2.5 Enterprise Resource Planning

7/25/2019 2.5 Enterprise Resource Planning

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MBA

INFORMATION SYSTEMS

ENTERPRISE RESOURCE PLANNING

Assignment

Enrolment number: MBISMCT!"#"$

Sel% &e'l(r(tion

I declare that the assignment submitted by me is not a verbatim/photo static

copy from the website/books/journals/manuscripts.

Signature of the student

Signature of the faculty concerned

)* Outline t+e (r'+ite'ture o% ERP (n, e-.l(in ,i/erent inter%('es*

Ans0er:


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ENTERPRISE RESOURCEPLANNING

&nrolment number'MBISMCT!"#"$

ERP Ar'+ite'ture:

( applications are most commonly deployed in a distributed and oftenwidely dispersed manner. )hile the servers may be centrali*ed+ the clients

are usually spread to multiple locations throughout the enterprise.

,enerally there are three functional areas of responsibility that is distributed

among the servers and the clients. !irst+ there is the database component -

the central repository for all of the data that is transferred to and from the

clients. $hen+ of course+ the clients - here raw data gets inputted+ reuests

for information are submitted+ and the data satisfying these reuests is

presented. astly+ we have the application component that acts as the

intermediary between the client and the database. )here these componentsphysically reside and how the processes get distributed will vary somewhat

from one implementation to the ne0t. $he two most commonly implemented

architectures are outlined below.

T0o1tier Im.lement(tions

In typical two-tier architecture+ the server handles both application and

database duties. $he clients are responsible for presenting the data and

passing user input back to the server. )hile there may be multiple servers

and the clients may be distributed across several types of local and wide

area links+ this distribution of processing responsibilities remains the same.

T+ree1tier Client2Ser3er Im.lement(tions

In three-tier architectures+ the database and application functions are

separated. $his is very typical of large production ( deployments. In this

scenario+ satisfying client reuests reuires two or more network

connections. Initially+ the client establishes communications with the

application server. $he application server then creates a second connectionto the database server.

$he SA( #/1 System architecture consists of three layers' Presentation+

Application+ and Data Storage.

$he following diagram illustrates the function served by each layer and how

the layers work together'

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Present(tion

$his is where users of the SA( #/1 System will submit input to the SA( #/1

System for the processing of business transactions. It is also where the

output from these transactions appears as output 6elds+ reports+ tables and

spread sheets.

"n the desktop level+ #/1 o7ers a user-friendly graphical interface called

SAPGUI. $he system also integrates alternative interfaces for optimumcompliance with your reuirements. $his includes integrating common (8

applications. Information e0change is also carried out through the Internet+

9iosk touch screen systems and telephone applications.

A..li'(tion

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An application is a logically independent component residing at the host

operating system level within the SA( #/1 client/server environment. $his

component is represented by an application server in the SA( #/1 network.After a user initiates a reuest at the presentation level+ logic is invoked to

service and process that information. $he application logic modules can

reside on one centrali*ed host machine or be distributed over several

physical host machines within a particular SA( #/1 network.

$ypically+ the update and enueue processes reside on the database server

in the application layer. In most cases+ the message+ spool and gateway

processes will also reside on the database server. $he database server may

also be referred to as the :central server;.

"n the application level+ #/1 o7ers sophisticated mechanisms to optimally

use high-performance system resources. $he system implements

interconnections between various applications so that they are practical from

a business perspective. #/1 closes the gap between the e0acting concept of

a business transaction and transactions from a data processing perspective.

&(t( Stor(ge

"n the database level+ #/1 e0clusively uses relational database systems by

various manufacturers. #/1 is able to utili*e the most advanced features of

each database vendor


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$he #/1 presentation software displays the graphical user interface using the

tools provided by the relevant presentation environment =frontend operating

system@.

