BATCH :2021-24

SUBJECT : 21503V1- ELECTIVE – II: ERP AND SAP

SEMESTER : FIFTH SEMESTER
Elective – II: ERP AND SAP
Objective: To introduce ERP concepts and SAP solutions to students for business operations.

Introduction to ERP – Conceptual model of ERP – Evolution of ERP – Structure of ERP – Reasons for Growth –
Advantages of ERP – Enterprise: An overview. ERP and Related Technologies: Business Process Re-engineering –
Management Information System – Decision Support System – Executive Information system – Data warehousing –
Data Mining – OLAP – Supply Chain Management.

UNIT II - ERP in Business Teaching hours - 13

ERP – Manufacturing Perspective – Materials Requirement Planning – Distribution Requirements Planning –

JIT – CAD/CAM – Product Data Management – ERP Modules: Plant Maintenance – Quality Management – Materials
Management - Benefits of ERP.

UNIT III - Hardware and Software’s of ERP and SAP Teaching hours - 13

An introduction to Operating Systems - An introduction to Database Systems – Overview of computer

Networks Protocol and IP Address concepts – An introduction to Kernel Software – Overview of Software
Development. Introduction to SAP – Evolution and Strategy – SAP Product Evolution.

UNIT IV - A gateway to SAP Teaching hours - 13

A Gateway to SAP – SAP Easy Access – The Architecture of SAP R/3 – Presentation Interface – Application inte
rface – Database interface. SAP User Interface Starting and Shutting the SAP System – Handling Tasks in SAP Reports
– Background Processing: SAP System Administration Utilities – SAP R/3 Basis System.

UNIT V - ABAP Programming Language Teaching hours – 13

Modules of SAP components – Roles in SAP application – Basic introduction to ABAP – Data Type and Tables i
n ABAP – The ABAP Programming Language – ABAP User Dialogs – Running ABAP Programs.
UNIT I:

Objectives

 At the end of the semester you will be able to

 List the functions of an enterprise and some corresponding business processes.
 Discuss the types of information systems (IS) used in an organization.
 Explain the interrelationships between the various information systems
 Elaborate on the contribution of IS to various business processes.
 Describe the integration of various enterprise functions and business processes.
 List some advantages of Enterprise Resource Planning Systems and discuss some challenges faced by
them.
 (Advanced Business Application Programming)

INTRODUCTION TO ERP :

What is a business process?

 A business process is a collection of linked tasks that find their end in the delivery of a service or
product to a client.
 A business process has also been defined as a set of activities and tasks that, once completed, will
accomplish an organizational goal.

Five Core Processes for Small Business

That means

accounting,

quality,

human resources (HR),

finance,

and product development.

ERP stands for Enterprise Resource Planning . ERP systems are the kind of software tools which are used
to manage the data of an enterprise. ERP system helps different organizations to deal with different
departments of an enterprise.

Different departments like receiving, inventory management, customer order management, production
planning, shipping, accounting, human resource management, and other business functions.

Basically, it is the practice of consolidating an enterprise’s planning, its manufacturing, its sales and
marketing efforts into one management system.

It combines all databases across different departments into a single database which can be easily accessible
to all employees of that enterprise.

It helps in automation of the tasks involved in performing a business process.

Before ERP:

Before an ERP system, there are different databases of different departments which they managed by their
own. The employees of one department does not know about anything about other department.

After ERP :
 After ERP system, databases of different departments are managed by one system called ERP
system. It keep tracks of all the database within system. In this scenario, employee of one department have
information regarding the other departments.
Vendors of ERP:
 Baan
 JD Edwards
 Oracle
 PeopleSoft
 SAP
Benefits of ERP:
1. This system helps in improving integration.
2. It is the flexible system.
3. There are fewer errors in this system.
4. This system improved speed and efficiency.
5. There is a complete access to information.
6. Lower total costs in complete supply chain.
7. This system helps in Shortening the throughput times.
8. There is sustained involvement and commitment of the top management.
9. Enhanced Decision-Making: ERP provides real-time access to critical business data, enabling decision-
makers to quickly identify and respond to issues, make informed decisions, and improve business
outcomes.
10. Improved Collaboration: ERP facilitates collaboration and communication between different
departments and stakeholders, enabling them to work together effectively towards common business
goals.
11. Standardization of Processes: ERP ensures that business processes are standardized across the
organization, reducing the risk of errors and inconsistencies and improving efficiency.
12. Effective Resource Management: ERP enables efficient management of resources such as personnel,
equipment, and inventory, ensuring optimal utilization and reducing wastage.
13. Scalability: ERP is highly scalable and can be customized to meet the evolving needs of the business,
ensuring that the system remains relevant and effective over the long term.
14. Regulatory Compliance: ERP systems can help businesses comply with regulatory requirements by
providing accurate and timely reporting, ensuring data privacy and security, and facilitating audits.

