Erp

1. Enterprise Resource Enterprise Resource
PlanningPlanning

2. ConceptConcept
ERP is a set of tools and processes that integrates ERP is a set of tools and processes that integrates
department and functions across a company into department and functions across a company into
one computer system. one computer system.
ERP runs off a single database, enabling various ERP runs off a single database, enabling various
deptts to share information and communicate with deptts to share information and communicate with
each other. each other.
ERP system comprise function specific modules ERP system comprise function specific modules
designed to interact with other modules, e.g. designed to interact with other modules, e.g.
accounts receivable, accounts payable purchasing accounts receivable, accounts payable purchasing
etc.etc.
ERP is an enterprise reengg. solutions that uses new ERP is an enterprise reengg. solutions that uses new
business computing paradigms to integrate IT business computing paradigms to integrate IT
processes across co’s divisions and departments.processes across co’s divisions and departments.

3. Evolution of ERPEvolution of ERP
TimelineTimelineSystemSystem DescriptionDescription
1960s1960s Inventory Inventory
Mgmt & Mgmt &
controlcontrol
It’s a combination of infr. tech, and It’s a combination of infr. tech, and
bus processes of maintaining the bus processes of maintaining the
appropriate level of stock in a appropriate level of stock in a
warehouse.warehouse.
1970s1970s Material Req. Material Req.
PlanningPlanning
Utilizes s/w applications for Utilizes s/w applications for
scheduling production processes.scheduling production processes.
1980s1980s MRP IIMRP II Utilizes S/w applications for Utilizes S/w applications for
coordinating mfg processes.coordinating mfg processes.
1990s1990s Enterprise Enterprise
Resource Resource
PlanningPlanning
Uses multi module application s/w Uses multi module application s/w
foe improving the performance of foe improving the performance of
internal bus, processes. internal bus, processes.

4. What drives ERP ?What drives ERP ?
BusinessBusiness
Customer satisfactionCustomer satisfaction
Business developmentBusiness development
Face competitionFace competition
Efficient processesEfficient processes

5. Cross functional approach of Cross functional approach of
ERPERP
Customer/
Employee
Production
Planning
Integrated
Logistics
Accounting and
Finance
Sales,
Distribution,
order
Management
Human Resources

6. Components of ERPComponents of ERP
ERP system is consists of two types of ERP system is consists of two types of
components Core components and Extended components Core components and Extended
components.components.
CORE ERP COMPONENTSCORE ERP COMPONENTS :: CEC are the CEC are the
traditional components included in most ERP traditional components included in most ERP
systems and they primarily focus on internal systems and they primarily focus on internal
operationsoperations..
EXTENDED ERP COMPONENTSEXTENDED ERP COMPONENTS :: EEC are the EEC are the
extra components that meet the organizational extra components that meet the organizational
needs not covered by the core components and needs not covered by the core components and
primarily focus on external operations.primarily focus on external operations.

7. CORE & EXTENDED CORE & EXTENDED
COMPONENTS OF ERPCOMPONENTS OF ERP
Enterprise Resource
Planning S/W
Accounting &
FINANCE
Production & Materials
Management
Human Resource
Business
Intelligence
Customer Relationship
Management
Supply Chain
Management
E- Business
Core ERP Components
Extended ERP Components

8. Core ERP Components:-Core ERP Components:-
Accounting and Finance:Accounting and Finance: A/cng and A/cng and
Finance components manage a/cng data Finance components manage a/cng data
and manage financial processes within the and manage financial processes within the
enterprise with functions as accounts enterprise with functions as accounts
payable, accounts receivable, assets payable, accounts receivable, assets
management, credit management etc.management, credit management etc.
Production and material managementProduction and material management::
handles the various aspects of production handles the various aspects of production
planning and execution such as demand planning and execution such as demand
forecasting, product scheduling, quality forecasting, product scheduling, quality
control.control.

