ERP

Lori
Martel

Hahn
Shin

Ramkin
Shetty

Dinesh
Sekar
SIS

Table of Contents

ERP

Introduction
Organizational & Technological Change
Business Engineering Vs. Business Process Re-engineering

Definition & ERPs role in the Supply Chain

Business Aspects
ERP: Vendors, Comparison, Characteristics of ERP,
Applications and Advantages
SAP R/3
Constraints: Business &Technical

Technical Aspects
Layer Architecture
Application Architecture
Customization

Industry Example: Quantum

Look into the Future
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Introduction

ERP

Growing Competition
Market Globalization
Decreasing Innovation Cycles

need
for flexible, integrated,
and open software

Relationship Based Transactions

Different Manufacturing Environments
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Introduction

ERP

Changes in Structure
Functional Vs. Process Based Structure
Value Chain Thinking
Order
Processing
Product
Development
Customer
Service

Personnel

Product Marketing
Development & Sales

Production
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Introduction

ERP

70s Standard Software, Mainframe Systems

Separate Applications for business functions

90s Technological Trends

Client/Server Computing
Innovative process integrated business solutions
Open Systems
Increasing computing speed, GUIs
Faster Data processing
Data Integration
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Introduction

Use of Prototyping/Modeling

BP R

- Building Systems around Business

Automating Business Processes through IT

Use of Blueprinting
BE
- Designing & Integrating Business Processes
IT used as a Strategic Tool
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ERP

Definition

- ERP is a software package integrating organizational

business processes & data across the company

Integrated views
Modeling
all the processes

Integrating
all the
information

Strategic use
of IT

Quality,
Cost,
Delivery

Effective use
of
resources

EIS
DSS

MIS

OA

TPS
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ERP

Role in Supply Chain

Extended Supply Chain Management
Supply
Planning

ERP

Scheduling

Demand
Planning
Logistics

Internal Supply Chain Management

External
Suppliers

Internal
Suppliers

MRP

External
Customers

ERP

Internal
Customers

ERP

Coordinated
Manufacturing

Plant
Management

MRP
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Business Aspects

11%

3%
3%
5%
5%

34%

5%
5%

7%
SAP
SSA
J.D. Edwards
Oracle
Peoplesoft
Others

9%

13%
Computer Assoicates
Baan
JBA
Marcam
QDA
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ERP

Business Aspects

High

Rebuild

Functionality

J.D. Edwards *

Remain

* R/3
* Oracle

Low
Low

* CA

* Peoplesoft
* Baan

Review

Reinforce

Technology

High

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Characteristics

Modeling Business Processes and

Integrating through Software
NOT Multiple Packages Pieced together
through Complex Interfaces
Configuration 8,000 Tables set up by Programmers
Series of Switches
Requires Deep Understanding of
Existing Business Processes
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Business Aspects

Aerospace & Defense

Automotive
Chemicals
Consumer Products
Financial Services
Healthcare
High-Tech & Electronics
Oil & Gas
Pharmaceuticals
Retail
Telecommunications
Utilities
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ERP

Business Aspects

Largest vendor of standard business application

R/3: Real-Time Version 3.0
Client/Server enterprise application software
6,000 companies, 50 countries
Companies in diverse businesses
30 seats or installations with 3,000 end users
800 predefined business processes

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ERP

Business Aspects

Business Components

- Finance, HR, Logistics

Business Objects
- Customer, Invoice

Business Information
Warehouse
- Aggregate Internal
& External Data

Business Engineer

- Customization Tool

Integration Technologies (ALE)

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ERP

Business Aspects

Reference Model
Data Model
Business Object Model
Organization Model
Process Model
Distribution Model

Event Driven
Process Chain (EPC)
Event
Function/Task
Organization
Communication

- Repository Holds the Reference Model, Industry

Specific Models & Enterprise Models
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ERP

Business Aspects

Fast
Flexibility
Expandable
Open
Industry Specific
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ERP

Business Aspects

Allows Companies to Adapt

to New Business Opportunities
Synchronous Transfer of Data
Encourages Multi-Disciplined Teamwork
Reduces Redundant Labor
Provides Standard Based Development Environment
Process Engineering Cost Benefits
Flattens Organizations to Increase Agility
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ERP

