ERP Book Excerpts Zaveri Revised

ERP Business Blueprint
This ERP book is available from: Himalaya Publishing House Pvt. Ltd. Offices as follows
Mumbai (Head Office) Mr. Neeraj Pandey / Mr. Anuj Pandey Himalaya Publishing House `Ramdoot`, Dr. Bhalerao Marg, Girgaon, Mumbai - 400 004, Maharashtra, India Tel : (91) (22) 23863863/23860170, Fax: (91) (22) 23877178 E-mail : himpub@vsnl.com, Website : www.himpub.com NEW DELHI "Pooja Apartments", 4-B, Murari Lal Street, Ansari Road, Darya Ganj, New Delhi 110 002. Tel : (91) (11) 2327 03 92, Fax: (91) (11) 2325 62 86. NAGPUR Kundanlal Chandak Industrial Estate, Ghat Road, Nagpur 440 018. Tel: (91) (712) 0712 272 12 16, Fax: (91) (712) 0712 272 12 15. BANGALORE No. 16/1 (Old 12/1), 1st Floor, Next to Hotel Highlands, Madhava Nagar, Race Course Road, Bangalore 560 001. Tel: (91) (80) 2228 15 41, 2238 54 61, Fax: (91) (80) 2228 66 11. HYDERABAD No. 2-2-1 167/2H, 1st Floor, Near Railway Bridge, Tilak Nagar, Main Road, Hyderabad 500 044. Tel: (91) (40) 5550 17 45, Fax: (91) (40) 2756 00 41. CHENNAI No. 85/50, Bazullah Road T.Nagar Chennai 600 017 Tel No 044-28144004/ 28144005 PUNE First Floor. Laksha Apartment, No. 527 Mehunpura Saniwarpeth Near Prabhat Theater, Pune -411 030 Tel No 020-24496323/ 24496333 LUCKNOW C-43, Sector C, Ali Gunj Lucknow 226 024 Tel No- 0522-2339329. AHMADABAD 114, Shahil 1st Floor Opp. Madhu Sudan House, C.G.Road Navrang Pura Ahmedabad -380 009 Tel No- 079-26560126 Mobile- 09327324149 09314679413 ERNAKULUM 39/104 A, Lakshmi Apartment Karikkamuri Cross Road Ernakulum, Cochin 622011 Tel No 0484-2378012, 2378016 Mobile 09344199799
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Seamless Integration of business processes in ERP

SECURITY ISO / Q C CRM
VAT
COST SHEET ESTIMATE
LOCAL PURCHASE
Accounts
Sub-Contractor OUT
PAYROLL HR
Order fulfillment
Import Purchase Production
BOM
SUBCONTRACTOR
EXPORT IN
Material Management
Send / Receive data MRP

