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Executive Summary

Enterprise resource planning systems are management information systems that integrate
and automate business practices associated with the operations, production and distribution
aspects of a company engaged in manufacturing products or services. ERP is an integral part
of modern enterprise. With ERP software, companies can standardize business processes
and more easily enact best practices.
A supply chain is the stream of processes of moving goods from the customer order through
the raw materials stage, supply, production, and distribution of products to the customer.
Supply chains of organization vary, depending upon the size of the organization and the type
of product manufactured. Management of supply chain through application of ERP system
makes the management more effective and efficient.
As per instruction of our honorable teacher Mr. Mohammed A Jahed, Associate Professor,
Department of Management Studies, we get the topic entitled, ERP System Application in
Supply Chain Management in Industry for preparing our report. We have to collect primary
and secondary data for this report. The findings are primarily based on a survey through
Questionnaire administered in Abul Khair Group.
The study is a synopsis on the overall ERP System Application in Supply Chain Management
in Abul Khair Group. AKG using ERP system since 2003 and their vendor is DreamApps.
AKG currently using ERP-3 within this month they will start using Oracle. Although AKG
faces many barriers and challenges but they get many benefits by using ERP system in their
supply chain management. AKG successfully select and implement ERP system in their
organization and their profit increases day by day and they become one of the largest
manufacturer and exporter in Bangladesh.

Introduction
Abul Khair Group is one of the leading manufacturer & exporter in Bangladesh of many
diversified Fast Moving Consumer Goods (FMCG), such as Condensed Milk, Beverage,
Powder Milk, Edible Oil, Tobacco, Steel Products, Cement, Tea etc. It was established in
1953 by late Abul Khair. The company started with Abul Bidi. Later on, the company
expanded its business to other sectors. It is now one of the most successful companies in
terms of professionalism and management excellence. Over 10,000 personnel are working
for this renowned company directly. Among the several units of Abul Khair Group, milk
and beverage is one of the most vital divisions of the group. This division produces and
packs condensed milk, powder milk, and several types of juice, flavored milk, drinks, snacks
and supreme quality tea. The company was awarded with the certificate of ISO and HACCP.
The company has a large number of satisfied and loyal customers with strong brand image.
The different sections of Abul Khair Group are:

Abul Khair Condensed Milk Industries Ltd.


Shah Dairy Products Limited
Abul Khair Condensed Milk & Beverage Industries limited
Shah dairy Foods Limited
A.K Corporation Limited
Abul Khair Tobacco Company Limited
Abul Khair Steel Mills Limited
Abul Khair Vegetables Oil Industries Ltd
A.K Properties Limited
Smark Coconut Oil Products Limited
Abul Khair Steel Mills Limited
Abul Khair Tea Limited

The products of Abul Khair Group are:


C.R. Coil
C.G.I. Sheet
G.P. Sheet
Ridging
Jhalor
Star Ship Condensed Milk
Star Ship Full Cream Milk Powder
Star Ship Fruit Juice
Star Ship Mango Milk
Star Ship Chocolate Milk
Seylon Tea
Shaad Snacks
Marine-Special Blend
Sun Moon-Filter Kings
42 No. Abul Bidi
Special Abul Bidi

Star Ship Soyabean Oil


Star Ship Coconut Oil
Star Ship Mustard Oil
Shah Cement

A supply chain is the stream of processes of moving goods from the customer order through
the raw materials stage, supply, production, and distribution of products to the customer. All
organizations have supply chains of varying degrees, depending upon the size of the
organization and the type of product manufactured. Production, supply, location,
transportation, information, people, technology are the key elements of Abul Khair Groups
supply chain management. AKGs supply chain management guide is enabling them to
monitor the results of the organization.
Abul Khair Group started using ERP software since 2003. IT department, senior
management and Finance department of Abul Khair Group initiated the idea for adopting
ERP system and the primary advocate for ERP application in organization was Chief
Financial officer. Their ERP software is bought and ERP vendor is DREAM APP
(Current). Currently Abul khair group using the ERP Version 2 but within this month they
will start using Oracle.

