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What is ERP?
ERP stands for Enterprisewide Resource Planning. An approach to focus on business activities and leaving routine tasks to systems. An ERP software or a system essentially ensures optimum use of the 6Ms of an enterprise. (Man, Money, Machine, Methods, Materials and Market).
ERP Evolution
Timeline
1960s
System
Inventory Management & Control
Description
Inventory Management and control is the combination of information technology and business processes of maintaining the appropriate level of stock in a warehouse. The activities of inventory management include identifying inventory requirements, setting targets, providing replenishment techniques and options, monitoring item usages, reconciling the inventory balances, and reporting inventory status
1970s
Materials Requirement Planning (MRP) utilizes software applications for scheduling production processes. MRP generates schedules for the operations and raw material purchases based on the production requirements of finished goods, the structure of the production system, the current inventories levels and the lot sizing procedure for each operation Manufacturing Requirements Planning or MRP utilizes software applications for coordinating manufacturing processes, from product planning, parts purchasing, inventory control to product distribution Enterprise Resource Planning or ERP uses multi-module application software for improving the performance of the internal business processes. ERP systems often integrates business activities across functional departments, from product planning, parts purchasing, inventory control, product distribution, fulfillment, to order tracking. ERP software systems may include application modules for supporting marketing, finance, accounting and human resources
1980S
1990s
Why ERP?
Optimize resource utilization by providing up-to-the-minute information on demand for quick decision making Overall cost reduction for business An increase in per capita productivity Quick response times Lower inventory levels Better customer orientation Pressure from parent collaborators
Features of ERP
ERP facilitates company-wide Integrated Information System covering all functional areas like Manufacturing, Selling and distribution, Payables, Receivables, Inventory, Accounts, Human resources, Purchases etc. ERP performs core Corporate activities and increases customer service and thereby augmenting the Corporate Image ERP bridges the information gap across the organisation ERP provides for complete integration of Systems not only across the departments in a company but also across the companies under the same management ERP is the only solution for better Project Management
Features of ERP
ERP eliminates the most of the business problems like Material shortages, Productivity enhancements, Customer service, Cash Management, Inventory problems, Quality problems, Prompt delivery etc. ERP not only addresses the current requirements of the company but also provides the opportunity of continually improving and refining business processes ERP provides business intelligence tools like Decision Support Systems (DSS), Executive Information System (EIS), Reporting, Data Mining and Early Warning Systems (Robots) for enabling people to make better decisions and thus improve their business processes ERP allows automatic introduction of latest technologies like Electronic Fund Transfer(EFT), Electronic Data Interchange(EDI), Internet, Intranet, Video conferencing, E-Commerce etc.
Why India?
Indias GNP is now the fifth largest in the world The transition to an open economy has thrust India into the information age that is forcing the country to cope with a deluge of new information relationships India must attempt to bolster its competitiveness in the global marketplace That requires industry to have a greater sophistication in dealing with materials, men, and machines.
ERP Software
ERP software applications are module-based Each software module automates business processes within a functional department ERP applications can be implemented and deployed module-by-module Major ERP software modules cover the major functional areas of organizations Common ERP modules include product planning module, parts and material purchasing module, inventory control module, product distribution module, order tracking module, finance module, accounting module, marketing module, and HR module Organizations often selectively implement the ERP modules that match their business needs
Cost of ERP
The total cost of ERP ownership includes the following Costs of Software Costs of Hardware Costs of Consulting & Professional Services(Customization,Integration,Data Conversion,Testing,Training)
Questions?
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