EXCISE
Multilocation
PLANT MAINTENANCE
Automatic E-Mail Alerts
After Sales Service
Resource Matrix E-Business
Sales & Distribution
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ERP Business Blueprint Copyright 2009-2011 Zaveri Jyotindra. All rights reserved. No part of this book may be reproduced, translated, converted into audio-video media, stored in a retrieval system or transmitted in any form or by any means electronic, mechanical, photocopying, recording, or otherwise without the prior written permission of Prof. Zaveri Jyotindra. Permission may be sought directly from Prof. Zaveri. Email j.zaveri@ERPerp.com . The export rights of this book are vested with Prof. Zaveri Jyotindra. The ERP Software is registered with the government of India and copyright law protects the same. Any use of unauthorized source or ERP software is illegal. All rights are reserved with Prof. Zaveri Jyotindra for the ERP computer program. Limits of liability and disclaimer of warranty: Notice: The author and publisher of this book have tried best to ensure that the programs, procedures, and functions described in the book are correct. However, the author and publishers make no warranty of any kind, expressed or implied, with regard to these programs or documentation contained in this ERP book. The author and publisher shall not be liable in any event of any damages, incidental or consequential, in connection with, or arising of the furnishing, performance or use of the ERP software package, procedures, and functions. Product name mentioned are used for identification purposes only and may be trademarks of their respective companies. All trademarks referred to in the book are acknowledged as properties of their respective owners. No responsibility is assumed by the author for any damage to persons or property as matter of products liability, negligence or otherwise, or from any use or operations of any methods, instructions, or ideas contained in the material herein. Because of rapid advances in the Information Technology and business challenges, independent verification of methods should be made. The author has used its best endeavors to ensure that any URLs for websites referred to in this ERP book are correct and active at the time of going to press. However, the author or publishers has no responsibility for the websites and can make no guarantee that a site will remain live or that the content is or will remain relevant. First edition: 2009 Published by Himalaya Publishing House. This softcopy edition revised again in 2010.
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ERP Business Blueprint About the book Some companies use information to innovate, control costs, or capture new markets. Others gather and evaluate information, but seem unable to translate data into productivity. In this ERP book, the author examines how companies use the management information to gain the competitive edge. Enterprise Resource Planning (ERP) helps the organization, especially manufacturing companies to manage the growth. There will be one more w in the WWW that is wWWW, the wireless-World-Wide-Web. SME cannot keep on using the bullock cart method of doing business anymore. What is new in this ERP book? Unlike other ERP textbooks, this book gives actual data entry screens, reports, and master files details for practical learning. This book is a good reference for various key functions managers, such as accounts, purchase, sales, production, etc. It is not just a book but also a companion for corporate commandos. This ERP book might not seem extra-ordinary, but it is. Business processes integrated in ERP should have already been demystified, but it has not been. What does this ERP book offer to lecturers, faculties, consultants? The book is projected to be a comprehensive guide to all aspects of deploying ERP within an organization. Reader will find that this ERP book has a good range of case studies to support their teaching. Who should use this ERP book? This book is useful for existing ERP users and ERP power-users as well. Senior managers and directors, CEO, CFO, COO, seeking to deploy ERP to benefit their organization. For companies who have deployed ERP but not able to understand why real benefit is not seen. Study of this book will reveal the mistakes made by management, ERP coordinators, ERP task force, or ERP steering committee. Use this book before, during and after ERP is deployed, as a reference material. The knack to making informed decisions is necessary for success. Yet many times, managers make vital decisions without real information. Use this book to understand how you can use ERP to enhance your decision-making aptitude. This book will be of immense value to professionals dealing with ERP implementation, I. T. professionals, mangers handling sales and distribution, logistic, supply chain and finance. MBA Students: This ERP book will be very useful to the B-Schools students who want to pursue their MBA. All these aspiring managers must know ERP well. In the interviews now on companies will not ask whether you know MS office or not, they will ask, Do you know ERP? This will be useful for managers working in small and medium size enterprises (SME). ERP Case studies: The author has worked on live ERP projects for over 200 organizations, in India and abroad. This is result of some twenty years of practical ERP experience. The author had an opportunity to offer I. T. solutions to small and large organizations, private and Government organizations. The ERP book also includes several case studies to illustrate various points in the book. This important book gives tactics about ERP implementation. The need has never been more crucial. Global economic scenario is unpredictable. The competition is increasing. Business executives are challenged to leverage I. T., to improve the enterprise
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ERP Business Blueprint performance. This book attempts to answer questions such as, How do you become a strategic ERP consultant, that enables efficient business management and improve operational efficiency? ERP is also evolving. Author discusses the emerging developments and compelling Business Process Management (BPM) for success. What can ERP do for the SME? Act confidently. Improve operational efficiency. Give the enterprise the edge it needs to succeed. Study this book to see why even small and medium business (SMB) units are using ERP software to achieve a competitive advantage. The decision making process is enriched if additional, relevant information is available. However, collecting information is costly. Hence, cost of additional information need also to be controlled. ERP will help user in this aspect immensely. Decision making under uncertainly will be facilitated. ERP is synonym to the DSS or Decision support system. This ERP book explains how ERP as a management tool, in a SME is a powerful and strategic set of applications that provides business visibility with real-time personalized access to enterprise data, for the purpose of analyzing, and benchmarking customers, suppliers, and the overall business' performance. This book discusses the common questions asked, to run a manufacturing company efficiently: Do you get information when you want? Do you have islands of information? Is stores-in-charge able to give you correct quantity of raw material in stock, as of now? Is purchase order linked to material inwards? Is inventory and accounts integrated? The companion website: Faculty and students can use the online resource for this book at www.ERPerp.com. This companion website will be helpful for students as well as lecturers. Make the most of your studies. This book attempts to answer all questions about ERP that you wanted to ask, but did not know whom to ask.
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Learning Objectives What is in it for me? Upon completion of this book, reader will be able to: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. Describe the concept of ERP. Define key terms as they relate to ERP. Understand the management. Material Requirement Planning and supply chain
State the benefits of ERP. State the pitfalls of ERP implementations. Understand the Reengineering. need for change management or Business Process
Learn about the MIS or Management Information System. Understand the Total Cost of Ownership (TCO). Write a business case to justify an ERP implementation Align strategic goals, people, knowledge processes, and internal systems Concept of business processes linking with other processes. Understand a key business processes. Improve and simplify a business process. Apply the result of business process analysis to an ERP implementation. Explain the interrelationships among the core business processes of sales order or Order Receipt Information or Order Acceptance, Bill of Materials (BOM), and work order to production. Describe the technological infrastructure requirements in implementing ERP. Describe project management and its use in implementing an ERP system. Describe steps necessary to successfully implement an ERP system Describe the roles and responsibilities of the key organization players or stakeholders. Describe how ERP can be used to achieve and sustain competitive advantage.
13.
14. 15. 16. 17.
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ERP Business Blueprint About the author Prof. Zaveri Jyotindra, Computer Engineer (Germany), I. T. consultantsince 1975.
Independent faculty and management consultant .
Visiting faculty for teaching management subjects: Information Technology, e-Marketing, Social media marketing, ERP, MIS, e-Business, e-Commerce, Data mining and web mining.
Providing professional consultancy for above subjects. Sought after speaker for
Visiting faculty in leading management institutes and colleges. seminars and management training programs.
Mr. Zaveri works with business users to determine and translate business requirements into Internet Technology solutions. Mr. Zaveri provides management training and consultancy for ERP, Internet, e-Marketing, Website using WEB 2.0, SEO, e-Business, e-Commerce, Data mining, Business Intelligence, and social media marketing strategy. Cyber branding. He specializes in creating "Social Media Marketing" campaign. Experienced faulty for subjects such as ERP, MIS, e-Commerce solutions, 'Supply Chain Management', Change Management (B. P. R.), Sales & Distribution systems, , and automation of manufacturing business process.
Mr. Zaveri is the architect who designed the ERP software called Digital Nervous System or "DNS", in 2002. Now used by hundreds of users. DNS ERP software package is intellectual property of Mr. Zaveri. This is an Integrated Business Management package. He has also designed ERP for Doctors, ERP for Institute management.
Formerly with IBM, trained in Germany (1977). Knowledge of networking and fundamentals of computer systems architecture a unique combination of expertise in computer hardware, software, and Internet. Over thirty-five years of experience in software development, implementation, and I. T. training. See year-by-year record of accomplishment since 1975. http://www.dnserp.com/track_record.htm Publications:
Prof. Zaveri is author of following books: (1) Book on ERP (2) Book on Internet Programming and Cyber Law (3) Book on MIS (4) Book on Business Applications. For professional networking http://in.linkedin.com/in/jyotindrazaveri
Traveled abroad: From India - Bahrain, France, Germany, Singapore, Switzerland, Thailand, UAE, UK, and USA.
Italy,
Japan,
Malaysia, Nederland,
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Foreword I read carefully, and with keen interest your book on Enterprise Resource Planning so painstakingly written by you. It throws a new light on the concept of Enterprise Resource Planning and would be of great help to senior Managers as well as academicians. It covers all the aspects of Enterprise Resource Planning (ERP) and therefore, would be a great source of guidance to the readers concerned. This is a first ever kind of book I have come across written in a scientific manner and presenting the same in a lucid and simple language. ERP as a concept and as a business process model is of recent development. You have written the book specifically for the functional managers targeting the SME sector (Small and Medium size Enterprises). This book exhaustively covers different modules in the industries and actual data entry screens, reports, master files of the business processes and sufficient case studies to understand the ERP in practice. You have wonderful track record of rich and vast experience and knowledge of India and abroad. You have amply demonstrated it in the book. The book can be definitely used by business schools as a reference book for ERP. It is useful to corporate to follow the steps given by you in order to reap the benefits of ERP in their organization. The chapter regarding the Humor is an interesting addition to the book not to be found commonly in such reference books. I would certainly like everyone concerned to use this book for reference purposes. Please accept my appreciation and congratulations for writing this book on a valuable subject. Regards, Dr. P. C. Shejwalkar, [Director IME, President ASM. Ex Dean Faculty of Management & Professor Emeritus of Commerce & Management Sciences, University of Pune].
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Book review I appreciate Prof. Jyotindra Zaveri for making immense efforts in authoring the book "Practical Guide to Enterprise Resource Planning". It reflects several years of experience and sincere efforts to present the complex subject in simple language loaded with live cases. Prof. Jyotindra Zaveri has been helping enterprises, especially from the Small and Medium Enterprises segment in implementing ERP to gain competitive advantage. Several cases in the book clearly reflect the dexterity. It is especially useful in the highly dynamic and demanding market environment of the 21st century that SME have to face. This book is a real treasure of the very best concepts from academics, relevant and insightful case studies, and powerful prescriptions for practicing managers. Prof. Jyotindra Zaveri has tried his best to keep away the hype and jargon. Reader can easily navigate the world of ERP. B-School students as well as practicing managers will certainly find this book very interesting especially with its own companion website. Dr. Milind M. Oka [Dr. Oka holds Ph.D. from University of Pune. He is Certified Assessor of Quality Systems. He has rich experience of over 35 years. He is an Academician, Management Consultant, Author, and Corporate Trainer.]
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ERP Business Blueprint Book review The book on ERP by Prof. Jyotindra Zaveri presents in a very lucid way and simple language various aspects of ERP. Especially he highlights seamless integration of business processes in ERP by using more than 300 diagrams / pictures / tables and giving practical case studies and examples from purchase, accounts, exports, material management, HR and all departments, which has increased its usefulness and value. I can safely say that even a layman like me or anybody working in ERP system will get all practical hints and guidelines regarding what, why, where, when and why of ERP. Mr. Shriniwas Rairikar, M. Com., MPM, LLB, DLL & LW, ISO 9001-2000 Lead Auditor. ISO 9001-2000 Diploma (U.K.). Senior Director, MCCIA. Founder Director Dasbodh Management academy.
Book review Dear Sir, At the very outset, I would like to congratulate you for the launch of your book. I have just one comment - being an institute in e-business, of all the books on ERP that I have gone through, yours might be in the top 10 books that I have read so far. Many of them are by international authors also. Once again, congratulations for the launch of the book. I am sure it will be a great success. Thanking you, With warm regards, Jai Singh Director IIeBM, Management Institute.
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Book review The recognition of ERP as a business application does deserve a special mention. The most crucial factor in the whole system of ERP is the implementation aspect. The implementation phase can decide the fate of ERP and its success. The success of an ERP implementation again lies on the speed at which it is introduced and applied. For this, necessary training needs to be imparted to all concerned who can implement ERP at the fastest speed. This training converted into practice by implementation of ERP would reveal the real advantages that an organization would receive in terms of cost control and cost reduction at every stage and improvement in profitability. The present work is the outcome of Prof. Zaveris hard work of over a period of nearly two decades in this area of ERP. The contents of this book depict his deep knowledge about the subject. His step-by-step approach with logical explanation at every stage leads a reader to end up with a thorough understanding of the subject. Even a nonprofessional can understand the language that he has used in his book. Prof. Zaveris interaction with various industries as well as students has helped him to assimilate his ideas in writing this book. I encourage and recommend SMEs, corporate, and others to read this book, understand the subject thoroughly and to implement ERP at their organizations. This book would also be extremely useful to students to understand the subject since it is written in a most lucid way. I wish all success to Prof. Zaveri in launching this unique book for the first time in the market. Dr. A. P. Ghosh Director Balaji Institute of Modern Management (BIMM) Sri Balaji Society, Pune
[Dr. A. P. Ghosh has a Ph. D. in Financial Management from University of Pune. He is certified corporate director from World Council for Corporate Governance London. He has authored many books on finance and management].
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ERP Business Blueprint Preface India Inc. is growing. SME are growing faster. In the midst of the Internet revolution, they are caught between the two methods of doing business. One is bullock cart method (legacy procedures) and the other is business process driven method. This book gives the reader the basic as well as advanced concepts of ERP. The business logic is prepared from the business rules approved by the top management. The entire organization, business partners, associates, employees, work as per the system defined by the business rules. The ERP captures these business rules. ERP software system will now ensure that everybody follows the same. ERP and ISO procedures go together. ERP is complete integrated business management software. This manual intends to define the concept and explain the logic on which ERP is designed and customized for a typical organization, especially the manufacturing business, as this poses the biggest challenge in deploying ERP on the shop floor. What is ERP? The name ERP or the Digital Nervous System is mentioned in the book Business @ speed of thought, written by Mr. Bill Gates. The ERP is like the nervous system of the human body for the business. Reader will find the word ERP used in the book as synonym to ERP. MIS or the Management Information System in the business organization is the result of good ERP software. All kinds of organizations are using ERP to get good MIS. For instance, hospitality industry, hospitals, airlines, institutes, etc. This book also deals with the manufacturing business, which is yet unexplored. The supply chain management (SCM) is also one of the key business processes that are integrated in a good ERP system. There is a need for ERP book that give practical guidelines. Managers do not understand the idea that manufacturing activity can be viewed as a process and then improved. Once I had a chance to talk to someone in an MNC food chain joint. He showed me a manual where it was clearly written serve the glass of the soft drink with four cubes of ice and put in the left side of the plate. There are not many SME organizations that have bothered to make a proper SOP (Standard Operating Procedures) manual. Sometimes the MD argues with me, what is there to write? In other words, hardly any document is available. This book does not discuss the hard-core programming used in the ERP software. Bits and bytes, tables of the backend RDBMS is not described in this book. This book is not for a developer who is looking for programming techniques used in ERP. Zaveri Jyotindra, Pune j.zaveri@dnserp.com
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ERP Business Blueprint Acknowledgements The author would like to thank the team at ERP e-Business Consultancy for their help in the creation of this book. Many thanks to the reviewers who have greatly assisted in developing the book. I thank Dr. P. C. Shejwalkar to read the book and write the foreword. I thank Mr. Shriniwas Rairikar (MCCIA), Dr. A. P. Ghose to give me guidance, especially stressing focus for the MBA students. I thank Dr. Milind Oka for taking his time for reviewing this book and give valuable suggestions. Care is taken to alter the actual data so that real name or actual information is not disclosed. However, in some case of screen dumps or showing graphics image of ERP input / output, some name may also appear, but the care is taken that the same does not harm the businesses. Especially while presenting case studies, organization may not like to publish the name directly, so I have avoided taking the name of the organization wherever possible. I would like to thank Mr. Surendra K. of Himalaya Publishing House for publishing this ERP book. I also thank Mrs. Savita Anil Shinde to carry out the typesetting work. Effort has been made to trace the owners of copyright material, in a few cases this has proved difficult. I take this opportunity to offer my apologies to any copyright holders whose rights I may have unwittingly infringed. Zaveri Jyotindra
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CONTENTS PART I ..................................................................................................................................................................... 21 CHAPTER 1. INTRODUCTION ..................................................................................................................... 22 HOW TO USE THIS BOOK?........................................................................................................................... 22 WELCOME TO ERP ............................................................................................................................................ 23 ERP Definition ................................................................................................................................................ 23 ERP vendors.................................................................................................................................................... 25 What is the difference between SAP and ERP? ................................................................................. 25 ERP customization ........................................................................................................................................ 26 ABOUT SMALL AND MEDIUM SIZE COMPANIES ............................................................................. 27 COMPUTER NETWORK SYSTEM SCHEMATIC ..................................................................................... 30 IT INFRASTRUCTURE RECOMMENDATIONS CHECKLIST ........................................................... 31 ERP IMPLEMENTATION PROJECT MANAGEMENT ........................................................................... 33 Implementation Strategy .......................................................................................................................... 34 Roadmap .......................................................................................................................................................... 39 CHAPTER 2. MASTERS DATA AND PRINTING CONCEPTS .......................................................... 43 MASTER DATA ENTRY FORMS.................................................................................................................... 43 PRINTING (HARDCOPY) ............................................................................................................................... 47 CHAPTER 3. CHANGE MANAGEMENT ..................................................................................................... 49 BPR OVERVIEW ................................................................................................................................................. 52 WHAT USER WANTS? ..................................................................................................................................... 55 CHAPTER 4. TCO OF ERP .............................................................................................................................. 56 CHAPTER 5. ERP IMPLEMENTATION ..................................................................................................... 58 OATH ........................................................................................................................................................................ 58 WHY ERP PROJECT FAILS ............................................................................................................................ 59 ERP IMPLEMENTATION TIPS FOR SUCCESS ..................................................................................... 64 IMPORTANT INSTRUCTIONS ..................................................................................................................... 65 CUSTOMIZATION .............................................................................................................................................. 67 IMPORTANCE OF QC DATA .......................................................................................................................... 71 CRP ........................................................................................................................................................................... 73 TEST RUN: CHECKING AND MARKING .................................................................................................. 75 PROOF OF CONCEPT FILE ............................................................................................................................ 77 DRAFT OF LETTER TO INFORM VENDORS / CLIENTS.................................................................. 81 CHAPTER 6. GETTING STARTED ............................................................................................................... 82 ERP CONCEPT ..................................................................................................................................................... 83 Material outward ........................................................................................................................................... 85
