Introduction to ERP

ERP is the abbreviated form of Enterprise Resource Planning. ERP software is a multi-module application software. It is basically a business process management software that allows an organization to use a system of integrated applications to manage the business and automate back office functions. ERP software manages and stores information of the business such as product planning, expense and advancement, Manufacturing, marketing and deals, inventory administration, shipping and payment etc. Also, ERP software may include application modules for the finance, accounting and human resources aspects of a business. Master Chip includes the following:

Marketing and Sales Information Systems Production and Supply Chain Management System(SCM)

Accounting, Invoicing and Finance System. ERP gives an organization on-going perspective of center business courses of

action, utilizing normal databases administered by a database administration framework. ERP frameworks track business assets money, crude materials, creation limit and current business practices: requests, buy requests, and payroll. The provisions that help in making up the framework offer information over the different offices (assembling, buying, bargains, accounting, and so on) that entered the information. ERP encourages data stream between all business capacities, and oversees associations with outside stakeholders.

Enterprise resource planning is a developing industry that prepares segments that help a mixture of business capacities. IT ventures have turned into the biggest classification of capital consumption in the organizations based in United States over the previous decade. Though it is a fact that early ERP frameworks kept tabs on vast ventures, more diminutive undertakings progressively utilize ERP frameworks.

Associations think about the ERP framework a basic organizational apparatus on the grounds that it coordinates changed organizational frameworks and encourages lapse free transactions and preparation. Then again, ERP framework improvement is unique in relation to customary frameworks development. ERP frameworks run on a mixture of workstation equipment and system setups, normally utilizing a database as a data archive (SAP n.d.).

Associations observe ERP as an essential device for organizational competitiveness, as it incorporates scattered organizational frameworks and encourages failure free transactions and processing. ERP sellers generally offer a solitary ERP framework. ERP frameworks experience the ill effects of impediments in adapting to the mix tests of evolving necessities. In any case, numerous organizations want to actualize an ERP suite from one seller that consolidates

remain solitary point results (that once filled characteristic holes in more seasoned ERP discharges) to accomplish larger amounts of joining and enhance client connections and general production network effectiveness.

In any case, however most organizations still take after the single platform approach, a noteworthy number of firms utilize a technique of best forms of ERP to strive for preference. ERP merchants gain items, or create new characteristics equivalent to or superior to numerous top provisions. This helps organizations, by means of single source, look after or make favourable element dependent upon modified business forms, instead of embrace the same business forms as their rivals.

In the accompanying years, reconciliation was a heading financing because of a characteristic hole and the requirement to grow and incorporate the ERP framework to different ventures or good requisitions.

Advantages

1. Sales and distributionThis helps bargains and conveyance forms, with capacities for evaluating, request handling and on-time conveyance. It has an immediate interface for the Materials Management and planning production process depicted underneath. This empowers a coordinated process that includes checking client credit, guaranteeing materials and handling limit are accessible to fulfil a request at the time it isn’t the time it is put in, executing the request, and computerizing the charging methodology. Master Chips will have the following advantages

Optimize inventory managementTrack inventory levels and stock movements in real time to minimize "stock-out" situations, it increases goods availability, and helps to reduce inventory-carrying costs. ERP implementation also manages price lists, special pricing, and quotes of the potato chips produced by master chips.

Anticipate customer demandAfter implementing ERP, Master Chip can provide full past-transaction data so that they can analyze the customer buying behavior to predict the demand of their products more accurately which can balance inventory levels accordingly.

Streamline the order to cash processAutomate key processes to improve efficiency across the order to cash cycle, including order creation, stock-level updates, delivery, invoicing, and accounts receivable.

Strengthen customer loyaltyMaster chips can track all customers contacts and purchasing preferences launch targeted promotions, offers and campaigns that keep customers coming back to buy more of their products which will prevent Master Chips from losing any customers.

Grows online presence and salesDesigning and manage online stores and seamlessly integrate them with back-end inventory management, order processing, shipment tracking and payment systems.

2. Purchase

ProcurementMaster chips integrates the entire purchasing process from order creation to goods receipt and invoice payment.

It will help to reduce purchase and inventory cost by having real time view

of inventory movement and delivery details of suppliers

Master chips can evaluate vendors by tracking history of their quality, cost and timely deliveries.

3. Manufacturing

Focus on manufacturing efficiencyStreamline the entire manufacturing process, from production scheduling to purchasing and logistics, so we cha outperform the competition.

Streamline production and planningManage material requirements for multilevel production processes; create manufacturing resource planning scenarios to forecast demand, and generate automatic replenishment orders to avoid production material shortages.

Manage Sub-ContractingTracking of sub contracting orders, status and costing

Optimize inventory managementTrack inventory levels and stock movements in real time to minimise out of stock situations, increase goods availability and reduce inventory carrying costs.

Meet regulatory mandatesTrack, manage and report on compliance with government mandates and industry guidelines

4. AccountsThis process gathers all the information pertinent to monetary accounting, from transactions to records, into an incorporated General Ledger. It gives thorough, proper budgetary reports and also ties together the Accounts Payable, diverse bits of monetary information, resource Management and Accounts Receivable. It likewise gives an up-to-the-moment premise for venture wide control and arranging, giving a "preview" of the undertaking. The FI module helps universal accounting measures, for example, GAAP and IAS. So Master Chips will be able to handle multiple companies from one single account and will allow automatic real time postings when relevant business events, such as inventory transfer and goods deliveries occur.

Besides that, it will also help Master Chips to handle taxes such as Sales tax, VAT, Service tax, TDS, Excise more conveniently.

Downsides

1. The cost of ERP Software, planning, customization, configuration, testing, implementation, etc. is too high.

2. ERP deployments are highly time-consuming – projects may take 1-3 years (or more) to get completed and fully functional.

3. Too little customization may not integrate the ERP system with the business process & too much customization may slow down the project and make it difficult to upgrade.

4. The cost savings/payback may not be realized immediately after the ERP implementation & it is quite difficult to measure the same.

5. The participation of users is very important for successful implementation of ERP projects – hence, exhaustive user training and simple user interface might be critical. But ERP systems are generally difficult to learn (and use).

6. There maybe additional indirect costs due to ERP implementation – like new IT infrastructure, upgrading the WAN links, etc.

7. Migration of existing data to the new ERP systems is difficult (or impossible) to achieve.  Integrating ERP systems with other stand alone software systems is equally difficult (if possible). These activities may consume a lot of time, money & resources, if attempted.

8. ERP implementations are difficult to achieve in decentralized organizations with disparate business processes and systems.

9. Once an ERP systems is implemented it becomes a single vendor lock-in for further upgrades, customizations etc. Companies are at the discretion of a single vendor and may not be able to negotiate effectively for their services.

10. Evaluation prior to implementation of ERP system is critical. If this step is not done properly and experienced technical/business resources are not available while evaluating, ERP implementations can (and have) become a failure.