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Presented By:
Gurwinder Kaur
3804
Enterprise Resource
Planning (ERP) Systems
What is ERP?
• The practice of consolidating an
enterprise’s planning, manufacturing, sales
and marketing efforts into one management
system.
• Combines all databases across
departments into a single database that can
be accessed by all employees.
Evolution of ERP
 1960s: software packages with inventory control
 1970s: MRP systems
 Production schedule with materials management
 1980s: MRPII systems
 Adds financial accounting system
 1990s: MRPII
 Integrated systems for manufacturing execution
 Late 1990s: ERP
 Integrated manufacturing with supply chain
Major Reasons for Adopting ERP
• Integrate financial information
• Integrate customer order information
• Standardize and speed up operations
processes
• Reduce inventory
• Standardize Human Resources information
How do ERP System Work
5
Employees
Managers and
Stakeholders
Central
Database
Reporting
Applications
Human
Resource
Management
Applications
Financial
Applications
Manufacturing
Applications
Inventory
And Supply
Applications
Human
Resource
Management
Applications
Service
Applications
Sales and
Delivery
Applications
Sales Force
And Customer
Service Reps
Customers Back-office
Administrators
And Workers
Suppliers
Components of ERP System
 Finance: modules for book keeping and making
sure the bills are paid on time. Examples:
General ledger
Accounts receivable
Accounts payable
 HR: software for handling personnel-related tasks
for corporate managers and individual employees.
Examples:
HR administration
Payroll
Self-service HR
Erp ppt
8
Customers
Customer
Demographic
Files
Sales Dept.
Vendor
Orders
Parts
Accounting
Accounting
Files
Purchasing
Purchasing
Files
Order is placed
with Vendor
Invoices
accounting
Inventory
Files
Warehouse
Checks for Parts
Calls back “Not in stock”
“We ordered the parts”
“We Need parts #XX”
“We ordered the parts”
Sends report
Sends report
Sends report
Ships parts
9
An ERP Example: After ERP
Database
Customers Sales Dept.
Purchasing
Warehouse
Accounting
Vendor
Inventory Data
If no parts,
order is placed
through DB
Orders
Parts
Order is submitted
to Purchasing.
Purchasing record
order in DB
Order is placed
with Vendor
And invoices accounting
Financial Data exchange;
Books invoice against PO
Books inventory
against PO
Ships parts
Potential Benefits of ERP
 Internal Benefits
 Integration of a single source of
data
 Common data definition
 A real-time system
 Increased productivity
 Reduced operating costs
 Improved internal communication
 Foundation for future improvement
Potential Benefits of ERP
External Benefits
• Improved customer service and order
fulfillment
• Improved communication with suppliers and
customers
• Enhanced competitive position
• Increased sales and profits
Benefits of ERP
Direct benefits include:
1. improved efficiency
2. information integration for better
decision making
3. Faster response time to customer
queries
Benefits of ERP
Indirect benefits include:
1. Better corporate image
2. Improved customer goodwill
3. Customer satisfaction
Potential Benefits are
1. Reduction of Lead-Time
2. On-Time Shipment
3. Reduction in cycle time
4. Better customer satisfaction
Others are
1. Improved supplier performance
2. Increased Flexibility
3. Reduction in quality costs
4. Improved resource utility
5. Improved information accuracy and decision-
making ability
Risks with ERP Implementation
 Expensive (can costs 100 thousands to
millions of dollars)
 Time-consuming (can take months to years)
 Great risk for the organization
 Transfer of Knowledge
 Acceptance with the company
Before ERP & After ERP
 Stand alone System.
 Lack of coordination
among business
function(Manufacturing &
sales)
 Non Integrated data: Data
have different meanings.
 System are maintained on
a procedural basis
 Redundant data and
inconsistent information.
 Difficult to manage.
 Integrated System.
 Support coordination
among business functions.
 Integrated Data: Data have
the same meaning across
multiple functions.
 Changes affect multiple
functions or Systems
 Common interfaces across
systems.