Limitations of ERP:
ERP system has 3 significant limitations:
1. Managers generate custom reports or queries only with the help from a programmer and this will create
a problem that they did not receive information quickly, which is essential for making a competitive
advantage.
2. There is no proper decision-making scenario i.e. this systems provide only the current status, such as
open orders. Whenever there is need to look for past status to find trends and patterns it become
difficult.that aid better decision-making.
3. No doubt that data is integrated within the system, but there is no integration of data with other
enterprise or division systems and it does not include external intelligence.
4. High implementation costs: Implementing an ERP system can be expensive and time-consuming. It
requires significant investment in hardware, software, and personnel, as well as training and consulting
costs.
5. Complex customization: Customizing an ERP system to meet the specific needs of an organization can
be complex and require specialized knowledge. This can lead to delays and additional costs.
6. Resistance to change: ERP systems often require significant changes to an organization’s processes
and workflows, which can be met with resistance from employees who are comfortable with existing
practices.
7. Data security risks: Centralizing sensitive business data in an ERP system creates potential security
risks, especially if the system is not properly secured or if there are vulnerabilities in the software.
8. Limited flexibility: ERP systems are designed to provide standardization and control, which can limit
the flexibility of an organization to respond to changing business needs and market conditions.
9. Dependence on vendor support: Organizations that use ERP systems are often heavily dependent on
the vendor for support, maintenance, and upgrades. This can create a risk of vendor lock-in and limit
an organization’s ability to switch to other systems or providers.

Evolution of ERP System

Enterprise Resource Planning (ERP) is made to automate any task. With ERP, it is easy to manage every
department under one single database. This consumes not much time and is easy and fast way to do work
with.
Example :
Any enterprise’s planning, manufacturing, sales and marketing efforts are put under one management system
and then it combines to one single database system.

Evolution of ERP System :

1. Material Requirement Planning (MRP) –
Developed in 1970s, Material Requirement Planning is widely used approach for production planning and
scheduling in industry. It is the approach embedded in many commercially available software applications.
The function of MRP is to provide material availability i.e, it is used to produce requirement quantities on
time. This process involves monitoring of stocks and demand, leading to automatic creation of procurement
proposals for purchasing or production. The main objective of MRP is to determine which material is
required, quantity required and by when it is required.

2. Manufacturing Resource Planning (MRP II) –

Developed in 1980s, Manufacturing Resource Planning is an expansion of closed loop MRP for managing an
entire manufacturing company. This system provides an information that is useful to all functional areas and
encourages cross-functional interactions.
It supports sales and marketing by providing and orders promising capability. It is a broad-based resource
co-ordination system involving other areas of a firm in planning processes, such as marketing, finance and
HR.
3. Enterprise Resource Planning (ERP) –
Developed in 1990s, Enterprise Resource Planning is foundation system for domestic and global operations,
supporting most or all functional areas in their daily operations. is one of more common categories of
business software, especially with large-scale businesses.
It is a business strategy and a set of industry-domain-specific applications that build customer and
shareholder communities value network system by enabling and optimizing enterprise and inter-enterprise
collaborative operational and financial processes. ERP at its core is an effective way of centralizing
information and workflow processes through data management. Because ERP keeps all of your workflow
data in one place.

4. Enterprise Resource Planning(ERP II) –

Developed in 2000s, ERP II is name now use to describe ERP. Basically, it is successor of ERP. It is
a business strategy and set of collaborative operational and financial processes internally and beyond
enterprise.
These new business models reflect an increased business focus on internal integration. It’s domain is
in all sectors and segments. Data in this is internally and externally published and subscribed. It
includes departmental modules, CRM, SCM and other stakeholders modules. It emphasis on
intangible assists.

Conceptual model of ERP

The below figure shows the conceptual model on which ERP theory is based. ERP defines the five
measures that govern business policies:
1. Process-based flat organization
2. Assemble-to-order or Make-to-order philosophy
3. Empowered employees
4. Customer and supplier integration
5. Sophisticated IT systems
 Fig: Conceptual ERP Model: pillars of ERP

These business policies lead to critical elements for the ERP system. The success of ERP depends
on the level of its adoption in the organization.
ERP can be defined in the following ways by keeping the above-mentioned concept in mind :
1. It is a planning methodology or philosophy that is based on the smooth integration of all the
business processes of an enterprise.
2. It is a set of software casing major business areas e.g. economics, plans, sales, materials,
manufacturing, distribution, all so tightly integrated with one another that any business activity
recorded at one place is immediately reflected in all other places.
3. It is the finest expression of the consistency of Info-tech and business. An enterprise-wide
system with enabling technology and effective managerial tool for integrating all the levels and
improving report ability.
The above definitions explain the fundamental design feature of ERP as a system-based business
solution. ERP integrates the various departments and functions throughout the organization. It
attempts to comprehend everything into a single system that can serve every department and
functional needs. While doing so, it focuses on the business plan areas and addresses those problems
with an integrated planning approach.
To understand how ERP is a system based business solution, we have to first critically examine
the two key words ‘System’ and ‘solution’.
System :
In the present context, we can say that ERP is a system for a specific set or arrangement of elements
that are organized to accomplish a pre-defined goal through the processing of information. This goal
invariably could be to support an existing business function, improve the transparency of data,
improve efficiency in business, improve decision-making, and provide improved customer
satisfaction. The key resource elements of such a system are hardware, software, users, databases,
etc.
Solution :
A business solution can be explained as a framework encompassing strategy, organization
structures, key performance indicators, measurements, and IT, which must be aligned to the business
processes. Conventionally, there are three kinds of business processes- acquiring and paying for
input resources, converting inputs into finished goods and services provided.
Thus ERP as a combination of system and business solution provides the user with a productive
planning tool.
STRUCTURE OF ERP :

