MBA

INFORMATION SYSTEMS
ENTERPRISE RESOURCE PLANNING

Assignment
Enrolment number: MBISMCT13727119

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Q.1 Outline the architecture of ERP and explain different interfaces.

Answer:

MBA
INFORMATION SYSTEMS

ENTERPRISE RESOURCE
PLANNING

Enrolment number:
MBISMCT13727119

ERP Architecture:
ERP applications are most commonly deployed in a distributed and often
widely dispersed manner. While the servers may be centralized, the clients
are usually spread to multiple locations throughout the enterprise.
Generally there are three functional areas of responsibility that is distributed
among the servers and the clients. First, there is the database component the central repository for all of the data that is transferred to and from the
clients. Then, of course, the clients - here raw data gets inputted, requests
for information are submitted, and the data satisfying these requests is
presented. Lastly, we have the application component that acts as the
intermediary between the client and the database. Where these components
physically reside and how the processes get distributed will vary somewhat
from one implementation to the next. The two most commonly implemented
architectures are outlined below.
Two-tier Implementations
In typical two-tier architecture, the server handles both application and
database duties. The clients are responsible for presenting the data and
passing user input back to the server. While 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.
Three-tier Client/Server Implementations
In three-tier architectures, the database and application functions are
separated. This is very typical of large production ERP deployments. In this
scenario, satisfying client requests requires two or more network
connections. Initially, the client establishes communications with the
application server. The application server then creates a second connection
to the database server.
The SAP R/3 System architecture consists of three layers: Presentation,
Application, and Data Storage.
The following diagram illustrates the function served by each layer and how
the layers work together:
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INFORMATION SYSTEMS

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Presentation
This is where users of the SAP R/3 System will submit input to the SAP R/3
System for the processing of business transactions. It is also where the
output from these transactions appears as output fields, reports, tables and
spread sheets.
On the desktop level, R/3 offers a user-friendly graphical interface called
SAPGUI. The system also integrates alternative interfaces for optimum
compliance with your requirements. This includes integrating common PC
applications. Information exchange is also carried out through the Internet,
Kiosk touch screen systems and telephone applications.
Application

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MBA
INFORMATION SYSTEMS

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MBISMCT13727119

An application is a logically independent component residing at the host

operating system level within the SAP R/3 client/server environment. This
component is represented by an application server in the SAP R/3 network.
After a user initiates a request at the presentation level, logic is invoked to
service and process that information. The application logic modules can
reside on one centralized host machine or be distributed over several
physical host machines within a particular SAP R/3 network.
Typically, the update and enqueue 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. The database server may
also be referred to as the central server.
On the application level, R/3 offers sophisticated mechanisms to optimally
use high-performance system resources. The system implements
interconnections between various applications so that they are practical from
a business perspective. R/3 closes the gap between the exacting concept of
a business transaction and transactions from a data processing perspective.
Data Storage
On the database level, R/3 exclusively uses relational database systems by
various manufacturers. R/3 is able to utilize the most advanced features of
each database vendors product. In other words, it is not constrained by the
lack of features in any individual database engine. Instead, it is able to fully
use a supplier-specific implementation without jeopardizing its own
portability.
Presentation interface
Interface controls what is shown on the monitor
The presentation interface SAP GUI (GUI = Graphical User Interface)
implements the platform-specific input and output functions of the R/3
System. The SAP GUI is primarily based on the Windows Style Guide and is
available for several platforms providing the same functions for each. If you
have learned to use the R/3 System on one platform, with the exception of a
few small platform-specific GUI attributes, you can use the system on
another platform exactly the same as before.

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MBA
INFORMATION SYSTEMS

ENTERPRISE RESOURCE
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Enrolment number:
MBISMCT13727119

The R/3 presentation software displays the graphical user interface using the
tools provided by the relevant presentation environment (frontend operating
system).

