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MI0038 ENTERPRISE RESOURCE PLANNING

Question 1
a. Explain the different types of business processes.
b. b. What are the different components of an information system?
Answer
Explaining three types of information system
Decision making takes place at all the levels of an enterprise (top level, middle level, and
bottom level). So, managers at different levels require different types of information to make
business decisions. Based on these levels, information is categorised in the following three
types:
Strategic Information: Refers to the information that is used by the top management of an
enterprise to establish an overall business strategy. Strategic information can be related to the
profitability of each division of an enterprise, level of competition in the market, and
investments made by the enterprise.
Tactical Information: Refers to the information that helps middle-level managers in the
allocation of resources. Tactical information can be related to business productivity, profit
and cash flow forecasts, and prices of different products.
Operational Information: Provides support to the bottom-level managers of an enterprise in
carrying out day-to-day operational tasks. For example, a production manager may want
information related to the quality control checks that are being carried out in the
manufacturing process.
Explaining at least four key components of information system
An IS is an organised combination of resources, such as people, technology, and data, to
produce meaningful information. The following are the key components of an IS:
People: Refers to the most important resource of an IS. An IS requires people for its
operation. These people (resources) are categorised into two types:

IS Specialists: Involve individuals who are responsible for developing and operating
an IS. They include system analysts, software developers, system operators,
programmers, and other IT personnel.

End Users: Involve individuals who use information produced by an IS. They include
market researchers, production managers, customers, and accountants.

Hardware Resources: Include physical devices and materials used for information
processing. These resources include computers, keyboards, mouse, printers, scanners,
magnetic tapes, and pen drives.
Software Resources: Include a set of instructions to direct and control computer hardware.
Software resources can be of two types, namely, programmes and procedures. Programmes
include operating system and application software, while procedures include data-entry
procedures and information distribution procedures.
Data: Includes observations and facts derived from the internal and external sources of an
enterprise. The internal sources are product descriptions, customer records, employee records,
etc. On the other hand, external sources are supplier details, market conditions, competitor
information, etc.
Network: Comprises a server and administrative tools for connecting and distributing
information to the different departments of an enterprise.
Information: Includes reports and results derived after processing the data. For example,
sales reports, cash flow forecasts, market reports, etc.
Question 2 Write short notes on
a. Customer relationship management
Customer Relationship Management (CRM) is a tool that helps an organisation in
establishing strong relationships with its customers. It enables an organisation to identify the
needs and expectations of customers and fulfil them, which results in achieving a high level
of customer satisfaction. In other words, CRM can be defined as a business strategy that
focuses on customer satisfaction and retention. It is a multifaceted system used for storing
and analysing information related to customers, such as their name, contact history, needs and
preferences, and repeat purchases. This information enables organisations to take sound
business decisions. The following are the main objectives of implementing a CRM system in
an organisation:

Simplifying marketing and sales processes

Providing a better customer service

Acquiring new customers and retaining the existing ones

Improving organisational efficiency and productivity

Reducing operational costs

b. Data warehousing

According to Bill Inmon, A data warehouse is a subject-oriented, integrated, time-variant


and non-volatile collection of data in support of managements decision making process.
Data warehousing is a process of consolidating this data at a centralised location. It helps
organisations to store data in such a manner that it can be easily analysed and converted into
meaningful information. Moreover, it protects the data from risks, such as misuse, damage,
and theft.
In order to maintain a data warehouse, data is extracted from the ERP system of an
organisation. The following are the main advantages of data warehousing:

Facilitates integrated storage of data.

Provides backup for a large amount of data produced in the past.

Provides a cross-functional view of data, which is helpful in decision making.

c. Data Mining
Data mining is an act of extracting valuable information from a database. The ERP system of
an organisation stores all its data in a database. With the help of data mining, this data is
analysed to produce meaningful information for business decision making.
A data mining system is usually a vital component of the IS of an organisation. This is
because a data mining system allows logical data analysis. The data mining technique is
widely used by organisations involved in market research, business development, advertising,
and investment analysis.
d. OLAP
OLAP is a technology that is used to analyse data stored at different network places or data
warehouses. It allows you to analyse data from multiple database systems at the same time.
The following are the five main characteristics of OLAP:
Fast: An OLAP system follows simple steps to analyse data and provides a quick response.
The response is so fast that you will find almost a real-time response from the system.
Analysis: An OLAP system is capable of analysing data by performing statistical operations
and logical reasoning.
Shared: An OLAP system administers the access to different users at a time. Moreover, it
prevents unauthorised access to information and maintains the confidentiality of information.
Multi-dimensional: An OLAP system is able to provide a multi-dimensional view of data
according to your requirements.
Information: An OLAP system is capable of analysing data quickly and providing
meaningful information