&(t(b(se inter%('e

$oday+ large amounts of data are usually administered using relationaldatabase management systems =#BMS@. $hese systems store the data andthe relationships between the data in two-dimensional tables+ which areknown for their logical simplicity. $he de6nitions of the data+ tables+ andtable relationships are stored in the data dictionary of the #BMS.)ithin ABA(+ SA( "(& S is used to access application data in thedatabase+ independent of the corresponding #BMS. $he #/1 databaseinterface converts the open S statements from the ABA( statements intothe corresponding database statements. $his means that applicationprograms written in ABA( are database-independent. ative S commandscan be used in ABA(.)hen interpreting open S statements+ the #/1 database interface checks

the synta0 of these statements and automatically ensures the local SA(bu7ers in the shared memory of the application server are utili*ed optimally.

ata freuently reuired by the applications is stored in these bu7ers so that

the system does not have to access the database server to read this data. In

particular+ all technical data such as ABA( programs+ screens+ and ABA(

ictionary information+ as well as some business process parameters usually

remain unchanged in a running system+ making them ideal bu7ering

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candidates. $he same applies to certain business application data+ which is

accessed as read-only

$o make the #/1 System independent of the database system with which you

use it despite the di7erences in the S synta0 between various databases+

each work process on an application server has a database interface. $he #/1

System communicates with the database by means of this interface. $he

database interface converts all of the database reuests from the #/1

System into the correct Standard S statements for the database system.$o do this+ it uses a database-speci6c component that shields the di7erences

between database systems from the rest of the database interface. %ou

choose the appropriate layer when you install the #/1 System.

$here are two ways of accessing the database from a program - with "pen

S or ative S.

O.en S)L

"pen S statements are a subset of Standard S that is fully integrated in

ABA(. $hey allow you to access data irrespective of the database system that

the #/1 installation is using. "pen S consists of the ata Manipulation

anguage =M@ part of Standard SC in other words+ it allows you to read

=S&&8$@ and change =IS$+ >(A$&+ &&$&@ data.

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"pen S also goes beyond Standard S to provide statements that+ in

conjunction with other ABA( constructions+ can simplify or speed up

database access. It also allows you to bu7er certain tables on the applicationserver+ saving e0cessive database access. In this case+ the database

interface is responsible for comparing the bu7er with the database. Bu7ers

are partly stored in the working memory of the current work process+ and

partly in the shared memory for all work processes on an application server.

)here an #/1 System is distributed across more than one application server+

the data in the various bu7ers is synchroni*ed at set intervals by the bu7er

management. )hen bu7ering the database+ you must remember that data in

the bu7er is not always up to date. !or this reason+ you should only use the

bu7er for data which does not often change. %ou specify whether a table can

be bu7ered in its de6nition in the ABA( ictionary.

N(ti3e S)L

ative S is only loosely integrated into ABA(+ and allows access to all of

the functions contained in the programming interface of the respective

database system. >nlike "pen S statements+ ative S statements are

not checked and converted+ but instead are sent directly to the database

system. )hen you use ative S+ the function of the database-dependent

layer is minimal. (rograms that use ative S are speci6c to the databasesystem for which they were written. )hen writing #/1 applications+ you

should avoid using ative S wherever possible. It is used+ however+ in

some parts of the #/1 Basis System - for e0ample+ for creating or changing

table de6nitions in the ABA( ictionary.

O.er(ting s8stem inter%('e

$he operating system views the #/1 runtime system as a group of parallel+cooperating processes. "n each application server these processes include

the dispatcher as well as work processesC the number of work processesdepends on the available resources. )ork processes may be installed fordialog processing+ update+ dialog free background processing and spooling.In addition to these work process types =dialog processing =@+ update =D' forthe ,erman :Derbuchung;@+ lock management =&@+ background processing=B@+ spool =S@+ the #/1 runtime system provides two additional services forinternal and e0ternal communication =below are the restrictions on thenumber of work processes@'

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$he message server =MS or M@ communicates between the distributed

dispatchers within the #/1 System and is therefore the prereuisite for

scalability using several parallel-processing application servers. $he gateway server =,) or ,@ allows communication between #/1+ #/2

and e0ternal application systems. ialog' &very dispatcher reuires at least two dialog work processes

Spool' At least one for each #/1 System =more than one allowed for

each dispatcher@ >pdate' At least one for each #/1 System =more than one allowed for

each dispatcher@ Background processing' At least two for each #/1 System =more than

one allowed for each dispatcher@ &nueue' "nly one enueue work process is needed for each system

Con'lusion: It shall be concluded that the ( architecture is highly capable

of providing close integration with business processes by adopting best

practices which leads to business process optimi*ation+ elimination of

unwanted processes and reducing the overall business/ product cost for a

successful business.

