ERP

Enterprise Resource
Planning
 What do we mean by-
• ENTERPRISES- The larger business community
covering all the players and
their participation in the
business.
• RESOURCES- A useful or valuable possession
or quality.
• PLANNING- How and when to perform.
2
ERP stand for Enterprise Resource
Planning.

It is a commercial software package that

provides techniques and methodologies
for seamlessly integration and flow of
information within an organization.

It provides operational, tactical and

strategic information for improving
productivity, quality and competitiveness of
a firm.
 Introduction
Enterprise Resource Planning systems (ERPs)
integrate (or attempt to integrate) all data and
processes of an organization into a unified
system.

A typical ERP system will use multiple components

of computer software and hardware to achieve
the integration.

A key ingredient of most ERP systems is the use of

a unified database to store data for the various
system modules.
 The Components of an ERP System
ERP Software - Module based ERP software is the core of an ERP
system.

 Each software module automates business activities of a functional

area within an organization.

 Common ERP software modules include product planning, parts

purchasing, inventory control, product distribution, order tracking,
finance, accounting and human resources aspects of an
organization.

Business Processes - Business processes within an organization falls

into three levels
a) Strategic planning
b) Management control
c) Operational control.
3. ERP Users - The users of ERP systems are
employees of the organization at all levels, from
workers, supervisors, mid-level managers to
executives.

4.Hardware and Operating Systems - Many

large ERP systems are UNIX based.
Windows NT and Linux are other popular
operating systems to run ERP software.
,
 Production
 Bill
of materials, classification
 Work order generation, scheduling
and control.
 WIP tracking, valuation
 Work station / machine center
management
 Materials
 Purchasing
 Stock management and
valuation
 Inventory analysis
 Finance
 General accounting functions
 Ledger, payables and receivables
 Cash-flow management
 Assets accounting
 Tax management
 Cost account: order accounting,
product costing
 Sales
 Order processing
 Sales analysis, budgets and controls
 Finished goods stores management
 Market / Customer / Product analysis
 Sales forecasting
 Personnel
 Personnel attendance system,
time management
 Human resources management;
planning, training
 Personnel cost, projection and
planning
 Quality control
 Analysis of quality by process,
material, work center location
 Analysis of quality by reasons and
action taken
 Building quality assurance data for
equipment / process / technology
selection
 Maintenance

 Plant maintenance planning

 Breakdown,conditional
maintenance
 ERP vs. CRM and SCM
CRM (Customer Relationship Management)
and
SCM (Supply Chain Management)
are two other categories of enterprise software that
are widely implemented in :-
a) corporations
b) non-profit organizations.

Continued…
While the primary goal of ERP is to improve
and streamline internal business
processes.

 CRM attempts to enhance the relationship

with customers.
 SCM aims to facilitate the collaboration
between a) the organization
b) its suppliers
c) the manufacturers
d) the distributors
e) the partners.
 General Features
 Separation of the programme code and
the data areas
 Command language
 Screen based flow control
 Word processing, text editing
 Tuning
 Enterprise modeling:
structure/policy/rules/guidelines
 Business System
• Business forecasting for products, groups, markets
• Business planning in terms of the resources to execute
• Strategy formulation and implementation
• Information base management for management
application
 Advantages
In the absence of an ERP system, a large manufacturer may find itself
with many software applications that do not talk to each other and do
not effectively interface. Tasks that need to interface with one another
may involve:

• design engineering (how to best make the product)

• order tracking from acceptance through fulfillment

• the revenue cycle from invoice through cash receipt

• managing interdependencies of complex Bill of Materials

• tracking the 3-way match between Purchase orders (what was ordered),
Inventory receipts (what arrived), and Costing (what the vendor
invoiced)

• the Accounting for all of these tasks, tracking the Revenue, Cost and
Profit on a granular level.