1. Enterprise Resource Planning

2. Enterprise Resource Planning
Enterprise Resource Planning Systems is a computer system that integrates application programs in accounting, sales, manufacturing, and other functions in the firm
This integration is accomplished through a database shared by all the application programs
ERP can be considered an initiative launched to better manage business processes across the organization using a common, integrated database, shared data management applications and reporting tools.

3. Enterprise Resource Planning - Background
An organization’s critical business processes often cut across many of its functional units.
In most organizations, each process has its own data needs and applications that operate as distinct systems.
The results of this approach:
- Function-Centric view in the business units
- Operational Inefficiencies
Example: A customer order
Sales
Accounting
Purchasing
Production
Logistics

4. The Idea of MRP Enterprise Resource Planning - Background
ERP evolved from MRP (Material Requirements Planning) and MRP II.
Customer orders
Forecasts
Material requirements plan
Inventory records Inventory transactions
Bills of materials
Routings
Time standards
MRP
explosion
Master production schedule
Manufacturing resource plan
Cost and
financial data

5. The Idea of MRP II Enterprise Resource Planning - Background
“Instead of having one set of numbers for the operating system in manufacturing and one set kept by the financial people – once the manufacturing people have numbers that are valid, the financial people can use these to get their numbers. Of course, whenever there are two systems – the numbers are bound to be different. With MRP II, everybody can be working with the same set of numbers, but that’s only the technical difference. The big difference comes in the way management uses these tools…MRP II becomes a company game plan for manufacturing, marketing, engineering, and finance.”
Oliver Wright, The Executives Guide to Successful MRP II, 1982.

6. Enterprise Resource Planning – Background Timeline

7. ERP Functional Components
Accounts Payable
Accounts Receivable
General Ledger
Capital Investments
Open Item Management
ABC (costing approaches)
Asset Management
Financial
Accounting
Customer Management
Order Management
Configuration Management
Billing
Rebate Processing
Sales & Distribution
Functional
Components
Human Resources
Instructor
Payroll
Benefits
Scheduling
Personnel Development
Workforce Planning
Travel Expense Accounting
Largest and most complex
Materials Management
Plant Maintenance
Quality Management
Production Planning and Control
Project Management
Budgeting
Manufacturing
& Logistics

8. SAP System Functional Components

9. Reasons for implementing ERP
Desire to standardize and improve processes
To improve the level of systems integration
To improve information quality
Integrate Financial Information
Integrate Customer Order Information
Standardize and Speed Up Manufacturing Processes
Reduce Inventory
Standardize Human Resources Information
Global Outreach
Avoid Redundancies

10. ERP Disadvantages Time-consuming Expensive Fit Vendor Dependence
Too many features, too much complexity
Process Rigor (Standardized)

11. The General ERP Process
Product Analysis
Module Selection
Process Analysis
Data Analysis
Applications Integration
Testing and Installation
Employee Training
Average Implantation Time
24+ Months
Meta Group Study

12. How Much Does an ERP Implementation Cost?
The size and geographic distribution of the company.
The size of the ERP package.
Hardware
Software
Consultants and Analysts Fees
Time
Training
A large company may spend from $ 50 to $ 100 M or more USD for an integrated ERP implementation.
Meta group survey; 63 companies (large and small) in a range of industries.
Average cost $ 15,000,000.
High $300 M, $300,000,000 USD
Low $ 400 K, $400,000 USD

13. Successful ERP Implementation Criteria
Top Management Support
Good Cost Estimation
Realistic Expectations
ERP Implementation
Cultural Impact
Training
Customization and Integration

14. Hillerich & Bradsby
About Hillerich & Bradsby

15. Additional ERP Resources
SSA Global Technologies –
SAP –
Oracle/PeopleSoft –
IBM -
Microsoft (Great Plains) –
Also, American Software, i2, Manugistics

16. Additional ERP Resources

17. Additional ERP Resources