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Enterprise Resource Planning

&
Supply Chain Management

Introduction
ERP is a cross-functional enterprise system driven by

an integrated suite of software modules that supports
the basic internal business processes of a company.
Integrated real-time view of its core business
processes tied together by ERP applications software
and a common database maintained by a database
management systems.
ERP systems track business resources and the status
of commitments made by the business. ERP facilitates
information flow.

ERP Definition
An ERP (Enterprise Resource Planning) system

integrates virtually all operational business
functions and processes and automates entries
to finance and reporting within the
enterprise (the legal entity or entities that make
up an entire company no matter where its
operations are). ERP systems focus almost
exclusively on operational excellence value
propositions of process efficiency and automation.

4  ERP – integrates all departments and functions throughout an organization into a single IT system so that employees can make enterprise wide decisions by viewing enterprise wide information on all business operations.  Core ERP components – traditional components included in most ERP systems and they primarily focus on internal operations  Extended ERP components – extra components that meet the organizational needs not covered by the core components and primarily focus on external operations .

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and asset management . accounts payable. accounts receivable.Accounting and Finance Components 6 Manage accounting data and financial processes within the enterprise with functions such as general ledger. budgeting.

job cost accounting. production scheduling.Production and Materials Management Components  Handle the various aspects of production planning and execution such as demand forecasting. and quality control 7 .

Human Resource Components 8 Track employee information including payroll. benefits. performance assessment. and assumes compliance with the legal requirements of multiple jurisdictions and tax authorities . compensation.

but also serving customers and collaborating with business partners . not only buying and selling.involves the management of information flows between and among stages in a supply chain to maximize total supply chain effectiveness and profitability  E-business .involves managing all aspects of a customer’s relationship with an organization to increase customer loyalty and retention and an organization’s profitability  SCM .information that people use to support their decision-making efforts  CRM .means conducting business on the Internet.Extended ERP Components 9  Business intelligence .

E-Business Components 10 E-logistics – manages the transportation and storage of goods E-procurement – the business-to-business (B2B) purchase and sale of supplies and services over the Internet .

Installation of the system without elaborate application/data integration by the Information Technology (IT) department . A common database. which supports all applications. without relying on periodic updates.ERP Characteristics An integrated system that operates in real time (or next to real time). A consistent look and feel through out each module.

Data becomes visible across the organization.  Decisions can be made more quickly and with fewer errors.ERP Advantages The fundamental advantage of ERP is that Integrating the myriad processes by which businesses operate saves time and expense. .

inventory receipts (what arrived). from acceptance through fulfillment Revenue tracking. and costing (what the vendor invoiced) . which allows inventory optimization Chronological history of every transaction through relevant data compilation in every area of operation. Order tracking.Tasks that benefit from this integration include Sales forecasting. from invoice through cash receipt Matching purchase orders (what was ordered).

marketing and sales. . bringing the following benefits They eliminate the need to synchronize changes between multiple systems—consolidation of finance. and manufacturing applications They bring legitimacy and transparency in each bit of statistical data. They enable standard product naming/coding. They protect sensitive data by consolidating multiple security systems into a single structure. human resource. They make real–time information available to management anywhere. any time to make proper decisions. They provide a comprehensive enterprise view (no "islands of information").ERP systems centralize business data.

ERP Benefits .

maintenance. Overcoming resistance to sharing sensitive information between departments can divert management attention. . and upgrade expenses. Re–engineering business processes to fit the ERP system may damage competitiveness and/or divert focus from other critical activities ERP can cost more than less integrated and/or less comprehensive solutions.ERP Disadvantages Customization is problematic. High switching costs associated with ERP can increase the ERP vendor's negotiating power which can result in higher support.

Extensive training requirements take resources from daily operations. Due to ERP's architecture (OLTP. planning and money. On-Line Transaction Processing) ERP systems are not well suited for production planning and supply chain management (SCM). Harmonization of ERP systems can be a mammoth task (especially for big companies) and requires a lot of time.Integration of truly independent businesses can create unnecessary dependencies. .

ERP Risks .

and retailers in order to improve the flow of goods. distribution centres. and funds across multiple functional areas both within and between chain members. services. and information from original suppliers to final customers. manufacturers. ‘‘Supply chain management” as the integration of key business processes among a network of interdependent suppliers.ERP & SCM SUPPLY CHAIN MANAGEMENT A supply chain is a dynamic process and involves the constant flow of information. Such a holistic approach . With the objectives of reducing system-wide costs while maintaining required service levels. materials.

 ERP is the battering ram that integrates all that information together in a single application. . and SCM applications benefit from having a single major source to go to for up-to-date information.

enabling organizations make more accurate management decisions. human resources.Integrating corporate finance. supply chain management and logistics execution. manufacturing and distribution. quantify and assist in planning an ERP and SCM implementation process and scalable transformation . It helps to identify.

greater efficiency. transportation and reverse logistics that can result in cost reduction and improved customer service Improve procurement operations to achieve better prices.Provides strategies for implementing new technologies in warehousing. tighter spend control and improved service levels .

Integrated solutions will help to Improve business responsiveness and communications Lower costs (operational and IT infrastructure) Employ state-of-the-art supply chain planning methods Improve logistics planning .

Improve decision-making and strategy Achieve strategic procurement solutions Achieve transformation and operations expertise Integrate all enterprise solutions .

suppliers and customers into an integrated system providing control and agility to continuously innovate and grow your organization. improve productivity. and reduced costs are all necessary components to stay competitive. ERP and SCM solutions help organizations track and analyze key information. .Conclusion 25 A global market requires manufacturers and distributors to stay on top of the many demands throughout the entire supply chain. High productivity. operational efficiency. and drive accurate decisions. This can only be accomplished by connecting partners. .

and reduced costs .Growth of the organization Connecting partners. operational efficiency. suppliers and customers into an integrated system Stay competitive High productivity.

Organizations are now changing the way they conduct business by innovating new process and customer service practices. manufacturing and distribution. supply chain management and logistics execution. . BI. human resources.CRM. enabling organizations make more accurate management decisions. SCM and ERP solutions are attaining a greater significance. It provides solutions that help integrate corporate finance.

org/wiki/Supply_Chain_management .wikipedia.com www.Reference logisticsmanagementandsupplychainmanagement.w ordpress.org/wiki/Enterprise_Resource_Planni ng en.edu www.net en.insead.com www.mainward.wikipedia.buker.slideshare.com www.

managementstudyguide.com www.fi www.pdf .student.com http://www.scribd.ac.oulu.wikipedia.student.com www.en.ittoolbox.oulu.fi/~jolahti/accinfo/2 %20ERP%20and%20supply%20chain%20management f http://www.ir/courses/8485/1/ce151a /resources/root/Enterprise%20Resource%20Planning .ce.org/wiki/Supply_Chain_management supplychain.sharif.

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