ERP for Manufacturing Organizations

Dr. E.Kirubakaran

Types of resources
– – – – – Peoplepower Materials Money Time Knowledge

For information to be useable it must be
» Correct » Current » Consistent » Clear » Complete » Available » Secure

Computing Complexity

Evolution of Logistical Systems




Order Point
1950 1965 1980 1995 2000

Past: Standalone Solutions

Order entry

Order Processing - Process Integration
Material requirements planning

Production order


Storage/ Delivery

Accounts receivable


Simply put, an ERP System is…..
• An IT based transaction processing system • Integrated information management and retrieval • Covers strategic and operational requirements of the business
Finance Manufacturing Materials Sales HR

What do ERP systems cover ?
Distribution Manufacturing Marketing


Planning and Execution


Engineering Human Resources


Business and technical advantages of using ERPs
• Implements best-of-class practices and provides benchmarking opportunities • Enables easy scale-up of operations • Enables real-time data creation by the persons actually responsible for it • Pushes the latest data to the operational-level personnel for better and faster decisions • Integrates organizational data into a single, comprehensive database • Provides correct and up-to-date online data and populates the warehouse for analysis and reporting

Benefits of ERP
• • • • • • • • • • Information integration Reduction in cycle time Improved resource utilization Better customer satisfaction Improved supplier performance Increased flexibility Reduced quality costs Better analysis and planning capabilities Improved information accuracy& decision making capability Use of latest technology

How does ERP create value?
• • • • • • Integrate the organizations activities Force the use of “best practices” Enable organizational standardization Eliminate information asymmetries Provide online and real-time information Allow simultaneous access to the same data for planning and control • Facilities intra-organization communication • Enable inter-organization collaboration

Risks of ERP
• • • • • • • • • People issues Internal staff adequacy Project team Training Employee re-location and re-training Top management support Consultants Discipline Resistance to change

ERP Implementation
• Standard ERP ( directly using all features that has come with the product) • Customization as per our requirement ( using special programs written by us, using our logic) , then integrating with the ERP

ERP implementation- the hidden costs
• • • • • • • • Training Customization Integration and testing Data conversion Data analysis ERP consultants Brain drain (Employee turnover) Continuing maintenance

Different phases of ERP implementation
• • • • • • • • • • • Pre-evaluation screening Package evaluation Project planning phase Gap analysis Reengineering Customization Implementation team training Testing Going live End-user training Post-implementation (Operation & Maintenance)

Organization of the implementation team
• • • • • • • • Chief executive officer Executive committee External consultants Project manager Project management team Work teams or implementation teams Technical support team Administrative support team

Implementation issues
• • • • • • • • Project size Lengthy implementation time High initial investments Unreasonable deadlines Insufficient funding Interface Organizational politics Configuration difficulties

Before you LEAP
• • • • • • • • • • • • • • Assembling the participants Feasibility study review Project mission and vision statements creation Determination of organizational structure Determination of the modules to be implemented Creating the core team Establishing the training needs Establishing the data conversion/migration strategy Establishing interfaces Determining work estimates Cost of Consultants Calculation of implementation time Identifying constraints Establishing polices and guidelines

Why do many ERP Implementations fail? • • • • • Lack of top management commitment and support Improper planning and budgeting Use of wrong ERP tool Lack of training Work culture of the organization

ERP Implementation (Transition) Strategies

Transition strategies • Big bang strategy • Big bang variants • Phase implementation • Parallel implementation • Process line transition strategy • Hybrid Transition strategy • Choosing a strategy

ERP and Related Technology
• • • • • • • • • Business process reengineering Business Intelligence Data warehousing Data mining On-line analytical processing Product life cycle management Supply chain management Customer relationship management Geographical information systems

Business Intelligence
• • • • • • Introduction Reasons for business intelligence Benefits of BI Factors influencing Business Intelligence Business intelligence technology Techniques for integrating business intelligence into business processes • Business intelligence and ERP

BPR-The different phases
• • • • • • • Phase 1:Begin Organizational Change Phase 2:Build the reengineering organization Phase 3:Identify BPR Opportunities Phase 4:Understand the Existing process Phase 5:Re-engineer the process Phase 6:Blueprint the New business system Phase 7:Perform the Transformation

Thank You

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