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)*# Pro3i,e t+e %r(me0or o% su..l8 '+(in m(n(gement (n, e-.l(in

its 'om.onents*

Ans0er:

Supply chain management is viewed as a new name for a combination of

purchasing+ operations and logistics. It is also consider it to be identical with

logistics+ inclusive of consumers and suppliers. Business people acknowledge

supply chain management as a new way to manage business and

relationships with other members of the supply chain such as suppliers+

manufacturers+ and consumers. $he ,lobal Supply 8hain !orum de6nes

supply chain management as the integration of key business processes from

end user through original suppliers that provides products+ services+ and

information that add value for customers and other stakeholders =ambert

233E@.

$he Supply 8hain Management =S8M@ framework is based on a functional

model of the Supply change management system. It is a development tool

that assists in the development of a well-integrated Supply change

management system in an organi*ation. $he framework consists of several

components that de6ne key functions+ processes and best practices."rgani*ational behaviors like Supply change management enablers support

the organi*ationFs overall performance.

All companies+ large and small+ manufacturers and service providers+ depend

on successful supplier performance to help satisfy their customers. $he

performance of an agile+ motivated and responsive supply base can improve

operating eGciencies+ reduce costs and increase customer satisfaction.

Supply chain management integrates the business processes associated

with the procurement of material+ the transformation of procured material

into 6nal product and the delivery of 6nal product to customers within the

conte0t of a supply chain management framework.

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Su..l8 C+(in M(n(gement Fr(me0or

$he framework emphasi*es the importance of aligning supply chain strategy

with business strategy and in leveraging information technology as both an

enabler for business process eGciency and e7ectiveness and as a means of

sharing knowledge and information among global supply chain partners.

Su..l8 C+(in M(n(gement Com.onents:

Supply chain is basically the whole process starting from the raw material

from the suppliers to manufacturing to packaging to warehouse to

distribution to 6nal reach of the product or service to its intended consumers.

So there is lot of components in a supply chain of a large company.

$he Supply 8hain Management =S8M@ framework is based on a functional

model of the S8M system. It is a development tool that assists in the

development of a well-integrated S8M system in an organi*ation. $he

framework consists of several components that de6ne key functions+

processes and best practices.

Supply chain management components represent business processes and

practices. !ollowing are the supply chain management components.

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SCM Le(,ers+i. - $his component provides a direction to the Supply

change management system. It is constituted by managers from the

di7erent functional areas. $he overall performance of the Supply change

management system depends on the interaction between these functional

heads and the senior management.

SCM Str(teg8- $he supply change management strategy forms an outline

for supply chain operations that support and are consistent with the

manufacturing and marketing objectives of the organi*ation.

O.er(tion(l Pl(nning - $his component de6nes the operational

reuirements for maintaining a supply chain which are speci6ed in terms of

tasks+ resource reuirements+ and measurements.Business rel(tions+i. m(n(gement - "rgani*ations and supply chain

partners are dependent on each other. It is imperative to have a favorable

environment that facilitates communication and negotiation between the

organi*ation and its supply chain partners. $he relationship can be improved

by having long-term contracts+ and by using inputs from di7erent levels of

management and supply chain partners in the communication and decision

making processes.

Or,er1to1,eli3er8 .ro'ess - $he order-to-delivery process de6nes how

e7ectively an organi*ation can direct the How of products from the suppliers

to the company. It includes processes like order releases+ receiving+

inspection of incoming material+ accounts payable+ and materials handling.

)u(lit8 (n, .er%orm(n'e m(n(gement - $his component is concerned

with the initiatives that organi*ations and suppliers take to improve and

maintain uality standards. $he uality and performance component helps

identify the uality defects in suppliersF products+ and facilitates cooperation

between suppliers and the manufacturer to improve the uality.


