execution and are updated into the system. Transaction data are applicable only for
that particular transaction.
Eg: PO, SO, Shipper, Receipt Tax, Labour entry, stock updation/consumption, Invoice,
etc.

Data Setup in an ERP System:

During new implementation and/or data migration from one system to another system the
data setup or data load will follow a logical data setup/load sequence.
Logical data setup/load sequence is as below,
1. Independent Control Setup.
Eg: Document Number setup, Material/Costing Closing - ECM Purchasing setup in
CSPROD etc.
2. Dependent Control setup.
Eg: CSAP depends on GL account codes, CSAR- depends on GL account codes,
account / labor in CSPROD, Tax Code depends on GL account codes.
3. Independent Master Data.
Eg: GL account codes, User creation, Country codes, GL Calendar, Currency, Facility
creation, Payment terms, etc.
4. Dependent Master Data.
Eg: Vendor depends on country code, currency code, GL account, Payment
Terms, etc.
Item creation depends on facility code, product class, Item group code,
Planner, freight class, etc.
BOM depends on item master.
Work center depends on Department.
Routing is depends on item master, work center, facility.
Location creation depends on Facility.
5. Independent Transaction data.
Eg: SO, PO, JO, etc.
6. Dependent Transaction data.
Eg: Receiver depends on PO.
AP Invoice depends on Receiver.
AP Payments depends on AP Invoice.
Shipper creation depends on SO.
AR Invoice depends on Shipper.
AR receivable depends on AR Invoice.
Labour entry is dependent on JO.

Process Data Flow:

Below is the schematic of Process Data Flow in the system,