Modules of ERP
 Finance
 Material
 Sales
 Marketing
 Personnel
Popular ERP Modules
ERP
Finance
Sale
Planning
Inventory
Operation
HR
ERP Finance Module
In This Data is collected From
various functional departments
and generate financial reports
ledger, Trail Balance, Balance
Sheets etc.
ERP HR(Human Resource) Module
 HR Module routinely maintain a complete
employee database including contact information,
Salary details Attendance, Promotions of all
employees.
 Produce pay check Reports
 Maintain personnel Record
 Training
 Time and Attendance Benefits
ERP Purchasing Module
Purchasing module is tightly
integrated with the inventory
control and production planning
Modules.
ERP Inventory Module
 Inventory Module facilitates processes
of maintaining the appropriate level of
stock in a warehouse.
BPR
ERP Implementation Approaches
 The big bang – install a single ERP system across
the entire organization
 Franchising – Independent ERP systems are
installed in different units linked by common
processes, e.g., bookkeeping.
 Slam dunk – install one or several ERP modules
for phased implementation of key business
processes
Major Phases of ERP Implementation
 Initiation – develop business case, project scope,
and implementation strategy
 Planning – establish implementation team,
determine goals and objectives, establish metrics
 Analysis and process design – analyze and
improve existing processes, map new processes to
be adopted by the system
Major Phases of ERP Implementation
 Realization – install a base system,
customization, and test the system
 Transition – replace the formal system with
the new system, data conversion
 Operation – monitor and improve system
performance, provide continued training and
technical support
Major Challenges to ERP Implementation
 Limitations of ERP technical capabilities
 Inconsistency with existing business processes
 Costs - implementation (hardware, software,
training, consulting) and maintenance
 Changes in employee responsibilities
Major Challenges to ERP Implementation
 Flexibility of software system upgrades
 Implementation timelines
 Availability of internal technical knowledge
and resources
 Education and training
 Implementation strategy and execution
 Resistance to change
New Developments In ERP
 Availability of web-based and wireless ERP
systems
 Adoption of easy-to-install ERP systems
 Linkage to other software systems, e.g., supply
chain management system, e-commerce, customer
relationship management system
Advantages of ERP
 Quicker completion of Processes
 Single system
 Modular software
 Database
 Easier to track various tasks
 Manage globally Data
Disadvantages of ERP
 Cost
 Time Consuming
 Training to employees
Erp ppt
Erp ppt

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Erp ppt

  • 1. Presented By: Gurwinder Kaur 3804 Enterprise Resource Planning (ERP) Systems
  • 2. What is ERP? • The practice of consolidating an enterprise’s planning, manufacturing, sales and marketing efforts into one management system. • Combines all databases across departments into a single database that can be accessed by all employees.
  • 3. Evolution of ERP  1960s: software packages with inventory control  1970s: MRP systems  Production schedule with materials management  1980s: MRPII systems  Adds financial accounting system  1990s: MRPII  Integrated systems for manufacturing execution  Late 1990s: ERP  Integrated manufacturing with supply chain
  • 4. Major Reasons for Adopting ERP • Integrate financial information • Integrate customer order information • Standardize and speed up operations processes • Reduce inventory • Standardize Human Resources information
  • 5. How do ERP System Work 5 Employees Managers and Stakeholders Central Database Reporting Applications Human Resource Management Applications Financial Applications Manufacturing Applications Inventory And Supply Applications Human Resource Management Applications Service Applications Sales and Delivery Applications Sales Force And Customer Service Reps Customers Back-office Administrators And Workers Suppliers
  • 6. Components of ERP System  Finance: modules for book keeping and making sure the bills are paid on time. Examples: General ledger Accounts receivable Accounts payable  HR: software for handling personnel-related tasks for corporate managers and individual employees. Examples: HR administration Payroll Self-service HR
  • 8. 8 Customers Customer Demographic Files Sales Dept. Vendor Orders Parts Accounting Accounting Files Purchasing Purchasing Files Order is placed with Vendor Invoices accounting Inventory Files Warehouse Checks for Parts Calls back “Not in stock” “We ordered the parts” “We Need parts #XX” “We ordered the parts” Sends report Sends report Sends report Ships parts