The essence of ERP is the fundamental approach that takes an integrated view of the subject. The
established application systems, which the organization generally employs, treat each deal separately.
They are built around the strong boundaries of specific functions that a specific application is meant to
carter.
Features of the Structure of ERP :
Here, we will discuss the basic features of the Structure of ERP as following.
 ERP considers them to be part of the interlinked processes that make up total business and
financial impact. Almost all the typical application systems are nothing but data manipulation
tools.
 They store data, process them, and present them inappropriately whenever requested by the user.
 In this process, the only problem is that there is no link between the application system being used
by different departments.
 An ERP system also does the same thing but in a different manner. There are a hundred such data
tables that store data generated as a result of the diverse deal, but they are not confined to any
departmental or functional boundaries.
 These are rather integrated for speedy and precise results required by multiple users, for multiple
purposes, for multiple sites, and at multiple times.
ERP Advantages :
Here, we will discuss the advantages of ERP. Let’s have a look.
 Flexible –
In response to changing needs of an enterprise, it should be flexible. The client-server technology
 authorizes ERP to run across various database backend via open database connectivity.

 Modular –
The ERP system has to have modular implementation architecture. This means that many
performances are logically clubbed into the different business procedure and structured into a
module which can be interfaced or detached whenever need without influence the other modules. It
should support multiple hardware platforms for the companies having a heterogeneous collection
of systems. It must support some third-party add-ons also.

 Comprehensive –
It should be able to support a diversity of organizational functions and must be suitable for a wide
range of business organizations.

 Beyond the company –

It should not be confined to authoritative boundaries, rather, it should support the on-line
connectivity to other business entities of an organization. These features are the recent
development and such ERP solution is referred to as E-ERP.

 Belonging to the best business practices –

ERP system must be updated with the best practices and must have a collection of the best
business processes applicable worldwide
Use of above advantages :
To make use of above advantages ERP Architecture must be designed using advanced information
technologies and environments. Thus, ERP is typically executed through a client-server environment.
This technology divides the applications essentially into two or more components called servers and
clients. The client portion uses the function of the server. The server is centralized while clients tend
to be spread out in multiple locations.
Application :
Here, we will discuss some important applications of ERP.
 ERP plays an important role in inventory management to manage the inventory and is very cost-
saving.
 In Analytics, it provides enough information to visualize the overall structure for better analytics.
 In compliance and risk management, it helps you to manage and maintain risk and compliance at
every stage.

ENTERPRISE :An Overview of ERP and related technologies:

Business Process Re-engineering (BPR) is a management strategy aimed at improving organizational

performance by re-designing and optimizing business processes. BPR is a systematic and radical
approach to change, focused on transforming and streamlining core business processes to achieve
dramatic improvements in quality, efficiency, and customer satisfaction.
BPR involves a comprehensive analysis of existing business processes, identifying inefficiencies,
bottlenecks, and waste, and then developing new and improved processes that align with the
organization’s strategic objectives. The objective is to eliminate unnecessary steps, reduce cycle time,
and improve overall efficiency, while maximizing the value delivered to customers.
BPR requires a fundamental shift in the way an organization thinks about its business processes,
emphasizing a customer-centric approach to process design and management. It involves a
collaborative and cross-functional approach, involving stakeholders from across the organization to
ensure that process improvements are aligned with the organization’s strategic objectives.
The benefits of BPR can include reduced costs, increased productivity, improved quality, faster time-
to-market, and greater customer satisfaction. However, implementing BPR can also be a complex and
challenging process, requiring significant investment in resources, time, and expertise.
Overall, BPR is a powerful tool for organizations seeking to transform their business processes to
meet changing market demands and improve performance. It involves a commitment to continuous
improvement and a willingness to challenge existing assumptions and ways of doing things, with the
goal of achieving significant and sustainable improvements in business performance.
According to Dr. Michael Hammer,
“Business Process Re-engineering is the fundamental rethinking and radical design of
business processes to achieve dramatic improvements in critical, contemporary
measures of performance such as cost, quality, service and speed.”
Business process re-engineering is not just a change, but actually it is a dramatic change and
dramatic improvements. This is only achieved through overhaul the organization structures, job
descriptions, performance management, training and the most importantly, the use of IT i.e.
Information Technology.