Question 3 Elaborate the different modules under manufacturing and production


planning.
The ten modules are as listed below
Material and capacity planning
Apart from purchasing quality products, you always expect on-time delivery of products. In
order to fulfil these requirements, an organisation needs to develop an effective production
schedule by properly planning its materials and capacity requirements. Material planning is
all about managing the supply of raw materials for quality production.
Shop floor control
Shop floor is the part of a factory where the machines are placed and men are directly
engaged in manufacturing activities. These activities need to be controlled in order to make
the product readily available in the market. Shop-floor control involves efforts made by
manufacturing organisations for managing shop-floor activities and reducing cycle time.
Quality management
The quality management module consists of a wide range of parameters that help an
organisation in ensuring that the quality requirements, at every stage of production, are
fulfilled. For this, the module collects data from other sub-modules of the manufacturing
module that has a direct impact on the quality of the final output. The quality management
module is capable of optimising the product-design process, production methods, and process
engineering techniques, thereby ensuring high-quality output.
JIT/repetitive manufacturing
JIT delivery is the most crucial element of the manufacturing process of an organisation. This
approach lays emphasis on reducing cycle time and lead time. The JIT module enables an
organisation to complete its manufacturing activities as per the schedule and make on-time
delivery of products. It also allows an organisation to develop a transition-based production
system, instead of discrete manufacturing. A detailed explanation of JIT is given in the next
unit.
Cost management
An organisation needs to incur different types of costs like manufacturing costs,
transportation costs, recruitment costs, etc. Every organisation desires to reduce these costs,
in order to maximise its profit. Among these costs, the manufacturing cost of a product has a
crucial part in the overall profits of an organisation. The manufacturing cost consists of all the
expenses that an organisation has to bear, in order to produce the desired quality output.

Engineering data management


The engineering data management module reduces the time taken in data transfer from one
module to another in the ERP system and minimises errors in data transfer. This leads to
increased efficiency of manufacturing operations. For this, the module develops an automatic
link between engineering and production information. In most ERP systems, the engineering
data management module works in association with Computer Aided Design (CAD)
software, to facilitate an easy exchange of information among people engaged in the
manufacturing process.
Engineering change control
Engineering change refers to the alteration or modification in the product development
process. This change affects the material and equipment requirements as well as the
manufacturing schedule of a product. Therefore, most organisations do not prefer to make
engineering changes. These changes can be made due to various reasons such as changing
needs of customers, technology obsolescence, and change in market trends. An engineering
change is quite critical to the success of a product in the market.
Configuration management
Configuration management is a process of maintaining consistent product performance
throughout its life cycle, in terms of its functionality and attributes. The main aim of
configuration management is to reduce order cycle time, by eliminating lengthy engineering
review of products.
Serialisation/lot control
An organisation needs to purchase an adequate amount of raw materials so that there should
be no shortage or over-supply of materials, during the production process. For this, the
organisation has to determine an optimum lot size and the number of lots to be purchased.
The lot size depends on the sequence (serial) of operations to be performed, while producing
the final product.
Tooling
In a manufacturing organisation, the availability of proper tools plays a crucial role in the
conversion of raw materials into finished products. The tooling module helps an organisation
in identifying the types and requirements of tools for performing manufacturing operations.
This module is closely integrated with capacity planning and inventory management modules
in order to identify the requirements of various tools. This integration helps an organisation

keep track on the delivery of tools so that there can be proper utilisation of productive
capacity.
Question 4 Discuss the various terminologies of ERP purchase system.
These terms are:
Purchase Requisition: It is a document that is generated to inform the purchasing
department about the need of materials to be ordered (purchased). This document is created
after considering the requirements of all the departments of an organisation. A purchase
requisition also specifies the quantity of items required and the timeframe. The purchase
module saves the time and effort of an organisation by efficiently handling the tasks related to
the purchase requisition. The module can automatically copy the previous requisition in case
the requirements are repetitive.
Purchase Requisition Review: After the requisition is created, it is sent for approval to the
purchase department. The purchase module helps the purchase department in verifying the
requisition by comparing the requirements for materials identified with the total amount of
materials available in the organisation.
Order Placement: After the purchase requisition is approved, the purchase department needs
to search for an appropriate supplier to place the order. The purchase module enables the
purchase department to identify the right supplier. Moreover, it automatically generates a new
purchase order or allows the purchasing department to modify the previous order.
Material Receipt and Inspection: The purchase module simplifies the entire process of
material receipt by supporting the activities, such as order tracking, material inspection, and
recordkeeping. After the order is received, the purchase module also enables the purchasing
department to verify whether the order received is as per the requirements.
Order Acceptance/Return: After the inspection of materials received, the order may either
be accepted or returned back to the supplier. The order is returned in case there happens to be
a mismatch between the quality or quantity of materials required and received. However, the
material can be returned only before invoicing. The purchase module helps in inspecting the
materials before they are accepted.
Invoicing: If the order is accepted, the invoice is prepared for the concerned purchase order.
The purchase module enables the purchase department to prepare the invoice by matching the
cost, quality, and quantity of materials accepted and ordered.