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ERP Business Blueprint CHAPTER 7. SCOPE OF ERP MODULES.................................................................................................. 86 CHAPTER 8. ERP DOCUMENT FLOW AND MATERIAL FLOW ................................................... 110 PART II ................................................................................................................................................................. 112 SECURITY MODULE & CLOSING BALANCE ....................................................................................... 114 CLOSING BALANCE ........................................................................................................................................ 114 CLOSING STOCK .............................................................................................................................................. 117 CHAPTER 9. PROCUREMENT MODULE................................................................................................. 121 PURCHASE MASTER.............................................................................................................................................. 123 Vendor Type Master .................................................................................................................................. 123 Vendor Master ............................................................................................................................................. 124 PURCHASE TRANSACTIONS ................................................................................................................................. 127 GRN (Goods Receipt cum inspection) ................................................................................................. 136 Job Order ....................................................................................................................................................... 136 PURCHASE REPORTS ............................................................................................................................................ 137 CHAPTER 10. IMPORT PURCHASE ........................................................................................................ 137 CHAPTER 11. MATERIAL MANAGEMENT (MM) MODULE .......................................................... 139 INVENTORY MASTER ............................................................................................................................................ 140 Item Master .................................................................................................................................................. 141 Finished Goods (Products) ...................................................................................................................... 142 Location concept ......................................................................................................................................... 144 Subcategory Master................................................................................................................................... 145 UOM (Unit of Measurement) Master.................................................................................................... 146 INVENTORY TRANSACTIONS ................................................................................................................................ 147 Goods Receipt Note (GRN) / Purchase Bill data entry screen ................................................... 147 Stock Transfer Challan (STC) ................................................................................................................ 148 Purchase return ........................................................................................................................................... 148 Stock Adjustment Note ............................................................................................................................ 149 INVENTORY REPORTS........................................................................................................................................... 149 GRN OR PV Register .................................................................................................................................. 149 Item Ledger .................................................................................................................................................. 151 Stock Statement ......................................................................................................................................... 151 Item List......................................................................................................................................................... 151 MIN Register: ............................................................................................................................................... 152 Stock Adjustment Note Register: ......................................................................................................... 152 CHAPTER 12. BOM MODULE ..................................................................................................................... 153 CHAPTER 13. SUBCONTRACTOR OUT MODULE ............................................................................. 173 CHAPTER 14. PRODUCTION MODULE ................................................................................................. 185 MAKE TO ORDER- MAKE TO STOCK .................................................................................................................... 188 E-MANUFACTURING ............................................................................................................................................. 190 ERP PRODUCTION MODULE LOGIC .................................................................................................................... 190 ASSEMBLY PRODUCTION ..................................................................................................................................... 191 PRODUCTION MASTER ......................................................................................................................................... 191 MACHINE MASTER................................................................................................................................................ 192 LOCATION ............................................................................................................................................................. 192 PRODUCTION TRANSACTIONS ............................................................................................................................. 192 WORK ORDER ...................................................................................................................................................... 192 PRODUCTION ENTRY ............................................................................................................................................ 193
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ERP Business Blueprint SUB-CONTRACTOR OUT ..................................................................................................................................... 193 FAQ FOR PRODUCTION MODULE ......................................................................................................................... 195 PRODUCTION REPORTS........................................................................................................................................ 197 Work Order Register.................................................................................................................................. 197 PROCESS PRODUCTION .............................................................................................................................. 198 PRODUCTION MASTER ......................................................................................................................................... 199 MACHINE MASTER EXPORTED TO EXCEL SHEET IS SHOWN BELOW: ................................................................ 199 OPERATOR MASTER ............................................................................................................................................. 200 PROCESS PRODUCTION TRANSACTIONS ............................................................................................................ 200 WORK ORDER ...................................................................................................................................................... 200 Production Planning ................................................................................................................................... 201 Process Production Entry ......................................................................................................................... 202 STAGE WISE INSPECTION ................................................................................................................................... 203 PRODUCTION REPORTS........................................................................................................................................ 204 Work Order Register.................................................................................................................................. 205 Production Register.................................................................................................................................... 206 MRP .................................................................................................................................................................. 206 Production Indent ....................................................................................................................................... 208 CHAPTER 15. ORDER FULFILLMENT MODULE ................................................................................ 212 Customer Type Master ............................................................................................................................. 213 Coordinator master .................................................................................................................................... 215 Sales Engineer master.............................................................................................................................. 215 Dealer Master ............................................................................................................................................... 219 Delivery Mode Master ............................................................................................................................... 219 Lead ................................................................................................................................................................. 221 Delivery Schedule....................................................................................................................................... 226 Sales Menu .................................................................................................................................................... 226 Sales Invoice ................................................................................................................................................ 228 Commercial invoice.................................................................................................................................... 229 Sales Quotation ........................................................................................................................................... 230 Sales Invoice ................................................................................................................................................ 234 Return Goods note..................................................................................................................................... 237 Purchase Return (Excisable) Invoice. ................................................................................................. 238 ORDER FULFILLMENT (SALES) REPORTS ........................................................................................................... 239 Invoice Register .......................................................................................................................................... 239 Invoice Register .......................................................................................................................................... 244 Enquiry register........................................................................................................................................... 245 Sales Invoice Register .............................................................................................................................. 245 Quotation Register ..................................................................................................................................... 247 OA (ORI) Register ...................................................................................................................................... 248 Reverse Invoice Register ......................................................................................................................... 248 ORI OR OA Status Register .................................................................................................................... 248 Ledger ............................................................................................................................................................. 248 Sales Analysis .............................................................................................................................................. 251 Dashboard ..................................................................................................................................................... 251 EXPORT MODULE ............................................................................................................................................ 253 CHAPTER 16. SUB-CONTRACTOR IN.................................................................................................... 257 MATERIAL INWARD TRANSACTION .................................................................................................... 259 CHAPTER 17. ACCOUNT MODULE .......................................................................................................... 260
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ERP Business Blueprint CHART OF ACCOUNTS RECOMMENDATIONS ....................................................................................................... 264 ACCOUNT MASTER ............................................................................................................................................... 266 Group (Schedule) Master ........................................................................................................................ 266 Subgroup Master ........................................................................................................................................ 267 GL Master ...................................................................................................................................................... 268 Details master: Narration Master ......................................................................................................... 268 ACCOUNT TRANSACTIONS ................................................................................................................................... 269 MONEY RECEIPTS ................................................................................................................................................. 270 ADJUSTMENT WINDOW ........................................................................................................................................ 271 JOURNAL VOUCHER .............................................................................................................................................. 272 PAYMENT VOUCHER ............................................................................................................................................. 273 CONTRA ENTRY .................................................................................................................................................... 274 ADJUST OPEN SALES INVOICE ........................................................................................................................... 274 ADJUST OPEN PAYMENT VOUCHER ..................................................................................................................... 274 CREDIT NOTE ....................................................................................................................................................... 275 DEBIT NOTE ......................................................................................................................................................... 276 EXPENSE VOUCHER .............................................................................................................................................. 278 ACCOUNT REPORTS ............................................................................................................................................. 279 CREDIT NOTE REGISTER ..................................................................................................................................... 279 DEBIT NOTE REGISTER ....................................................................................................................................... 280 SUB LEDGER TRIAL BALANCE ............................................................................................................................. 280 GENERAL LEDGER ................................................................................................................................................ 281 BANK BOOK .......................................................................................................................................................... 281 CASH BOOK .......................................................................................................................................................... 281 TRIAL BALANCE .................................................................................................................................................... 281 CONTRA ENTRY REPORT ...................................................................................................................................... 282 CREDIT NOTE REGISTER ...................................................................................................................................... 282 DEBIT NOTE REGISTER ........................................................................................................................................ 282 JOURNAL VOUCHER REGISTER ............................................................................................................................ 282 CUSTOMER FULL LEDGER .................................................................................................................................... 283 CHAPTER 18. ACCOUNTS POINTS ......................................................................................................... 284 CHAPTER 19. SALES TAX AND VAT....................................................................................................... 288 CHAPTER 20. EXCISE INTEGRATION .................................................................................................. 291 DAILY STOCK ACCOUNT OR DSA REGISTER ................................................................................... 294 GAR 7 CHALLAN .......................................................................................................................................... 295 CHAPTER 21. SARBANES-OXLEY ........................................................................................................... 298 CHAPTER 22. AFTER SALES SERVICE MODULE ............................................................................. 299 MACHINE HISTORY CARD OR HC .......................................................................................................... 299 CHAPTER 23. PAYROLL MODULE ........................................................................................................... 305 CHAPTER 24. AUTOMATIC EMAIL ALERT .......................................................................................... 314 CHAPTER 25. SEND DATA / RECEIVE DATA .................................................................................... 316 CHAPTER 26. ERP MAJOR TRANSACTIONS LIST .......................................................................... 319 CHAPTER 27. OTHER MASTERS .............................................................................................................. 321 CHAPTER 28. BACKUP .................................................................................................................................. 323 CHAPTER 29. BLOG & TWITTER ............................................................................................................. 329 HTTP://TWITTER.COM/FOLLOWERP ................................................................................................. 329
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ERP Business Blueprint PART III ............................................................................................................................................................... 330 CHAPTER 30. CASE STUDIES ................................................................................................................... 331 ERP FOR CONSTRUCTION INDUSTRY ................................................................................................................. 332 ERP FOR A CORRUGATED BOX MANUFACTURING COMPANY .............................................................................. 333 ERP FOR VADA PAV COMPANY ........................................................................................................................... 341 ERP FOR LENS MAKING COMPANY ...................................................................................................................... 345 ERP FOR OEM SUPPLY OR MAKE TO ORDER ...................................................................................................... 352 ERP IN PRECISION MACHINING MANUFACTURING ............................................................................................. 354 ERP FOR CHEMICAL INDUSTRY ........................................................................................................................... 355 ERP FOR A UPS MANUFACTURING ..................................................................................................................... 356 ERP FOR ELECTRONIC CONTROL INSTRUMENTS MANUFACTURING................................................................... 358 ERP FOR AN INDUSTRIAL SYSTEM MANUFACTURING ......................................................................................... 359 ERP FOR SPM MANUFACTURING ........................................................................................................................ 361 ERP FOR FURNITURE MANUFACTURING ............................................................................................................. 362 ERP FOR TOYS MANUFACTURING ....................................................................................................................... 364 CHAPTER 31. MC DONALDS STORY..................................................................................................... 367 CHAPTER 32. AUTOMOBILE ENTERPRISES ..................................................................................... 370 CHAPTER 33. RFID ......................................................................................................................................... 371 CHAPTER 34. QUESTIONS ......................................................................................................................... 372 CHAPTER 35. ERP DATA VALIDATION ............................................................................................... 378 CHAPTER 36. E-LEARNING WEBSITE FOR ERP. ............................................................................ 386 CHAPTER 37. HUMOR ................................................................................................................................... 387 GLOSSARY........................................................................................................................................................... 391 INDEX .................................................................................................................................................................... 397
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Island of information:
WHY E.R.P ? BECAUSE OF ISLANDS OF INFORMATION
My growth will be OK . No?
Material Management Finance
Corporate office Production Sales Group