Figure : Business Process Re-engineering

BPR projects have failed sometimes to meet high expectations. Many unsuccessful BPR attempts are
due to the confusion surrounding BPR and how it should be performed. It becomes the process of trial
and error. Phases of BPR : According to Peter F. Drucker, ” Re-engineering is new, and it has to be
done.” There are 7 different phases for BPR. All the projects for BPR begin with the most critical
requirement i.e. communication throughout the organization.
1. Begin organizational change.
2. Build the re-engineering organization.
3. Identify BPR opportunities.
4. Understand the existing process.
5. Reengineer the process
6. Blueprint the new business system.
7. Perform the transformation.
Objectives of BPR : Following are the objectives of the BPR :
1. To dramatically reduce cost.
2. To reduce time requirements.
3. To improve customer services dramatically.
4. To reinvent the basic rules of the business e.g. The airline industry.
5. Customer satisfaction.
6. Organizational learning.
Challenges faced by BPR process : All the BPR processes are not as successful as described. The
companies that have start the use of BPR projects face many of the following challenges :
1. Resistance
2. Tradition
3. Time requirements
4. Cost
5. Job losses

Advantages of BPR : Following are the advantages of BPR :

1. BPR offers tight integration among different modules.
2. It offers same views for the business i.e. same database, consistent reporting and analysis.
3. It offers process orientation facility i.e. streamline processes.
4. It offers rich functionality like templates and reference models.
5. It is flexible.
6. It is scalable.
7. It is expandable.
Disadvantages of BPR : Following are the Disadvantages of BPR :
1. It depends on various factors like size and availability of resources. So, it will not fit for every
business.
2. It is not capable of providing an immediate resolution.
3. While Business Process Re-engineering (BPR) can have many potential benefits, there are also
several disadvantages that organizations should consider before embarking on a BPR initiative.
Some of the key disadvantages of BPR include:
4. High costs: Implementing BPR can be a costly and time-consuming process, requiring significant
investment in resources, including technology, training, and consulting fees. This can be a
significant barrier for small or cash-strapped organizations.
5. Resistance to change: Implementing BPR can be a difficult and complex process that requires
significant changes to an organization’s culture, processes, and people. Employees may resist the
changes, especially if they feel their job security is at risk, leading to decreased morale and
increased turnover.
6. Risk of failure: BPR is a high-risk strategy that can fail if not implemented properly. The failure to
gain employee support, lack of a clear strategy, or poor planning can all lead to a BPR initiative’s
failure.
7. Disruption to operations: Implementing BPR can disrupt the day-to-day operations of the
organization, leading to decreased productivity, customer dissatisfaction, and revenue loss.
Focus on short-term goals: BPR initiatives may focus on short-term goals, such as reducing costs,
without considering the long-term impact on the organization’s overall strategy and goals.
In summary, BPR can be a powerful tool for organizations seeking to transform their business
processes and improve performance. However, the costs, resistance to change, risk of failure,
disruption to operations, and focus on short-term goals are all potential disadvantages that
organizations should carefully consider before embarking on a BPR initiative.

MANAGEMENT INFORMATION SYSTEM

A management information system (MIS) is an information system used for decision-making, and for the
coordination, control, analysis, and visualization of information in an organization. The study of the
management information systems involves people, processes and technology in an organizational context.

MIS IMPORTANCE.

1. Management Information System is always management oriented and keeps in view every level of
management and gets the desired information.

2. Integrated – refers to how different components (sub systems) are actually tied up together. eg: different
departments of organization linked together.

3. Useful for planning – as every organization makes log-term and short-term plans with the help of
information like sales & production, capital investments, stocks etc management can easily plan..

4. Effective Management Information System helps the management to know deviations of actual
performance from pre-set targets and control things.

5. It‘s important for increasing efficiency.

6. MIS provides updated results of various departments to management.

7. MIS is highly computerized so it provides accurate results.

8. MIS adds to the intelligence, alertness, awareness of managers by providing them information in the form
of progress and review reports of an ongoing activity.

9. Helps managers in decision- making.

Structure of MIS:

Structure of MIS may be understood by looking at the physical components of the information system in an
organization.

The physical components of an organizational information system may be hardware, software, database,
manual procedures and operating persons.

A brief description of these components has been outlined in the following paragraphs: 

Hardware Hardware refers to the physical data processing equipment and peripheral devices, For example,
CPU, monitor, keyboard, printer, drives, tapes, communication devices, etc. 

Software Software is a broad term given to the instructions or programs that direct the operating of the
hardware. Software could be of two types, i.e. system software and application software.

Database The database consists of all data utilized by application software.

Data is stored in files. 

Procedures Formal operating procedures, which are required to operate a system, such as manuals, are also
regarded as physical elements. 
Operating Personnel Personnel like Computer Operators, Computer Programmers, System Analysts,
System Managers, etc., are the operating people of the information systems. 

Input and Output Various physical inputs and outputs from the information system, existing in forms like
printout, reports etc.

Types of Information Systems:

1. TPS Transaction Processing System

2. MIS Management Information System
3. DSS Decision Support system
4. ESS Executive Support System
5. OAS Office Automation System

1. TPS are used primarily for structured operational, and to a lesser degree, management
control applications.
2. MIS are used for semi--structured, management control applications. It also overlaps into
the operational and strategic planning realms as well.
3. DSS are used primarily for unstructured decision-making whether that occurs at
the operational, management and strategic planning levels.
4. ESS is used primarily for structured management and strategic planning applications.

5. OAS are used as a facilitator of office correspondence and communication, underlies all
of this activity.

A typical organization is divided into operational, middle, and upper level. The information
requirements for users at each level differ. Towards that end, there are number of information
systems that support each level in an organization.

