HOME WORK-1 Enterprise resource planning

Submitted by:Name shivangi shukla REGNO:---11005946 Roll-no:- RDIR14B41 Submitted to:Mr.rahul saha

1. Discuss the need of ERP in Retail Enterprises with example. Answer: Enterprise Resource Planning (ERP) has long been a crucial tool for manufacturers to discover potential efficiencies, standardize processes, reduce costs, and provide visibility for informed decision making. Since the widespread adoption of ERP in manufacturing, other industries have followed suit and are now using ERP to manage and improve their business performance. For example, Aberdeen's 2011 ERP survey of 52 retail organizations, Aberdeen finds that 83% are currently using ERP. Still, 51% of those ERP systems are less than five years old. Evidence of the fact that 93% of leading retail organizations is using

ERP compared to 73% of all others, shows that the benefits of ERP have been taken advantage of in leading retail organizations and those organizations that are lagging behind could benefit from using ERP to catch up. To overcome from these challenges a Retail industry need ERP. Several Advantages of Using a Retail ERP Suite are given below:\ 1. Retail specific components Unlike a general ERP package, retail ERP suite offers retail centric components that are customized to meet the specific requirements of a retail organization in an effective and efficient manner. This makes a retail ERP suite much more suitable to meet the specific requirements of a retail organization. 2. Segment specific expandability option Within the retail sector, there is a wide variety of different segments that vary in their nature and scope of operations. A retail ERP package has provisions to meet the varying needs of the different segments within the retail sector. 3. Support for the store system Retail ERP suite offers support for the store systems that form the pivot of a retail business. The critical functions include keeping track of the inventory, ordering and replenishment, loss prevention and task management. This makes retail ERP system suited to the specific needs of a retail organization. 4. Configuration and scalability A good retail ERP system allows a high degree of customization and is easily scalable to attune itself to the size of the organization and its level and scope of operations. Such configuration and scalability prove to be a boon in managing the retail operations across an enterprise. This allows a retail ERP system to grow with the organization. 5. Workflow automation and enterprise process management Modern day retail ERP packages offer workflow automation and enterprise process management to make the workflow smooth and

seamless across the entire enterprise. This allows the management to monitor and keep track of the workflow while also undertaking the enterprise process management leading to the identification and removal of any inconsistencies in the business process. 6. Technology and application integration A good retail ERP system allows technology and application integration to allow a platform independent, seamless transfer of processes across different modules running on different technologies in an enterprise wide environment that may include interaction with legacy systems and external entities such as the suppliers and the customers. Such integration provides the critical enterprise-wide view to the management. Q2--Closed loop relations are often mandatory in ERP- comment and explain. Ans: A program used for development preparing and stock control, with an details reviews function that allows programs to be examined and modified. Shut Cycle MRPs connect the purchasing or components purchase programs with the master development schedule. The program for back details about finished produce and components on hand into the MRP program, so that these programs can be modified according to capacity and other requirements. The program is called a closed loop MRP because of its reviews function, which is also termed as ending the loop. Closed loop MRP techniques are considered to be secondgeneration techniques, and have since being superceded by development source preparing (MRP II) and business source preparing (ERP) techniques. While MRP techniques were mainly concerned with components used in the process, MRP II and ERP techniques incorporated additional factors such as finance and HR. Q3--Suppose you have a new business process applied to your business process but your current ERP does not have those

capabilities to process. How can you manage to make your company with profit in this adverse situation? Ans:-An ERP, by definition, provides automation for all departments/functions of an organization. Thus, Sales and Marketing will be able to run their operations on the ERP system, and so will Material Management, Finance and Accounts, Retail and Distribution, Production, and so on. It is not as if these functions did not have any automation prior to the ERP implementation, just that after the implementation they share the same data seamlessly, information flow across functions and locations is enabled and process driven. Thus ERP benefits the organizations by enabling organization integration, islands or silos of information get eliminated and everyone is able to work on mutually shared objectives. 4. What is MPS? How it is significant in case of MRP?

