ERP: An Overview

 Information in large organizations is often spread across numerous

homegrown computer systems, housed in different functions or
organizational units.
 With the advent of E-Business and the need to leverage multiple
sources of information within the enterprise, ERP software has
emerged as a major area of interest for many businesses.
 Back-office enterprise software has its roots in the 1960s and
1970s, as computing power became affordable enough for
companies to automate materials planning through MRP and
financial processing through payroll and general ledger software.
 MRP, short for Material Requirements Planning, was developed in
the early 1960s at IBM and had become the principal production
control paradigm in the U.S. MRP consists of a set of procedures
that convert forecasted demand for a manufactured product into a
requirements schedule for the components, subassemblies and raw
materials comprising that product.
 Definition: ERP is a software architecture that facilitates the
flow of information among the different functions within an
enterprise.
 It enables decision-makers to have an enterprise-wide view
of the information they need in a timely, reliable and
consistent fashion.
 ERP provides the backbone for an enterprise-wide
information system. At the core of this enterprise software is
a central for database which draws data from and feeds data
into modular applications that operate on a common
computing platform, thus standardizing business processes
and data definitions into a unified environment.
 ERP System is gaining Popularity.
 Why are so many companies replacing their key
Business system?
 Enable improved business performance
 Cycle time Reduction
 Increased Business agility
 Inventory reduction
 Order fulfillment improvement

 Support business growth requirements

 New product/product lines , new customers
 Global requirements including multiple languages and
currencies
 Provide flexible , integrated ,real -time decision
support
 Improve responsiveness across the organization.
 Provide flexible , integrated ,real -time decision
support.
 Take advantages of the medium size organizations
 Increased functionality at a reasonable cost.
 Client server/open system technology
1. Doing it in the first place.
2. No clear destination.
3. A good plan or just a plan?
4. Part-time project management.
5. Under-estimating resources required.
6. Over-reliance on the consultants.
7. Customization.
8. On the job training.
9. Insufficient testing.
10. Not enough user training.
 Enterprise data and transactions available through ERP
functions that are accessible from mobile, social, and
collaboration channels.

 Enterprise Resource Planning (ERP) in particular has

a lot to gain from adopting an open approach to new
innovations.
 The Internet of Things-car, electrical appliance
 Wearable technology-mobile,smart phones,ipad
 Big data analytics-by the help of IoT,WT
 The age of context- For example, a field service engineer
will automatically receive all the asset data, job
instructions, customer relationship history as soon as they
arrive at the repair site.
 Opening business to innovation- depend on all above
 These days, way of doing business is changing fast due to
changing in law and invention in the standards. So,
management of business process which is done through
ERP should be flexible. If ERP system will be flexible,
we can change processing system as per our requirement.
 One of the great characteristics of any good ERP system
that it has open module architecture. It means, if there is
error in any module, we can correct it by opening it instead
affecting all other modules. For example, Open ERP has
following module which can be open separately.
 Ex: Sales Management , Purchase Management , Customer
Relationship Management , Project Management ,
Warehouse Management , Manufacturing , Accounting &
Finance, Content Management
 ERP system should be advance and it should use
comprehensive way. It means, all most all the functions of
business should be done through ERP System. If we will
get only small number of activities through ERP and other
will be done through manual, then, this ERP system is not
ok. Its capacity should to cover all the functions of
business.
 Today, in the market, there are lots of ERP solution but which
is the best, it will tell its features? Check whether it has
capacity to connect other ERP system online or not. Because,
today business has started to interact with millions of other
business. So, it is necessary to connect them online through
our ERP.
 Each business activities have lots of standards. For
example, accounting follows IFRS(International
Financial Reporting Standards),quality management
follows ISO 9000 and marketing follows the standard
of MASB(Mass Announcement System Bus). So, your
ERP system will updated regarding all standards.
 A good ERP System should have multi-facilities. It
means, it can work in multi-currencies, multi-mode
manufacturing and multi-platform.
 Strategic Planning is the main and top function of
business. It should be done through ERP. ERP should
integrate all its sub-part systems for making better
strategic planning.
 A good ERP system optimize the data for effective
utilization of limited business resources. It also
optimizes the data for reducing cost and risk.
 A good ERP System collaborate the team in real time
for working together on a project. Everything about the
project process can be tracked through this.
 We can measure the quality of ERP from its advance
automatic functions. With these automatic functions,
organization saves his lots of time. This automatic
function may be in electronic fund transfer, electronic
data interchange and ecommerce.
 Reduction of Lead - Time :Lead time is time
between placing an order and receiving the goods . It is
very important for taking purchasing and inventory
control . In production , optimum availability of raw
material is must . If we keep inventory control with the
help of safety stock and re-order level . But low reorder
level and high reorder level are both harmful .
 Disadvantage of low reorder level : Suppose , you
need raw material for production but it is out of stock ,
then it will decrease the goodwill and also losing of
customers. .
Disadvantage of high reorder level : Suppose , there
is no need raw material for production for long time but
excess raw material is in stock , it will block money and
increase the fixed cost of production .
 On - Time Delivery to Customers :
ERP system is so advance and it can be used to make
advance manufacturing strategy . In ERP system , we can
easily integrate the CAD software of engineering drawing
and all data of engineering designing can exchange with
production department . With this according to the need ,
design of product can easily be changed and after this we
can deliver goods to customers on time.

 Reduction in Cycle time:

We can define the cycle time as time between getting of
order and delivery of same ordered goods to customers . If
this time is reduced , business can get the reputation in the
heart of customers . This can be possible with the help of
ERP system . When any order is placed , ERP system
automatically checks whether stock is nearest
manufacturing plant or not after this it alerts to finance
department for raising sale invoice and ensure that payment
is received under the terms and conditions of finance
department . All these automatic activities reduce the cycle
time .
 Effective utilization of resources :
In ERP system maximum work is done by automatic
software techniques , so it will save and energy of
employees and they can perform other duties of company
and So , ERP's main benefit is to use effective utilization of
resources .
 Satisfaction to Customers:
With adopting ERP system , Company can give better
services to customers and can satisfy them . Company can
provide services with following way :-
 To change the layout and design of product in real time .
 To provide free service for any defects in product .
 To inform , if product in process , customer can track when will
company deliver to him.
 Improved supplier performance:
ERP system can increased and improved supplier's
performance . Supplier's performance can be measure on
the satisfaction of customers . If supplier will use this
software system , then supplier will enable to provide right
goods at right time and at right place .
 Increase flexibility :
Flexibility to rectify any mistake is available in ERP
system . If auditor checks any mistake in accounting or data
entry , then in alter mode that mistake can be changed and
rectified fastly.
 Reduced quality costs :
Quality is the heart of product . Today , each customer likes
quality of product . But in increasing of quality , it also
increases cost of product . But cost of operating ERP is zero
level . But there are needed some experts to operate ERP
softwares .
 Improved information accuracy and decision
making capability :
 All information is available on ERP data base , so if any
mistake happen , it can easily find from other part of system
of ERP . So , change of mistake is very low and with this
employees of company can improve the information
accuracy and decision making capability .
Thank You