Database interface
Today, large amounts of data are usually administered using relational
database management systems (RDBMS). These systems store the data and
the relationships between the data in two-dimensional tables, which are
known for their logical simplicity. The definitions of the data, tables, and
table relationships are stored in the data dictionary of the RDBMS.
Within ABAP, SAP OPEN SQL is used to access application data in the
database, independent of the corresponding RDBMS. The R/3 database
interface converts the open SQL statements from the ABAP statements into
the corresponding database statements. This means that application
programs written in ABAP are database-independent. Native SQL commands
can be used in ABAP.
When interpreting open SQL statements, the R/3 database interface checks
the syntax of these statements and automatically ensures the local SAP
buffers in the shared memory of the application server are utilized optimally.
Data frequently required by the applications is stored in these buffers so that
the system does not have to access the database server to read this data. In
particular, all technical data such as ABAP programs, screens, and ABAP
Dictionary information, as well as some business process parameters usually
remain unchanged in a running system, making them ideal buffering
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INFORMATION SYSTEMS

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candidates. The same applies to certain business application data, which is

accessed as read-only

To make the R/3 System independent of the database system with which you
use it despite the differences in the SQL syntax between various databases,
each work process on an application server has a database interface. The R/3
System communicates with the database by means of this interface. The
database interface converts all of the database requests from the R/3
System into the correct Standard SQL statements for the database system.
To do this, it uses a database-specific component that shields the differences
between database systems from the rest of the database interface. You
choose the appropriate layer when you install the R/3 System.
There are two ways of accessing the database from a program - with Open
SQL or Native SQL.
Open SQL
Open SQL statements are a subset of Standard SQL that is fully integrated in
ABAP. They allow you to access data irrespective of the database system that
the R/3 installation is using. Open SQL consists of the Data Manipulation
Language (DML) part of Standard SQL; in other words, it allows you to read
(SELECT) and change (INSERT, UPDATE, DELETE) data.

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MBA
INFORMATION SYSTEMS

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MBISMCT13727119

Open SQL also goes beyond Standard SQL to provide statements that, in
conjunction with other ABAP constructions, can simplify or speed up
database access. It also allows you to buffer certain tables on the application
server, saving excessive database access. In this case, the database
interface is responsible for comparing the buffer with the database. Buffers
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.
Where an R/3 System is distributed across more than one application server,
the data in the various buffers is synchronized at set intervals by the buffer
management. When buffering the database, you must remember that data in
the buffer is not always up to date. For this reason, you should only use the
buffer for data which does not often change. You specify whether a table can
be buffered in its definition in the ABAP Dictionary.
Native SQL
Native SQL is only loosely integrated into ABAP, and allows access to all of
the functions contained in the programming interface of the respective
database system. Unlike Open SQL statements, Native SQL statements are
not checked and converted, but instead are sent directly to the database
system. When you use Native SQL, the function of the database-dependent
layer is minimal. Programs that use Native SQL are specific to the database
system for which they were written. When writing R/3 applications, you
should avoid using Native SQL wherever possible. It is used, however, in
some parts of the R/3 Basis System - for example, for creating or changing
table definitions in the ABAP Dictionary.
Operating system interface
The operating system views the R/3 runtime system as a group of parallel,
cooperating processes. On each application server these processes include
the dispatcher as well as work processes; the number of work processes
depends on the available resources. Work processes may be installed for
dialog processing, update, dialog free background processing and spooling.
In addition to these work process types (dialog processing (D), update (V: for
the German Verbuchung), lock management (E), background processing
(B), spool (S), the R/3 runtime system provides two additional services for
internal and external communication (below are the restrictions on the
number of work processes):
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MBA
INFORMATION SYSTEMS

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Enrolment number:
MBISMCT13727119

The message server (MS or M) communicates between the distributed

dispatchers within the R/3 System and is therefore the prerequisite for
scalability using several parallel-processing application servers.
The gateway server (GW or G) allows communication between R/3, R/2
and external application systems.
Dialog: Every dispatcher requires at least two dialog work processes
Spool: At least one for each R/3 System (more than one allowed for
each dispatcher)
Update: At least one for each R/3 System (more than one allowed for
each dispatcher)
Background processing: At least two for each R/3 System (more than
one allowed for each dispatcher)
Enqueue: Only one enqueue work process is needed for each system

Conclusion: It shall be concluded that the ERP

of providing close integration with business
practices which leads to business process
unwanted processes and reducing the overall
successful business.