Current Practice
ERP software vendors provide software that assists companies, large to small. They also
make possible customer technological support to ensure that the software system will run
exactly the way it was designed. The top ERP vendors of Bangladesh are:

Advanced ERP (BD) Ltd.

Advanced ERP is offering quality ERP (Enterprise Resource Planning) software solution
and services to Customers around the world with DREAM (Dynamic Resource Extended
Application Management) technology.

DreamApps
A top of the line web based ERP/CRM suite of application software
Accessible from Anywhere, Anytime
Unlimited User License
Unparalleled Pricing
Easy-to-Handle customization
Optimum Successful Implementation
Runs on Windows, Mac, Linux
Option to select RDBMS like SQL Server, Oracle, PostgreSQL,DB2
Ready to Use
Proven over the years in different countries
Email:
support@advancederpbd.comsupport@advancederpbd.com

Divine IT Limited

Divine IT Limited is a consulting and technology company specializing in Software, Web


and Multimedia solutions and one of the leading IT solution providers in Bangladesh. Divine
IT offers high quality IT outsourcing solutions with professional services of outstanding
quality, competence, performance and objectivity, with much needed user-friendliness to the
customers in and around the globe.

Products/services:

Software Development
Offshore Outsourcing
ERP Software provider
Graphics Design
Flash and Multimedia
IT Enabled Services

E-mail: office@divine-it.net
Web: http://www.divineit.net

E.B. Solutions Ltd.

E. B. Solutions Ltd. features a very rich selection of services for software development, Web
site design and development, automation solutions, v-sat solutions and network solutions.

Products/services:

Software Development
ERP solutions
Web Development
Domain Name Registration & Hosting Service
Internet Solutions & Network Solutions
Automation/Security Solutions
HR and Payroll Management
Hospital management

Business PLUS Enterprise Software

ValuePLUS Computer Systems (VPCS) is a software development company of Bangladesh.


Quality assurance in the software development is their first priority persuaded by customer
delight.

Product Details:
Type: ERP, Brand Name: Business PLUS Enterprise, Place of Origin: Bangladesh
Compound, Mode: Integrated System, Yarn Dyeing, Sweater, Garment, Apparel Integrated
Software, Reduce Production Cost, Timely delivery: alerts (sms and email)
Key Benefits
1. Timely and accurate reports to the management
2. All the information stored in the computer
3. Clear picture of transactions with Buyers
4. Significant reduction of work load
5. Effective and efficient management of business
6. More than 40 different reports Modules of the Software.

Flora Systems Limited

Flora Systems Limited is a leading software development and business process outsourcing
(BPO) service providers, offering customers competitive pricing by utilizing state of the art
information technologies and service delivery methodologies.
Flora Systems Limited has developed and implemented Core Online Banking application
software (named Flora Bank) for a number of commercial banks and Online ERP software
(named Flora ERP) for many small and medium size enterprises.
Flora Systems offers different types of Form Processing, Rebate Claim Processing, Manual
Data Entry, Automated Data Entry, Utility Bill Processing, Scanning Service, Payroll
Processing, Cheque Processing, Insurance Claim Processing, Back Office Accounting and
many other allied services.
Flora Systems was founded in 1998 in Dhaka, Bangladesh and has the proven capabilities in
designing and developing software for Banking, ERP, CRM, Biometrics Solution, Telco
Billing Solution, and Web Applications.
eMail: duke@floratelbd.com, waesh@floratelbd.com
Website URL: www.florasystems.com

Daffodil Software Ltd. (DSL):

Daffodil Software Ltd. (DSL) is fast emerging global software Development Company. DSL
has corporate office at Dhaka, while branch offices are situated at Chittagong, and New
York, USA.
DSL provides the comprehensive ERP software and related services to help clients to
manage and run their business more efficiently and profitably. By properly diagnosing clients
specific business needs and issues, DSL is able to provide clients best-fit solution that is
aligned with the current and future needs of the company at a price that client can afford.
www.daffodilsoft.com

Popular ERP Vendors


Popular vendors of ERP systems are SAP AG, Oracle Applications, PeopleSoft, J. D.
Edwards, and Baan. These five ERP vendors have made a tremendous impact on the
industry.

