Enterprise Resource Planning (ERP) Implementation Methodology

ERP Implementation

System
A set of detailed methods, procedures, and routines established or formulated to perform a task or resolve a problem.

Procedure
A fixed, step-by-step sequence of activities that must be followed in the same order to correctly perform a task.

Methodology is generally a guideline system for solving a problem, with specific components such as phases, tasks, methods, techniques and tools

A methodology is defined as something that represents a package comprising practical and proven practices for a given area of activity. Methodology includes the planning, the development of the design and the management of the systems

It provides control mechanisms and road map for planning of the implementation project. Methodology can be altered and modified depending on changing needs, and in the end manages to establish and deliver the most appropriate release. It comprises practical ideas and proven practices for a given area of activity.

Business Process
A business process is a collection of related, structured activities that produces service or product and serve the purpose
Sequence of activities of a Business process can be visualized well in graphical form Note?. Discuss examples of business processesEveryone has to give example
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A business process is a set of logically related tasks that uses the resources of an organization to achieve a business outcome

Reengineering is the radical redesign of business processes for improvement(s)

 It is a depiction of a sequence of operations, declared as work of a person(s), or an organization of staff. It covers all possible routes of task. is to: - Place the controls - Deal all situations
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PR WORKFLOW

PR / SR For Revision

PR / SR Raised By User

Notification of Cancellation

Verification

PR / SR Verifying Authorities Dept. Wise

Rejected

Cancellation of PR

Verified PR For Revision

Notification of Approval For Revision Rejected

Assets PR / SR

PR Type

Inventory Items PR / SR

Non-Stock Items PR Notification of Approval Approval Limit in Pak RS More Than 50,000 Approval Limit in Pak RS Up to 5,000

Approved By VPM or MES or MS

Approval Authority

Up to 2,000,000 Up to 50,000

More than 2,000,000 Approved By CEO Approved By CFO Approved By Head Of Dept.

Approved PR / SR

Approval Authority

Approved PR / SR Approved By BOD Approved PR/ SR Approved PR/ SR Rejected Received BY Admin. HO Dept For RFQ Rejected Approved PR / SR

BOD

Received BY Buying Dept. For RFQ

Rejected

Rejected

Cancellation of PR

Enterprise Resource Planning (ERP) is an industry term for integrated, multi-module application software packages that are designed to serve and support most of business functions. It enables information entered once to be shared throughout the organization. It is a pre-designed and developed generic software, which is configured to cater the need of different industries and organizations Transaction Processing System

1. 2. 3.

Single Database Online Real time (No batch) Seamless Integration across modules Most of functions are automated

4.

ERP Integrated Management

FRONT OFFICE
C U S T O M E R Sales & Distribution Corporate Reports Financial Application S U P

Central Database
HR Application

P
Production Application Inventory Application L I E R S

BACK OFFICE

Customers

Marketing
Customer Service Sales Extended ERP Finance HR

Business Partners

Suppliers

External Employees Manufacturing

Logistics/ Distribution

Timeline System 1960s Inventory Management & Control

Description Inventory Management and control is the combination of information technology and business processes of maintaining the appropriate level of stock in a warehouse. The activities of inventory management include identifying inventory requirements, setting targets, providing replenishment techniques and options, monitoring item usages, reconciling the inventory balances, and reporting inventory status.
Materials Requirement Planning (MRP) utilizes software applications for scheduling production processes. MRP generates schedules for the operations and raw material purchases based on the production requirements of finished goods, the structure of the production system, the current inventories levels and the lot sizing procedure for each operation. Manufacturing Requirements Planning or MRP utilizes software applications for coordinating manufacturing processes, from product planning, parts purchasing, inventory control to product distribution.

1970s

Material Requirement Planning (MRP)

1980s

Manufacturing Requirements Planning (MRP II)

1990s

Enterprise Resource Enterprise Resource Planning or ERP uses multi-module application software Planning (ERP) for improving the performance of the internal business processes. ERP systems often integrates business activities across functional departments, from product planning, parts purchasing, inventory control, product distribution, fulfillment, to order tracking. ERP software systems may include application modules for supporting marketing, finance, accounting and human resources.

ERP Evolution
2000s Extended ERP 1990s Ent. Resource Planning (ERP)

1980s Manuf. Resources Planning (MRP2)

1970s Mat. Requirement Planning (MRP1) 1960s Inventory Control Packages

ERP Evolution
2000s Extended ERP 1990s Ent. Resource Planning (ERP)

1980s Manuf. Resources Planning (MRP2)

1970s Mat. Requirement Planning (MRP1) 1960s Inventory Control Packages

ERP Evolution
2000s Extended ERP 1990s Ent. Resource Planning (ERP)

1980s Manuf. Resources Planning (MRP2)

1970s Mat. Requirement Planning (MRP1) 1960s Inventory Control Packages

ERP Evolution the big 5

2000s Extended ERP 1990s Ent. Resource Planning (ERP)

1980s Manuf. Resources Planning (MRP2)

1970s Mat. Requirement Planning (MRP1) 1960s Inventory Control Packages

Assignment # 1
What is MRP and MRPII, write two line definition of each.

What is ERP, list its characteristics.

Define an Enterprise. Group Assignment: Write a Business Process and draw its flow

Give a practical example of reengineering

Single DB means there is no ambiguity in info, Improved visibility, controls and online access to information No reconciliation, data for analytics Reduce cash to cash cycle Improved Customer service Workflow for paperless and efficiency Process reengineering - update old processes Foundation for new processes, such as eprocurement, with significant ROI Flexibility: Think Local, Act Global

1. Input From: To work on the data already exist in the system

2. Output To: To provide the output of module functions to another system for further processing

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