ERP DEF

http://www.mcts.com/erp.htm

What Is ERP?
ERP is an integrated management process for company-
wide management of a business enterprise. The concepts
and techniques of ERP must be applied across all
company functions. ERP integrates management
processes to assure that decisions and planning are born
out of the same databases, assumptions and
methodology and language—and includes Continual
improvement techniques and supply chain
management. ERP solutions focus on optimizing
productivity by focusing on planning and executive
reporting of the Enterprise as an integrated unit. When
used as an integrated management process companies
significantly improve their business performance and
competitive positions.
ERP is much more than a manufacturing software tool. It
is a management philosophy for making and keeping
promises—to better manage the supply and demand
sides of the business using directly integrated
management systems. The focus is on results –improving
competitiveness in the marketplace and improving
overall company business performance.
Resource utilization must be properly measured to
properly manage the supply and demand sides of the
business. Inefficient utilization of resources drives costs
up and customer service down. Methods and approaches
for resource management and ERP planning are changing
with the introduction of Hoshin Kanri.
Effective ERP requires that integrated management
processes extend horizontally across the company,
including product development, sales, marketing,
manufacturing, and finance. It must extend vertically
throughout the company's supply chain to include the
acquisition of raw materials, suppliers, customers, and
consumers. The fundamental purpose of ERP is to
establish a process that links projected demand plans to
supply plans, so that the resources of manufacturers,
their suppliers, and especially their customers are utilized
in the most efficient and cost effective way.
To do so requires a process for anticipating demand and
planning and scheduling resources in a manner that
supports a company's strategic and financial goals.
There are five major elements required for correctly
defining a closed-loop planning & scheduling system:
 An integrated business operating process
links strategic plans & business plans to
sales plans & operations plans.
 A people-driven process that is supported
by a computer system.
 A formal resource planning process that
involves all functions within a company.
 Defined responsibilities and performance
measurements for all functions in a
company.
 Communications across all company
functions as well as communications across
all divisions & sister companies.
Strategies must be tied to tactics, supply is resolved with
demand, the financial system is tied to the operating
system, aggregate planning is translated into detailed
planning, and planning and execution are linked together
via a two-way flow of information and a spirit of
cooperation among all functions.
ERP is a people process supported by the computer,
rather than the other way around. People -- and their
behavior and discipline in utilizing the ERP process -- is
vital. When people understand how to utilize
the ERP process, tools, and techniques, the data and
information will be highly accurate, and they will make
sound decisions.
ERP creates organizational synergy that drives the
development of highly effective processes that are
properly managed for continual success. The dramatic
results are derived from a deep organizational
understanding of ERP philosophy. Proactive strategies
become the mainstay of the company-wide operating
system. Without this organizational understanding, well-
intended efforts will deliver wrong results. Organizational
profitability is derived from the organization’s overall
willingness and ability to improve. Therefore people at
every level must see beyond their local functions and
interactively understand how their individual actions
increase or decrease profitability.

Back to Hoshin Overview...

ERP & Hoshin Kanri...
ERP-MRP Evolution…
ERP & Hoshin Kanri…
ERP Implementations… 
Profit-Ability Improvement... (¬Click here to see
definitions)
Profit-Ability Management Principles... (¬Click here to
see definitions)
People, Empowerment & Profit-Ability… (¬Click here to
access articles)
Hoshin Kanri & Deming's Plan-Do-Check-Act... (PDCA)
Cycle…