Snoop M.

K Deepti Kanjani Manoj Kumar Sharma Poulomi Sen Shaswati Sen Chaitanya Banal

Definition :
ERP (Enterprise resource planning) can be defined as a software solution that addresses the enterprise needs taking the process view of the organization, to meet the organizational goals tightly integrating all functions of an enterprise

Evolution of ERP System

Till 1960s (Pre-computer age)

Re-order point

# Kardex Card (Bin Card) # Visual Checking (2-bin sys) # A Class more often (monthly) # Fixed Quantity / Period Consumption Once in a Quarter

1960s (IBM 1401 ERA)

Purchase Order issue, and not only IC Stock Figure available only at Month end

Purchase schedules & inventory adjusted by shortage every month for 3-4 months

All Run Once-A-Month

1970s (IBM 370 ERA)

CLOSED-LOOP MRP
Importance of MPS (in weeks) Planning, rescheduling in weeks

All Weekly

1980s MRP-II (burrows 20-30 terminals)

Planning & Monitoring all resources Mfg. Mkt. , Fin., Engg., Matls

1990s (C/S tech.)

According to Gartner
ERP is an integrated application software suite that balances manufacturing, distribution and financial business functions when fully implemented, ERP can enable enterprises and allows for necessary management
ERP is the technical evolution of MRP-II through the

introduction of RDBMS, CASE, GUI, 4GL Development Tools and Client Server Architecture.
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Evolution of Mfg. Systems

DEM ERP

MRP II
MRP

IC
1960 1970 1980 1990 2000
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Enterprise by Function
The 1980s Enterprise

MFG.

Distribution

Finance

Projects

Purchasing

Sales

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Functional Applications
The 1980s Enterprise
MRP then MRP II Finance

Distribution

Projects

Purchasing

Sales

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Simplifying Baan ERP into Components

MFG. Distribution

Finance

ERP
Sales

Projects

Purchasing

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Extended Enterprise
Todays Enterprise

Customers

MFG.

Dist.

Suppliers

Finance

Projects

Pur.

Sales

Value Chain

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Beyond ERP : Extending the Enterprise

Todays Enterprise

Customers

MFG. Finance

Dist.

Suppliers

Projects

Pur.

Sales

Baan Front Office

Baan ERP

Baan SCS

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Competing in Your Market

Enterprise 1
MRP
FIN

New potential Customer

Enterprise 3 Enterprise 2
MFG DIST
Customers
MFG
DIST

Suppliers

FIN PUR

FIN PUR SLS

PCS SLS

PCS

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Why ERP :
Helps in reduction of organizations operating costs can be reduced.

Integrates all parts of an organization

Increases the efficiency of operations as a result of this integration

Integration of information systems which enables seamless flow of information across the organization.
Enables consolidation of different software in the organization Helps in better customer service

Capability of ERP
Delivery Time (Speed)
Flexibility (Customization) After Sales Services Quality / Reliability Cost

:Explicitly
:Explicitly :Explicitly :Implicitly :Implicitly
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Implementation of ERP
The implementation of most of the ERP packages begin with the ENTERPRISE MODELING which defines 1.The enterprise structure, 2.The authority functions, 3. The process and the business rules . oThe enterprise modeling is the platform for the ERP system implementation. oThe ERP solution is structured in the modular fashion to cover the entire business operation.

A typical ERP package solution has the following modules :

1. Sales , Marketing , Distribution

2. Manufacturing
3. Stores Management 4. Finance 5. Personnel 6. Maintenance 7. Purchase Inventory 8. Planning and Control.

The modules are designed for 1. Data capture, 2. Data transaction validation

3. Its analysis
4. Accounting upgradation and

5. Reporting.

ERP Features :
1. Security Authorization 2. Referencing Responsibility 3. Implementation of business rules

These features are provided to

1. Safeguard the business of the organization from illegal practice 2. To protect the valuable information from misuse.

Authorization is a feature provided for ensuring that the transaction is completed with regards to the business rules set by the management.
Referencing is a feature for tracking the chain of events for monitoring , progress checking and control. The business organization runs through the rules and responsibility allocation. A strict adherence to them is essential for creation of controlled environment. The ERP satisfies this need of the business.

ERP Architecture :
Any information system has three basic components :1. Data Management 2. Application Logic 3. Presentation

The architecture of ERP can be a two tier or three tier :

Data Management

Application Logic

Presentation Two Tier Architecture

Data Management

Data Server Function

Application Logic

Application Server Function

Presentation

Client Function

Three Tier Architecture

Data Management Server

Application Logic

Application Logic Client Presentation

Client / Server Architecture

Present Complexities of Business

Problems Functional role conflict Product Variety Geo. Distributed core competencies Solutions Process thinking Mfg. & Dist. Strategies Multi-site enterprises

ERP support to these complexities

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Traditional Organization Structures

CEO
GM MKT/SALES GM FINANCE
GM PRODUCTION

GM MATL

GM IT

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Functional Role Conflicts

Marketing/Sales

Finance High Availability Low Cost High Stocks Low Stocks Marketing/Sales VS. Production Customer Satisfaction Employee morale High Variety Ease of opn. Frequent Set-up Changes Low Set-up Changes
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VS.

Functional Role Conflicts

Purchase

VS.

Low Cost Low Wip Purchase Production Distribution IT

VS. VS. VS. VS.

Production Low Shortages High Wip Quality Quality Production Production

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Result ?
PIECE-MEAL
OPTIMIZATION COMPUTERIZATION AUTOMATION

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Solutions ?
Business process Re-engineering (BPR)

Process thinking rather than Functional thinking

Cross-functional team working

ERP Supports all these

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Benefits Of ERP:
1. Better Management of resources reducing the cost of

operations.
2. Planning at function and process level . Simultaneous

increase in the productivity of the business possible.

3. Customer satisfaction increases due to shorter delivery

cycle. Closer contact with the customer.

4. As ERP is scalable architecture, it remains valid solution

with expansion of business.

5. The process becomes faster due to work group

technology and application of workflow.

Limitations of ERP
Strategic Thinking Environment Scanning

Innovation
Product Design