9. Example of Production planning process of Example of Production planning process of
Grupo Farmanova Intermed, in Costa Rica…Grupo Farmanova Intermed, in Costa Rica…
Sales Forecasting
Operations Planning
Detailed Scheduling
Materials requirement
planning
Production Purchasing

10. Human Resource Components:Human Resource Components: Tracks Tracks
employee’s information including payroll employee’s information including payroll
benefits, compensation, performance benefits, compensation, performance
assessment, and assume compliance with legal assessment, and assume compliance with legal
requirements of multiple jurisdictions and tax requirements of multiple jurisdictions and tax
authorities.authorities.
Extended ERP Components:-Extended ERP Components:-
Business Intelligence:Business Intelligence: ERP system offers ERP system offers
powerful tools to measure and control powerful tools to measure and control
organizational operations. BI describes the organizational operations. BI describes the
information people used to support their information people used to support their
decision making efforts.decision making efforts.

11. Customer Relationship Management Component: Customer Relationship Management Component:
involves managing all the aspects of customer’s involves managing all the aspects of customer’s
relation with an organization to increase relation with an organization to increase
customer loyalty and retention and customer loyalty and retention and
organization’s profitability.organization’s profitability.
Supply Chain Management ComponentsSupply Chain Management Components: involves : involves
the management of information flows b/w and the management of information flows b/w and
among stages in a supply chain to maximize total among stages in a supply chain to maximize total
supply chain effectiveness and profitability.supply chain effectiveness and profitability.
E-Business Components: E-Business Components: means conducting means conducting
business on the internet, not only buying and business on the internet, not only buying and
selling, but alsoselling, but also
serving customer and collabrating with businessserving customer and collabrating with business
partners. Two primary functions of E-Bus is E-partners. Two primary functions of E-Bus is E-
Procurement and E-Logistics.Procurement and E-Logistics.

12. Example of E-Business as ERP component of Example of E-Business as ERP component of
Orbis Corp. , Australia.Orbis Corp. , Australia.
Retailer
Supplier
(Sony)
Courier
AD Agency
Scanning
House
Digital ImageCatalog
User
Linear Process model Followed By Orbis Corp.

13. After Introducing E-bus,the Orbis Business After Introducing E-bus,the Orbis Business
model is likemodel is like
Product-bank.com
Hub
Printer
Sony
Nokia
Other
AD Agency 1 AD Agency 2
Other
Retailer 2
Retailer 1

14. Basic advantages of ERPBasic advantages of ERP
. The Direct advantages include improved. The Direct advantages include improved
Business Integration Business Integration
EfficiencyEfficiency
 Faster responseFaster response
FlexibilityFlexibility
Better analysis and planning capabilitiesBetter analysis and planning capabilities
Use of latest technologyUse of latest technology
The Indirect benefits includes better corporate The Indirect benefits includes better corporate
image, improved customer goodwill, customer image, improved customer goodwill, customer
satisfaction etc.satisfaction etc.

15. Some of the quantitative benefits are:Some of the quantitative benefits are:
Reduced Inventory and inventory carrying Reduced Inventory and inventory carrying
cost.cost.
Reduced manpower costs.Reduced manpower costs.
Improved sales and customer service.Improved sales and customer service.
Efficient financial management.Efficient financial management.
Some of the qualitative benefits are:Some of the qualitative benefits are:
AccountingAccounting
Product and process designProduct and process design
Production and material managementProduction and material management
Sales Sales
MIS FunctionMIS Function

16. Why ERP is Important Why ERP is Important
in a company?in a company?

17. ERP in A company resultsERP in A company results
ERP effects almost all the organizations- ERP effects almost all the organizations-
irrespective of their size and nation.irrespective of their size and nation.
Forces the competition to change their Forces the competition to change their
strategies.strategies.
Influence bus partners to become more Influence bus partners to become more
competitive.competitive.
Improves the Profits.Improves the Profits.
Fully utilize the true potential client-server Fully utilize the true potential client-server
computing to deliver an enterprise product.computing to deliver an enterprise product.
Changes the nature of information systems Changes the nature of information systems
functions.functions.

