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Enterprise Resource
Planning (ERP)
SOSE! SITE Open Source ERPhttp://www.open-source-erp-site.com
http://www.open-source-erp-site.com
What is ERP?
facilitates company-wide integrated information systems, covering all functional areas
performs core Corporate activities and increases customer service augmenting Corporate Image
ERP is a solution, which
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The Current Scenario
Islands of Information Difficult to get timely & accurate information Heterogeneous Hardware & Software
platforms & practices Poor connectivity between different
organizational locations Sticking with obsolete technology Resist to change Lack of proven man-power to develop
integrated software
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Why ERP?
For Management – to know what is happening in the company
One solution for better Management For cycle time reduction To achieve cost control & low working
capital To marry latest technologies To reduce the geographical gaps To satisfy the customers with high
expectations To be Competitive & for survival
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ERP - Definition“Software solution that addresses the Enterprise needs, taking a process view of the overall organization to meet the goals, by tightly integrating all functions and under a common software platform”
OR
Firm wide information systems that integrate key business processes so that information can flow freely between different parts of the firm.
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Evolution of ERP 1960’s - Systems Just for Inventory Control
1970’s - MRP – Material Requirement Planning (Inventory with material planning & procurement)
1980’s - MRP II – Manufacturing Resources Planning (Extended MRP to shop floor & distribution Mgmt.)
Mid 1990’s - ERP – Enterprise Resource Planning (Covering all the activities of an Enterprise)
2000 onwards – ERP II – Collaborative Commerce (Extending ERP to external business entities)
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ERP – Expectations Integrating all the functions Ex: Land
line bill payment, college mgmt with attendance system, library system.
Integrating the systems running in all the locations
Transparency of information using a single data source across the organization
Software must be responsive Modular(divided into well defined tasks) Flexible(user friendly) Easy to add functionalities(but not begin again) Provide growth path(directions for next implementations)
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TRADITIONAL VIEW OF SYSTEMS (F. 2.15)
M a n u fa ctu rin g A cco u n t in g Fin a n ceM a rk e t in g a n d
S a le sH u m a n
R e s o u rce s
M a n u fa ctu rin gS y s te m s
A cco u n t in gS y s te m s
Fin a n ceS y s te m s
M a rk e t in g a n dS a le s S y s te m s
HumanRes ources
S ys tems
B u s in e s sPro ce s s e s
B u s in e s sPro ce s s e s
B u s in e s sPro ce s s e s
B u s in e s sPro ce s s e s
B u s in e s sPro ce s s e s
B u s in e s s Fu n ct io n s
I n fo rm a t io n S y s te m s
OrganizationalBoundaries
OrganizationalBoundaries
V e n do rs C u s to m e rs
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ENTERPRISE SYSTEMS (F. 2.16)
B u s in e s s Pro ce s sB u s in e s s Pro ce s sB u s in e s s Pro ce s s
En te rpris e -wide bu s in e s spro ce s s e s
M a n u fa ctu rin g A cco u n t in g
H u m a nR e s o u rce s
S a le s a n dM a rk e t in g
Fin a n ce
En te rpris e S y s te m
V e n do rs C u s to m e rs
Org
aniz
atio
nal
Bou
nda
ries
Org
aniz
atio
nal
Bou
nda
ries
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EXTENDED ENTERPRISES
Extended Enterprises: Networks linking systems of multiple firms in an industry. Also called extended enterprises.
Vertical industrial networks :Networks for integrating the operations of a firm with its suppliers.
Horizontal industrial networks: Networks for linking firms across an entire industry.
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INDUSTRIAL NETWORKS (F. 2.17)
F ir m1
F i r m4
F i r m3
F i r m2
F i r m1
S u p p l ier1
S u p p l ier3
S u p p l ier2
Indus tr ial N etw orks
H o rizo n ta l in du s tria l n e two rk
V e rt ica l in du s tria l n e two rk
F irm value c hains and enterpr is e s ys tem s
F irm sin a s in g lein d u s t ry
F irm s inc om plem entarybus ines s
Indus tryvaluec hain
ERP MODULES
ERP Solutions are available on Unix and Windows NT.
The ERP Solution is modular in structure. A typical ERP package solution has following modules:
1.Sales, Marketing, Distribution 2.Manufacturing 3.Stores Management 4. Finance and Accounting 5. Personnel 6. Maintenance 7. Purchase, Inventory 8. Planning and control
ERP FEATURES
Security authorization Referencing responsibility Implementation of business rules
Security Authorization : Security sys of ERP is around OS Security with
some additional features. Controlled access to use and update operation. Authorization is for ensuring that the transaction is completed as per rules. Ex. Purchase Order. Price and discount, terms, purchaser order. 3 levels of users.
No limit on no. of levels
ERP FEATURES Referencing : is provided for tracking
the chain of events of monitoring, progress checking and control.
Ex. Status of customer order. This feature links the
Work order refers to Customer order Delivery note refers to Work order Bill refers to delivery note and
customer order.
ERP FEATURESImplementation of Business Rules: Rules and responsibilities allocation are
precisely met by ERP Very fast in execution ex: email to issue memos,
reminders. Supporting tech is EDI, through this it can directly transact with customer or vendor.
ERP is user friendly, meets changing needs (not fixed)
User can define the events, alert and schedule them at his choice. (about timings)
The events alerts are triggered by the DB inserts and updates.
Multiple actions can be performed. Ex: an item received in stores.
ERP FEATURES
Some more additional features: Drill down and Context Sensitive features Drill down: Helps to run through the sys
and identify the weak spot for action and control.
Ex: Sales manager viewing the sales by region by product line. To know seasonality of business. Can use the info the way he wants and judge. Multi directional to analyze critical business info
ERP FEATURES
Context Sensitive : Provides an access to help library which can be used by user just by calling help for info, guidance, understanding of term or process or formats. So user friendly.
MODEL FOR INTEGRATION
Design,Enquiry,Prototype
Vendors
Marketing
Manufacturing
Warehouse
Sales
Inventory
Procurement
Custumers
Distribution
ENTERPRISE MANAGEMENT SYSTEM Integration of following Systems:
Enterprise Resource Planning Supply Chain MgmtCustomer Relationships Mgmt
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BENEFITS AND CHALLENGES OF ENTERPRISE SYSTEMS
Benefits Firm structure and organization: One
Organization Management: Firm wide Knowledge-based
Management Processes Technology: Unified Platform Business: More Efficient Operations and
Customer-driven Business Processes
Challenges Threatening Implementation High Up-front Costs and Future Benefits Inflexibility between user skills and software