May 2015

architecture is highly capable

processes by adopting best
optimization, elimination of
business/ product cost for a

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MBA
INFORMATION SYSTEMS

ENTERPRISE RESOURCE
PLANNING

Enrolment number:
MBISMCT13727119

Q.2 Provide the framework of supply chain management and explain

its components.
Answer:
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. The Global Supply Chain Forum defines
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 (Lambert
2004).
The Supply Chain Management (SCM) 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 organization. The framework consists of several
components that define key functions, processes and best practices.
Organizational behaviors like Supply change management enablers support
the organization's overall performance.
All companies, large and small, manufacturers and service providers, depend
on successful supplier performance to help satisfy their customers. The
performance of an agile, motivated and responsive supply base can improve
operating efficiencies, 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 final product and the delivery of final product to customers within the
context of a supply chain management framework.

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INFORMATION SYSTEMS

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Supply Chain Management Framework

The framework emphasizes the importance of aligning supply chain strategy
with business strategy and in leveraging information technology as both an
enabler for business process efficiency and effectiveness and as a means of
sharing knowledge and information among global supply chain partners.
Supply Chain Management Components:
Supply chain is basically the whole process starting from the raw material
from the suppliers to manufacturing to packaging to warehouse to
distribution to final reach of the product or service to its intended consumers.
So there is lot of components in a supply chain of a large company.
The Supply Chain Management (SCM) framework is based on a functional
model of the SCM system. It is a development tool that assists in the
development of a well-integrated SCM system in an organization. The
framework consists of several components that define key functions,
processes and best practices.
Supply chain management components represent business processes and
practices. Following are the supply chain management components.
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INFORMATION SYSTEMS

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SCM Leadership - This component provides a direction to the Supply

change management system. It is constituted by managers from the
different functional areas. The overall performance of the Supply change
management system depends on the interaction between these functional
heads and the senior management.
SCM Strategy - The supply change management strategy forms an outline
for supply chain operations that support and are consistent with the
manufacturing and marketing objectives of the organization.
Operational Planning - This component defines the operational
requirements for maintaining a supply chain which are specified in terms of
tasks, resource requirements, and measurements.
Business relationship management - Organizations and supply chain
partners are dependent on each other. It is imperative to have a favorable
environment that facilitates communication and negotiation between the
organization and its supply chain partners. The relationship can be improved
by having long-term contracts, and by using inputs from different levels of
management and supply chain partners in the communication and decision
making processes.
Order-to-delivery process - The order-to-delivery process defines how
effectively an organization can direct the flow of products from the suppliers
to the company. It includes processes like order releases, receiving,
inspection of incoming material, accounts payable, and materials handling.
Quality and performance management - This component is concerned
with the initiatives that organizations and suppliers take to improve and
maintain quality standards. The quality and performance component helps
identify the quality defects in suppliers' products, and facilitates cooperation
between suppliers and the manufacturer to improve the quality.
Human resources management - This component deals with the training
of personnel to improve their skills, Knowledge, and attitudes to enhance the
supply chain performance.
According to Lambert and Cooper (2000) the following are the components of
supply chain management:
Planning and control
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INFORMATION SYSTEMS

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Work structure
Organization structure
Product flow facility structure
Information flow facility structure
Management methods
Power and leadership structure
Risk and reward structure
Culture and attitude

Supply Chain Management Enablers:

The SCM enablers are a group of carefully conceived and defined behaviors
and approaches that allow, encourage, and reinforce a firm's commitment to
high performance SCM practices. The following are the SCM enablers:
1. Alignment: Alignment refers to matching the corporate and business unit
goals. It is a key organizational behavior within the SCM system and includes
consistency in processes, actions and decisions across the business units to
support the SCM processes. For better alignment, the company leadership
should set goals, objectives and strategies that support successful supplier
relationships.
2. Customer - Supplier focus: The customer-supplier focus aims to plan
the organization's processes in such a way that they are able to understand
and react to customer requirements quickly. To improve suppliers'
satisfaction, organizations should have clear and mutually understood and
agreed rules of relationship and should show commitment for their suppliers'
long-term profitability and success.
3. Design: Design 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,
defines the overall external and internal requirements to the organization.
4. Measurement: Measurement is a tool that organizations use to quantify
information about inputs, outputs and the performance dimensions of
products, processes and services and to evaluate the performance of
different business processes and supplier activities.
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INFORMATION SYSTEMS