SAP AG
Founded in 1972, SAP AG is the largest European software enterprise, headquartered in
Walldorf, Germany. SAP is an acronym for Systems, Applications and Products in Data
Processing. It is the largest ERP solution software provider in terms of revenue. SAP
products focus on ERP systems. Its main product is SAP R/3. R stands for real-time data
processing, and the number 3 relates to the three-tier application architecture of its database,
application server and client. The software R/3 was created for the purpose of assisting
companies with their logistics and accounting processes. Over time, SAP has extended its
services to include supply chain maintenance and data warehousing solutions. There are over
91,500 SAP installations at more than 28,000 companies. Over 12 million people in more
than 120 countries use SAP products.

Oracle Applications
Oracle Corporation was founded in 1977. Oracle has sold ERP tools since the late 1980s. It
is one of the major companies involved in the development of database management
systems, tools for database development, and enterprise resource planning software. The
Oracle e-Business Suite includes software that performs financial, manufacturing and
Human Resource Management Systems related functions. User access to these facilities is
provided through a browser interface over the Internet or corporate intranet.

PeopleSoft
Another most popular ERP software company is PeopleSoft. The area where this company
became most prominent was human resources. It eventually placed an emphasis on tailoring
its products to the service sector, and they wanted to help organizations deal with their costs
and expenses. One reason why SAP and PeopleSoft had a great deal of success is because
they extended their product line to suit the needs of a changing market.

J. D. Edwards
J. D. Edwards, founded in 1977 and its headquarter is in Denver, Colorado. J. D. Edwards is
a company that has sold software for many years. However, they did not officially become a
public company until the 1990s. When the launched the One World ERP tool, they became
a powerful force in the market, and they have earned billions of dollars in profits.

Baan
Baan is a company based in the Netherlands that sells ERP logistics tools to companies that
wish to avoid doing business with SAP. They have spent a great deal of effort focusing on
software suppliers that are relatively small. One of the most powerful advantages of this
strategy is that a broader variety of products were introduced.

ERP Selection & Implementation


Selection:
Building in house ERP system is very much expensive, time consuming and risky. (Marry S.
Enterprise Resource Planning, ch-1, pg-8) Selecting the suitable ERP software for organization is
very difficult. Abul Khair Group selects their ERP according to their business, strategic and
functional requirement and they select the ERP system on the basis of ERP solution
evaluation. AKG bought their ERP software and their current vendor is DREAM APPS.
Currently AKG using ERP version 2 and within this month they will start using Oracle.

Implementation:
The implementation of ERP system is a process of great complexity strongly involving the
whole company which has decided to introduce such a system into its organization.
Implementing ERP on organization required significant modifications in all level. Nature of
requirements, number of modules, level of customization, use of external resources, level of
internal expertise are the functional parameters and size of the organization, complexity of
the organization, total number of users, resources available, level of commitment from users,
level of commitment from senior management, need to re-design/standardize business
processes are the organizational parameters that influenced AKGs choice of the
implementation strategy. For implementing ERP on organization AKG choose both all-inone package and best-of-bred application and they use the pilot approach as their
implementation strategy.
Adaptations ERP system by an organization requires many changes and naturally people
resist changes. So, every organization has to face many factors that affect the adaptation of
ERP software. Like other organization AKG faces many barriers at the time of adaptation of
ERP software. These are:

