ENTERPRISE RESOURCE PLANNING (ERP)

GUIDED BY : MEMBERS:
Aalok Bhunjiya
Prof. BHAVNA SHARMA Manish Kaushal
MBA (FT) 4th Semester
Enterprise
Resource
Planning
 Introduction to ERP

What makes an ERP?

Process Of implementation

Major ERP Vendors

Advantages and Disadvantages of ERP

Example of ERP implementation

3
 Islands of Information
 Difficult to get timely & accurate
information
 Heterogeneous Hardware & Software
platforms & practices
 Poor connectivity between different
organizational locations
 Sticking with obsolete technology
 Resist to change
 Lack of proven man-power to develop
integrated software
 For Management – to know what is
happening in the company
 One solution for better Management
 For cycle time reduction
 To achieve cost control & low working
capital
 To marry latest technologies
 To shun the geographical gaps
 To satisfy the customers with high
expectations
 To be Competitive & for survival
 ERP
 Enterprise Resource Planning (ERP) systems integrate (or attempt to
integrate) all data and processes of an organization into a unified system.

 ERP is the technological backbone of e-business, an enterprise wide

transaction framework with links into sales order processing, inventory
management and control, production and distribution planning, and
finance.

 A typical ERP system will use multiple components of computer software

and hardware to achieve the integration.

 Today's ERP systems can cover a wide range of functions and integrate
them into one unified database.

7
 1960’s - Systems Just for Inventory Control

 1970’s - MRP – Material Requirement Planning

(Inventory with material planning & procurement)

 1980’s - MRP II – Manufacturing Resources Planning

(Extended MRP to shop floor & distribution Mgmt.)

 Mid 1990’s - ERP – Enterprise Resource Planning

(Covering all the activities of an Enterprise)

 2000 onwards – ERP II – Collaborative Commerce

(Extending ERP to external business entities)
 What makes an ERP ?
Integration is the key to an ERP system

ERP's main goal is to integrate data and

processes from all areas of an organization and
unify it for easy access and work flow.

Single database to employ different software

modules

9
 An ideal ERP system is when a single database is utilized and contains
all data for various software modules. These integrated software
modules can include:

Manufacturing: Some of the functions include; engineering, capacity,

workflow management, quality control, bills of material,
manufacturing process, etc.

Financials: Accounts payable, accounts receivable, fixed assets,

general ledger and cash management, etc.

Human Resources: Benefits, training, payroll, time and attendance, etc

Supply Chain Management: Inventory, supply chain planning,

supplier scheduling, claim processing, order entry, purchasing, etc.
10
 Projects: Costing, billing, activity management, time and expense, etc.

 CustomerRelationship Management: sales and marketing, service,

commissions, customer contact, calls center support, etc.

 DataWarehouse: Usually this is a module that can be accessed by an

organizations customers, suppliers and employees.
 ERP Systems

12
 ERP software suites typically consist of
integrated modules of…

Manufacturing
Distribution
Sales
Accounting
Human Resource Management
 Pre evaluation Screening
 Evaluation Package

 Project Planning

 Gap analysis

 Reengineering

 Team training

 Testing

 Going Live

 Post implementation
Source: AMR Research
 Benefits of ERP
All aspects of an organization can work in harmony.

A totally integrated system

The ability to streamline different processes

The ability to easily share data across various departments

Improved quality, efficiency and productivity

 Better tracking and forecasting

 Lower costs

 It has ability to make better decisions in a timely manner across the

entire business.

Improved customer service

17
 Limitations of ERP

Customization is complex

The need to re-engineer business

processes

Expensive to purchase and maintain

18
Reengineering is a rebuilding activity in which we rethink,
reanalyze, redesign and redevelop the program or the system in
order to which achieve improvement in their performance.
It occurs at two level of abstraction:
1) At the Business level
2) At the software level
BUSINESS
DEFINITION
 BPR a set of logically related tasks performed to
achieve a defined business outcomes.
 Within the business process people equipment,
material resources and business procedures are
combined to produce a special result.
 Every business process has a defined customer,
person or groups that receives the outcomes. In
addition business process across organizational
boundaries. They require that different
organization groups participate in the logically
related task that defines the process.
 Each business process is defined by set of
sub processes and has a hierarchy of these.
 BPR can be applied at any level of hierarchy.
 There is a strong cyclical relationship

between the capability of IT and the BPR that

takes place within the business. As IT
capabilities grow they can drive changes in
business processes.
 BPR should occur in top down manner beginning
with the identification of major business objectives
goals and eliminating with a much more detailed
specification of the tasks that defines a specific
business process
 Organize around outcomes not tasks.
 Have those who use the output of the process
perform the process.
 Incorporate information processing work into the
real work that produces the raw information.
 Treat geographically dispersed resources as
though they were centralized.
 Link parallel activities instead of integrating

their results.
 Put the decision point where the work is

performed and build control into the process.

 Capture data once at its source.
 ERP Implication : Example:
Wockhardt
 Wockhardt Limited has been able to meet its
additional growth requirements by
implementing SAP ECC 5.00.

 Added growth means exposure to multiple

currencies, locations and languages.
Wockhardt business processes were not integrated

data lacked consistency and accuracy.

ineffective decision-making.

lack of flexibility

inefficient use of resources.

data entry errors.

 higher
costs of error processing and
paperwork.

 late closure of accounts after every quarter.

 Legacysystem not meeting added growth

requirements
 SAP implementation was completed in a matter of eight
months from May 2005 to January 2006.
 Modules such as Materials Management, Production

Planning, Quality Management, Plant Maintenance, Sales &

Distribution, Customer Service, Human Resources
Financials & Controlling and Product Life Cycle
Management were implemented
 BUSSINESS PROCES & FUNCTIONS SUPPORTED BY ERP

S C
U U
P Enterprise resource Planning S
P T
L O
I M
E Finance and Accounting E
R R
S Human Resources S
 better integration of information, planning and inventory control across
business processes procurement and payments.

 unified data platform and standardized business processes.

 SAP system works in real time the staff at Wockhardt can update, retrieve
and manage data in real-time, enjoys full visibility into its stocks across all
sites.

 improved inventory management, while reducing dependency on employees

to provide data.

 SAP implementation has resulted in better Reduced Credit Returns

• The Company Wockhardt Limited
• The Solution SAP ECC 5.00
• Operating System IBM AIX 5L version 5.3
• Database Oracle 10g
• Servers A total of 16 servers, which is a mix of IBM
eServer p5 520 and IBM eServer p5 550.
• User licenses 500 user licenses
• Implementation partner IBM India
 integrated computer-based system used to manage internal
and external resources

 a software architecture whose purpose is to facilitate the

flow of information between all business functions.

 gives an overview of any business situation.

 ERP systems consolidate all business operations into a

uniform and enterprise wide system environment.
 Name of the Company Location of the company Implementer
 Arvind Mills Ahmadabad Coopers &
Lybrand
 Ranbaxy Mohali, Chandigarh Coopers &
Lybrand
 Reliance Industries Mumbai SAP India
 Mahindra & Mahindra Mumbai SAP India
 Siemens Mumbai SISL
 Crompton Greaves Mumbai Self
 Procter & Gamble Mumbai Self
We welcome your Queries...