ERP An Overview

What is ERP? A Brainwave? A A Fad? A Quick fix solution? A Software package?

ERP Is… A powerful tool(if used properly) to Orchestrate Business * Business Planning * Sales Planning * Production Planning * Materials Planning * Capacity Planning * Financial Planning * Manpower Planning Integrated and formal approach

Let us start with knowing how the business world got the concept of ERP

Development of business organization Sole trading/manufacturing organization A family business / Partnership organization A Private Limited company A Public Limited Company A Holding Company having subsidiary public limited companies A Group conglomerate having versatile business activities with various holding companies. A giant business house having various Groups

Resources a business would need MONEY ( Capital ) MACHINERY ( Assets ) MANPOWER ( People at various levels) MATERIAL ( Raw material/Finished goods) MANAGEMENT the force that organises all other resources to earn PROFIT Which is the objective of the entire business process

Management of resources becomes complex when : A business organisation grows. Business activities grow Business products and locations grow Market Machine Men Money Material

Complexity started with Materials Management So emerged MRP1 (Material Resource Plan) Module This consisted of: Planning of purchases Planning of procurement Planning of Stores and material movement Planning of distribution

Complexity multiplied with Manufacturing Management So emerged MRP2 (Manufacturing Resource Plan) Module This consisted of: Manufacturing Layout Manufacturing processes/Activities Work centers/Activity types Routings Scheduling ………….etc…….

Complexity exploded with Management of Multiple business activity Multiple products Multiple locations Multiple markets Multiple people set ups……AND… Multiple sources and application of MONEY and thus emerged the concept of ERP !!

ERP – Enterprise Resource planning Thus: It integrates data It Processes the data and It Reproduces the data as per the requirement FOR ENTIRE ENTERPRISE ERP is an application software that integrates all departments and functions across a company onto a single computer system that can serve all those different department’s particular needs.

An ERP System Takes organization closer to the customer Helps Management to speedup the decision making process Eliminates the non value adding processes in business activities Helps employees to work with speed and higher accuracy

 The only thing that's constant is CHANGE!!  Organizations must continually change to: stay competitive improve productivity reduce employees cost cut costs improve customer service improve quality reduce transit time. reduce inventories ERP addresses Today’s Business Challenges

Tangible Benefits ** 15-25% increase in sales due to timely and faster shipments 11-20% increase in productivity due to availability of matched sets,reduced follow-up and overtime 10-20% reduction in purchase costs due to less expediting and more time available for sourcing 15-35% reduction in inventory due to valid schedules and matched sets

Intangible Benefits Better customer satisfaction Improved vendor performance Increased flexibility Reduced quality cost Improved resource utility Improved information accuracy Reduced expediting

ERP Vs MRP II  Integrated, End to end processes.  Improved productivity and usability for greater efficiency and quicker responsiveness.  Increased insight for more assured decision making.  Advanced flexibility and adaptability to lower costs and to accelerate change.