Resistance to change from employees


Resources shortages e.g. no maintenance and update
Skills shortages e.g. Computer illiteracy within the company
Insufficient vendor support
Hidden cost
Integration with customers system

Integration with existing system


Integration with suppliers system

According to AKG, the organizational critical success factors of an ERP implementation


are:
Redesigning business processes to fit software
Organizational commitment to change
Integration with software
Adequate internal expertise
Adequate mix of internal and external human resources
Sufficient standardization and discipline
Avoiding technical bottlenecks
Avoiding conflict with business strategy
Clearly stating scope of project
Clearly stating project timeline
Assigning role/responsibilities for functional areas
And functional critical success factors of an ERP implementation are:

Fit between software and business processes


Aligning project objectives and strategic business goal
Acknowledging change management
Dealing with organizational resistance
Effective communications

Following ERP modules are implemented in AKG:

Finance
Manufacturing
Sales and marketing
Production and material management
Personnel
Maintenance
Purchase, inventory
Stores management

Implementation Phases of ERP System by AKG are as follows:

Strategy and Planning


Blueprinting and Design
Software Configuration
Data Migration
System Testing
Final Implementation

During and after the implementation of ERP software in the organization AKG faces the
following challenges:
Integration with new business software
Data migration
Customization
Security
Implementation of ERP requires personnel expertise on ERP software and trained skilled
employee to work on it. AKG provide their employees ERP project team training and web
based training to make them skilled on ERP software. Their approximate training cost is
11% to 15% of the overall budget. They believe that a typical employee will be mastered in a
week through this training to learn the application management tool. AKG achieved
expected outcomes from this training.
Implementing ERP system in an organization is considerably costly and time consuming.
Most of the implementation time cost are late or over budget. (Marry S. Enterprise Resource
Planning, ch-1, pg-13). But AKG successfully implement ERP on their organization within
their original budget. Due to security concern they didnt tell us about their actual cost on
ERP implementation.

Impact on Organization & Future Outlook


There is no doubt that implementation of ERP in an organization always brings profit. AKG
believe that their ERP system fulfill 81%-100% of their business strategy. The annual
increase percentage in the capacity utilization, inventory, turn and delivery lead time of AKG
is 31%-40% and its ERP system provide an enterprise database for all business transaction.
AKG identifies the following benefits that they receive after the implementation of ERP
system on the organization:
Better quality of information
Better quantity of information
Flexibility
Reduced lead-time in production
Cost saving
Forecasting
Resource planning
Better operational efficiency
Reduced inventory level
More accurate costing
Increased coordination between departments
Increased sales
Increased coordination with customers
Increased coordination with suppliers

AKG experience problems a few times with their ERP application interfaces and the end
user or the support team generally identifies application problem. AKG believe that if their
ERP applications are monitored for performance, they will receive effective information in
developing their application management strategy.
AKGs ERP system application is cost effective because they implement the ERP system
within their estimated budget.

Impact on Supply Chain Efficiency:


AKGs ERP system basically focuses on product quality, customer need, supply chain and
reduce lead time. ERP system improved and increased the supply chain efficiency of AKG.
After adapting ERP system by AKGs it improves organizations supply chain management
by providing
Linkage between suppliers & manufactures
Linkage between manufactures & retailers

Projected Future:
AKG believes that they will be largest manufacturer and exporter in Bangladesh through
using newer and newer version of ERP system application in their supply chain management
more effectively with modern technology.

Recommendation:
AKG develops day by day and increase their profits after implementing ERP system
application in supply chain management. The following future measures are important for
remain profitable and supporting organization effort in supply chain management and ERP
system:
More education, e.g. formal
Easier access to vocational training
More funding and financial support
More inter-country regional
Better infrastructure e.g.
Improved information provision
Increased regional cooperation
Closer cooperation between
AKG also agree with our recommendation, that these are important measures that should be
taken by them to get more profit through using ERP software.

