ENTERPRISE RESOURCE PLANNING

It is popularly known as ERP.

Todays corporate world the companies world wide use ERP to integrate business processes and thereby reduce costs and increase productivity. To be highly successful in todays global competitive market, it is necessary that business enterprises continuously strive for developing a high level of interaction and coordination along the supply chain and improve in the area of quality, time to reach the market, customer satisfaction , performance and profitability .

ENTERPRISE RESOURCE PLANNING

ERP is a software package developed for optimum use of resources of an enterprise in a planned manner. ERP integrates the entire enterprise starting from the supplier to the customer, covering logistics, financial and human resources. To increase productivity by reducing cost.

FUNCTIONING OF ERP
ORDER PLACED ERP CHECKS STOCK

CREDIT LIMIT OF THE DEALER

DELIVERS THE PRODUCT

CASH SUFFICIENT

EXCEEDS

SCOPE OF ERP
The various areas normally covered by ERP are: 1. financials: financial accounting, treasury management, asset management and enterprise control. 2. Logistics: production planning, materials management, plant maintenance, management, project management, sales and distribution management.

SCOPE OF ERP
3.Human Resources : personnel management, training and development and skills inventory.
4. Work flow: integrates the entire organisation with flexible assignment of tasks and responsibilities to locations , positions, jobs, groups or individuals.

BENEFITS OF ERP

ERP brings together people who work on shared tasks within the same enterprise or in their dealings with suppliers and customers and ensures the smooth flow of information at all levels and accessibility to up to date information. Some of the tangible benefits of ERP are: Reduction of lead time by 60%. 99% on time shipments. Doubled business. Increase inventory turnover to 30 %. Reduction of cycle time to 80%. Reduction of work in process inventory to 70%.

BENEFITS OF ERP
Some of the intangible benefits are : Better customer satisfaction. Improved vendor performance. Reduced quality costs. Improved resource utilisation. Improved information accuracy. Improved decision making capability.

E L E C T R O N I C D A T A I N T E R C H A N G I N G

Work flow Automation

1.Strategic& Business Planningmaterials Pdt pricing New pdt introduction Bill of materials Long range forecasting& capacity planning Engg change mgt

Electronic mail

Data base creation

3.Strategic &business planning-Resources Intelligent Resources planning Human Resources planning Quality mgt I M A G I N G

Order mgt Dist mgt

2.Operational planning & Execution- materials Routing Order processing Supplier mgt Inventory/warehouse mgt forecasting Distribution Scheduling & WIP mgt mgt MULTI-PLATFORM MULTI-FACILITY

Organisation Payroll employee Cost of accounting Accounts Receivable General Ledger Fixed assets Accounts Payable Budgeting Logistics/Distribution Materials Data Model

Facilities maintenance Planning implementation

4.Operational planning & materials- Resources Fixed assets mgt Recruitment

Payroll Job evaluation Costing & budgeting Performance appraisal Quality planning Maintenance engineering & control & scheduling MULTIMODE MANUFACTURING MULTI CURRENCY MULTI LINGUAL

FEATURES OF ERP
The general ERP model has a central database shared by all the functions of the enterprise, represented by four quadrants in the figure. The figure represents the concept of enterprise resources planning and execution: symbolizing integrated functionality and the global nature of todays enterprises. Some of the salient features are

FEATURES OF ERP
Accommodating variety : the ERP software solutions provides both multi-lingual and multi currency capabilities. And also multi mode manufacturing and multi facility provide the capability required to compete and succeed globally. Integrated management information : Todays business managers use ERP for Flexible reporting tools to extract the information as and when needed without depending on an information system department (MIS) . Electronic data interchange (EDI) to electronically accept customer information like purchase orders, schedule amendments or cash payments and electronically send order acknowledgement and invoices to customers.

FEATURES OF ERP

Imaging to provide the ability to display drawings or specifications, ability to store original sale orders, purchase orders, quotations and contracts.

Data base creation : starting with time and attendance reporting , monitoring and control of machines and post sales statistics.

Seamless integration: integration of new product introductions or changes to existing products fully into the enterprise system, also known as engineering change management is crucial to the enterprise.

The engineering change management should include electronic approval routing change order process, routing, revision- level control and automatic generation of product structures.

FEATURES OF ERP

Supply chain management: end to end supply chain management is crucial for enterprises having multiple manufacturing units and distribution networks.

Intelligent resource planning is used to optimise the overall flow of demand and supply data and to build relationship between various activities to optimally identify the demand and supply chain.

FEATURES OF ERP

Resource management:
the resources such as equipment and human resources should be effectively managed. To facilitate effective management of equipment resources online records of equipment location and status need to be kept and proper accounting methods need to be kept followed in respect of operating costs and maintenance costs.

To manage human resources effectively, functions such as employee database job descriptions and evaluations

FEATURES OF ERP

Applicant tracking, requisition management, performance review, cost benefits, career and succession planning, creating alternative organisation structures, taking care of training needs etc. are provided by the ERP software package.

To facilitate total quality management (TQM), the ERP provides for quality planning required for ISO 9000 certification.

APPLICATION OF ERP

ERP is gaining popularity at a rapid pace. This is mainly due to the need for reducing costs especially when the sales are sluggish in the sub-merging markets.

With the entry of MNC into the Indian markets need for quality service to the customer is gaining momentum.
Hence , many Indian enterprises both large, medium and small scale have implemented ERP

APPLICATION OF ERP

For eg: Reliance Tata Group of industries and Hindustan Lever Limited (HLL) have already implemented ERP more than 300 indian companies are in the process of implementing ERP according to the recent reports.

In the global market, ERP group of industries sales have increased from $13 billion in 1997 and is expected to touch $ 20 billion by the turn of the century.

SELECTION OF ERP PACKAGE

As the money involved from a few lakhs to a few crores, careful selection of ERP package assumes greater implementation a thorough introspection of the companys activities importance. Before deciding to go in for the ERP implementation, a thorough introspection of the company activities is necessary to understand ones exact requirements. Lack of proper planning and preparation may result in the selection of the wrong vendor which in turn may not ensure the expected returns on the resources employed.

Implementation period may take 120-24 months depending the scale and scope of the operation.

SELECTION OF ERP PACKAGE

The giants in the ERP field are SAP, ORACLE applications and Baan.

Other vendors are JD Edwards, People Soft, Scala, Rarnco Marshal, QAD.

SELECTION OF ERP PACKAGE

While ERP can be tailor Suit needs of specific customers, packaged product is gaining more popularity compared to customised software. If ERP cant be tailor made to fit into companys requirement, then the companys requirement can be tailored to fit the ERP. however it is important to remember that no ERP implementation will be successful. Unless there is a very commitment from the management.