Beruflich Dokumente
Kultur Dokumente
Planning
MPC 6th Edition
Chapter 1a
McGraw-Hill/Irwin
1a-2
Agenda
1a-3
What is ERP?
ERP software is
Multifunctional
Integrated
Modular
Able
1a-4
Multifunctional
The ability to track financial
performance in monetary terms ($, )
Can track purchasing activity in
material units (pounds, kilos, tons)
Follows sales in terms of products or
services
Reports manufacturing activity in terms
of products, resources, or people
1a-5
ERP Scope
Enterprise resource
planning
Manufacturing
and logistics
Manufacturing
planning and
control
Enterprise performance
measures
Data warehousing
Report generation
Transaction processing
Human resource
management
Finance
Sales and
marketing
1a-6
Integrated
1a-7
Modular
Functional units (finance, sales,
manufacturing, etc.) are narrowly
focused
Functional units can be combined to
create a single system
Software from other sources can be
connected as well
1a-8
1a-9
Process Standardization
is demand?
What is inventory?
How are exchange rates determined?
What transfer costs apply (for internal
transactions)?
What labor rates are applied?
1a-10
Decision Support
1a-11
Transaction Processing
An ERP system is designed to
process business transactions in real
time, working from a single database
Data warehouse software may be
added to facilitate queries not built
into the ERP system
1a-12
Performance Metrics
1a-13
1a-14
Description
Best-inClass
Average
Delivery
performance
93%
69%
97%
88%
Perfect order
fulfillment
92.4%
65.7%
Order fulfillment
lead time
135 days
225 days
Warranty cost
1.2%
2.4%
Inventory
55 days
84 days
Cash-to-cash
cycle time
35.6 days
99.4 days
Asset turns
4.7 turns
1.7 turns
1a-15
Procurement
cycle
Manufacturing
cycle
Sales and
distribution cycle
Distribution inventory
Accounts receivable
1a-16
Purchasing
Accounts payable
Inventory
Manufacturing
Sales and
distribution
Cost of sales
Cash-to-cash
cycle time
Sales
Accounts receivable
1a-17
S
d
AR
Sd
ARd
Cd S d CS
I
Cd
Id
APd
AP
Cd
1a-18
Cash-to-Cash Example
Sales over last 30 days = $1,020,000
Accounts receivable = $200,000
Inventory value = $400,000
Cost of sales = 60% of total sales
Accounts payable = $160,000
Sd
ARd
S 1,020,000
34,000
d
30
AR 200, 000
5.88 days
Sd
34000
Cd S d CS 34,000(0.6) 20,400
Id
I
400,000
19.6 days
Cd
20,400
APd
AP 160,000
7.84 days
Cd
20,400
Cash to cash cycle time ARd I d APd 5.88 19.6 7.84 17.64 days
1a-19
of a global company
Process improvement
Simplified training
Strategic direction
Organizational flexibility
Set of global policies
1a-20
Concluding Principles
Redundant transactions must be reduced
or eliminated.
To maintain data accuracy and realize
efficiencies, information must be captured
at the initial entry, using documented
processes.
Processes need to be changed to support
the data needs of the ERP system
hardware and software alone isnt
sufficient.
1a-21
Concluding Principles
The company must define a
comprehensive set of performance
measures, with policies and goals that
correspond to these measures.
IT economies of scale can be
obtained from supporting fewer
hardware and software platforms.
1a-22
Quiz Chapter 1a
1a-23