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My Nift Notes
Notes related to Course Notes, Entrance Examination and General Discussion about Fashion Management Course conducted by National Institute of Fashion Technology.
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My ERP Notes
1. ERP is not about software. It is about business processes. 2. A Business process is a sequence of activities that serve a particular Goal. 3. A business process begins with a customers need and ends in the fulfillment of that need. 4. The outcome of a typical business process is an increased effectiveness (value for the customer) and increased efficiency (less costs for the company). 5. Process are of two types: Primary processes- which are directly involved in the creation of the customer value and support process which are involved with the organizations internal activities. 6. Characteristics of a business process: a. Definability : It must have clearly defined boundaries, input and output. b. Order : It must consist of activities that are ordered according to their position in time and space. c. Customer : There must be a recipient of the process' outcome, a customer. d. Value-adding : The transformation taking place within the process must add value to the recipient, either upstream or downstream. e. Process Owner: The person responsible for the continuous improvement and performance of the process. f. Resources: It uses resources. Unlike information resources get consumed. As an example, as customer orders are processed they are completed and signed off, and typically are used only once per unique resource (order). g. Information: It uses information. Information, unlike resources, is not consumed in the process - rather it is used as part of the transformation process. In formation may come from external sources, from customers, from internal organizational units and may even be the product of other processes. 7. What is an ERP An enterprise-wide set of management tools that balances demand and supply, containing the ability to link customers and suppliers into a complete supply chain, employing proven business processes for decision making, and providing high degrees of cross-functional integration among sales, marketing, manufacturing, operations, logistics, purchasing, finance, new product development, and human resources, thereby enabling people to run their business with high levels of customer service and productivity, and simultaneously lower costs and inventories; and providing the foundation for effective e-commerce. 8. ERP evolved from MRP ( Material Requirement Planning) It uses the master schedule (What are we going to make?), the bill of material (What does it take to make it?), and inventory records (What do we have?) to determine future requirements (What do we have to get)? 9. It also makes use of Rough Cut Capacity Planning which converts the sales and operations plan into approximate material and capacity requirements twelve to eighteen months into the future. 10. Next Level was closed loop MRP which has tools to address both priority and capacity. It has feedbacks from execution function to planning function so that plans can be altered when necessary. 11. Next Level is MRP-II which has three additional functions: Sales and operational planning, Financial interface and Simulation ( What if analysis).

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12. Next Level is ERP where it is more powerful than MRP II because it 1.Supplies single set of resource planning tools across the entire enterprise. 2) provides real-time integration of sales, operating, and financial data 3) connects resource planning approaches to the extended supply chain of customers and supplier. 13. ERP is different from other approaches to manufacturing such as lean manufacturing, six sigma that it concentrates on coordination of the individual elements of business processes. 14. ABC of ERP implementation: A items are very costly and important hence they demand most attention and careful planning. The B are less significant than A and C are the least significant items. In implementation C, is the computer: the hardware and the software. B is the data: inventory records, the bill of materials. Item A is the people If People part is implemented correctly, the people will understand objectives and how to get there. 15. The implementation Dilemma: Work load: Installing enterprise software can be an enormous task. Even with lots of people from outside consulting firms, the time requirements for the companys people are very large. If these guys are already doing a lot of work, they dont have the mental energy required in implementing ERP. 16. Catch-22 of ERP Software: a. It is a lot of work b. It is a do-it-yourself project. Remember here implementers = users. c. It is not Priority Number-1 d. It is people-intensive e. It requires top management leadership and participation. f. It involves virtually every department in the company g. It requires people to do work differently. 17. An average ERP takes 18 months to implement. 18. In any project there are three variables- the amount of work done, the amount of time available and amount of resources available to accomplish the work. 19. Ideal way to Implementation of an ERP a. An analysis of the companys current situation, problems, opportunities, strategies, etc. b. A group of executives and operating managers from within the company must learn, in general terms, how Enterprise Resource Planning works; what it consists of; how it operates; and what is requiredto implement and use it properly. c. Cost/Benefit analysis d. Go/No-Go Decision e. Vision Statement: A written document defining the desired operational environment to be achieved with the implementation of ERP. f. Performance Goals: Agreement as to which performance categories are expected to improve and what specific levels they are expected to reach. g. Selection of the full time project leader and other people who will work full time on the project. h. Implementing Sales & Operations Planning. i. Demand Management, Planning, and Scheduling Processes: Issues of mixspecific products, customers, orders, equipmentare handled in the area of demand management, planning, and scheduling. j. Data Integrity k. Finance and Accounting Processes l. Software selection and software configuration installation m. Audit-II: More focused approach. n. Ongoing Education A symmetry boggles over a snag.

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