18. ERP BenefitsERP Benefits
Integrate Financial InformationIntegrate Financial Information
Integrate Customer Order InformationIntegrate Customer Order Information
Standardize & Speed up manufacturing Standardize & Speed up manufacturing
ProcessesProcesses
Reduce InventoryReduce Inventory
Standardize human resource informationStandardize human resource information

19. Benefits to Colgate PamoliveBenefits to Colgate Pamolive
Order acquisition & processing reduced Order acquisition & processing reduced
from 2 days to 4 hrsfrom 2 days to 4 hrs
On-time deliveries increased to 97.5% On-time deliveries increased to 97.5%
from 91.5%from 91.5%
Domestic inventories dropped by one Domestic inventories dropped by one
-third-third
 Receivables outstanding dropped to 22.4 Receivables outstanding dropped to 22.4
days from 31.4days from 31.4
Total delivery cost per case reduced by Total delivery cost per case reduced by
10%10%

20. Risks of ERPRisks of ERP

21. DataData
In 1999,Hershey missed In 1999,Hershey missed
customers( walmart) as 3 mths behind customers( walmart) as 3 mths behind
schedule, trying to fix glitches in order-schedule, trying to fix glitches in order-
processing, shipping functionsprocessing, shipping functions
Warehouses piled up with undelivered Warehouses piled up with undelivered
goodsgoods
III quarter sales dropped by 12.4%III quarter sales dropped by 12.4%
Earnings were off 18.6%Earnings were off 18.6%

22. Case study-Ambuja cementsCase study-Ambuja cements
Launched Connect India Plus, which has Launched Connect India Plus, which has
proved to be one of the most significant, proved to be one of the most significant,
large scale IT deployment. large scale IT deployment. Connecting Connecting
200 locations200 locations, training , training 2,5002,500 end-usersend-users, ,
and migrating data from and migrating data from 8 8 different different
legacy legacy systemssystems onto the ERP all in onto the ERP all in 14 14
months flatmonths flat
manufacturing plants are located in manufacturing plants are located in
remote areas where the scope of remote areas where the scope of
connectivity was minimal, the resources, connectivity was minimal, the resources,
namely hardware, software and people namely hardware, software and people
were located at plant siteswere located at plant sites

23. Reasons to implement

uniform, standard, and ubiquitous system uniform, standard, and ubiquitous system
across the organization(globally also)across the organization(globally also)
reduction in cost of operations and reduction in cost of operations and
maintenance of the IT systemmaintenance of the IT system
respond quickly to changes in the business respond quickly to changes in the business
environmentenvironment..

24. Challenges facedChallenges faced
TechTech-multiple plants, each with their own -multiple plants, each with their own
computer systems and processes, there computer systems and processes, there
was a need to create a single business was a need to create a single business
blueprint across the organization.blueprint across the organization.
PeoplePeople-integrate individuals with diverse -integrate individuals with diverse
background to be able to work as a focused background to be able to work as a focused
team.team.
ProcessesProcesses- Infrastructure refreshes, Data - Infrastructure refreshes, Data
migrationmigration

25. After the successful After the successful
implementationimplementation
improve operational efficiency in terms of improve operational efficiency in terms of
cycle-time monitoring cycle-time monitoring
 fleet managementfleet management
The information is dispatched to The information is dispatched to
customers via SMScustomers via SMS

26. ConclusionConclusion
It is the right combination of technology, It is the right combination of technology,
architecture, functionality, active customer architecture, functionality, active customer
support that provides max payback support that provides max payback
potentialpotential
For successful implementation it is imp to For successful implementation it is imp to
anticipate, handle & mitigate risksanticipate, handle & mitigate risks
Introduce new business processes, Introduce new business processes,
eliminate redundant practiceseliminate redundant practices