Figure 1: Why ERP? Islands of information.
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Part I
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Chapter 1. Introduction
How to use this Book?
This ERP book gives overall scope of generic ERP software package. To understand the ERP in-depth the author has used a package called ERP. Hence, ERP appears in many screen shots. Actual print-screen of the data entry screen and the actual layout of the outputs are given for key procedures. The explanation of each ERP module gives the business blueprint where as the printouts shown gives the Proof of Concept (or POC). This Business Blueprint and POC will also be related to a particular avatar (or version) of ERP and make of the ERP. This may vary depending on the ERP vendor, versions, etc. This is a very important reference document and therefore it is necessary that the ERP implementer consultants, ERP coordinator, and ERP users all study the concepts well before embarking on to the ERP software deployment. This ERP book is a good companion during the software installation. This book is organized into three parts: 1. The first part discusses the ERP implementation methodology and overview of implementation of ERP system for effectiveness of ERP systems. 2. The second part discusses details about ERP modules or business processes such as accounts, purchase, sales, production, etc. These chapters are further divided into sections containing information about master, transaction, and report. 3. The third part gives some interesting case studies.
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ERP Business Blueprint Welcome to ERP This ERP book is meant for both Power User (ERP experienced user) as well as First Time User. This book will introduce all important concepts and features of this advanced ERP package. The ERP package versions (avatar) may undergo changes as the development, customization, and implementation take place. The book will also discuss many advanced concepts of ERP software. The ERP is short for Digital Nervous System. The word ERP is synonym with the word ERP. Throughout this book, reader will find the word ERP used instead of ERP. ERP is all about making smarter as well as faster decisions. To make well-informed and timely decisions, you need instant access to accurate information from every function in your enterprise. You need to focus on urgent tasks, instead of fire fighting. This book examines how to gain reliable, accessible information using ERP, and how to use that information to make better decisions, to a stronger competitive position. What is the relation of MIS and ERP? MIS (Management Information System) is a system to give information to managers for making decisions. ERP ensures the data capture in chronological order. ERP ensures that these managers get MIS. ERP is management software that will ensure correctness of input data and completeness of input data. Therefore, MIS is the output of ERP. What user will see on the computer screen is real time information. Behind the scene is business process management (BPM) done by the Enterprise Resource Planning software. ERP Definition There seems to be no universally accepted definition of the ERP software, but Deloitte Consulting has defined ERP as follows: An Enterprise Resource Planning system is a packaged business software system that allows a company to: Automate and integrate the majority of its business processes Share common data and practices across the entire enterprise Produce and access information in a real-time environment
Source: Deloitte Consulting, New York, 1999.
ERP definition by the author: Enterprise Resource Planning software is complete integrated business management software, which captures data in chronological order, and is used to link businesses processes automatically, and give real time information, to authorized user. Enterprise Resource Planning System is a multi-user, multi-location, and multi-company, software solution.
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ERP Business Blueprint ERP-centric organization Understands that integrated business processes add significant value to the organization. Understands that business processes are a significant contributor to the fulfillment of an organizations strategy. Incorporates ERP into the management practices of the organization. Non-ERP-centric organization Does not fully appreciate the contribution that integrated business process make to the organization and the realization of the organizational strategy.
Management of business processes is not the primary focus.
ERP and Internet were probably the two most important information technologies to emerge into widespread use in the 1990s.
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ERP Business Blueprint In 1999, total revenue from the ERP software and services market was US$18.3 billion and US$ 19.9 billion in the year 2000. ERP implementation costs are often reported to be five to ten times the cost of software licenses. If so, organizations worldwide spent something like US$100 billion per annum on ERP software systems. In short, organizations around the world have made huge investments in ERP software systems in the past decade. Source: Second wave ERP published by Cambridge
ERP vendors There are hundreds of software companies offering ERP solutions. There are two kinds of ERP companies. (1) ERP software developing organizing and (2) ERP implementing partners. Some examples of ERP vendor companies: SAP, Oracle Apps (this includes PeopleSoft and JD Edwards), Microsoft Dynamics (Navision), Baan, etc. Some examples of the ERP implementer partners: Siemens InfoTech, PwC, Infosys (recent acquisition of Axon, for instance), etc. What is the difference between SAP and ERP? This is wrong question. It is like asking, What is the difference between a car and Honda Accord? Honda Accord is one of the models of cars. Car is a generic name given to vehicle. Similarly, ERP is generic name given to enterprise management integrated software. Please note that SAP is a well-known, leading ERP company in the world. However, SAP is not the only ERP vendor. There are many ERP companies. SAP is one of the ERP companies in the world. There are hundreds of them. ERP is a generic name of the business management software. SAP is a specific name of the one of the companies, which has developed ERP software. Therefore, it is wrong way to ask, What is the difference between SAP and ERP? One may ask a question, What is the difference between SAP and MS Dynamics?? That makes more sense. SAP Certification: I would like to caution a student who is going for SAP course without any practical working experience, whatsoever. No doubt SAP is considered as # one ERP, and learning SAP ERP will be a feather in your cap, however, (first you need the cap). Many students in India unfortunately are carried away by the brand name of SAP, without understanding that, just by sitting in the Mercedes car, you cant learn driving. Make sure that SAP certificate is backed by adequate practical training and at least two years of work experience. A fresher with SAP certificate is a sad joke.
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ERP Business Blueprint ERP vendors:
Group I SAP Oracle Oracle eBusiness Suite Oracle JD Edwards Oracle Peoplesoft Microsoft Dynamics
Group II Epicor Sage Infor IFS QAD Lawson CDC Software
Group III ABAS Activant Solutions Inc. Bowen and Groves Compiere Exact NetSuite Visibility CGS Hansa World Consona Syspro
ERP customization Usually ERP captures the best business practice that would meet standard requirements. Adding new requirements is called customization. This may be non-standard feature. This involves changing software codes. It can range from relatively simple changes, such as developing very special reports, through major changes, such as changing the program source code itself. ERP software is a semi-finished package! The user organization must configure to their needs. This is also referred as parameterization, enabling, or disabling certain business process. This configuration or initial setup procedure will allow user to use the package as it is. An implementation that involves configuring but not customizing the ERP is called a Vanilla implementation. This is fastest and cheapest way to get into ERP for SME. Although most ERP software are standard software package, in practice it is observed that 80% to 90% procedures are standard and can be used as it is. About 10% to 20% procedures need to be customized (changed) during the implementation. These changes (or fine-tuning) will depend on many factors such as final product, current legacy procedures, maturity level of senior executives, kind of customers, etc.
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About Small and Medium size companies
Corrugated Box
Industrial springs n
Toys and games
Safety Valve
Special Purpose Machine
Fire fighting equipment
Eye lens
Vada Pav
UPS and Inverter
Glass windows
Industrial oven
Sofa-set
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ERP Business Blueprint Figure 2: Small and Medium Sized companies products
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Small and Medium size companies are using ERP to gain competitive advantage. Many SME or small and medium size companies in India are growing. They all need complete integrated business management software to manage that growth. The company may be engineering, making plastic toys, making lenses, or discreet products, all need ERP software. Why ERP? Traditional accounting packages are Financial reports-centric. They are primarily designed to inform management of a companys financial condition long after it has conducted its business. On the other hand, ERP adopts a day-to-day perspective. It provides strategic information and tools in real-time, when you need it the most. ERP is answer to the following frequently asked questions Do you get information when you want? Do you have islands of information? Pune emerges as major hub for German companies: Pune has emerged as the city with the single highest concentration of German companies in India. A significant number of prospective new comers are likely to be from the area of advanced materials used in the automotive and machine building sectors. These companies will largely be SMEs. According to the Indo-German Chamber of Commerce. There are over 950 German companies in India, of which 100 are located in India. This may become 200 in about two years. Mercedes Benz and Volkswagen are already present in Pune. Source: Mr. Zubin Kabraji, regional director, Indo-German Chamber of Commerce, Pune.
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COMPUTER NETWORK SYSTEM SCHEMATIC Local Area Network or LAN UPS SERVER HIGH PERFORMANCE COMPUTER (e.g. Xeon) With MS Windows 2003 Server Operating System MS SQL 2005 SERVER RDBMS ANTI-VIRUS SOFTWARE SERVER EDITION
Switch User PC Accounts User PC Purchase User PC Stores
User PC Production
User PC Sales
Printers as per requirement
ERP Network Server PC must have a CD / DVD Drive for Backup. Server network with Switch Gigabit LAN. CAT 5 LAN cables. Switch or Wi-Fi network, supported by UPS battery backup. Figure 3: Server computer and users PC
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IT infrastructure recommendations checklist
Checklist to plan hardware, software, and personnel for ERP deployment: 1. At head office, provide one High performance Processor Server (e.g. Intel Xeon CPU) with Minimum 2 GB RAM, minimum 80 GB HDD. (With CD or DVD writer for taking periodical backup). With at least two nodes (256 MB or 512 MB RAM) with Operating system WIN XP or Vista for your software Coordinator and our QC team to test EXE, prepare master data, give training, etc. Other client sides PC (nodes) with MS Windows XP (or later versions) with at least 256 MB RAM. ERP development team and implementation team will also use these computers during the initial phase. These nodes (client PC) should be networked with the ERP Server computer. MS Windows 98 is not recommended. 2. Recommended Memory: Minimum 512 MB RAM on client computer and 512 MB or 2 GB on Server. MS Excel on client PC. For Microsoft Windows Vista Operating System it is recommended to have 4 GB RAM. 3. For outputs (reporting): Inkjet or Laser Jet printer (A 4 size paper), or a Dot matrix printer with fanfold setting 8.5 X 12 selection. It is recommended that users should phase out the dot matrix printer (if not done already). 4. The monitor resolution setting should be 800 X 600. 5. Arrange to deploy licensed software: MS Windows 2003 Sever Operating System and MS SQL 2005 Server RDBMS software. MS Excel. Check with ERP vendor for exact software requirements. 6. One PC with Internet connection for remote support from ERP vendors helpdesk. It is better to send email to helpdesk email id instead of personal email id. 7. UPS (battery backup) for the Server and switch (hub) is required for at least two/three hours. Provide Generator set for power backup if necessary, for longer electric power shutdown. 8. You may add more PCs as the data entry work increases and as users start being trained over a period. The PC (nodes) may be networked using wired LAN or wireless LAN technology. Wi-max solutions can also be considered if available in your location. The V Pro CPU (Intel) based, PC may be considered for the client side computers. 9. Anti-virus software with facility to update the signatures is required (a) Sever version for the server computer and (b) client version for each user PC. 10. At least one LaserJet (or DeskJet) printer for hard copy printouts. You may add more printers as per requirements. This is a good time to phase out the Dot Matrix Printer. 11. Appoint ERP Coordinator exclusively, who is available during the Software testing, implementation and deployment activity. Time commitment towards Software project is essential.
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ERP Business Blueprint 12. There will be a Chief-of-Project (sponsor) to monitor and review the progress during the software implementation. (Usually a very senior person, like owner, with necessary authority to take crucial decisions). 13. Appoint network administrator to support the IT infrastructure, such as Server, networking, etc. He will also take care of anti-virus solutions, Firewall, Login and secret password, etc. (May be same person as ERP project Coordinator). 14. For remote access, provide Server with static IP address for out-locations to login. A good broadband connectivity at the server locations will be required. Internet / Email connectivity. The net connection is necessary for remote login for support. 15. Provide CD / DVD (or tape backup) for taking backup of database and important software programs. 16. UPS to supply electric power to the ERP Server. Battery backup for at least two / three hours. The same should also give uninterrupted power to the network-switch (or router). You may plan for separate UPS for each user PC. Generator power as per requirement. 17. Date and Time setting. a. Date and Time setting is done by the network support engineer (or the computer hardware support person). The ERP server date and time setting is important and it is used at the time of capturing and saving transactions, preparing reports, etc. b. The date format of each computer should be dd-mm-yyyy. This is set using regional setting option, of control panel. c. Do: 1. Set all clients PC's Timestamp to ERP Server Time Stamp. Time and Date should be same for all PCs connected to your ERP Server. 2. Setting of All "Time zones" of all the PCs should be GMT 5:30 New Delhi, (in India). Set this from Windows control panel, Time and date Properties-Time Zone. 3. Care should be taken to ensure that user is not allowed to temper with the system data and time. Necessary password control is required. d. Do not: Do not Change time and date of the server and any other client PC, in the network at any time.
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ERP Implementation project management ERP Implementation step-by-step strategy:
1. Scope as per ERP proposal and approval from ERP project organization
2. System Requirement Specifications as per SRS template
3. Legacy docume nts / Logic sheets
4. Database Setup, First-cut by DEC team
5. Make Server ready and deploy ERP EXE
6. CRP Checklist and POC printouts by DEC Team
7. QC Database Setup on ERP Server, deploy EXE
8. Training and Demo to the Task Force
9. First-cut by Task Force team
10. CRP Checklist and POC printouts by Task Force
11. Essential customizat ion, database changes
12. Complete CRP run by task force, complete CRP checklists, and print POC
13. Go Live. All ERP authorized users starts using ERP
14. Rollout Figure 4: Typical workflow for the implementation
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ERP Business Blueprint Implementation Strategy 1. 2. IT Infrastructure Readiness: Please prepare Server computers and other items of hardware and software as described above. Software Project Preparation: Defining exact scope with help of the Chief of project. Prepare the legacy documents (file containing existing transactions / reports). ERP implementer consultant will help you in preparing module wise legacy file (AS IS business process). Kick-off meeting: ERP implementation team makes Project kick-off presentation in presence of complete Steering committee (key users). Preparing the SRS: System Requirements Specifications. This is well documented in the manual (called ERP Business Blueprint). Based on the legacy data and standard best business practice a business cycle will be shown. The SRS may now be required to be documented to capture exceptional scenarios. Gap Analysis: Clearly defines business logic. The ref. manual based on the first cut end-to-end cycle is prepared, given to ERP Coordinators for approval. Once the same is received the changes / customization takes place. This will ensure user gets essential customization done. At the same time user may do BPR and accepts the ERP business logic. Appoint ERP Steering committee or the task force team. This is a team comprising of one or two persons from each business function (department). Headed by the chief of ERP project and ERP coordinator. These are the stake holders in the ERP project. Awareness / Training: To all ERP Users and the ERP Coordinator about ERP concept and menus and sub-menus. Business requirements: Discuss BPR (Business Process Reengineering) and decide the need to customize to meet your specific business requirements. Roles and Responsibility Matrix (what menu to whom). TO BE business process: Customization is carried out by our team (changing our programs) and preparing the Proof of concept file. This is configuring ERP software for you. The entire package is run on the server using test database (QC data) with sample master and transaction. CRP run: Conference Room Pilot. Task Force (and key users) is given training and asked to enter transactions and does the CRP run. ERP team will do necessary confidence building and handholding. A sample printouts of each transaction and report will be printed and kept in file called POC file (proof of concept), for sign off. Data Migration: One time data transfer from legacy (old) system to new (ERP) system may be considered. This will depend on the data format of the legacy data, accuracy, and completeness of the old records. Some time it is prudent to enter the data again in the new ERP software. Although, one time migration saves time (and money) it should be done with due diligence. Many times, it is observed that the data that was migrated in the new system was actually garbage data (not checked). Later to check and correct the masters took even more time (and money). E.g. in customer master, we need the contact persons name, city, etc. as separate fields. In legacy data if the same is not stored properly, how new ERP system will give benefit. Master data preparation for test run: E.g. Item master, customer master, vendor master, BOM master, etc. Ownership transfer from ERP Coordinator to end-users. Go-Live preparation: Cutoff date Inventory closing balance/account-closing balance in live database. Roll out Go-Live: Start using ERP for all business activities.