Ans4---MRP is concerned with both production scheduling and inventory control. It is a material control system that attempts to keep adequate inventory levels to assure that required materials are available when needed. MRP is applicable in situations of multiple items with complex bills of materials. MRP is not useful for job shops or for continuous processes that are tightly linked. The major objectives of an MRP system are to simultaneously: 1. Ensure the availability of materials, components, and products for planned production and for customer delivery, 2. Maintain the lowest possible level of inventory, 3. Plan manufacturing activities, delivery schedules, and purchasing activities. MRP is especially suited to manufacturing settings where the demand of many of the components and subassemblies depend on the demands of

items that face external demands. Demand for end items are independent. In contrast, demand for components used to manufacture end items depend on the demands for the end items. The distinctions between independent and dependent demands are important in classifying inventory items and in developing systems to manage items within each demand classification. MRP systems were developed to cope better with dependent demand items. The three major inputs of an MRP system are the master production schedule, the product structure records, and the inventory status records. Without these basic inputs the MRP systemcannot function. The demand for end items is scheduled over a number of time periods and recorded on a master production schedule (MPS). The master production schedule expresses how much of each item is wanted and when it is wanted. The MPS is developed from forecasts and firm customer orders for end items, safety stock requirements, and internal orders. MRP takes the master schedule for end items and translates it into individual time-phased component requirements. The product structure records, also known as bill of material records (BOM), contain information on every item or assembly required to produce end items. Information on each item, such as part number, description, quantity per assembly, next higher assembly, lead times, and quantity per end item, must be available. The inventory status records contain the status of all items in inventory, including on hand inventory and scheduled receipts. These records must be kept up to date, with each receipt, disbursement, or withdrawal documented to maintain record integrity. MRP will determine from the master production schedule and the product structure records the gross component requirements; the gross component requirements will be reduced by the available inventory as indicated in the inventory status records. 1.1 MRP Computations

We will illustrate MRP computations through examples. Example 1 Suppose you need to produce 100 units of product A eight week from now, where product A requires one unit of product B and two units of product C, while product C requires one unit of product D and two units of product E. How many units of each type do you need? In thisexample it is easy to compute the requirements of each item to produce 100 units of product A: Req(B) = 100, Req(C) = 200, Req(D) = 200, Req(E) = 400. Suppose further that the lead-times for the products are as follows: Product A, four weeks, product B three weeks, product C two weeks, products D and E one week each. Since the production lead-time for product A is four weeks, we must have products B and C available at the end of week four. Since product B has a lead time of three weeks, we need to release the production of product B by the end of the first week. Similarly, product C need to be released for production at the end of week two, while products D and E must be released for production at the end of week one. IEOR 4000: Production Management page 2 Professor Guillermo Gallego A material requirements plan has been developed for product A based on the product structure of A and the lead-time needed to obtain each component. Planned order releases of a parent item are used to determine gross requirements for its component items. Planned order release dates are simply obtained by offsetting the lead times. 2 The computations and steps required in the MRP process are not complicated. They involve only simple arithmetic. However, the bill-of-materials explosion must be done with care. What may get complicated is the product structure, particularly when a given component is used in different Gross requirements

Static lot sizing rule:

A decision rule that orders the same quantity each time an order is placed. Tend to generate higher average on-hand inventory because they create inventory remnants. Can provide extra SAFETY STOCK.

Dynamic lot sizing rule:

A decision rule that changes the order quantity with each order, typically so that each order is just large enough to prevent shortages over a specified time period. Tend to cause instability by tying lot-size to gross requirements. Lower-level components may not be able to respond sufficiently fast to changes in requirements.

5 ERP is suitable for big companies only- Comment over the statement Ans)yes, ERP is suitable for big companies ,just for the following reason:Ans5This is one of the main misconceptions prevailing among some small and medium sized companies. This is due to the unawareness of the functioning of an ERP system. Mainly what is to be understood is that an ERP system automates business processes across an organization and thus eliminates inefficiency caused by a legacy system. It is true that there are some big players like SAP in the market that may be taking care of business process of huge organizations. But today, medium and small sized companies are benefited from automation and streamlining of their business process with