Conclusion
Abul Khair Group is one of the largest and rapid growing manufacturing and export
oriented companies in Bangladesh. It operates its supply chain system through the
implication of ERP system software since 2003. ERP software nowadays is very much
essential to run a business supply chain management effectively and efficiently. At the end of
the whole report from above the discussion we can say that Abul Khair Group operates its
Supply chain management effectively and efficiently by using ERP system application and
increase its profit day by day.

Reference
1. A Comparative Study of Issues Affecting ERP Implementation in Large Scale and
Small Medium Scale Enterprises in India: A Pareto Approach International Journal of
Computer Applications (0975 8887) Volume 8 No.3, October 2010
2. Ada Wong, Harry Scarbrough, Patrick Y.K. Chau, Robert Davison Critical Failure
Factors in ERP Implementation
3. Alter, S. (1979), Implementation risk analysis, TIMS Studies in Management Sciences,
Vol. 13 No. 2 pp. 103-19.

4. Chan, S. (1999), Architecture chices for ERP systems, in Proceedings of America Conference on
Information Systems 99, pp.210-212

5. Christopher P. Holland and Ben Light, A Critical Success Factor Model of ERP
Implementation May/June 1999
6. Davis, G.B. (1982), Strategies for information requirements determination, IBM System
Journal, Vol. 21 No. 1, pp. 4-30.
7. Ewusi, M.K. (1997), Critical issues in abandoned information systems development projects,
Communications of the ACM, Vol. 40 No. 9, pp. 74-80.

8. mr Y.Saatolu Dokuz Eylul University What Determines User Satisfaction In Erp


Projects: Benefits, Barriers Or Risks? Proceedings of European and Mediterranean
Conference on Information Systems 2007 (EMCIS2007) June 24-26 2007,
Polytechnic University of Valencia, Spain
9. Markus, M.L., S.Axline, D. Petrie, & C. Tanis, 2000. Learning from adopters experiences
with ERP: Problems encountered and success achieved Journal of Information Technology
15 pp. 245-265
10. R Appuswami Implementation Issues in ERP 1st International Conference on System
Thinking in Management, 2000
11. Saunders, J. (1999), Manufacturer build on CRM, Computing Canada, Vol. 25, No.
32, pp.17-18
12. Sheilds, Mureell G., E-Business and ERP: Rapid Implementation and Project Planning.
(2001) John Wiley and Sons,

13. Vladimra Vl kov Erp And Edi System As Tools For Integrated Logistical Management
Support Vadyba / Management. 2006 m. Nr. 1(10)
www.sap.com
www.oracle.com
www.peoplesoft.com
www.wikipedia.com
http://www.divineit.net
http://wiki.answers.com/Q/What_are_the_phases_of_ERP_implementation
http://www.implement-erp.com/erp-implementation-guide.html
http://www.open-source-erp-site.com/erp-implementation-life-cycle.html
http://www.iacis.org/jcis/pdf/Peslak_Subramanian_Clayton_48_2.pdf
http://www.management-hub.com/marketing-erp.html
http://www.ehow.com/list_6718157_phases-erp-implementation.html
http://www.technofunc.com/myblog/phases-of-erp-implementation-erp-processes-andactivities-their-importance
http://www.gofrugal.com/supply-chainmanagement.html?gclid=CJnG9fz2gKcCFcZOHAodfDhBew
http://ideas.repec.org/a/eee/ejores/v146y2003i2p284-301.html

Report on ERP System Application in Supply


Chain Management in Industry

Prepared For:
Mr. Mohammed A Jahed
Associate Professor
Department of Management Studies
University of Chittagong

Prepared By:
Group Name-Orion
4th year BBA, Final Term
Session: 2005-2006
Department of Management Studies
University of Chittagong