3. 4.
5.
6.
7. 8. 9.
10.
11.
12. 13. 14. 15.
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ERP Business Blueprint 16. Post implementation support: Support is provided by ERP team if and when require for about a month so that all users feel confident and system stabilizes
ERP project management This is very important for the success of ERP implementation. ERP project management life cycle consists of the following major phases: 1. Initiation. a. This includes deciding start date and finish date. b. Define working time and non-working time. c. Define the workweek, which days of the week are the usual workdays for this ERP project. Select a date that should be a nonworking day, such as a holiday (E.g., 15 August) or a day off for your organization. d. Define time units, such as 8 hours a day or 40 hours per week, or 25 days a month, etc. in the calendar. 2. Planning. a. b. c. d. e. f. 3. This includes defining major milestones, tasks Make a list of resources Mark dates to fix the training days, referred as ERP training calendar. ERP review meetings dates. Inform all stakeholders (resources). Define precedence of tasks. E.g., Task 2 can start after task 3 is finished. Make a base plan.
ERP implementation. a. Track and mange.
4.
Go-live. a. Discard legacy and use ERP for business management.
ERP task force team manages the implementation using Project management software, such as Microsoft Project. Task: An activity that has a beginning and an end. ERP project implementation is made up of several tasks. One must enter duration for each task. Milestone: A reference point marking a major event in the ERP implementation. Milestone is used to monitor the ERP projects progress. In MS project, any task with zero duration is automatically displayed as a milestone. Note: Do not start with the unreasonable end date and work back reducing the project estimate. It is better to increase the amount of resources, reduce scope, or change the plan. A lot of time and pressure causes inefficiency with meetings to discuss why things are going wrong.
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ERP Business Blueprint Resource: The taskforce members are resources. ERP Implementation consultant and ERP developer are also resources i.e. ERP coordinators, ERP taskforce member, ERP user, are all resource. Ensure time is provided for planning, teambuilding, and ERP training. One may use a dated diary, calendar, or MS Outlook to block the dates and commit for a given task as per plan. The roles and responsibility matrix should be prepared. It is very important to assign login ID and passwords for using ERP software. If it is not done carefully, ERP server access is compromised. Predecessor: A task that must finish before another task can start.
ERP Tip: Please provide proper notebook for noting down the notes during training, clearly marked as ERP notes. Loose-leaf rough pad is not recommended.
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Figure 5: Every member in ERP team has times when they need support. Helping ERP project team succeed.
I am sure the organization that is planning to use ERP, wants the ERP project manager to succeed. Creating an environment that supports success is a major step towards helping the ERP project teams succeed. Everybody needs to work together and support each other; this includes not only the ERP implementation team but also vendors (suppliers) and customers. Always encourage practice in planning. ERP roadmap is used to manage the implementation and therefore must be kept up-to-date. If the plans that are created at the beginning of the project are put in a file and forgotten, why bother creating them in the first place.
ERP Tip:
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ERP Business Blueprint There should be focus on implementation control, not just reporting. Sometimes it is also necessary to report if things are going as per plan. This is called positive reporting. Keeping quiet and not reporting is not good. Most ERP project fails because of lack of communication or incomplete communication. Sometime people are afraid to tell that they have not done the task or failed to keep the deadline. In short, email should be sent about every activity, milestone, and status to all stakeholders. This will ensure that people (resources) know where their business unit or department fits into the plan.
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Roadmap If you fail to plan, may be you plan to fail. Stakeholders: Individuals, ERP implementers, and ERP user organization are all stakeholders. They are actively involved in the ERP project. Their interest may be affected by the ERP project. Who will make the roadmap? The chief of ERP project, ERP coordinator along with ERP implementation team will prepare the roadmap. Prerequisites: 1. 2. 3. 4. 5. 6. List down tasks Mark milestones Fix the project start date Write duration for each task Identify resource for each task Define predecessor
The following is a sample plan showing various milestones and tasks. Please note the sequence of the task. The numbers of days are only for the example. This will depend on various factors such as resources allocated to task, data readiness, and availability of resource during the project implementation, IT infrastructure and so on.
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ERP Business Blueprint Duration days 95 days 9 days 1 day 2 days 2 days 2 days 1 day 3 days 1 day 89 days 2 days 10 days 3 days 2 days 2 days 2 days 28 days 10 10 8 51 7 9 44 days days days days days days days
ID 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42
Task / Milestones Total project duration Planning Scope list printout and softcopy Install IT infrastructure ERP Preparation Prepare Legacy file and send to ERP Kick-off meeting System Requirement Specifications SRS Legacy received by ERP team Begin Implementation Prepare blank database to start ERP First cut by ERP team Business Blueprint - first draft POC spiral based on first cut Documents given to user- two spirals Training Training completed CRP by ERP team Start customization Internal CRP - S1 Internal CRP - S2 POC file S3 ERP EXE Ready for first cut First cut by Task force / users Essential customization CRP by task force / users Accounts Module General Ledger Accounts VAT / Sales Tax Module Excise Module Material Management (MM) Module Purchase Import Purchase CRM Module Sub-contractor OUT Module BOM Module PPC process production Production Module Sales Export Sales Sales & Distribution - trading Plant Maintenance Module M. R. P. Costing Module
Predecessors
2 2 4 4 6 5 6 4 8 8 8 12,13 13 15 11 11 11 19 20 21 21 11 23 23 23 23 23 29 29 29 31 31 31 31 31 31 38 38 38 38
5 days 3 days 3 days 8 days 4 3 4 3 5 3 5 3 3 3 3 3 3 days days days days days days days days days days days days days
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ERP Business Blueprint Item code generator In ERP, item code can be generated automatically using unique feature auto item-code generator. In item master, the RM Item Code Specification fields are fetched from masters. While entering any new raw material item as you select the specifications from the drop down list one by one the item code is generated automatically.
Item Master Example of Raw Material (FG).
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ERP Business Blueprint Example of Raw Material (Casting)
Figure 18: Example of Raw Material (Casting) Everyone in the organization must call any material (item) by the same name (nomenclature). Proper classification or categorization of material is very important in ERP. This discipline helps in getting useful MIS (Management Information System) reports. Access / secret password to prepare the item master should be restricted to two people only, to ensure correct grouping of items. Finished Goods (Products) The item that usually appears in the sales invoice is created under the FG category. Usually by selling the FG item the user organization gets the money.
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ERP Business Blueprint Semi-finished Item The ERP software can also track semi-finished goods (SFG) or sub assembly. For this, it is necessary to give item code and item description for such SFG items. These can be classified as factory made items. Usually these items are produced (assembled) as a result of some production process. The relation of child items consumed to produce the SFG item is defined in the BOM master. If sub-assemblies (SFG) are required to be produced then BOM has to be prepared. internal ORI OR OA and Work order is to be made followed by production entry. An
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Location concept Please study the work flow diagram in previous section.
TP
VENDOR
HOLD
STORES
WIP (SHOP FLOOR)
F. G. STORES
REJECTION
Customers
Figure 19: Make logical locations and if possible physical locations as shown Any material movement is always with respect to an inventory location that is defined in the location and sub-location master database.
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AL VARIOUS INTERN DEFINED IN LOCATIONS ARE R LOCATION MASTE
LOCATION CONCEPT
STORES LOCATION PLANT 1 LOCATION
VENDOR
REJECTION
STC
SCRAP
RTV
STORES LOCATION
PLANT 2
LOCATION
RTV
Figure 20: ERP is multi-user and multi-location software Subcategory Master Note: There are two important flags (tick marks) provided on the Item sub-category master. Activate serial number: When ticked, ERP will keep track of serial number of the item. Excess received percentage: When material is received, the PO quantity is defaulted automatically. The stores person cannot receive quantity exceeding PO quantity. However, for some items it may not be practically possible for vendor to supply the exact quantity. When ticked, ERP will allow excess by percentage to be defined for a given sub-category.
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UOM (Unit of Measurement) Master It displays various units of measurement, which are regularly used. Set, etc. This is accounting unit required while creating item master. EACH KG MTR MT SET NO E.g. Kg, Each, Pair,
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ERP Business Blueprint Inventory Transactions Goods Receipt Note (GRN) / Purchase Bill data entry screen
Note: GIN / RM / Bought out: Goods Inward Note cum Inspection or GRN is used in ERP when material is being received in the stores. PO is a parent document to make a GIN or GRN. When the user selects the vendor name, all pending PO will default automatically. User will enter Quantity information and save the GIN OR GRN. This document is active document. In ERP, user does not have to enter documents twice. GRN [or GIN] does the following: GIN OR GRN will add material into stock. Credit the vendor (supplier): Automatic posting in creditor ledger ensures that both ledgers item and account are updated instantly after the material is accepted. QC inspector / Quality Assurance will enter accepted quantity. This will automatically add item into main stores and if item is rejected, it is added into Rejection Location.
There are two types of Purchase bill. 1) Normal Bill
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ERP Business Blueprint 2) Agent bill Note: This GRN option can be seen under the Inventory menu -> Inventory Transaction sub menu. The GRN is a unique transaction that is integrated with purchase order, inventory as well as creditor account. Stock Transfer Challan (STC) STC is used to transfer material from one location to another. material. User has to select 'From' location and 'To' location. Purchase return Prepare Excise invoice when material is returned back to vendor. For non-excisable material user can prepare RTV or Return-To-Vendor. Reference of GIN OR GRN is required. This does not consume
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ERP Business Blueprint Sales Return (RGN Return Goods Note) It is prepared when material is received back from customer (e.g. Rejected by customer). This scenario can be taken care of in ERP by following way: 1. Let us assume that material sold to customer through Challan cum Invoice is say, 1000 Qty FG. 2. Partial FG are rejected at customers end e.g. 100 Qty 3. Customer sends back the material through his Challan cum Invoice 4. To receive this material back, a logical location will be created in ERP called Sales Return Location. 5. Rejected Material will come in ERP by a transaction called RGN (Return Goods Note)/ 6. In RGN customer is selected first. 7. Then Sales Invoices made for that customer is selected. 8. Here entire Sales Invoice will be defaulted in RGN. 9. By double clicking on the invoice, the rejected qty e.g. 100 is entered. 10. RGN with all taxes details are saved. This will add the material in the Sales Return Location and gives credit to the customer for rejected amt. 11. 100 qty will reflect in Sales Return Location in Item ledger. 12. Then after inspection, it will be known whether to do rework on the same material or replace with new FG. 13. Once 100 qty FG are ready, that will be dispatched through Sales Invoice with different series. 14. This sale Invoice posting will NOT come in DSA register (Daily Stock Account Excise related records) and separate register will be maintain for these invoices. Stock Adjustment Note SAN is used to add or remove item from the stock. Access to SAN is given to authorize responsible person only. This is useful to correct the stock balance in case of difference in the ERP book-stock and physical-stock. Inventory Reports GRN OR PV Register
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Figure 21: Goods Receipt Note (GRN) register GRN register. Also called Purchase Register. Some users refer the same as Purchase Voucher Register. This gives details of item received in the stores. GRN register can be prepared for a given location, say stores and for a given period by giving From date and To date in ERP. The following columns display important information in the GRN register: 1. GR No 6. Vendor Name 10. Disc 15. Sh Cess 19. Insur. 2. GR Date 7. Vendor Bill No 11. Octroi 16. Vat 20. Other Chg. 3. PO No. 8. Vendor Bill Date 12. P & F Amount 17. CST 21. Grand Total 4. QC Status 9. Net Amt 13. CenVAT 18. Frights 22. Locatio n 23. ACCT. Status 14. Cess 5. QC Done Date
There are TWO parts: The first part gives document level detail, that is vendor bill amount information, whereas on drilldown user can get item level details, that is quantity information. STC Register: This gives list of Stock Transfer Challan.
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Show enquiries for Which quotation is not made?
Enquiry report of open enquires.
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Order acceptance register or Order Receipt Information (ORI or OA):
Sales order item wise report shows pending / dispatched status:
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Age wise analysis of outstanding bills
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Invoice Register 1. From - From Date. Manual entry / Calendar date selection field. User has to input the date from which the Invoice Register is required. 2. To To date. Manual entry / Calendar date selection field. User has to input the date up to which the Invoice Register is required. 2. Location Location for which the register is required. List selection field. User has to select the region for which the Invoice Register is required.
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Enquiry register
Sales Invoice Register
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In Sales Invoice Register there is a button Show Total by Customer- If we click this button we can get Total Amount customer wise report.
In the above register, we can also view the information separately for Proforma Invoices, Trading Invoices and Normal Sales + Trading Invoices and view the records accordingly.
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Quotation Register
Here there is a filter including three options 1) Open quotations This option will show only open quotations with latest revised quotation no. 2) Closed quotations This option will show list of quotations which are closed explicitly or if order is received against that quotation. 3) All Quotations By selecting this option, it will show all quotations irrespective of open, closed and revised Drill Down: By clicking this button user will be able to see all necessary information at item level for quotations.
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OA (ORI) Register ORI register and Delivery schedule register. (Menu in pre-sales) Reverse Invoice Register ORI OR OA Status Register
Ledger 1.1.1.1. 1.1.1.2. Customer Full Ledger Age wise Outstanding
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1.2. 1.3.
Outstanding statement as on date Age wise Overdue
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1.3.1. Show all outstanding documents
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Sales Analysis