 Pyramid Diagram of Organizational levels and information requirements

 Transaction Processing System (TPS)
 Management Information System (MIS)
 Decision Support System (DSS)
 Artificial intelligence techniques in business
 Online Analytical Processing (OLAP)
 Pyramid Diagram of Organizational levels and information requirements Understanding
the various levels of an organization is essential to understand the information required by
the users who operate at their respective levels.

The following diagram illustrates the various levels of a typical organization.

Operational Management Level

The operational level is concerned with performing day to day business transactions of
the organization.

Examples of users at this level of management include cashiers at a point of sale, bank
tellers, nurses in a hospital, customer care staff, etc.

Users at this level use make structured decisions. This means that they have defined rules
that guides them while making decisions.

For example, if a store sells items on credit and they have a credit policy that has some
set limit on the borrowing. All the sales person needs to decide whether to give credit to a
customer or not is based on the current credit information from the system.

Tactical Management Level

This organization level is dominated by middle-level managers, heads of departments,

supervisors, etc. The users at this level usually oversee the activities of the users at the
operational management level.

Tactical users make semi-structured decisions. The decisions are partly based on set
guidelines and judgmental calls. As an example, a tactical manager can check the credit
limit and payments history of a customer and decide to make an exception to raise the
credit limit for a particular customer. The decision is partly structured in the sense that
the tactical manager has to use existing information to identify a payments history that
benefits the organization and an allowed increase percentage.

Strategic Management Level

This is the most senior level in an organization. The users at this level make unstructured
decisions. Senior level managers are concerned with the long-term planning of the
organization. They use information from tactical managers and external data to guide
them when making unstructured decisions.
Transaction Processing System (TPS)

Transaction processing systems are used to record day to day business transactions of the
organization. They are used by users at the operational management level. The main objective of
a transaction processing system is to answer routine questions such as;

 How printers were sold today?

 How much inventory do we have at hand?
 What is the outstanding due for John Doe?
By recording the day to day business transactions, TPS system provides answers to the above
questions in a timely manner.

 The decisions made by operational managers are routine and highly structured.
 The information produced from the transaction processing system is very detailed.
For example, banks that give out loans require that the company that a person works for should
have a memorandum of understanding (MoU) with the bank. If a person whose employer has a
MoU with the bank applies for a loan, all that the operational staff has to do is verify the
submitted documents. If they meet the requirements, then the loan application documents are
processed. If they do not meet the requirements, then the client is advised to see tactical
management staff to see the possibility of signing a MoU.

Examples of transaction processing systems include

 Point of Sale Systems – records daily sales

 Payroll systems – processing employees salary, loans management, etc.
 Stock Control systems – keeping track of inventory levels
 Airline booking systems – flights booking management

Management Information System (MIS)

Management Information Systems (MIS) are used by tactical managers to monitor the
organization's current performance status. The output from a transaction processing system is
used as input to a management information system.

The MIS system analyzes the input with routine algorithms i.e. aggregate, compare and
summarizes the results to produced reports that tactical managers use to monitor, control and
predict future performance.

For example, input from a point of sale system can be used to analyze trends of products that are
performing well and those that are not performing well. This information can be used to make
future inventory orders i.e. increasing orders for well-performing products and reduce the orders
of products that are not performing well.

Examples of management information systems include

 Sales management systems – they get input from the point of sale system
 Budgeting systems – gives an overview of how much money is spent within the
organization for the short and long terms.
 Human resource management system – overall welfare of the employees, staff
turnover, etc.
Tactical managers are responsible for the semi-structured decision. MIS systems provide the
information needed to make the structured decision and based on the experience of the tactical
managers, they make judgement calls i.e. predict how much of goods or inventory should be
ordered for the second quarter based on the sales of the first quarter.
Decision Support System (DSS)

Decision support systems are used by senior management to make non-routine decisions.
Decision support systems use input from internal systems (transaction processing systems and
management information systems) and external systems.

The main objective of decision support systems is to provide solutions to problems that are
unique and change frequently. Decision support systems answer questions such as;

 What would be the impact of employees' performance if we double the production lot
at the factory?
 What would happen to our sales if a new competitor entered the market?
Decision support systems use sophisticated mathematical models, and statistical techniques
(probability, predictive modeling, etc.) to provide solutions, and they are very interactive.

Examples of decision support systems include

 Financial planning systems – it enables managers to evaluate alternative ways of

achieving goals. The objective is to find the optimal way of achieving the goal. For
example, the net profit for a business is calculated using the formula Total Sales
less (Cost of Goods + Expenses). A financial planning system will enable senior
executives to ask what if questions and adjust the values for total sales, the cost of
goods, etc. to see the effect of the decision and on the net profit and find the most
optimal way.
 Bank loan management systems – it is used to verify the credit of the loan applicant
and predict the likelihood of the loan being recovered.

Online Analytical Processing (OLAP)

Online analytical processing (OLAP) is used to query and analyze multi-dimensional data and
produce information that can be viewed in different ways using multiple dimensions.
 Let's say a company sells laptops, desktops, and Mobile device. They have four (4)
branches A, B, C and D. OLAP can be used to view the total sales of each product in
all regions and compare the actual sales with the projected sales.