efficient and affordable web-based ERP solutions like eresource. Both SAP and eresource are ERP systems and designed for large, small and medium sized organizations across every industry On the priority basis the first choice should be that the ERP you are selecting must be Product Fit. As you know there are many ERP products on the market and each designed for a particular segment. Therefore, you must ensure the product is aimed at your type of organization. If you are a small, regional discrete manufacturer, then don't buy a product intended for very big organizations such as oil refineries etc. Second point is the ERP software must be Process Fit. After doing a rough cut analysis for product fit, it is necessary to look thoroughly at your own needs and match them against the ERP solution you have opted for. Make sure that the software is integrated with all the modules you are looking for and it is well designed to suit your requirement. You must also check the reliability of the solution providers. Since ERP is a long-term commitment, ongoing support / maintenance are essential. The software firm that you are dealing with must have the resources and technician to carry out the whole operation and further maintenance and training successfully. You must also check that their implementation methodology is efficient and reasonable. Lastly before you have decided with one of them consider whether the pricing is reasonable and the terms are acceptable. Don't forget to include ongoing support and maintenance in the price discussion. Large businesses often do highly specialised, excellent work but that doesnt always mean that there isnt any room for improvement. Many large companies could benefit from updated, enhanced ERP systems to make them more effective and enable

them to plan their resources better. Here are five ways in which ERP systems can help large businesses. ENHANCES TECHNICAL CAPABILITIES Probably one of the main ways in which these systems can help big companies is in enhancing their technical capabilities. Often, companies grow, gaining more staff and customers, but their technology fails to grow with them. This can usually be managed up to a point, but there comes a time where businesses need to invest in new technology to help them manage their processes better and make sure that they have the capacity to cope with further expansion. MAKES PROCESSES MORE EFFICIENT This also helps to make businesses more efficient in how they deliver processes. One of the big benefits of ERP software is that it has got many capabilities, meaning that it can This helps to prevent a fragmented approach to business and also helps to make the process of collecting data more efficient as everything is recorded in a central database. IT INTEGRATES DATA This is linked to the idea of integrating all of your data. Many businesses are very good at collecting data, but this is often done within individual departments rather than on a company wide basis. This can lead to the duplication of information, or even different departments having different information because some have not been updated properly on the latest developments. This problem can be exacerbated if a large company is based across multiple sites, but it can be mitigated by using ERP software to link up the different operations within a business. This means

that everyone who needs it has access to the most relevant, up to date information. IT MAKES REPORTING EASIER In turn, this helps to make the process of reporting easier within large companies as all the information needed to create useful reports is held within the integrated ERP systems. The very best ERP solutions allow a large business to customise reports so that they can see analysis of exactly what they are interested in and compare different aspects of the company. It enables more complex reports to be generated and allows more staff to reflect on their work in this way, rather than having to ask a particular department for the information first. IT OFFERS GOOD ACCESS TO DATA Finally, the fact that everyone who needs it within the organisation has good access to data means that other aspects of the business will also improve. For example, better data and a more integrated approach means that the customer service your business provides is likely to improve and it allows employees to communicate with each other more effectively, all of which should have a positive effect on the operations of your large business.

6. Inventory control is a significant part of ERP systems- How? Explain with proper justification. ANs) Inventory Control is the supervision of supply, storage and accessibility of items in order to ensure an adequate supply without excessive oversupply.

It can also be referred as internal control - an accounting procedure or system designed to promote efficiency or assure the implementation of a policy or safeguard assets or avoid fraud and error etc. IMPROVE CONTROL You can manage your inventory with the level of flexibility and control most appropriate for your business. This solution provides instant access to critical information, such as inventory availability, quantity on hand, reorder quantities and costs. Powerful multi-site functionality lets you manage multiple warehouse locations and track inventory to the lot, serial or bin level.

After you have generated some history, the system will examine your inventory sales and recommend new highs and lows based on the sales volumes, number of days it takes to arrive, and if the trend is showing more or less sales. With barcode support, you can ensure accurate control, counting and selling of your inventory. While barcode support is included in Windward, bar codes are not for everyone, and we can show you several alternate methods of controlling inventory. Yes , Inventory control is a significant part of ERP systems because of the Following Reason:-

Find inventory by part number, description, supplier, main and sub category lookup and numerous other search options Easily see quantities in stock, committed-to work orders, layaways and quantities available to sell Costing on first in, first out method reports show weighted average (Costing by average method available by request) List price and twelve extra price levels of different prices for different customers Supports bar codes at point-of-sale, receiving and when counting-you can even print your own bar codes. Alternate suppliers complete with part number and their price you can find a part by suppliers part number