  • 9. 9 An ERP Example: After ERP Database Customers Sales Dept. Purchasing Warehouse Accounting Vendor Inventory Data If no parts, order is placed through DB Orders Parts Order is submitted to Purchasing. Purchasing record order in DB Order is placed with Vendor And invoices accounting Financial Data exchange; Books invoice against PO Books inventory against PO Ships parts
  • 10. Potential Benefits of ERP  Internal Benefits  Integration of a single source of data  Common data definition  A real-time system  Increased productivity  Reduced operating costs  Improved internal communication  Foundation for future improvement
  • 11. Potential Benefits of ERP External Benefits • Improved customer service and order fulfillment • Improved communication with suppliers and customers • Enhanced competitive position • Increased sales and profits
  • 12. Benefits of ERP Direct benefits include: 1. improved efficiency 2. information integration for better decision making 3. Faster response time to customer queries
  • 13. Benefits of ERP Indirect benefits include: 1. Better corporate image 2. Improved customer goodwill 3. Customer satisfaction
  • 14. Potential Benefits are 1. Reduction of Lead-Time 2. On-Time Shipment 3. Reduction in cycle time 4. Better customer satisfaction Others are 1. Improved supplier performance 2. Increased Flexibility 3. Reduction in quality costs 4. Improved resource utility 5. Improved information accuracy and decision- making ability
  • 15. Risks with ERP Implementation  Expensive (can costs 100 thousands to millions of dollars)  Time-consuming (can take months to years)  Great risk for the organization  Transfer of Knowledge  Acceptance with the company
  • 16. Before ERP & After ERP  Stand alone System.  Lack of coordination among business function(Manufacturing & sales)  Non Integrated data: Data have different meanings.  System are maintained on a procedural basis  Redundant data and inconsistent information.  Difficult to manage.  Integrated System.  Support coordination among business functions.  Integrated Data: Data have the same meaning across multiple functions.  Changes affect multiple functions or Systems  Common interfaces across systems.
  • 17. Modules of ERP  Finance  Material  Sales  Marketing  Personnel
  • 19. ERP Finance Module In This Data is collected From various functional departments and generate financial reports ledger, Trail Balance, Balance Sheets etc.
  • 20. ERP HR(Human Resource) Module  HR Module routinely maintain a complete employee database including contact information, Salary details Attendance, Promotions of all employees.  Produce pay check Reports  Maintain personnel Record  Training  Time and Attendance Benefits
  • 21. ERP Purchasing Module Purchasing module is tightly integrated with the inventory control and production planning Modules.
  • 22. ERP Inventory Module  Inventory Module facilitates processes of maintaining the appropriate level of stock in a warehouse.
  • 23. BPR
  • 24. ERP Implementation Approaches  The big bang – install a single ERP system across the entire organization  Franchising – Independent ERP systems are installed in different units linked by common processes, e.g., bookkeeping.  Slam dunk – install one or several ERP modules for phased implementation of key business processes
  • 25. Major Phases of ERP Implementation  Initiation – develop business case, project scope, and implementation strategy  Planning – establish implementation team, determine goals and objectives, establish metrics  Analysis and process design – analyze and improve existing processes, map new processes to be adopted by the system
  • 26. Major Phases of ERP Implementation  Realization – install a base system, customization, and test the system  Transition – replace the formal system with the new system, data conversion  Operation – monitor and improve system performance, provide continued training and technical support
  • 27. Major Challenges to ERP Implementation  Limitations of ERP technical capabilities  Inconsistency with existing business processes  Costs - implementation (hardware, software, training, consulting) and maintenance  Changes in employee responsibilities
  • 28. Major Challenges to ERP Implementation  Flexibility of software system upgrades  Implementation timelines  Availability of internal technical knowledge and resources  Education and training  Implementation strategy and execution  Resistance to change
  • 29. New Developments In ERP  Availability of web-based and wireless ERP systems  Adoption of easy-to-install ERP systems  Linkage to other software systems, e.g., supply chain management system, e-commerce, customer relationship management system
  • 30. Advantages of ERP  Quicker completion of Processes  Single system  Modular software  Database  Easier to track various tasks  Manage globally Data
  • 31. Disadvantages of ERP  Cost  Time Consuming  Training to employees