Dashboard This gives few key figures to the top management. For instance, total sales from 1 April to date. Display the current cash or bank balance, display outstanding balance, etc. It is like the dashboard in a car, which gives the driver some important information such as fuel level, speed, engine RPM, and so on, and so forth. The ERP dashboard is giving some vital figures or status to the top management to drive the business with the right speed.
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Project Workbench
Project workbench gives project wise or sales order wise status at a glance.
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Export module
Many companies are exporting goods to other countries. Here the following points needs to be kept in mind: 1. Foreign currency. It is necessary to capture the exchange rate and compute various amounts in the local currency as well. 2. Export related documents such as packing list.
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Example of commercial invoice is shown below. Note the additional fields such as Port of loading, Port of Discharge, Final destination, etc.
Above figure shows Commercial Invoice E.g., Goods export to Thailand from India
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Above figure shows example of the packing list that is prepared automatically along with the commercial invoice in the export module of ERP. Some information is necessary for the purpose of custom officers such as marks and number, number and kind of packages, description of goods, etc.
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ARE 1 Application for Removal of Excisable Goods for Export is called ARE1
This kind of document is necessary to show to excise authority that the goods are removed from factory without paying excise duty because the same is exported outside India. Many times, the export consignment may be delayed because some important documents are missing or not prepared properly. Export module in ERP can help to some extent to meet the compliance. However, user should also understand limitation of ERP and may not expect all documents to be generated automatically. Some manual procedures are still required to be followed outside ERP.
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Chapter 16. Sub-contractor IN Customers material is received Labour charges bill raised and customers material returned back after duly processed. Customers master is created in the address master. This will also create an inventory location.
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Material Inward Transaction
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Chapter 17. Account Module
GROUP MASTER SUBGROUP MASTER (SCHEDULE) GL MASTER (ACCOUNT HEAD) NARRATION MASTER
ERP FLOWCHART ACCOUNT MODULE
ACCOUNT MASTER PRINTOUT ACCOUNT GROUP MASTER PRINTOUT
EXPENSE PO (PURCHASE INDENT) ADJUST (LINK) OPEN DEBIT DOCUMENT OR OPEN CREDIT DOCUMENT
EXPENSE VOUCHER (SERVICE BILLS) MONEY RECEIPT PAYMENT VOUCHER SALES INVOICE PV GIN
ERP
CASH BOOK BANK BOOK JOURNAL GENERAL LEDGER CREDITOR LEDGER DEBTOR LEDGER TRIAL BALANCE AGE WISE ANALYSIS EXPENSE PO REGISTER EXPENSE PV REGISTER
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Manufacturing tab will capture details pertaining to the Battery, make, type, rating etc. This will also show key components that have gone inside the product (UPS). This is based on the BOM.
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Battery serial number is captured in the tab Additional info as shown below:
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OLP of the HC is shown below:
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The output can be converted to .pdf file using the Adobe distiller program as shown below:
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Chapter 23. Payroll Module The scope of this important Payroll & HR module can be given in one line as Hire to Retire. Human capital management is crucial for the organization. To compete effectively you need to align all corporate resources including employees with business objectives. The Payroll and HR module in ERP, helps aligning employees with the strategies, for the business success.
Employee Master Account master State master City master Earnings & deductions master Department master
Pay slip Earning & Deduction reports
ERP Employee Attendance transaction
HUMAN RESOURCE DEPARTMENT
ACCOUNTS DEPARTMENT
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Payroll masters
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Employee Master Database
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Employee master information is captured in the database. The income tax act / section number is shown to get the data that is used to compute the income tax. E.g., under section 10(14) information regarding number of children taking education, or number of children residing in hostel is stored, as shown below:
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Standard deduction that is allowed under section 80 ( C), etc., is stored as shown below:
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Payroll MIS / Outputs
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Pay slip. Pay slip is prepared automatically every month based on the employee master data and the attendance data. The pay slip shows employee wise details of the basic salary, various earnings, various deductions, and net pay. A sample pay slip is shown below:
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Payroll Register is prepared automatically showing employee-wise, earning, deductions, employer contribution towards ESIC and PF, as shown.
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Form No. 16 is prepared by the system, which shows the income tax deduction details. This is important for the employee to claim income tax refund, if any.
Finally, payroll is important module because money matters.
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Chapter 24. Automatic email alert Email id Master for sending auto emails Alerts user for items falling below ReOrder Level (ROL) Pending Purchase Order since defined days. Pending patients Bills since defined days/Months. Bank balance going below defined amount. Non-Moving Items. Daily collections to TOP Management.
Option If manger has Blackberry enabled mobile, will get report on the move.
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Above screen dump shows automatic email sent, by ERP software to designated Doctor (Or any individual, that is defined in the email settings).
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Chapter 25. Send data / Receive data Caution: Send and receive data should not be started unless two users are trained at each location. It should not be started in live unless the same is tried and tested on the QC database. This is a manual procedure and therefore needs people who take full responsibility to follow the instructions. 1. Send-receive module 1.1. Purpose: To use ERP at multi-locations. E.g. at office (Plant-1) and Plant 2. There will be two ERP servers. The objective is to synchronize these two ERP servers. We assume broadband internet is NOT yet possible at Location 2. This solution is good for places where Internet speed is an issue. Since at both places user can enter transactions independently, it is an advantage because it does not depend on internet speed at the time of saving the transaction. 1.2. This special ERP send-receive module is useful where due to security reason server is not connected to internet with (static) IP address or a location where broadband connectivity is not at all available. 1.3. Send data and Receive data can be done only on the server computer. 1.4. When user clicks on send data, ERP will prepare a .txt file. Ordinary dial-up internet line can be used to send and receive this text file, containing only incremental data from one location to the other (e.g. Location 1 to Location 2 factory and vice versa). The text file can be sent by attaching the same to email. User should send and receive data (at least) once in 24 hours (or for that matter as often as required). Typically, where HO is making the PO and stores in factory (in remote place) is receiving the material, and so on. 1.5. Unique feature: ERP Server will automatically take care of synchronizing both servers ERP database. Back-end is MS SQL Server on MS Windows 2003 Server OS. 1.6. Even the small .txt file can be sent and received by a CD through post for remote places where even dial-up internet connection is not possible. 1.7. Limitations: Let me give one analogy to understand limitation. In one small village, a man constructed multi-storey building. He lived on fourth floor. The builder asked to provide three phase electric power connection for installing the lift. Unfortunately, the power was not available. So he also provided for the staircase. The man used steps to go to fourth floor. Naturally, climbing steps manually is a bit cumbersome as compare to automatic elevators. 1.7.1. Similarly in case of send / receive module: 1.7.1.1. You have to remember to send data everyday by email. (manually done, so remember) 1.7.1.2. You have to receive data everyday to synchronize the database. 1.7.1.3. You cannot create masters in both locations. 1.7.1.4. Data send / receive should be in chronological order. Especially, due to holiday mismatch. 1.7.1.5. Train at least two persons for the task at both locations. 1.7.1.6. The send / receive should be done on the server computer only. Procedure:
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For example, head office wants to send data to factory. A designated person ERP-send-data-in-charge should do this task. 1) This procedure of send data should be done on ERP Server, where ERP database is installed. 2) Log in to ERP. Click on Send Data Menu. ERP will automatically prepare a text file of incremental data (since last send). 3) On ERP server, make a folder C:\erp\send. 4) ERP will give a pop up after successful sending to the database. 5) Data Sent means .txt files will be created in C:\ERP\send folder. 6) User should send this file to the other location (say factory), by attaching to email. (Alternatively, text file can be copied to a CD / DVD and sent by post to the factory). At the factory: A designated person ERP-send-data-in-charge at the other location should do this.
Figure 61: Sending data
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Figure 62: Receiving data 7) User will receive the email along with the attached text files. Copy these files to C:\receive folder. 8) Click on Receive menu. 9) ERP will now append the factory database. The transactions crated at HO will now be synchronized seamlessly in the Factory ERP server.
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Chapter 26. ERP major transactions list
# 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48
Transaction Name Call Sheet Closing Balance Commercial CCI Contra Entry Credit Note Custom Invoice Debit Note Dispatch Order Excise JV Expense PO Expense Voucher Export CCI Export Cost Sheet Export Enquiry Export ORI OR OA Export Quotation GDN GIN Goods Inward Note Goods Receipt Note Import Purchase Order Indent Internal ORI OR OA Invoice Journal Voucher Labour Invoice Labour PO Labour PO Lead Main Challan Material Inward Merchant Cost Sheet MIN Modvat Purchase Voucher Opening Balance Opening Stock Order Receipt Information Packing List Payment Voucher PLA Entry Production Production Issue Production QC Production Slip Proforma Invoice Project PV Purchase Enquiry Purchase Order
Prefix CS CL CI R N A D DO EX PE F X EC Z OX U GD GI GI P PI IN IO I J LI PL LP AA S MI MC M PM OB OS O PL PV PL B H QC G PG PP PY PO
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# 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73
Transaction Name Purchase Quotation Purchase Requisition Quotation Receipt Replacement Challan RGN Damaged RGN Exover (expired) RGN Ok RGN Tour RGN Transfer RTV VOUCHER Sales Enquiry Sales Order Sales Schedule Sample Inward Service Report Slitted Program Slitting Production STC With Work Order Stock Adj. Note Stock Transfer Challan Subsidiary Challan TR6 Challan Transfer Invoice Work Order
Prefix PQ RQ Q T E R2 R5 R1 R3 R4 V Y SO DS PB SR SP SB PR L ST K KL TI W
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Chapter 27. Other Masters
Figure 63: Other Masters There are other kinds of masters in ERP such as: Country Master State Master City Master
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Figure 64: City Master
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Chapter 28. BACKUP Purpose: To keep additional copy of database and ERP EXE program in case of computer server breakdown. This is a routine operation carried out by the ERP coordinator or IT support person. By clicking on the backup button, ERP will automatically create a database backup. A pop up message is displayed Backup is taken successfully. ERP coordinator is expected to copy (burn) the same on a removable media such as a CD. Backup is required to be taken for each server periodically, once in a day. Three generations of backup CD should be kept e.g. son, father, and grandfather. To ensure that regular backup is taken it is recommended to maintain a physical logbook along with the signature of the person who has performed the backup. It is necessary that MD / internal auditor / CEO / also counter signs the logbook periodically. Do not underestimate the importance of daily backup. Backup procedure has to be part of the companies Disaster Management Plan. It is necessary to understand the importance of backup procedure to use computers effectively. 5. Once the server is configured for ERP software, it should not be disturbed. No one should format or accidentally delete any file. To safe guard the ERP server, protect it by a secret password to boot the server. The MS Windows Server operating system will authenticate the user and allow only authorized person to start or shutdown the server computer. It is recommended that physical access to the server computer should also be rusticated by keeping server in a server room. ERP team and two or three persons will only be allowed to access the server with the password. It is like holding an important key to the office, which should be given to a responsible (senior executive) only. ERP coordinator must inform ERP Team and users before there any changes in hardware and software. Backup should be taken before doing anything with the server computer. In case the server has to be formatted, ensure that the ERP team and coordinator is present there. In some organization two servers are kept (mirror servers) or another server in a physically separate building for safety. This kind of care should be included in the disaster management plan.
6. 7. 8.
Advance backup plan recommended: 1. For safety, one back up computer with MS windows 2003 Server OS, with MS SQL 2000 Server should be provided. A physical label should be put on the second server clearly indicating that it is the backup ERP server. A physical label on the main server should clearly indicate that it is the Main ERP server. The configuration may be: Intel Pentium P4 3.0 dual core / 1 GB RAM / 160 GB hard disk/ Intel Mother Board , DVD writer, with Windows 2003 server OS. A hot swappable hard disk in the server is also recommended. The hard disk should be mirrored.
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It is important is to copy the main folder that contains all exe, data, etc. to this backup server. For the settings for automatic mirror server or mirror hard disk, the network support engineer has to be consulted or simply a copy of the ERP folder to the backup server should be done manually. In case the main server is down, the backup server can always be used. A logbook should be kept to record about backup and restore. The servers should be kept in an area where normally users cannot access it. It is necessary to keep the ERP server in a separate room. This server room should have restricted entry where only authorized person are allowed to access the server. UPS for both servers and LAN-switch is necessary. 2. There is another way of backup server. An extra stand-alone PC (backup PC) with Ethernet card NOT CONNECTED IN THE LAN so that virus cannot affect this PC can be kept, so that incase there is a problem (say a virus) with the existing LAN, then the LAN cable can be physically connected to the switch to start the backup PC. The entire LAN can now work with the backup PC server, while the original server is being serviced. A copy on one stand-alone laptop (notebook computer) can also be kept, which has simple MS Windows XP and MS SQL client side. Database should be restored periodically (once in a week) from the back up CD (and not from LAN) on this laptop. This laptop computer can be used by people in the field (sales) to view reports (status as on last date of backup). Importance should be given to the login id and the secret password for the backup menu. Unauthorized person should not be allowed to take backup. 3. In any case burning a CD or DVD as backup CD is mandatory and should be kept in a separate building (say home). At least three generations of backup CD is necessary. That means making CD once in 24 hrs in addition to mirror server.
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Restore Restoring database procedures in SQL Choose from device and then click Select Devices
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Invalid bill date. Account module validation checks for incomplete data entry.
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In above example, user is prompted if the cheque number is not entered.
Credit note data entry is validated. The debit total must be equal to the credit total.
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Reason for pop up: If changes rate of any Item, it prompts user for conformation.
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Purchase quotation (suppliers quotation data entry) validation. Reason for pop up: If user presses Save button and filled zero value for any Item in Purchase Quotation. Action to avoid pop up: Mention value for all items and then save.
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Accurate data capture is important. Key business processes are tightly integrated in ERP. The business units cannot work like islands of information, that is why no user will save his or her data on the local hard disk (own computer), but in ERP data is saved on the server computer hard disk automatically, after validation.
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Chapter 36. E-learning website for ERP. I have published presentations and video lectures on this free web site where you can learn at your own speed. These are free PowerPoint ppt files that you can view using your browser or download.
Learn ERP. ERP Study Material http://www.dnserp.com/erp_presentations.htm