Each piece of information such as product, number of sales, sales value represents a
different dimension

The main objective of OLAP systems is to provide answers to ad hoc queries within
the shortest possible time regardless of the size of the datasets being used.

• Improving growth and development by increasing volume, expanding

geographically and being harmonized with suppliers and customers;
• Forms of mergers and alliances through various agreements in marketing etc.

DATA WAREHOUSING
The term "Data Warehouse" was first coined by Bill Inmon in 1990. According to Inmon, a data
warehouse is a subject oriented, integrated, time-variant, and non-volatile collection of data. This
data helps analysts to take informed decisions in an organization.
A data warehouses provides us generalized and consolidated data in multidimensional view.
Along with generalized and consolidated view of data, a data warehouses also provides us
Online Analytical Processing (OLAP) tools. These tools help us in interactive and effective
analysis of data in a multidimensional space. This analysis results in data generalization and data
mining.
Data mining functions such as association, clustering, classification, prediction can be integrated
with OLAP operations to enhance the interactive mining of knowledge at multiple level of
abstraction. That's why data warehouse has now become an important platform for data analysis
and online analytical processing.
Data Warehouse Features
The key features of a data warehouse are discussed below −
Subject Oriented − A data warehouse is subject oriented because it provides information
around a subject rather than the organization's ongoing operations. These subjects can be
product, customers, suppliers, sales, revenue, etc. A data warehouse does not focus on the
ongoing operations, rather it focuses on modelling and analysis of data for decision
making.
Integrated − A data warehouse is constructed by integrating data from heterogeneous
sources such as relational databases, flat files, etc. This integration enhances the effective
analysis of data.
Time Variant − The data collected in a data warehouse is identified with a particular
time period. The data in a data warehouse provides information from the historical point
of view.
 Non-volatile − Non-volatile means the previous data is not erased when new data is
added to it. A data warehouse is kept separate from the operational database and therefore
frequent changes in operational database is not reflected in the data warehouse.
Note − A data warehouse does not require transaction processing, recovery, and concurrency
controls, because it is physically stored and separate from the operational database.
Data Warehouse Applications
As discussed before, a data warehouse helps business executives to organize, analyze, and use
their data for decision making. A data warehouse serves as a sole part of a plan-execute-assess
"closed-loop" feedback system for the enterprise management. Data warehouses are widely used
in the following fields −

 Financial services
 Banking services
 Consumer goods
 Retail sectors
 Controlled manufacturing
Types of Data Warehouse
Information processing, analytical processing, and data mining are the three types of data
warehouse applications that are discussed below −
Information Processing − A data warehouse allows to process the data stored in it. The
data can be processed by means of querying, basic statistical analysis, reporting using
crosstabs, tables, charts, or graphs.
Analytical Processing − A data warehouse supports analytical processing of the
information stored in it. The data can be analyzed by means of basic OLAP operations,
including slice-and-dice, drill down, drill up, and pivoting.
Data Mining − Data mining supports knowledge discovery by finding hidden patterns
and associations, constructing analytical models, performing classification and prediction.
These mining results can be presented using the visualization tools.

Data mining
Data mining (sometimes called data or knowledge discovery) is the process of analyzing
data from different perspectives and summarizing it into useful information - information
that can be used to increase revenue, cuts costs, or both.
Data mining software is one of a number of analytical tools for analyzing data. It allows
users to analyze data from many different dimensions or angles, categorize it, and
summarize the relationships identified.
Technically, data mining is the process of finding correlations or patterns among dozens
of fields in large relational databases.
Data Mining is defined as extracting information from huge sets of data. In other words,
we can say that data mining is the procedure of mining knowledge from data.
The key properties of data mining are
Automatic discovery of patterns
Prediction of likely outcomes
Creation of actionable information
Focus on large datasets and databases

DATA MINING PROCESS:

The information or knowledge extracted so can be used for any of the following
applications –
• Market Analysis
• Fraud Detection
• Customer Retention
• Production Control
• Science Exploration

Data Mining Applications

Data mining is highly useful in the following domains –
• Market Analysis and Management
• Corporate Analysis & Risk Management
• Fraud Detection
Apart from these, data mining can also be used in the areas of production
control, customer retention, science exploration, sports, astrology, and Internet Web Surf-
Aid.
Market Analysis and Management .
Listed below are the various fields of market where data mining is used –
• Customer Profiling − Data mining helps determine what kind of people buy what kind
of products.
• Identifying Customer Requirements − Data mining helps in identifying the best
products for different customers. It uses prediction to find the factors that may attract new
customers.
 • Cross Market Analysis − Data mining performs association/correlations between
product sales.
• Target Marketing − Data mining helps to find clusters of model customers who share
the same characteristics such as interests, spending habits, income, etc. • Determining
Customer purchasing pattern − Data mining helps in determining customer purchasing
pattern.
• Providing Summary Information − Data mining provides us various multidimensional
summary reports.
Corporate Analysis and Risk Management
Data mining is used in the following fields of the Corporate Sector –
• Finance Planning and Asset Evaluation − It involves cash flow analysis and prediction,
contingent claim analysis to evaluate assets.
• Resource Planning − It involves summarizing and comparing the resources and
spending.
• Competition − It involves monitoring competitors and market directions.
Fraud Detection
Data mining is also used in the fields of credit card services and telecommunication to
detect frauds. In fraud telephone calls, it helps to find the destination of the call, duration
of the call, time of the day or week, etc. It also analyzes the patterns that deviate from
expected norms.

