ERP-Enterprise Resource Planning: (An Introduction)
ERP-Enterprise Resource Planning: (An Introduction)
ERP-Enterprise Resource Planning: (An Introduction)
Planning
( An Introduction)
B.Ramesh
Kumar
Definition Of ERP
What is ERP
?
Facilitates Company-wide integrated
Information Systems Covering all functional
Areas.
Performs core Corporate activities and
increases customer service augmenting
Corporate Image.
Organizes & Optimizes the data input
methodologies systematically.
Evolution of Business
Applications
MIS - Management Information Systems
Decision Support - No
Evolution of Planning
Systems
Materials Requirement Planning (MRP)
Manufacturing Resource Planning ( MRP II)
Enterprise Resource Planning ( ERP)
Other terminologies are :
Is It Only a Jargon
?
Is It Going to be there
long?
Yes and No.
ERP will be there for a long time, if you are
willing to upgrade to new versions with new
features as and when the are released in the
market
Can We wait
? have :
Wait if you
Good systems running.
No immediate threat of Y2K, Euro and other
known/unknown problems.
No management commitment.
Financial problems.
Do not wait if you have :
Tough competition in the market.
Multiple location operations.
Plans to grow Globally.
Why ERP
?
Profitability
Demands on the
Industry
Tough competition
Need to analyze costs / revenues on a product
or customer basis
Flexibility to respond to changing business
requirements
More informed management decision making
A Typical IT Story
Manufacturin
g
location 1
My growth
will be OK .
No?
Financ
e
Corporate
office
Sales
Manufacturin
Interfaces
Tools
IT
Present Software does not meet business needs
Legacy systems difficult to maintain, Y2K
Problem , Euro currency
Subsystems of ERP
Logistics
Bill Of Materials
Sales & Marketing
Master Scheduling
Materials Requirement Planning
Capacity Requirements Planning
Purchasing
Shop Floor Control
Accounts Payable/Receivable
HR
Oracle 4.8
Baan 3.0
CA 3.0
JDE 2.2
SSA 2.1
GEAC 2.0
IBM 1.8
JBA 1.7
Others 59.0
Understanding ERP
Integration of Information
Systems
IS messages
Manufacturing
Local purchasing,
invoice verification
Inventory
management
Internal sales,
shipping and billing
Profit/loss
Capacity utilization
IS messages
Head
Quarters
Information
Systems:
Project Mgmt
Inventory
Purchasing
Sales
Budget
Marketing/Sale
s
Sales, shipping
and billing
Purchasing of
trading goods
Inventory
Management
Customer
Definition of Business
Intelligence
Any tools enabling people to make better decisions
and thus improve their business processes
Examples
:
Reporting
Data mining
Early warning systems (robots)
Suppliers
Reference Model
Customer
Requirements
New Business
Concepts
New
Technologies
Business
Engineering
Workbench
Please Accept my
new order for 1000
more sets
Customer
Representative
Increase
credit limit
Launch
Workflo
w
Prepare
production
Credit Manager
Product Manager
Schedule
customer
visit
Sales Manager
Financ
e
Procurement
Purchasin
g
market
Machine
s
Productio
n
Operating
resources
Managing
Balance
sheet
Sales.
Human
resources
Transport
Allocation
ATP
Credit limit
Sales order
entry
ED
I
EDI
entry
Blocked
Picking
Delivery
EDI
note
Billing
Scan
log
ED
I
Loading
list
Workflow for
exception handling, Trigger for mail, transactions,
EDI
Go Ahead with
ERP
Re-engineering
Study the current system & Processes
Design and develop new systems
Define Process, organization structure,
procedures
Develop/Customize the software
Train people
Implement new system
Disadvantages
o Best Business practices would have been ignored
Simplify
Processes
by
Eliminating
waste
Eliminating
Combining
Rearrangi
ng
Automate
the
Process
EDI
ER
P
ERP Selection
Check whether all functional aspects of your
Business are covered
Check whether all the business functions and
processes are integrated
Check whether all latest IT trends are covered
Check whether the vendor has customizing &
implementing capabilities
Check the Service options available
Define Requirements
Determine the hardware required
Analyze the existing Processes
Fine tune the processes to be in line with
those of ERP defined
ERP Implementation
Commitment from Management
Form a task force with personnel from all
functional Areas
Take care of Hardware requirements
Step-by-step rather than big-bang introduction
ERP
Involves
Project Planning
Business & Operational Analysis, including Gap Analysis
Business Process Re-engineering (BPR)
Installation & Configuration
Project Team Training
Business Requirements Mapping to Software
Module Configuration
System Modification and Interfaces
Data Conversion
Custom Documentation
End User Training
Conference Room Pilot
Acceptance Testing
Implementation Approach
Phase
Detailed
Discussions
Design &
Customization
Implementation/
Prepare to Go Live
Production/
Go Live
Task
s
Project Initialization
Evaluation of current processes,
business practices, requirements
Set-Up Project Organization
Map Organization
Map Business Processes
Define Functions and Processes
ERP S/w Configuration
Build ERP System Modifications
Deliverable
s Accepted norms &
Conditions
Project Organization Chart
Identify Work Teams
Organization Structure
Design Specification
Process Flow Diagrams
Function Model
Configuration Recording
Systems Modification
Advantages Of
ERP
Decide
Make Or Buy !
Embrace
New Technologies
Internet/Intranet enabled
Transporters
EDI
Banks Vendors
Video Conferencing
Demand
Chain
Management
Supply Chain
Management
Summary
Optimum utilization of resources
Customer satisfaction