Presented by

Jayant Chopra (08008)

Nikhil Kumar Lunia (08016)
Rohit shaw (08020)
Sourabh Saha (08025)
 Background of ERP
 Overview
 Merits & Demerits
 ERP Market
 Implementation
 Example: Shoe Manufacturing Company
 ERP Trends
 An ERP solution aims to provide a single software
which will integrate all the divisions in an organization
—manufacturing, sales, marketing, finance, HR—and
yet fulfill each division’s information and planning
needs.

 Though ERP began as something internal to the

enterprise, today most systems are Web-enabled,
allowing them to extend to external suppliers and end
users.
 Inventory control systems
o 1960s
 MRP (Material requirement planning)
o 1960s, 1970s
o Inventory + purchasing + production scheduling
 MRP II (Manufacturing Resource Planning)
o 1970s, 1980s
o MRP + finance, HR
 ERP
o 1990s
o MRP II + other functions of marketing and sales
 Typical ERP
System

Source: Davenport (1998) and Chen (2001)

Dimension Benefits
Operational • Cost reduction
• Cycle time reduction
• Productivity improvement
• Quality improvement
• Customer services improvement

Managerial • Better resource management

• Improved decision making and planning
• Performance improvement

IT Infrastructure • Build business flexibility for current and

future changes
• IT cost reduction
• Increased IT infrastructure capability

Source: Shang and Seddon (2000)

Dimension Benefits
Strategic • Support business growth
• Support business alliance
• Build cost leadership
• Generate product differentiation
(including customization)
• Build external linkages (customers and suppliers)
• Worldwide expansion
• Enabling e-commerce

Organizational • Support organizational changes

• Facilitate business learning
• Empowerment
• Build common visions
• Change employee behavior
 Expensive

 Time Consuming

 Needs Proper Implementation

 Security Issues
# Vendor Revenue (mn $) Market share (%)
1 SAP 4726 28.7
2 Oracle Applications 1674 10.2
3 The Sage Group 1221 7.4
4 Microsoft Dynamics 616 3.7
5 SSA Global 464 2.8
Technologies

Market share 2005 according to Gartner Dataquest

 Define your goals
 Explore the market
 Go modular
 Participate
 Expect hidden costs
 Analysis
 Modeling of Business Processes
 Integration
 Data Conversion
 Staff Training
 Testing
Transition
is Tough
Work!

HELP!!

Source: http://link.unm.edu
Source: http://link.unm.edu
Source : www.ciol.com
• Assembly Product: leather, lace, sole and
accessories.
• Operation in Eastern and Southern Zone
• Total Annual Sale: Rs.1000 cr.
• Average Price of each Shoe is Rs.2500
• The company has a four different manufacturing
unit say A, B, C & D
• The Head Quarter of the company is A.
• Annual Sale from each Manufacturing Units.
• A= 300 Cr., B= 300 Cr., C= 250 Cr., and D= 150
Cr.
• Daily production 14285 pairs from the entire four
different plants .
 Total no. of production per day from each distributed plant
in the ratio of 3: 3: 2.5: 1.5
 A=4286 pairs, B=4285 pairs, C=3571 pairs and D=2143
pairs.
 Each worker can produce 50 unit per day i.e. worker
required in each plant are A=86w, B=86w, C=71w and
D=43w
 Each supervisor can deal with 10 workers. So, A= 8s, B=8s,
C=7s and D=4s.
 Company required 27 ERP users in Production
department.
 5 users in purchase department.
 45 users in sales and distribution i.e. 1 chief, 2
regional, 6 districts and 36 circle.
 20 users for finance.
 11 users for HR.
 In totality 108 users for using ERP in an organization.
 6 month to implement ERP
 Before that 2 week for training and 1 month for
consultancy.
 5 trainers are required which is cost for a company
i.e. 5 trainers will teach 5 Hours per day, 5 days in a
week for 2 weeks @ $ 12 per hour which is equal to $
3000 i.e. equivalent to Rs. 1,38,000.($1= Rs 46)
 For consultancy 3 consultants are required which is
cost for a company i.e. 3 consultant will work for 5
Hours per day, 5 days in a week for 24 weeks @ $ 20
per hour which is equal to $ 36,000 i.e. equivalent to
Rs. 16,56,000. ($1= Rs 46)
 Small to midsize companies are targeted.

 Adding more decision support tools.

 Reduction in implementation time and cost.

 Adding more functionalities such as CRM and SCM

o ERP II (named by Gartner Group)
 Toward more open, flexible Internet-based
technologies (e.g., XML, HTTP) that makes a firm
easier
o to integrate with other systems in the company, and
o to collaborate with its business partners

 Freestanding components, not interdependent

modules, that enable firms to
o Choose different vendors for each of the components
o Manage the integration of components of multiple vendors