ERP

ENTERPRISE RESOURCE PLANNING

PRESENTED BY

WASHI ABDULLAH BIN SHARIF

ID: 1404060

INTRODUCTION TO ERP
ERP is a business management software typically a suite of
integrated applications that a company can use to collect, store,
manage and interpret data from many business activities,
including: Product planning, Cost, Manufacturing or Service
Delivery, Marketing and Sales.
ERP provides an integrated view of core

business processes using common

databases
ERP facilitates information flow between

all business functions, and manages

connections to outside stakeholders

EVOLUTION OF ERP
The evolution of ERP from 1960s to 2st century is given below:
1960s: Inventory Management & Control
Combination of IT and business processes of maintaining the

appropriate level of stock in a warehouse

Activities include identifying inventory requirements, setting

targets, providing replenishment techniques and options,

monitoring item usages, reconciling the inventory balances,
and reporting inventory status etc.
1970s: Material Requirement Planning [MRP]
Utilizes software applications for generating schedules for the

operations and raw material purchases based on the

production requirements of finished goods, the structure of
the production system, the current inventories levels and the
lot sizing procedure for each operation

EVOLUTION OF ERP
1980s: Manufacturing Requirements Planning [MRP II]
Utilizes software applications for coordinating manufacturing

processes, from product planning, parts purchasing, inventory

control to product distribution
1990s: Enterprise Resource Planning [ERP]
Uses multi-module application software for integrating

business activities across functional departments

2000s: Extended ERP [ERP II]
ERP like systems that are evolving to support inter-

organizational business processes across the supply chain

A solution that includes the traditional materials planning,

distribution, and order-entry functionality strengthened by

capabilities like CRM, HRM

FUNCTIONAL AREAS OF ERP

Financial accounting: General ledger, fixed asset, payables

including vouchering, matching and payment, receivables cash

application and collections, cash management, financial
consolidation
Management accounting: Budgeting, costing, cost management,

activity based costing

Human resources: Recruiting, training, rostering, payroll,

benefits, 401K, diversity management, retirement, separation

Manufacturing: Engineering, bill of materials, work orders,

scheduling, capacity, workflow management, quality control,

manufacturing process, manufacturing projects, manufacturing
flow, product life cycle management

FUNCTIONAL AREAS OF ERP

Order processing: Order to cash, order entry, credit checking,

pricing, available to promise, inventory, shipping, sales analysis and

reporting, sales commissioning
SCM: Supply chain planning, supplier scheduling, product

configurator, order to cash, purchasing, inventory, claim processing,

warehousing (receiving, put away, picking and packing)
Project management: Project planning, resource planning, project

costing, work breakdown structure, billing, time and expense,

performance units, activity management
CRM: Sales and marketing, commissions, service, customer contact,

call center support - CRM systems are not always considered part of
ERP systems but rather Business Support Systems (BSS)
Data services: Various "selfservice" interfaces for customers,

suppliers and/or employees

ADVANTAGES OF ERP
Sales forecasting which allows inventory optimization
Chronological history of every transaction through relevant data

compilation in every area of operation

Order tracking, from acceptance through fulfillment
Revenue tracking, from invoice through cash receipt
Matching purchase orders (what was ordered), inventory receipts

(what arrived), and costing (what the vendor invoiced)

Eliminates the need to synchronize changes between multiple

systemsconsolidation of finance, marketing, sales, human resource,

and manufacturing applications
Brings legitimacy and transparency to each bit of statistical data
Facilitates standard product naming/coding
Provides realtime information available to management anywhere,

any time to make proper decisions

Protects sensitive data by consolidating multiple security systems

DISADVANTAGES OF ERP

Very expensive to purchase and even more so to customize

Implementation may require major changes in the company and

its processes
So complex that many companies cannot adjust to it
Involves an ongoing, possibly never completed, process for

implementation
Expertise is limited with ongoing staffing problems

IMPLEMENTATION OF ERP

Very expensive to purchase and even more so to customize

Implementation may require major changes in the company and

its processes
So complex that many companies cannot adjust to it
Involves an ongoing, possibly never completed, process for

implementation
Expertise is limited with ongoing staffing problems

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