Business Aspects

Very Expensive
Every $1 Spent in Software Licenses $8 - $10 Spent on Consulting Support
Outside Consulting Fees can cost $1500/day
Requires Equipping employees with new skill sets
Hard to Keep Resources
Changing Business Processes to suit ERP/ can
Effect the Organizations Culture
Can NOT Impose ERP Infrastructure on Company
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ERP

Business Aspects

Lack of Flexibility
Complexity & Rigidity
High Implementation Time
Difficult in Decentralized Environments
Difficult Interfaces
Steep Learning Curve
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Technical Aspects

Layer Architecture
Development workbench
Application
Layer

Dictionary

Applications

Program Interface Modeling

editor
builder tools

Repository
Middleware

Basis
Layer

Middleware
System software: GUI, DBMS, OS, N/W

- Issues: Scalability, Portability, Interoperability & openness,

Customizability, GUI, etc.
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Technical Aspects

Application Architecture
SD

Repository

CO

AM

System model
Business model

MM

FI

WF

Scope, Rules & Pattern

IS

DM
PP

HRM

PS

Business Kernel
FM

WFM

Full Business
QM

PM

DW
Specific Situation

- Issues:
1. Independent from all types of computers(UNIX, Window NT,
AS/400, etc.), DBMS(Informix Online, Oracle 7, ADABAS, DB2, MS SQL
Server 6.0, etc.), GUI flatform(OS/2 Presentation Mgr.., OSF/Motif,
Macintosh, Windows, etc)
2. Independent from the country specific rules, languages, etc.

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Technical Aspects

Customization: Support of initial implementation

projects, follow-up projects, and release-change projects
Implementation environment
Procedure model
Implementation
guides

Customized model

Reference model:
FM, PM, DM, IFM, OM,
Comm. Model,
Distr. Model

Documentation

Release management

- Issues: Integrated customizing functions, quality assurance, etc.

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Industry Examples

Objectives
Available-to-Promise (ATP), the real-time
capability to take an order, schedule it to be
delivered anywhere in the world and confirm
delivery instantly
Ability to determine what was actually in inventory
or in production and how much of it had been
promised to other customers
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Industry Examples

Scope
Based on the full suite of Oracle Corp.'s manufacturing
and operations applications
750 users in 25 locations worldwide
To adopt Big-bang approach
One of the largest distributed business systems to go live
worldwide at one time

HP9000 hardware, HP UX operating system (10.1) and

Oracle Release 10.4

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Industry Examples

Pre-Implementation Assessment
Legacy system-based MRP system in use
Each division's business transactions in separate
databases by business unit, and by function
within a unit
Databases couldn't share information

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Industry Examples

Project Planning & Control

Project team members pulled from regular jobs
& relocated to Building 12
Building 12 essentially set up a scaled-down
business model of Quantum
Team members play-acted their real-life roles
Improved business processes and wrote
requirements for the new system
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Industry Examples

Implementation Process
Packaged available applications & selected Oracle
applications
Consultants from Price Waterhouse and Oracle,
installed the software & began pilot projects
Complexity and magnitude of the project
quadrupled (Digital Disk drive division
acquisition)
Conference room pilots tests

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Industry Examples

Human (HR) Side

Locally trained about 100 users from all over the
world and flew them into Milpitas to run a fullscale system simulation
Sponsored massive user training - users had to
pass a test before returning to their jobs
Ran Internal PR campaign- Entailed group
meetings, presentations,an intranet site and events
emphasizing system's importance
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Industry Examples

Project Statistics
October 1992 - May 1996
16 full time managers
100 person
multidisciplinary team
1,632 meetings
79 shouting matches

800GB of disk space

18,064 miles of cable
300,000 cups of coffee
58,000 e-mails
7,503 cases of beer
1.62 million miles
of air travel
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Future Aspects

Targeting Small & Medium Enterprises

Business

Addition of Simple GUI based

development Tools
Strategic Alliances
- Andersen Consulting & SAP
- IBM & J.D. Edwards
- GE & Oracle

Supply Chain Management

Technology

Internet Enabled
Workflow Management
Resource Planning
Data Warehousing
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