Date of Submission: February 6, 2011

Group Name-Orion
Group Members:
Name

Exam Roll

Class
Roll

% of Work
Completed

Description

Tazin Ismat Niti

2006/78

4913

30%

Fatema Sultana

2006/82

5005 26%

Masudul Islam

2006/19

4969 20%

Kapil Barua

2006/28

4956

Data collection,
literature
review, prepare
questionnaire,
Industry visit,
prepare final
report
Data collection,
literature
review, prepare
questionnaire,
Industry visit
Data collection,
Industry visit
Industry visit

Sumon Chakroborty

2006/104

5007 12%

12%

Industry visit

Group Contact Information:

Tazin Ismat Niti- tazinniti@yahoo.com- 01815506684


Fatema Sultana- fetemasultanamumu@gmail.com-01814892794
Masudul Islam- robinhoddha@gmail.com- 01717845005
Kapil Barua- speakkapil@gmail.com- 01814305166
Sumon Chakroborty- sumonchakraborty@gmail.com - 01813557710

4th year BBA, Final Term


Session: 2005-2006
Course No-409
Course Title- Management Information System
Department of Management Studies
University of Chittagong

Preface
Enterprise Resource Planning is an important factor in modern Supply Chain Management
in Industry. It is an essential term to make supply chain management effective and efficient
in current global marketplace. Selecting and implementing the right ERP in organization
can manage this increasingly complex supply chain environment.
As per direction of our honorable teacher Mr. Mohammed A Jahed, Associate Professor,
Department of Management Studies, we have completed the report entitled, ERP System
Application in Supply Chain Management in Industry. Thanks to our teacher for giving us
such an important topic of management information system. At present Enterprise Resource
Planning is essential to operate supply chain management successfully and increase business
profit.
Nobody differs with the opinion that to run a business successfully in current business
environment ERP system application is must in supply chain management. With the help of
books, journals, web site and survey information we have prepared the report. Here, we have
tried our best to show the current practice in ERP market, ERP selection, its
implementation, ERPs impact on organization and future outlook about ERP of Abul Khair
Group. We hope you will excuse us if there is any mistake, in preparing this report.

Orion Group
4th Year BBA, session: 2005-2006
Department of Management Studies,
University of Chittagong

Acknowledgement
The report could not have been prepared without the generous contribution of individuals
and Abul Khair Group of Companies. We express our sincere thanks to our honorable
teacher Mr. Mohammed A Jahed, Associate Professor, Department of Management Studies,
University of Chittagong, for his excellent supervision, genuine inspiration, guidance,
suggestion and encouragement, which enabling us completing this report. For giving us this
opportunity, we are grateful to him. This opportunity will help us to learn professionalism
and increase our out knowledge for developing our career.
Data were collected through personal interview with Mr. Md. Sahneoaz Ahmed Saju, SR.
Manager, Supply Chain Management, AKCGD. So, we are sincerely thankful to him and
Abul Khair Group of Companies. They provided consistent support and encouragement.
Their personal commitment is deeply appreciated. Without their valuable suggestion the
report could not have been prepared by the authors. Again we owe special thanks for their
valuable time, cooperation and sacrifices.
We are indebted to the following people for their insightful and helpful comments and
suggestions for the entire work:

Mr. Mohammed A Jahed, Associate Professor, Dept. of Management Studies,


University of Chittagong
Mr. Md. Sahneoaz Ahmed Saju, SR. Manager, Supply Chain Management, AKCGD,
Abul Khair Group of Companies
Mr. Md. Mahfuzul Hoque (Kamal), Senior General Manager, (Commercial), Abul
Khair Group of Companies

Errors of omission are sole responsibility of the authors.

Authors

Contents

1.

Executive Summary

Pg-1

2.

Introduction

Pg-2

3.

Current Practice.

Pg-3

4.

ERP selection & implementation..

Pg-7

5.

Impact on Organization & Future Outlook..

Pg-9

6.

Conclusion.

Pg-10

7.

References..

Pg-11