Enterprise Resource Planning (ERP)

A software package developed for optimum use of resources of an enterprise in a planned manner Integrates the entire enterprise starting

From the supplier to the customer Covering logistics, financial and human resources

A package for cost saving A single solution addressing the information needs of the whole organization

ERP- Features

A central data base Accommodating Variety

Provides multi-lingual and multi-currency, multi mode manufacturing and multi- facility capabilities to compete and succeed globally
Used for Flexible reporting tools to extract information as and when needed without depending on MIS department For Electronic data interchange to accept information like Purchase Orders, Schedule amendments, cash payments, order acknowledgements, raising invoices etc.

Integrated Management Information

ERP- Features

For Imaging to provide the ability to display drawings , specifications, store original sale orders, Purchase Orders, quotation etc. For Database creation starting with attendance reporting, monitoring and control of machines and post sale statistics Integration of new product introductions or changes to existing products fully into the enterprise system of Engineering Change Management, to include electronic approval, routing, change order process routing, revisionlevel control etc.

Seamless Integration

ERP- Features

Supply Chain Management Resource Management

Effective management of human as well as equipment resources Heart of any ERP system providing for data for employees, suppliers and customers

Integrated data model

ERP- Scope

Financial

Financial accounting, treasury management, asset management and enterprise control Production Planning, Material management, Plant maintenance, Quality management, Project management & Distribution

Logistics

management

Human Resources training and development and skills inventory Work Flow: Integrates the entire organization with flexible assignment of tasks and responsibilities to location, positions, jobs, groups or individuals

Enterprise Resource Planning (contd.)

ERP integrates enterprise-wide activities:

Marketing Accounting Production Logistics Product Design Order processing Finance Materials Human Resource Quality
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Requirements of ERP

People in the organization have to be prepared. Skills, methods and attitudes of people are important.

Organization has to introspect and constantly

improve with ERP as an enabler.

Transparency and honesty of data are important.

ERP- Benefits

Some of the Tangible benefits

Reduction of lead time (up to 60%) On- time shipments Excellence in business Increase in inventory turn over to over 30% Reduction of cycle time to 80% Reduction of W-I-P inventory to 70%

ERP- Benefits

Some Intangible benefits

Better customer satisfaction Improved vendor performance Reduced quality costs Improved resource utilisation Improved information accuracy Improved decision- making capacity Integration of work-flow in the entire enterprise Transparency of decisions and Introspection

ERP

Application

Large number of organization nationally and internationally have implemented already/ in the process of implementing

Selection of ERP package

Cost of package from few lakhs to a few crores Needs of the company to be fully understood before ordering a package Implementation period varies from 12-24 months Building of right platform, right software vendor selection and right consultant for implementation essential to get the right ERP package

ERP

Major vendors are SAP, Oracle applications and Baan Others in the field include JD Edwards, People Soft, Scala, Ramco Marshal, QAD etc A very high commitment absolutely essential for a successful implementation of ERP

Limitations

Personnel Turnover Re-engineering in business processes Expensive Sometimes it is too rigid and difficult to adapt. Less flexibility in implementation.

ERP

Enterprise Resource Planning is used world wide by companies to integrate business resources and thereby reduce costs and increase productivity ERP provides a total solution on an integrated system providing information needs of the entire enterprise Careful selection of the ERP package is extremely important to suit the specific business needs of the enterprise as it involves huge expenditure