Record Keeping and Report Generation: The purchase module of an ERP system stores
data related to purchasing so that it can be easily retrieved whenever required. Using this
data, the module generates reports that help managers in making purchase-related decisions.

Question 5 CRM is a powerful tool used by an organization to acquire new customers


and retain the existing ones. Explain various types of CRM.
Four Types of CRM

Operational CRM

Analytical CRM

Sales Intelligence CRM

Collaborative CRM

Operational CRM
Operational CRM supports the front-office operations of an organisation such as sales and
marketing. Apart from this, operational CRM enables an organisation to store customer
information and retrieve it as and when required, in order to understand the background,
needs, and preferences of customers. For example, the sales and marketing department of an
organisation can easily maintain and update the customer related data using operational
CRM. In addition, it can access the data whenever and wherever required. It is of three types

Sales Force Automation

Enterprise Marketing Automation

Customer Service and Support

Analytical CRM
Analytical CRM enables an organisation to analyse customer information and make various
product-related decisions accordingly. This information is used for various purposes, which
are:

Conducting marketing campaigns for customer acquisition and retention, as well as


for improving marketing efficiency Analysing customer behaviour for making
product-related decisions

Making various decisions such as financial forecasting and customer profitability


analysis For example, an organisation can determine customer requirements, using
analytical CRM, and produce products accordingly.

Similarly, using the analytical CRM, the organisation can also determine customer buying
behaviour and make strategies for increasing their buying frequency.
Sales intelligence CRM
Sales intelligence CRM is a tool that an organisation uses to optimise and evaluate its key
sales processes. It allows salespeople to analyse information related to customers and take
various sales decisions. Besides, sales intelligence CRM enables an organisation to track
available sales opportunities and enhance sales productivity. This ultimately generates high
revenue for an organisation. Sales intelligence CRM is primarily designed for organisations
involved in the wholesale, distribution, and manufacturing segments. The system allows these
organisations to identify cross-sell, switch-sell, and up-sell opportunities by analysing
customer buying trends. For example, the sales intelligence CRM provides updated sales data
to an organisation. It also enables the organisation to comp are the current sales data with the
previous years data, and frame effective sales practices and procedures.
Collaborative CRM
Collaborative CRM facilitates the free flow of customer information among the different
departments of an organisation. This helps the organisation to understand and fulfil the
requirements of customers, thereby, maintaining cordial relationships with them. For
instance, you are the marketing manager in an organisation. Collaborative CRM can help you
to share information related to the demand for products and services with the production
department. Following are the main objectives of collaborative CRM:

Reducing customer service costs

Facilitating customer interaction

Gathering information related to customers

Question 6
a. Explain main application suite provided by JD Edwards World Solutions Company.
JD Edwards, now owned by Oracle, was founded by Jack Thompson, Dan Gregory and Ed
McVaney in 1977. Initially, the organisation developed software for several small and
medium-scale organisations. In 1980s, it started providing products to IBM. During this time,
JD

Edwards

introduced

Computer-Aided

Systems

Engineering

(CASE)

software

development and design tool. It provides three main application suites, namely OneWorld,
WorldSoftware, and WorldVision. These are discussed as follows:
JD Edwards OneWorld:

It is a flexible application that can be integrated with the existing technology of an


organisation. OneWorld includes various tools and technologies that provide up-to-date
information related to different business processes of an organisation.
JD Edwards WorldSoftware:
It is inherently flexible software that can easily be implemented in an organisation.
WorldSoftware can be:

Modified as per the requirements of an organisation and changing business


conditions. Implemented along with WorldVision in order to obtain client/server
benefits.

Run along with OneWorld in order to incorporate other computing platforms into a
single network.

JD Edwards WorldVision:
It provides Graphical User Interface (GUI) and allows an organisation to:

Maximise its productivity by minimising training cost.

Make a safe move to client/server by leveraging the existing host-centric


WorldSoftware applications.

b. Explain the different modules under MFG/PRO application.


MFG/PRO is an integrated ERP package that can be used for different manufacturing
processes, such as make-to-stock, configure-to-order, and repetitive manufacturing.
The following are the different modules of MFG/PRO:
Distribution Module (DM): It is used for tracking inventory and making timely delivery of
products.
Manufacturing Module (MM): It helps an organisation to manage its overall manufacturing
process.
Financial Module (FM): Monitors the financial activities of an organisation. It is used in
integration with the distribution and manufacturing modules of MFG/PRO.
Supply Chain Management (SCM) Module: It is used for managing the supply chain
activities of an organisation.