Online Analytical Processing Server (OLAP)

OLAP is based on the multidimensional data model. It allows managers, and analysts to get an
insight of the information through fast, consistent, and interactive access to information. This
chapter cover the types of OLAP, operations on OLAP, difference between OLAP, and statistical
databases and OLTP.
Types of OLAP Servers
We have four types of OLAP servers −

 Relational OLAP (ROLAP)

 Multidimensional OLAP (MOLAP)
 Hybrid OLAP (HOLAP)
 Specialized SQL Servers
Relational OLAP
ROLAP servers are placed between relational back-end server and client front-end tools. To
store and manage warehouse data, ROLAP uses relational or extended-relational DBMS.
ROLAP includes the following −

 Implementation of aggregation navigation logic.

 Optimization for each DBMS back end.
 Additional tools and services.
Multidimensional OLAP
MOLAP uses array-based multidimensional storage engines for multidimensional views of data.
With multidimensional data stores, the storage utilization may be low if the data set is sparse.
Therefore, many MOLAP server use two levels of data storage representation to handle dense
and sparse data sets.
Hybrid OLAP
Hybrid OLAP is a combination of both ROLAP and MOLAP. It offers higher scalability of
ROLAP and faster computation of MOLAP. HOLAP servers allows to store the large data
volumes of detailed information. The aggregations are stored separately in MOLAP store.
Specialized SQL Servers
Specialized SQL servers provide advanced query language and query processing support for
SQL queries over star and snowflake schemas in a read-only environment.
OLAP Operations
Since OLAP servers are based on multidimensional view of data, we will discuss OLAP
operations in multidimensional data.
Here is the list of OLAP operations −

 Roll-up
 Drill-down
 Slice and dice
 Pivot (rotate)

Supply Chain Management (SCM):

A supply chain is a global network used to deliver products and services from raw
materials to end customer through information flow, physical distribution and
cash.

Supply chain involved all the stages directly or indirectly in fulfilling a customer request which
includes manufacturers, suppliers, transporters, warehouses, retailers and customers. It is the
integration of demand and supply. Examples of supply chain activities include farming,
refining, design, manufacturing, packaging, and transportation.

A supply chain may be defined as an integrated process wherein a number of

various business entities like

 Suppliers
 Manufacturers / Producer
 Deal
REailers, Customer
 etc., Work together
in an effort to
 Acquire raw materials
 Convert these raw materials into specified final products, and
 Deliver these final products to retailers.

Customer is the integral part of supply chain. The main objective

of supply chain management is to monitor and relate production, distribution, and
shipment of products and services. This can be done by companies with a very
good and tight hold over internal inventories, production, distribution, internal
productions and sales.

Supply chain management basically merges the supply and demand management.
It uses different strategies and approaches to view the entire chain and work
efficiently at each and

every step involved in the chain. Every unit that participates in the
process must aim to minimize the costs and help the companies to
improve their long term performance, while also creating value for
its stakeholders and customers. This process can also minimize the
rates by eradicating the unnecessary expenses, movements and
handling.

DIFFERENT TYPES OF GENETIC SUPPLY CHAINS

Manufacturer Wholesaler Retailer Customer

Manufacturer Manufacture Manufacturer

r
 Manufacturer Customer

Fig 1 : Types of Genetic Supply Chains

OBJECTIVES OF SUPPLY CHAIN MANAGEMENT

 To maximize overall value generated

 To meet consumer demand for guaranteed delivery of
high quality and low cost with minimal lead time
 To fulfill customer demand through efficient resources
 To maximize efficiency of distribution side
 Helps in better decision

IMPORTANCE OF SUPPLY CHAIN MANAGEMENT

 Improves Customer Services

 Customers expect to receive the correct product
mix and quantity to be delivered on time
 Products need to be on hand in the right location
 Follow up support after a sale must be done quickly
 Reduce Operating Costs
 Decreases Purchasing Cost
 Decrease Production Cost
 Decrease Total Supply Chain Cost
 Improves Financial Position

FUNCTIONS OF SUPPLY CHAIN MANAGEMENT

 Customer Relationship Management: Consistent focus on

end customer demands to meet the increasing customer
requirements and ensures a high degree of flexibility.
  Flexibility and demand-oriented production: Continuous
cost reduction and resource optimization across all stages of the
value chain.
 Synchronization of supply and demand: Increasing the
adaptability and development capability of the supply chain.
ADVANTAGES OF SUPPLY CHAIN MANAGEMENT

 Develops better customer relationship and service.

