ERP (Enterprise Resource Planning)

ERP (Enterprise Resource Planning) Implementation

Definition:

Enterprise Resource Planning or ERP is an industry term for integrated, multi-module application software packages that are designed to serve and support multiple business functions. It enables information entered once to be shared throughout the organization.

It is pre-developed software, which is configured for different organizations

History of ERP

Timeline: 1960s

Inventory Management & Control

Inventory Management and control is the combination of information technology and business processes of maintaining the appropriate level of stock in a warehouse. The activities of inventory management include identifying inventory requirements, setting targets, providing replenishment techniques and options, monitoring item usages, reconciling the inventory balances, and reporting inventory status.

Timeline: 1970s

Material Requirement Planning (MRP)

Materials Requirement Planning (MRP) utilizes software applications for scheduling production processes. MRP generates 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.

Timeline: 1980s

Manufacturing Requirements Planning (MRP II

Manufacturing Requirements Planning or MRP utilizes software applications for coordinating manufacturing processes, from product planning, parts purchasing, inventory control to product distribution.

Timeline: 1990s

Enterprise Resource Planning (ERP)

Enterprise Resource Planning or ERP uses multi-module application software for improving the performance of the internal business processes. ERP systems often integrates business activities across functional departments, from product planning, parts purchasing, inventory control, product distribution, fulfillment, to order tracking. ERP software systems may include application modules for supporting marketing, finance, accounting and human resources.

Advantages of ERP

• Improve access to information
• Improve workflow and efficiency
• Improve controls and program alerts
• Process reengineering - update old processes
• Foundation for new processes, such as e-procurement, with significant ROI
• Flexibility: Think Local, Act Global

Disadvantages of ERP

• Direct costs only represent a fraction of the total costs of ERP
• Direct costs include hardware, software, and people on the project - the largest category is personnel costs
• Indirect costs include the costs of training employee, increasing salaries and the total life cycle costs of the ERP, maintenance, ongoing production, and upgrades.
• ERP’s can be very rigid and may not fit the business flow of the company trying to use it.
• Company’s may need to customize their ERP package which isn’t allowed by most ERP vendors.

Success Factors of ERP

• The ERP Contract
• Limit Customizations and Scope
• Use of Consultants
• ERP Project Management
• Creating the “Single Team” atmosphere
• Recruitment and Retention Issues
• Morale of the team

  

ERP Applications

• SAP
• Oracle
• Infor
• Sage Group
• Microsoft
• Lawson
• Epicor
• IFS
• Exact Software
• Activant
• & Many More….

keywords : erp, erp implementation