Erp

Concept ERP is a set of tools and processes that integrates department and functions across a company into one computer system. ERP runs off a single database, enabling various deptts to share information and communicate with each other. ERP system comprise function specific modules designed to interact with other modules, e.g. accounts receivable, accounts payable purchasing etc. ERP is an enterprise reengg. solutions that uses new business computing paradigms to integrate IT processes across co’s divisions and departments.

Evolution of ERP Timeline System Description 1960s Inventory Mgmt & control It’s a combination of infr. tech, and bus processes of maintaining the appropriate level of stock in a warehouse. 1970s Material Req. Planning Utilizes s/w applications for scheduling production processes. 1980s MRP II Utilizes S/w applications for coordinating mfg processes. 1990s Enterprise Resource Planning Uses multi module application s/w foe improving the performance of internal bus, processes.

What drives ERP ? Business Customer satisfaction Business development Face competition Efficient processes

Cross functional approach of ERP Customer/ Employee Production Planning Integrated Logistics Accounting and Finance Sales, Distribution, order Management Human Resources

Components of ERP ERP system is consists of two types of components Core components and Extended components. CORE ERP COMPONENTS : CEC are the traditional components included in most ERP systems and they primarily focus on internal operations . EXTENDED ERP COMPONENTS : EEC are the extra components that meet the organizational needs not covered by the core components and primarily focus on external operations.

CORE & EXTENDED COMPONENTS OF ERP Enterprise Resource Planning S/W Accounting & FINANCE Production & Materials Management Human Resource Business Intelligence Customer Relationship Management Supply Chain Management E- Business Core ERP Components Extended ERP Components

Core ERP Components:- Accounting and Finance: A/cng and Finance components manage a/cng data and manage financial processes within the enterprise with functions as accounts payable, accounts receivable, assets management, credit management etc. Production and material management : handles the various aspects of production planning and execution such as demand forecasting, product scheduling, quality control.

Example of Production planning process of Grupo Farmanova Intermed, in Costa Rica… Sales Forecasting Operations Planning Detailed Scheduling Materials requirement planning Production Purchasing

Human Resource Components: Tracks employee’s information including payroll benefits, compensation, performance assessment, and assume compliance with legal requirements of multiple jurisdictions and tax authorities. Extended ERP Components:- Business Intelligence: ERP system offers powerful tools to measure and control organizational operations. BI describes the information people used to support their decision making efforts.

Customer Relationship Management Component: involves managing all the aspects of customer’s relation with an organization to increase customer loyalty and retention and organization’s profitability. Supply Chain Management Components : involves the management of information flows b/w and among stages in a supply chain to maximize total supply chain effectiveness and profitability. E-Business Components: means conducting business on the internet, not only buying and selling, but also serving customer and collabrating with business partners. Two primary functions of E-Bus is E-Procurement and E-Logistics.

Example of E-Business as ERP component of Orbis Corp. , Australia. Retailer Supplier (Sony) Courier AD Agency Scanning House Digital Image Catalog User Linear Process model Followed By Orbis Corp.

After Introducing E-bus,the Orbis Business model is like Product-bank.com Hub Printer Sony Nokia Other AD Agency 1 AD Agency 2 Other Retailer 2 Retailer 1

Basic advantages of ERP . The Direct advantages include improved Business Integration Efficiency Faster response Flexibility Better analysis and planning capabilities Use of latest technology The Indirect benefits includes better corporate image, improved customer goodwill, customer satisfaction etc.

Some of the quantitative benefits are: Reduced Inventory and inventory carrying cost. Reduced manpower costs. Improved sales and customer service. Efficient financial management. Some of the qualitative benefits are: Accounting Product and process design Production and material management Sales MIS Function

Why ERP is Important in a company?

ERP in A company results ERP effects almost all the organizations- irrespective of their size and nation. Forces the competition to change their strategies. Influence bus partners to become more competitive. Improves the Profits. Fully utilize the true potential client-server computing to deliver an enterprise product. Changes the nature of information systems functions.

ERP Benefits Integrate Financial Information Integrate Customer Order Information Standardize & Speed up manufacturing Processes Reduce Inventory Standardize human resource information

Benefits to Colgate Pamolive Order acquisition & processing reduced from 2 days to 4 hrs On-time deliveries increased to 97.5% from 91.5% Domestic inventories dropped by one -third Receivables outstanding dropped to 22.4 days from 31.4 Total delivery cost per case reduced by 10%

Data In 1999,Hershey missed customers( walmart) as 3 mths behind schedule, trying to fix glitches in order-processing, shipping functions Warehouses piled up with undelivered goods III quarter sales dropped by 12.4% Earnings were off 18.6%

Case study-Ambuja cements Launched Connect India Plus, which has proved to be one of the most significant, large scale IT deployment. Connecting 200 locations , training 2,500 end-users , and migrating data from 8 different legacy systems onto the ERP all in 14 months flat manufacturing plants are located in remote areas where the scope of connectivity was minimal, the resources, namely hardware, software and people were located at plant sites

Reasons to implement uniform, standard, and ubiquitous system across the organization(globally also) reduction in cost of operations and maintenance of the IT system respond quickly to changes in the business environment .

Challenges faced Tech -multiple plants, each with their own computer systems and processes, there was a need to create a single business blueprint across the organization. People -integrate individuals with diverse background to be able to work as a focused team. Processes - Infrastructure refreshes, Data migration

After the successful implementation improve operational efficiency in terms of cycle-time monitoring fleet management The information is dispatched to customers via SMS

Conclusion It is the right combination of technology, architecture, functionality, active customer support that provides max payback potential For successful implementation it is imp to anticipate, handle & mitigate risks Introduce new business processes, eliminate redundant practices

Erp

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