What is ERP?
ERP is a solution, which facilitates company-wide integrated information systems, covering all functional areas performs core Corporate activities and increases customer service augmenting Corporate Image
Information Islands
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ERP - Definition
Software solution that addresses the Enterprise needs, taking a process view of the overall organization to meet the goals, by tightly integrating all functions and under a common software platform
Evolution of ERP
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 Mgnt.) 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)
ERP
Expectations
Integrating all the functions Integrating the systems running in all the locations Transparency of information using a single data source across the organization Software must be responsive Modular Flexible Easy to add functionalities Provide growth path
Manufact uring service Material Project Account ing
Sales
Forecasting Demand management Quotations and proposals Sales order processing Shipping Sales analysis
Distribution
Distribution Resource planning Electronic data Interchange Inventory tracking and control Invoicing Transportation Export documentation
Service
After sales service Service contract control Installation control Warranty operations Service analysis
Accounting
General Ledger Books of accounting Accounts payable Accounts receivable Budgetary control Cash flow management Loans Auding Letter of credit and Bill of exchange
Project Management
Project Project Project Project definition budgeting and estimation monitoring and control requirement planning
Materials
Materials requirement planning Purchasing Vendor development Contracting
Manufacturing
Capacity requirement planning Master production scheduling Production planning and control Plant operations Shop floor Bills of materials Engineering change Product definition/ change
Plant maintenance
Equipment maintenance operations Corrective and preventive maintenance Planning and execution Calibration Maintenance store management
Human resource
Recruitment and selection Payroll and compensation Statutory compliance Performance appraisal
Quality
Inbound and outbound quality planning Inbound and outbound quality assurance Inward inspection Outward inspection
Logistics
Inventory Raw materials Work in progress Finished material
Tangible benefits of ERP
Reduction in inventory levels Improvement in customer service level Improvement in purchasing cost Productivity improvement
Intangible benefits of ERP
Information availability System maintainability Reduction in response time
Entities involved in ERP implementation
Customers ERP vendors Implementation partners
BPR & ERP
Just automating the existing business practices will not help ERP to achieve the anticipated results. Business Process Re-engineering [BPR] brings out the deficiencies of the existing setup BPR and ERP will give way to implement new systems and the long pending improvements in the existing systems BPR may be time consuming but the scope can be restricted & controlled by the Management
BPR - Steps
Step 1 Step 2 Step 3
Understand
Understand the existing systems associated with all the functionalities
Simplify/Improv Automate e
Draft & frame the Implement possibilities & ways with the help to simplify or of ERP Improve or eliminate the processes
Vendor
SAP Oracle Applications Infor Global Solutions The Sage Group Microsoft Dynamics (Formerly Microsoft Business Solutions)
Lawson Software Epicor Visma Industrial and Financial Systems (IFS) NetSuite ABAS Software Ramco Systems Technology One
As mentioned before SAP is an acronym for "System Application & Products" which creates a common centralised database for all the applications running in an organization. The application has been assembled in such a versatile way that it handles all the functional department within an organisation. Today major companies including Microsoft and IBM are using SAP's Products to run their own businesses. R/2, which ran on a Mainframe architecture, was the first SAP version. Sap's products are generally focused on Enterprise Resource Planning (ERP). Sap's applications are built around R/3 system which provide the functionality to manage product operations, cost accounting, assets, materials and personnel. The R/3 system of SAP runs on majority of platforms including windows 2000 and it uses the client/sever model.
SAP provides majority of enterprise applications that includes: 1. SAP Knowledge Warehouse (KW) 2. Product Lifecycle Management (PLM) 3. Human Resource Management Systems (HRMS) 4. Supplier Relationship Management (SRM) 5. Supply Chain Management (SCM) 6. Customer Relationship Management (CRM) 7. Advanced Planner and Optimizer (APO) 8. Business Information Warehouse (BW) SAP NetWeaver is the latest technology introduced by SAP. SAP's products are mainly focussed on large organizations which mainly comprises of Fortune 500 companies and its a number one choice for ERP system worldwide. SAP has software solutions called SAP Business One (SAP B1) and SAP all in one which are mainly created for small and mid sized organizations. SAP products are used by millions people worldwide and in more than 120 countries and is constantly increasing. SAP had over 38, 4000 employees in over 50 countries, and more than 36,200 customers around the world as on Jan 2007