Audit trail in ERP Backup CXO e-Manufacturing ERP Book ERP Book @ Himalaya ERP Book excerpt ERP Book Review ERP CASE STUDIES ERP flow diagram ERP for Dr. ERP levels ERP Menu ERP Newsletter ERP SCOPE 30 MODULES ERP Scope for Dr. Indian ERP software LEARN ERP Paperless office RFID SAP Video lectures Year-end procedure in ERP.
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Chapter 37. Humor In 1997, a complaint letter was as follows: This letter is from Mr. X to Mr. Bill Gates of Microsoft Subject: Problems with my new computer Dear Mr. Bill Gates, We have bought a computer for our home and we have found some problems with your windows, which I want to bring to your notice. 1. There is a button 'start' but there is no 'stop' button. We request you to check this. 2. We find there is 'Run' in the menu. One of my friends clicked 'run ' he ran up to the neighboring town! Therefore, we request you to change that to 'sit', so that we can click that by sitting. 3. One doubt is whether cycle is available in system? I find re-cycle', but I own a scooter at my home. 4. There is 'Find' button but it is not working properly. My wife lost the door key and we tried a lot trace the key with this ' find' button, but was unable to trace. Please rectify this problem. 5. My child learnt 'Microsoft word' now he wants to learn 'Microsoft sentence', so when you will provide that? 6. I brought computer, CPU, mouse, and keyboard, but there is only one icon, which shows 'MY Computer': when you will provide the remaining items? 7. It is surprising that windows say 'MY Pictures' but there is not even a single photo of mine. So when will you keep my photo in that. 8. There is 'MICROSOFT OFFICE' what about 'MICROSOFT HOME' since I use the PC at home only. 9. You provided 'My Recent Documents'. When you will provide 'My Past Documents'? Regards, Abc
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Now, in 2007 ERP Complain letter. This letter is from Mr. Y to our ERP team: Dear Sirs, Subject: Problems with ERP software We have deployed ERP software for our factory management and we have found some problems, which I want to bring to your notice. 1. Sometime we will make PO, sometime not. For keeping track of the stock, it might also be enough if you feed the opening stock, receipt, and issue. Receipt can also be recorded with a proper GRN (It is not necessary to have a purchase order every time). We are not living in an ideal world. We have to be more practical to make ourselves a little more comfortable. We shall accept all positive suggestions from your side, when we are convinced about the logic and practicability of your suggestion. But we are not running our organisation for ERP. On the contrary, ERP should be a user-friendly tool for running our organisation more effectively with less strain. We expect value for the money we spend. 2. Editing in ERP: About the other points, like the data being editable for the administrators (in our case, we would be the administrators), I would insist on that. It would be highly impractical to assume that human errors would not occur while entering data. 3. We want daily trial balance in ERP but we cannot enter data daily. You see, we are busy with ISO, we are busy with export. We do not have time to enter data every day. Please do not insist on auto-date auto-number. Allow us to do backdated entry. You see, in Kelly accounting software it is allowed to change, edit, anything we want. It is much flexible software. We do data entry only when we are in mood. Your ERP is very rigid, and is enforcing discipline on me. 4. Why do you insist on sign-off? We do not want to commit any requirement specification. So, please make provision in the ERP. Answer from Mr. Z: Please invest time in training. There is no full stop to training. ERP will work fine on demo PC but may fail to give desired results, probably user is not trained. :-) .....Happy computing in Digital economy Humor in ERP implementation Conceiving the ERP project ERP Project Manager is a person, who thinks nine women can deliver a baby in One month. ERP programmer is a person who thinks, it will take 18 months to deliver a baby. ERP Coordinator is one who thinks single woman can deliver nine babies in one month. ERP Marketing manager is a person who thinks he can deliver a baby even if no man and woman are available. Resource Optimization team thinks they do not need a man or woman; they will produce a child with minimum resources. Documentation team thinks they do not care whether the child is delivered, they will just document 9 months. Quality Auditor is the person who is never happy with the business process to produce a baby. User is the one who does not know why he wants a baby! (or why he wants ERP)
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Go to Server Once there was a call from the user that there is some problem in ERP. helpdesk was trying to give support on the phone. The
Helpdesk: Please go to server. User after couple of minutes a confused tone: but server room is closed and I do not have the key.. Helpdesk: no, no, I mean go the server icon in your control panel..
One American company decided to have some parts manufactured in Japan as a trial project. In the specifications, they set out that they will accept three defective parts per 10,000. When the delivery came in, there was an enclosed letter. "We, Japanese people, had a hard time understanding North American business practices. But the three defective parts per 10,000 have been separately manufactured and have been included in the consignment. Hope this meets your requirement."
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Glossary Active transaction Application Server ASP or Active Server Pages Avatar Active transaction is a transaction that affects either inventory or accounts or both. E.g., sales invoice is an active transaction. Main Server computer provides the ERP application program, may be away from the users computer. A technology developed by Microsoft that can be used for dynamic web pages, often related to database query and retrieval (using Internet). Avatar refers to the version of the computer program. When the source program is changed and a new program is given to user, usually it is referred as new version or new Avatar. E.g., Microsoft Windows new Avatar is Windows Vista. High-speed communications links used to enable Internet communications across a country and Internationally. The database (RDBMS) used by the ERP software. ERP uses MS SQL 2000 Server as Back-end. Indicates the speed at which data is transferred using a particular network media. It is measured in bits per second (bps). A way or method of accomplishing a business function or process that is considered superior to all other known methods. Bill of Materials. A list of direct materials required manufacturing a given product. The BOM defines father-child relation of item being produced and that being consumed during production. Business Process Reengineering is a radical improvement approach that critically examines, rethinks, and redesigns mission product and service processes within a given environment. It achieves dramatic mission performance and gains from multiple customer and stakeholder perspectives. It is key part while implementing ERP software. The root-drive of the computer. Challan cum Invoice. This is the sales invoice. Prepared at the time of parting the material while shipping the same to the customer. Also referred as Tax invoice. Child transaction or child document is prepared by ERP by defaulting the parent transaction. E.g. Purchase Order is a parent document and the GRN (Goods Receipt Note) is a child document. A distributed technology approach where the processing is divided by function. The server (PC) performs shared functions managing communications, providing database services, etc. The client performs individual user functions.
Backbone
Back-end Bandwidth Best Practice BOM
BPR
C:\ CCI
Child transaction Client / Server
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CRM
CRP
Customer Relationship Management. Some presales transactions are covered in the CRM module, such as, sales enquiry, sales quotation, order acceptance or Order Receipt Information. Conference Room Pilot. The term CRP denotes the activity of creating a prototype of the ERR solution and discussing with the key managers collectively. Since such an exercise is often carried out in a conference room (with LCD projector), it is called as Conference Room Pilot. Also referred as Parallel-run or test-run. Entire ERP is simulated in test environment using QC database. One time data transfer from legacy (old) system to new (ERP) system. Database can be defined as collection of related information. RDBMS is Relational Database Management System is an extension of a DBMS. For example, Microsoft SQL Server 2005 or Oracle 9i, etc. Digital Nervous System or ERP is a short name given to ERP. Mr. Bill Gates first coined ERP word in his book Business @ the speed of thought. ERP is used as a synonym to ERP. ERP also means Domain Name System. This is Internet system to translate names into IP addresses (Internet Protocol). ERP maps names to IP addresses of Internet domain servers.
Data migration Database
ERP
Downstream supply chain ERP ERP Deployment plan
Transactions between an organization and customers and intermediaries (e.g. franchisees). Enterprise Resource Planning
its
A schedule that defines all tasks that needs to occur in order for changeover to occur successfully from legacy management to management using ERP. Often such plan is made and monitored using project management software. This is the first step in ERP implementation. Executable computer program. Application program usually will have filename extension as .exe or .com Finished Goods. Final product. Specialized software installed on the ERP server computer at the point it is connected to the internet. Its purpose is to prevent authorized access into the company from outsiders. Goods Delivery Note. This transaction is used at the time of sending material to the third party. GDN may
EXE F. G. Firewall
GDN
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GIN
Go Live
GRN
Hacker Hold IP address JIT
be linked to Job Order or may not be linked to the Job Order Goods Inward Note. This transaction is used at the time of receiving material from the third party. GIN is linked with the Job Order. Auto-production entry is done by ERP to consume child items from the third party location. This also credits the third party in the creditor ledger. Used to denote that the company has shifted to the ERP for its routine transaction processing or live environment and has stopped using the legacy system. Goods Receipt Note. This transaction is used at the time of receiving material from the vendor (or supplier). This also credits the vendor in the creditor ledger. Individuals who break into computer network system without proper permission. Hold is a location in the stores where material is kept at the time of receiving from the vendor. Material waiting for quality check. Internet Protocol address. Just in time inventory management. Just in time delivery. A goal of value chain management, in which carrying excessive levels of inventory are avoided. At the same time stock should not be less, so that next business process suffers. JIT inventory management is all about keeping optimum level of stock (raw material, or semi-finished goods or finished products). Job Order is prepared to instruct the third party to carry out the job working or proceeding / assembling in their factory. This transaction also fixes the labor charges rate to be paid to the third party. It is Purchase Order given to the sub-contractor. Local Area Network. ERP is a Client / Server Architecture. Server is connected to users computers using cables (or wireless) usually within four walls of the organization. All ERP data is saved on Server using LAN. Existing program or traditional system, often manual or preparing report using Excel, etc. Using single user accounting program is an example of Legacy software. Items pertaining to maintenance, repairs, and operations. E.g. spares such as bearing or V belt Material Requirement Planning OnLine Printout. Hard copy of any transaction, such as Purchase Order. Order Receipt Information. This is the sales order data. Customers purchased order is our ORI. Also sometimes referred as OA or Order Acceptance or Order Acknowledgement. ORI or OA is used to
Job Order
LAN
Legacy
MRO item MRP OLP ORI or OA
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Outsourcing Parallel Runs
prepare the sales invoice. Subcontracting of functional tasks, productions, or service to a third party. The activity of transaction processing being done in legacy (existing) system AS WELL AS in the in parallel mode to confirm accuracy of results from ERP. Parent transaction or parent document is used to prepare the child document by automatically defaulting the information. E.g., Purchase Order is a parent document and the GRN (Goods Receipt Note) is a child document. Passive transaction is a transaction that affects neither inventory nor accounts is a passive transaction. E.g. Purchase Order. Purchase Order Proof of Concept. POC file contains sample input and output printouts from the latest avatar of ERP. This is used to establish users acceptance. A website that acts as a gateway to information and services available on the Internet by providing information, downloads, free newsletter subscription forms, etc. Production Entry or PE is a transaction used to report the production. Production Entry consumes the child items and produces the father item. PE is tightly linked to the BOM (Bill of Materials). Purchase Order is prepared to instruct the vendor or supplier to supply material. This transaction also fixes the rate at which we are purchasing the material. Return on investment. A method of evaluating the potential costs and benefits of a proposed capital investment. (Also see TCO) The term rollout denotes that the ERP software is being released for live use. (Otherwise, it is used in QC data or test data). The Rollout occurs after the final POC sing-off or User acceptance is formally signed by Director. This is go live stage. Structured Query Language for accessing relational database system Each database comprises of several tables. The data is stored in such tables. Total Cost of Ownership. Actual cost of investment is sum total of all cost. E.g., TCO of ERP is not only cost of software, but also includes cost of implementation, hardware, etc. The first tier is the client (user) that handles the display, second is application logic and business rules (ERP software application) and third tier is the
Parent transaction
Passive transaction PO POC
Portal
Production Entry Purchase Order
ROI
Rollout
SQL Tables TCO
Three-tier client / server architecture
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database storage. TP Third party or subcontractor. Supplier where the material is sent OUT for processing / assembly. Also referred as outsourcing or offloading. Universal Data Link or UDL is a universal file that links to a specific database. Use the UDL program to define the database properties to connect to the Microsoft SQL Server database. Work Order is a transaction instructing the production manager, what to produce, and what quantity. This is communication between marketing to production. Work Order also shows the child items required to produce the father item. Work Order is tightly linked to BOM (Bill of Materials).
UDL
Work Order
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Reference Book Title 1. Business @ the Speed of Thought. Succeeding in the Digital Economy 2. Business Process Management. Practical Guidelines to successful implementations 3. Comprehensive guide for Tally 9 4. E-Business and E-Commerce Management 5. E-Commerce. An Indian Perspective 6. Emerging Issues in supply chain management 7. ERP Demystified 8. McDonalds Behind the Arches Author Bill Gates. John Jeston and Johan Nelis AK Nadhani and KK Nadhani Dave Chaffey P. T. Joseph, S.J. Editor BS Sahay Alexis Leon John F. Love
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Index
A
accounts module, 372 Accounts payable, 265 Accounts receivable, 261 Activate serial number, 145 Adjustment Window, 271 after sales service, 299 Age wise, 248 assemble-to-order. See ATO ATO, 196 audit trail, 225 automatic email, 315 automobile, 352, 353, 366, 370
E
E-learning website for ERP, 19, 386 electronic products, 358 enquiry, 229, 230 ERP coordinator, 73, 323 ERP customization, 26 ERP Definition, 23 ERP for a corrugated box manufacturing, 333 ERP for a vada pav, 341 ERP for lens, 345 ERP for OEM Supply, 352 ERP project management, 35 ERP servers, 316 Excel, 161 Excess received percentage, 145 Excise Tariff Heading, 291 Expense voucher, 87, 103, 122, 262, 378, 379 export, 347, 359, 388
B
backup, 323, 324 Bill Of Material. See BOM blog, 329 Blog, 329 BOM, 153, 154, 161, 173, 174, 193, 203 BPR, 49, 51, 52, 64, 67, 329, 391 business process, 13, 49, 67, 78, 84, 85, 86, 113, 372 Business Process Reengineering. See BPR
F
FBT, 265 Feasibility flag, 230 Fixed Assets, 264 Form No. 16, 313 Franchisee, 341
C
case studies, 5 Case studies, 331 Central Sales Tax, 126, 290 Cess, 130, 264, 285 Challan problem, 298 Change management, 49 chemical company, 355 Closing balance rate, 285 closing stock, 117 coiling, 202, 203 contact person, 230 Contact person name, 126 Credit Note, 275, 279 CRP, 40, 41, 60, 73, 75, 78, 190, 357, 392 customer item code, 231 customers part number, 231 customization, 23, 67
G
Gantt chart, 41, 42 General Ledger, 40, 281, 288, 290 GIN, 174, 176, 177, 286, 287, 288 glass windows, 332 Goods Inward note cum inspection, 147 GRN register, 150
H
History Card, 299
I
internal ORI, 143 Invoice correction, 238 IT infrastructure, 31 Item master, 374, 377 item-code generator, 141, 335
D
Date and Time setting, 32 dealer, 219 Dealer Master, 219 Debit Note, 276, 280, 282, 374 Digital Nervous System. See DNS DNS, 4, 13, 22, 23, 392 Drucker, 80
J
Job Order, 176
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L
Labor PO, 174, 176 LAN. See Local Area Network landed cost, 285 LIVE data, 73 Live Database, 71 Local Area Network, 30, 393
R
reason master, 180 registers, 174 Rejection, 147 Replacement Challan, 320, 348, 350 Request For Quotation. See RFQ Resource, 36, 392 return goods note, 348 Return Goods Note, 149, 228, 237, 348 RFID, 371 RFQ, 128 RGN. See Return Goods Note, See Return Goods Note
M
Machine History Card, 299 Machine Master, 200 Make to order, 188 Make to stock, 188 Management Information System. See MIS, See MIS maser data entry form, 43 Material requirement planning, 209 Material Requirement Planning, 207 McDonalds, 367, 368, 396 Milestone, 35 MIS, 13, 142, 187, 341, 342, 346, 347, See , See , See , See , See , See MRP. See Material requirement planning multi-location, 316
S
sales coordinator, 215 Sales Engineer, 215, 216 sales enquiry, 229 Sales Invoice, 236 Sales schedule, 225, 231 Sales Tax, 40, 126, 288 Samosa, 341 Sarbanes-Oxley, 298 save, 203, 238 SCM, 13 Selecting ERP, 61 Send and receive, 316 Server, 323, 391 Service Provider Bill, 286 Service Tax, 264, 287, 291 Shift Master, 200 small and medium size companies, 29 SME. See small and medium size companies SPM, 361 spring manufacturing, 352, 353 Stage wise inspection, 78, 203 supplier, 147, 176 supply chain management. See SCM Supply chain management, 186, 211, 371
O
OLP, 73, 174 Operator Master, 200 Order Acknowledgement, 231 Order Receipt Information, 207 ORI, 207, 239
P
paper less office, 47 Part no, 231 password, 58 Password, 114 Pay slip, 311 Payment terms, 126 PDF, 47 PFD. See Process Flow Diagram PLA, 291, 359 plastic, 29, 361, 366 precision machining, 354 previous stage quantity, 203 Process Flow Diagram, 198 Production Entry, 174, 193, 202 production process, 203 purchase rate, 285 PV, 136, 147
T
Task, 35 Tax Deducted at Source. See TDS TCO of ERP, 56 TDS, 286, 287 Terminate Qtn, 231 Testimony, 347, 360 Third Party, 122, 136, 173, 174, 176 Toyota, 370 toys, 29 Twitter, 329
Q
QC, 73, 147, 176 QC Database, 71 quotation, 230, 231, 232 Quotation revision, 230 UDL, 73 UOM, 146, 200 UPS, 31, 32, 324, 357
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V
Vada Pav, 341 Valuation, 285 Vanilla implementation, 26 VAT, 40, 44, 285, 288 vendor. See supplier, See supplier, See supplier, See supplier Vendor, 148
W
WAR, 285 warranty management, 357 Weighted Average Rate, 285 What user wants, 55 Windows 2003 Server OS, 316 WIP rate, 286 Work Order, 174, 193, 195, 197, 202, 205
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ERP Business Blueprint

