1.Why should we implement ERP?

ERP stands for enterprise resource planning. Companies had separate

software solutions for their difference areas like inventory management,
financials, manufacturing management etc.. There was no centralized
system connecting all of these areas. That’s why they couldn’t give real
time information which greatly affects a company’s efficiency, customer
dissatisfaction, loss of revenue and repute. To increase efficiency, save
money, and generate higher productivity, a company will select an ERP
system. ERP is maintained data at a central location and is shared with
various departments. Departments have access information of other
departments. All departments update a central information system. All
departments get real time information. ERP makes a company faster and
makes process order quicker. ERP system to improve collaboration
between vendor and customer. ERP increases productivity, better inventory
management, reduced material cost, effective human resources
management, reduced overheads boosts profits. Better customer
interaction increased throughput which helps to improve customer service.
2. What was the previous scenario before ERP?
Suppose ERP system is not available yet, a customer need to order a
particular product and he contact with sales teams but the product is out of
stock and customer will not happy to see this. Since it is a decentralized
process, the Sales Team do not have any real-time inventory information.
So they approach the Inventory department to check the availability of the
product. This process takes time and the customer chooses another vendor
which lead to loss of revenue and customer dissatisfaction. If the product is
out of the stock, seals team approach the production planning team to
manufacture the product for future use. The production planning team
check the availability of raw material required. Raw material information is
separately store in two different departments Inventory as well as
Production Planning. When sales team check a particular raw material
required to manufacture the product, it shows the raw material is available
as per the inventory, but as per the database of the production planning
team, the raw material is out of stock. So, they go ahead and buy the raw
material. Once the raw material is available, the shop floor department
suddenly realizes they are short of workers. They approach the HR, who in
turn hire temporary employees at higher than market rates. The production
planning department fails to update the finance department on the
materials they have purchased. The finance department defaults the
payment deadline set by the vendor causing the company loss of its
reputation.