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Chap 5
ERP
• Streamlining the business transaction processing in
an organization.
• SCM
• CRM
• Globalization
• Quality
Need of ERP
• companies are trying to utilize their all resources
effectively to make business more efficient and effective.
• companies are looking for enterprise software and other
quality techniques.
• In the absences of seamless integration efforts were
required to facilitate information interchange between
such independently designed functional software
systems.
Evolutionof integrated system
• Data island was a problem.
• Islands of Data describes a situation in which departments
within an enterprise each use their own software applications
from disparate vendors, none of which integrate with one
another.
• A common database is used or different databases are being
shared by different components of the integrated system.
• ERP is enterprise wide integrated information system that
helps in planning and monitoring of business activities.
• A set of application integrating information from
manufacturing,finance,distribution for final decision making.
Scope
• Aims at creating a common database across organization used
by different departments.
• Brings different functions including
material,manufacturing,distribution and marketing under one
umbrella using common database.
• Helps in creating robust backbone of transaction processing
layer on IS in an enterprise.
Benifits
• Seamlessly integrate business processes that ensures
reducton in inventories and writing down on cycle
times.(Cycle time is the time between placement of the order
and delivery of the product.)
• Improves white collar productivity, information support for
operational level and decision making at senior mgmt mevel.
Vendors
• Many vendors from different countries have started offering ERP
solutions.
• Initially they made use of high end computers such as mainframes,
superminis etc.
• ERP solutions were mostly hardware platform dependant.
• To anticipate the changes in information technology vendors started
offering ERP products that work with different hardware platforms
and OS environments.
• Today's vendors use satellite communications, internet and e-
commerce for offering their solutions.
Functional Architecture
• Sales
• Distribution and Traspotation
• Service
• Finance and Accounting
• Costing
• Tresury
• Project
• Materials
• Manufacturing
• Plant Maintenance
• Human Resource
• Quality
• Logistics
Modules
• Centralized database(Heart of ERP solution)
• Interface with external entities like
supplier,employees,managers,and shareholders.
• Addressing business requirements at transaction processing
and reporting layer.
Selecting ERP Software
• Either implement all the modules or only selected modules.
• May adopt phased approach of implementing some modules
in first phase and taking up remaining in subsequent phases.
SCM
• Entities involved:
• Customer buys a finihshed product of a company that the
retailer sales it to a customer.
• Retailer gets product from wholesaler or a distributor who in
turn gets it from manufacturer.
• Manufacturer procures the product required as a raw
material that are supplied from vendor who in turn produce it
from another vendor or manufacturer.
SCM
• The process that covers all the activities pertaining to creation
of products for customers.
• Synchronized set of integrated resource systems that cover all
business entities involved in making product available to
customer.
• Process of managing assets and relational ships between
business entities in order to transform raw material into
product of value to customers in most effective and efficient
manner.
Flows
• Three distinct elements:
– Material
– Money
– Information