An Insight of ERP Systems

“Why is it important for Engineers to understand”

Date March 28, 2011

Presenters • Mr. Hassan Aziz (B.E. IM-019)

• Mr. Saad Yousuf (B.E. IM-065)
 AGENDA
What is ERP?

What can be the Resources of different Enterprises?

What happens when Enterprises don’t have ERP

System?

What are Pros of implementing ERP System?

What are different ERP Software?

 What is ERP?
ERP is an Acronym of “Enterprise Resource Planning”

 “ENTERPRISE RESOURCE PLANNING” as the term indicates is a Management Tool for

effectively Planning the functionalities of the Resources of an Enterprise

 The term ERP is used for broad set of activities supported by multi module application

software that help a manufacturer or other business manage the important parts of its

business including product planning, pars purchasing, maintaining inventories,

interacting with suppliers, providing customer services and tracking orders

 Components of Enterprises
 Customers => Customer Relationship Dept.
 Employee => Human Resource Dept.
 Suppliers => Supply Chain Dept.
 Finance => Finance Dept.
 Machinery => Maintenance Dept.
 Investors => Investor Relationship Dept.
 Raw Material => Material Requirement Dept.
 PROS of ERP

1. Integration

2. Better Database Management

3. Portability
1) Integration
2) Better Database Management
Before ERP
2) Better Database Management
Before ERP
2) Better Database Management
After ERP
 3) Portability
TOYOTA President without ERP
 MODULES OF ERP
The generic ERP package
represents the commonly
operated business model of the
organization. It is build with
function model like :
 Finance
 Materials
 Production
 Marketing
 Sales & Distribution
 ERP FINANCE MODULE
All kind of organizations small scale, large scale
organizations benefit from the implementation of ERP
financial module. The financial module is the core of many
ERP software systems. It can gather financial data from
various functional departments, and generates valuable
financial reports such general ledger, trail balance, as
balance sheet and quarterly financial statements.
 ERP HR MODULE
Human Resources is another widely implemented ERP module. HR
module streamlines the management of human resources and
human capitals. HR modules routinely maintain a complete
employee database including contact information, salary details,
attendance, performance evaluation and promotion of all employees.
Advanced HR module is integrated with knowledge management
systems to optimally utilize the expertise of all employees. 
• Produce pay checks and payroll reports;
• Maintain personnel records;
• Pursue Talent Management,
• Training,
• Time and attendance benefit
 ERP PRODUCTION
MODULE
Production planning module optimizes the utilization of
manufacturing capacity, parts, components and
material resources using historical production data and
sales forecasting. 
 Process definition with inputs, outputs, by-products
and overheads
 Definition of Bill of Material for all products up to
any number of levels
 Planning based on customer wise production advice
and sales forecast.
 ERP PURCHASE MODULE

Purchase module streamline procurement of required raw materials. It

automates the processes of identifying potential suppliers, negotiating
price, awarding purchase order to the supplier, and billing processes.
Purchase module is tightly integrated with the inventory control and
production planning modules. Purchasing module is often integrated with
supply chain management software.
 ERP INVENTORY MODULE

Purchase module streamline procurement of required raw materials. It

automates the processes of identifying potential suppliers, negotiating
price, awarding purchase order to the supplier, and billing processes.
Purchase module is tightly integrated with the inventory control and
production planning modules. Purchasing module is often integrated with
supply chain management software.
 ERP SALES &
MARKETING MODULE
Sales module implements functions of order placement, order scheduling,
shipping and invoicing. Sales module is closely integrated with
organizations' ecommerce websites. Many ERP vendors offer online store
front as part of the sales module. ERP marketing module along with CRP
supports lead generation, direct mailing campaign and other marketing
works. Scheduling of the promotion is possible using this.
 CHARACTERISTICS OF ERP
SYSTEMS
An ERP system is not only the integration of various organization processes.
Any system has to possess few key characteristics to qualify for a true
solution. These feature are:
Flexibility: An ERP system should be flexible to respond to the changing
needs of an enterprise. The client server technology enables ERP to turn
across various data base back ends through Open Data Base Connectivity
(ODBC)
Comprehensive: It should be also to support variety of organizational
function and must be suitable for a wide range of business organizations
CHARACTERISTICS OF ERP
SYSTEMS
Modular & Open: ERP system has to have an open system architecture.
This means that any module can be interfaced or detached whenever
required without affecting the other modules. It should support multiple
hardware platforms for the companies having heterogeneous collection of
systems. It must support some third party add-ons also.
Best Business Practices: It must have a collection of the best business
processes applicable world – wide.
Simulation of Reality: Last but not the least, it must simulate the reality of
business processes on the computers. In no way it should have the control
beyond the business processes and it must be able to assign
accountabilities to the users controlling the system.
 FEATURES OF ERP SYSTEMS
The major features of ERP and what ERP can do for the business system
are:
• ERP facilities company – wide Integrated Information System, covering all
functional areas like, Manufacturing, Selling and distribution, Payables,
Receivables, Inventory, Accounts, Human resources, Purchase, etc
• ERP performs core corporate activities and increases customer service and
thereby augmenting the corporate image.
• ERP eliminates most of the business problems, like Material shortages,
Productivity enhancements, Customer service, Cash Management,
Inventory problems, Quality problems, Prompt delivery, etc.
 FEATURES OF ERP SYSTEMS
• ERP provide business intelligence tools like Decision Support Systems
(DSS), Executive Information Systems (EIS), Reporting, Data Mining and
Early Warning Systems for enabling people to make better decisions and
thus improve their business processes.
• ERP bridges the information gap across the organization.
• ERP provides for complete integration of systems not only across the
department in a company but also across the companies under the same
management.
• ERP is an effective solution for better Project Management.
 WIDELY USED ERP
SOFTWARES
Some widely used ERP softwares are:
• SAP
• Oracle
• MS Dynamics
• Baan
• J D Edwards
• WebERP
• Scoopsoft
 ADVANTAGES OF ERP
SYSTEMS
There are many advantages of implementing an EPR system. A few of
them are listed below:
• A perfectly integrated system chaining all the functional areas
together
• It can integrate the cost, profit, and revenue information of sales that
are made, and it can be presented in a granular way.
• The capability to streamline different organizational processes and
workflows
• The ability to effortlessly communicate information across various
departments
• Improved efficiency, performance and productivity levels
• Enhanced tracking and forecasting
• Improved customer service and satisfaction
 ADVANTAGES OF ERP
SYSTEMS
• ERP can also be responsible for altering how a product is
manufactured. It allows the products themselves to be
produced with a higher level of quality.
• Can protect a company against crimes such as embezzlement
or industrial espionage
 DISADVANTAGES OF ERP
SYSTEMS
While advantages usually outweigh disadvantages for most organizations
implementing an ERP system, here are some of the most common
obstacles experienced:
• The scope of customization is limited in several circumstances
• The present business processes have to be rethought to make them
synchronize with the ERP
• ERP systems are hard to customize.
• ERP systems can be extremely expensive to implement. At present, only
large corporations can truly take advantage of the benefits that are
offered by this technology
• There could be lack of continuous technical support
THANK YOU