ERP Business Blueprint

Seamless Integration of business processes in ERP

COST SHEET ESTIMATE

Import Purchase Production

Send / Receive data MRP

Automatic E-Mail Alerts

After Sales Service

Resource Matrix E-Business

Sales & Distribution

ERP Business Blueprint

14. 15. 16. 17.

ERP Business Blueprint

ERP Business Blueprint

ERP Business Blueprint

ERP Business Blueprint

ERP Business Blueprint

WHY E.R.P ? BECAUSE OF ISLANDS OF INFORMATION

My growth will be OK . No?

Material Management Finance

Corporate office Production Sales Group

ERP Business Blueprint

ERP Business Blueprint

How to use this Book?

Source: Deloitte Consulting, New York, 1999.

Management of business processes is not the primary focus.

ERP Business Blueprint ERP vendors:

Group II Epicor Sage Infor IFS QAD Lawson CDC Software

ERP Business Blueprint

About Small and Medium size companies

Toys and games

Special Purpose Machine

Fire fighting equipment

UPS and Inverter

ERP Business Blueprint

ERP Business Blueprint

Switch User PC Accounts User PC Purchase User PC Stores

Printers as per requirement

ERP Business Blueprint

IT infrastructure recommendations checklist

ERP Business Blueprint

ERP Implementation project management ERP Implementation step-by-step strategy:

2. System Requirement Specifications as per SRS template

3. Legacy docume nts / Logic sheets

4. Database Setup, First-cut by DEC team

5. Make Server ready and deploy ERP EXE

6. CRP Checklist and POC printouts by DEC Team

7. QC Database Setup on ERP Server, deploy EXE

8. Training and Demo to the Task Force

9. First-cut by Task Force team

10. CRP Checklist and POC printouts by Task Force

11. Essential customizat ion, database changes

13. Go Live. All ERP authorized users starts using ERP

14. Rollout Figure 4: Typical workflow for the implementation

12. 13. 14. 15.

ERP implementation. a. Track and mange.

Go-live. a. Discard legacy and use ERP for business management.

ERP Business Blueprint

ERP Business Blueprint

Item Master Example of Raw Material (FG).

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ERP Business Blueprint Example of Raw Material (Casting)

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