Enterprise Resource Planning

Pre-ERP ERA Individual silos ‡ Manufacturing ‡ Materials Management ‡ Quality Management ‡ Sales and distribution ‡ Finance ‡ Human resource ‡ Strategic & Operational Planning ‡ Logistics Management ‡ Maintenance Management

Strategy, Markets, diversification, development,
Budgeting, forecast, Stock levels, customer orders

Business planning General planning
No Resource OK? Yes

Master Schedule

Quantity /Requirements per product

Production Program

Bill of material, stocks, work in progress, lead times, handling rules

Material Requirement

Detailed Planning and Programming


Schedules, Capacity planning, efficiency, workflow, work stations

Calculation of workload
No Resource OK? Yes

Available material, available capacity, Suppliers performance

Release of shop floor order, works order and purchase order

Movement in and out , rejects,

Monitoring and execution

Execution and control

Extended MRP I

Internal and external priorities ,workshop , scheduling

Priority control Measurement of performance



The Advantages of ERP ‡ ‡ ‡ ‡ Business Integration Flexibility Better analysis and Planning Use of latest technologies .

REASONS FOR THE GROWTH OF THE ERP SYSTEM *To enable improved business performance Cycle time reduction Increased business agility Inventory reduction Order fulfillment improvement ‡ To support business growth requirement New products /products lines/new customers Global requirements including multiple languages and currencies ‡ To improve flexible .integrated real time decision support ‡ improve responsiveness across the organization ‡ To eliminate limitation of legacy system ‡ Fragmentation of data and processing ‡ Inflexibility to change ‡ Insupportable to technologies ‡ To Take advantage of the untapped mid-market organization ‡ Increased functionality at a reasonable cost ‡ Client/server open systems technology ‡ Vertical market solutions .

Enterprise Resource Planning Strategic & Operational Planning ‡Manufacturing finance Materials Management ERP SYSTEM ‡Human resource Maintenance ‡Quality Management Sales and Distribution Logistics .

Business organisation Model : Modular and Process View CEO/Business Head Marketing Production Procurement Finance HR and administration Sales Accounts Inventory Planning Dispatch of goods and billing Legends Process View Customer Bill and goods Modular View .

‡ Creates knowledge database using data warehousing and data mining applications ‡ Can run on different network environment ‡ Use object and component technologies .Features of ERP ‡ Business Rules embedded in the process ‡ Extensive use of stored procedures ‡ Stage wise cost data capture for analysis and decision making ‡ Resource planning .scheduling and optimisation.

Increase in productivity of the business ‡ Customer satisfaction increases due to shorter delivery cycles. ‡ Simultaneous activation of the decision centers due to instant triggers or updates ‡ Business operations transparency between partners cutting down the execution time of critical business operation ‡ Intelligent ERP download the decision making at lower level. releasing the burden on the middle management . Closer contact with the customer.Benefits of ERP ‡ Better management of resources reducing the cost of operation ‡ Planning at function and process level.

it makes the management alert at number of points demanding the decision or action ‡ The process becomes faster due to work group technology and application of work flow automation ‡ Due to support technologies like EDI .the human resource can be utilised better due to access of information across the database distributed across the organisation ‡ Since the ERP design is proactive .paperless office is a newer possibility as communication is faster and systems get connected directly .management can see the information in their perspective and take different view of the business ‡ Due to strong interface capabilities . E mail .Benefits of ERP ‡ Due to faster processing technology and SQL .office automation .

Benefits of ERP ‡ ‡ ‡ * * The ERP still remain a valid solution with the expansion of business as it is a scalable architecture Due to client server architecture. market and technology The quality of decision making improve as the user decision maker is made alert and knowledgeable and better informed dynamically . the process changes can be easily carried out in a short duration of time. the application of object technology and use of front end tools. The ERP implementation automatically leads to the usage of best business practices and practices bringing the consistency of operation in the world of business The ERP scope can be enlarged through internet/intranet/extranet access making the ERP sensitive to latest events in the business.

Operational Benefits ‡ Reduce processing cycle ‡ Access to multi dimensional information ‡ Empowerment of employess to become decision maker ‡ Effective cost control through use of cost of data for business decision ‡ Increase in resource productivity .

Business benefits ‡ Higher profits and improved ROI due to cost savings ‡ Improved working capital management due to reduced inventory and receivables ‡ Higher utilisation of resources reducing the cost of production per unit ‡ Higher customer satisfaction due to prompt deliveries .

Ease of configuration is due to object technology in ERP development ‡ Strategic information about sales.resource usage showed through pattern and trends ‡ Secured information access to authorised users ‡ Cost of business reduced business performance improved due to other technologies integration with ERP process . production .Management Benefits ‡ Change Management is easy due to configurable feature of the ERP.

and production planning Sales and distribution Plant maintenance Quality Management Materials Management Facilities Management and Maintenance Warehousing and logistics .Modules available in ERP ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ Finance Mfg.

Finance Modules (Sub system) ‡ ‡ ‡ ‡ ‡ ‡ Financial accounting Investment Management Controlling Treasury Enterprise controlling Management Accounting .

Sales Modules ‡ ‡ ‡ ‡ ‡ ‡ ‡ Forecasting Planning Sales budget Order Processing Order execution Delivery Invoicing Maintenance .

Business Modules ‡ ‡ ‡ ‡ ‡ ‡ ‡ Forecasting Planning Goals Objectives Targets Strategy Control Fixed Assets .

Production Modules ‡ ‡ ‡ ‡ ‡ ‡ ‡ Planning Order Control WIP Quality Scheduling Dispatch Quality Control .

Materials Modules ‡ ‡ ‡ ‡ ‡ ‡ Purchase Inventory Stores Valuation Analysis/control Cost accounting .

Personnel /HR Modules ‡ ‡ ‡ ‡ ‡ ‡ Human Resource Payroll Accounting Skill Attendance Inventory Analysis /control Consolidation of business Operation .

which is essential for maintaining competitive advantage ‡ ERP systems provide current status only such as open orders. Managers often needs to look at past status to find patterns and trends which will help for better decision making ‡ The data in the ERP applications is not integrated with other enterprise system and does not include intelligence .Limitations of ERP ‡ Managers cannot generate custom reports and queries without a help of a programmer and this inhibits them from obtaining information quickly.

Technologies used to overcome limitations of ERP ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ Business process Re-engineering (BPR) Management Information System ( MIS) Decision Support System ( DSS) Executive Information System( EIS) Data warehousing Data Mining On-line analytical Processing Supply chain Management .

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