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)ork structure

"rgani*ation structure

(roduct How facility structure

Information How facility structure

Management methods

(ower and leadership structure

#isk and reward structure

8ulture and attitude

Su..l8 C+(in M(n(gement En(blers:

$he S8M enablers are a group of carefully conceived and de6ned behaviorsand approaches that allow+ encourage+ and reinforce a 6rmFs commitment to

high performance S8M practices. $he following are the S8M enablers'

* Alignment' Alignment refers to matching the corporate and business unit

goals. It is a key organi*ational behavior within the S8M system and includes

consistency in processes+ actions and decisions across the business units to

support the S8M processes. !or better alignment+ the company leadership

should set goals+ objectives and strategies that support successful supplier

relationships.

#* Customer 1 Su..lier %o'us' $he customer-supplier focus aims to plan

the organi*ationFs processes in such a way that they are able to understand

and react to customer reuirements uickly. $o improve suppliersF

satisfaction+ organi*ations should have clear and mutually understood and

agreed rules of relationship and should show commitment for their suppliersF

long-term pro6tability and success.

!* &esign' esign is the feature of products+ processes+ systems+ and

services that ensures their successful functioning. It is a comprehensive

process+ which+ after considering feedback from customers and suppliers+de6nes the overall e0ternal and internal reuirements to the organi*ation.

6* Me(surement' Measurement is a tool that organi*ations use to uantify

information about inputs+ outputs and the performance dimensions of

products+ processes and services and to evaluate the performance of

di7erent business processes and supplier activities.

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7* P(rti'i.(tion2in3ol3ement' Stakeholders must be involved in the

decision-making process to ensure the success of products+ processes+

systems and services. "rgani*ational eGciency and performance can be

improved by utili*ing the available resources in terms of talents and energies

of employees and e0ternal stakeholders.

4* Perio,i' re3ie0: 8ontinuous improvement is based on the periodic

review of all the business processes+ programs+ and systems. $hese reviews

indicate the di7erence between the e0pected performance and the actual

performance and the reasons for the deviations.

Prim(r8 A,3(nt(ges o% Su..l8 C+(in M(n(gement:

Businesses e0ist to make pro6ts. $o remain competitive 6rms have to o7er

superior uality goods at the lowest prices possible. $he need to minimi*e

product costs makes e7ective supply chain management vital. "ne of the

most eGcient ways of increasing a company


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Increased &Gciency

#esource wastage is a common source of increase production costs. "ften

this is due to improper planning. A company that employs supply chain

management is able to achieve eGciency of its operations since only those

values adding activities are encouraged. $his ensures that the organi*ation


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production may have to stop which will slow down your organi*ation. A S8M

system improves cycle times and ensures that raw materials are provided

when your business needs them so that you never have to stop production.

Res.onse to Con=i't - >nfortunately+ a business cannot always run

smoothly and there are a number of factors that can lead to problems in the

production of a product. If an issue occurs with the suppliers of your

company+ you may have to change how you produce your product. If the

distributor goes out of business+ you will have to 6nd another way to sell the

product. A S8M system lets your company better cope with problems at

either side of the production spectrum. %ou can uickly and easily 6gure out

a response to the problem instead of being surprised by it at a later time.

A,,ition(l (,3(nt(ges:

)ith the increased visibility into the supply chain and adaptive supply

chain network+ it can be more responsive. )e can sense and respond

uickly to changes and uickly capitali*e on new opportunities.

By o7ering a common information framework that supports

communication and collaboration+ S8M enables to better adapt to and

meet customer demands.

)e can track and monitor compliance in areas as environment+ health

and safety.

Information transparency and real-time business intelligence can lead

to shorter cash-to-cash cycle times. #educed inventory levels and

increased inventory turns across the network can lower overall costs.

)ith S8M+ we can lower operational e0penses with timelier planning

for procurement+ manufacturing and transportation. Better order+

product and e0ecution tracking can lead to improvements in

performance and uality - and lower costs. )e can also improvemargins through better coordination with business partners.

$ight connection with trading partners keep the supply chain aligned

with current business strategies and priorities+ improving the

organi*ationFs overall performance and achievement of goals.

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Con'lusion: Supply chain management is an e0citing and important area of

business improvement. Specialist companies are able to save the world ?ust1

in1time met+o,s (n, .remium su..l8 '+(in m(n(gement.

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2.5 Enterprise Resource Planning