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5. Participation/involvement: Stakeholders must be involved in the

decision-making process to ensure the success of products, processes,
systems and services. Organizational efficiency and performance can be
improved by utilizing the available resources in terms of talents and energies
of employees and external stakeholders.
6. Periodic review: Continuous improvement is based on the periodic
review of all the business processes, programs, and systems. These reviews
indicate the difference between the expected performance and the actual
performance and the reasons for the deviations.
Primary Advantages of Supply Chain Management:
Businesses exist to make profits. To remain competitive firms have to offer
superior quality goods at the lowest prices possible. The need to minimize
product costs makes effective supply chain management vital. One of the
most efficient ways of increasing a companys profits is by ensuring that
costs are kept as low as possible. The application of SCM leads to cost
reductions due to elimination of wasteful processes. Since these are
operating costs for the company, the savings on these costs reflect increased
profits by the company.
Reduced Costs
Supply chain management involves identifying those processes that increase
cost without increasing the value of the final product. These processes are
wasteful and do not add value, and should be eliminated whenever possible.
By adding an effective SCM system to a business, the added global efficiency
can lead to lower costs of raw materials. This system efficiently plans for
materials to be brought to the company from the lowest cost provider
possible and at just the right time to ensure there is no excess or deficiency
in the material. A SCM system can improve the company's relationship with
vendors so that there are opportunities to cut costs like through a volume
discount.
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Increased Efficiency
Resource wastage is a common source of increase production costs. Often
this is due to improper planning. A company that employs supply chain
management is able to achieve efficiency of its operations since only those
values adding activities are encouraged. This ensures that the organizations
processes flow smoothly and output keeps in line with the company's needs.

Increased Output
A company that employs supply chain management can foster close-knit
relationships with its suppliers and customers, ensuring the timely fulfillment
of orders. A company known for its timeliness and responsiveness will attract
more customers, and will grow as a result of increased output and sales.
Increased Profits
The SCM Systems gives the ability to quickly and effectively process orders
to ensure customer needs are understood and addressed quickly. It will
also provide the business with the flexibility to respond to ever changing
customer demands and market trends.
Improved Collaboration - A SCM system wired in to the latest software
allows you to know the position your raw materials and your finished
products are in by tracking both your suppliers and your distributors. These
companies can also track where you are at in receiving or sending those
materials. This knowledge can keep relationships between these businesses
strong. This system often includes the development of reports on how the
chain of goods progresses from supplier through distributor. These reports
help your businesses to determine potential areas of improvement.
Cycle Times - The cycle time can be defined as the time it takes your
business to turn over a product from raw materials, give it to your distributor
to sell and then make enough money to purchase new raw products to start
the cycle over. If at any point it takes too long to obtain these raw materials,
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INFORMATION SYSTEMS

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production may have to stop which will slow down your organization. A SCM
system improves cycle times and ensures that raw materials are provided
when your business needs them so that you never have to stop production.
Response to Conflict - Unfortunately, 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 find another way to sell the
product. A SCM system lets your company better cope with problems at
either side of the production spectrum. You can quickly and easily figure out
a response to the problem instead of being surprised by it at a later time.
Additional advantages:
With the increased visibility into the supply chain and adaptive supply
chain network, it can be more responsive. We can sense and respond
quickly to changes and quickly capitalize on new opportunities.
By offering a common information framework that supports
communication and collaboration, SCM enables to better adapt to and
meet customer demands.
We 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. Reduced inventory levels and
increased inventory turns across the network can lower overall costs.
With SCM, we can lower operational expenses with timelier planning
for procurement, manufacturing and transportation. Better order,
product and execution tracking can lead to improvements in
performance and quality - and lower costs. We can also improve
margins through better coordination with business partners.
Tight connection with trading partners keep the supply chain aligned
with current business strategies and priorities, improving
organization's overall performance and achievement of goals.

May 2015

the

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MBA
INFORMATION SYSTEMS

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Conclusion: Supply chain management is an exciting and important area of

business improvement. Specialist companies are able to save the worlds
leading businesses large amounts of money, time and effort by creating an
effective supply chain. Certainly it is to be appreciated that the high quality
of the product and its value for money are not only a result of high quality
design and engineering, but also a direct result of lean production, justin-time methods and premium supply chain management.

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