 Creates better delivery mechanisms for products and
services in demand with minimum delay.
 Improvises productivity and business functions.
 Minimizes warehouse and transportation costs.
 Minimizes direct and indirect costs.
 Assists in achieving shipping of right products to the right place at the right
time.
 Enhances inventory management, supporting the
successful execution of just-in-time stock models.
 Assists companies in adapting to the challenges of
globalization, economic upheaval, expanding consumer
expectations, and related differences.
 Assists companies in minimizing waste, driving out costs,
and achieving efficiencies throughout the supply chain
process.
CHARACTERISTICS OF SUPPLY CHAIN MANAGEMENT

 Focuses more on the customer

 Sourcing of raw materials or finished goods from anywhere in the world
 Centralized global business
 Ability to manage information not only within a
company but across industries and enterprises.
 Responsibility of multiple flow in supply chain network both upward and
downward

HISTORY OF SUPPLY CHAIN MANAGEMENT

Creation era

The term "supply chain management" was first coined by Keith Oliver in 1982.
However, the concept of a supply chain in management was of great importance long before, in the
early 20th century, especially with the creation of the assembly line. The characteristics of this era of
supply-chain management include the need for large-scale changes, re-engineering, downsizing driven
by cost reduction programs, and widespread attention to Japanese management practices. However,
the term became widely adopted after the publication of the seminal book Introduction to Supply
Chain Management in 1999 by Robert B. Hand field and Ernest L. Nichols, Jr., which published over
25,000 copies and was translated into Japanese, Korean, Chinese, and Russian.

UNIT II
ERP-MANUFACTURING PERSPECTIVE
Material Requirement Planning
Material requirement planning is a system based approach, which organizes all
necessary production material. Material Requirements Planning, abbreviated as
MRP is a straightforward system to calculate arithmetically the requirements of
the input materials at different points of time based on actual production plan.
Theorists described MRP as a planning and scheduling system to meet time-
phased materials requirements for production operations. It is a set of techniques
that calculate the requirement of all items structured in bill of material. The
calculated requirements are based on the quantity and timing requirement of end
items listed in master production schedule. The item calculation requirement is
based on the master production schedule, the bill of material file and the item
master file (Toomey, 1996). The main intent of is to meet the delivery schedule of
finished products as specified in the master production schedule. MRP is a
material planning method that developed in the decade of1970 that utilized
computer technology.

Material requirement planning is an information system for production planning

based on inventory management. It is stated in management studies that
Information Technology has major role in designing and implementing Material
Requirements Planning systems and processes as it provides information about
manufacturing needs as well as information about inventory levels. MRP
techniques focus on optimizing inventory. MRP techniques are used to explode
bills of material, to calculate net material requirements and plan future
production. The main traits of MRP are the creation of material requirements via
exploding the bills of material, and time-phasing of requirements using posted
average lead times. MRP II was developed as the second generation of MRP
and it features the closed loop system: production planning drives the master
schedule which drives the material plan which is the input to the capacity plan.
Feedback loops provide input to the upper levels as a reiterative process.

The vital components of material planning include the following:

1. Material planning provides information that all the required raw material and
products are available for production.
2. Material planning guarantees that inventory level is maintained at its minimum
levels. But also ensures that material and product are available whenever
production is scheduled, therefore, helping in matching demand and supply.
3. Material planning provides information of production planning and scheduling
but also provides information around dispatch and stocking.
The major objectives of MRP: The goal of the Material Requirements Planning
document is to supply information that will facilitate the company to have enough
inventory on hand to fulfil demand, available only when needed at a quality level
that meets specification, (and at the lowest price. A good Material Requirements
Planning program can offer the fundamental needs of keeping inventory levels
low and fulfilling customer expectations for on time delivery.

Major objectives are as under:

1. Reduction in Inventory Cost: MRP offers accurate quantity of material at right

time to meet master production schedule to avoid the cost of excessive
inventory.
2. Meeting Delivery Schedule: By minimizing the delays in materials
procurement, production decision making, MRP assists evade delays in
production thereby meeting delivery schedules more consistently.
3. Improved Performance: By stream lining the production operations and
minimizing the unplanned interruptions, MRP focuses on having all
components available at right place in right quantity at right time.
Material Requirements Planning System

Architecture

Master Production Schedule: MPS is designed to fulfil the market demand that
include company orders and forecasted demand in future in the taken planning
horizon. MPS mainly represents the complete delivery schedule of the end
products. However, orders for replacement components can also be included in it
to make it more comprehensive.
Bill of Materials File: This symbolizes the product structure. It includes
information about all sub components needed, their quantity, and their sequence
of develop in the end product. Information about the work centres performing
build-up operations is also included in it (Toomey, 1996).

Inventory Status File: Inventory status file maintains recent record of each item
in the inventory. Information such as, item identification number, quantity on
hand, safety stock level, quantity already allocated and the procurement lead
time of each item is recorded in this file.

After getting input from these sources, MRP logic processes the available
information and gives information about the following:

Planned Orders Receipts: This is the order quantity of an item that is planned
to be ordered so that it is received at the beginning of the period under
consideration to meet the net requirements of that period. This order has not yet
been placed and will be placed in future.

Planned Order Release: This is the order quantity of an item that is planned to
be ordered in the planned time period for this order that will ensure that the item
is received when needed. Planned order release is determined by offsetting the
planned order receipt by procurement lead time of that item.

Order Rescheduling: This emphasizes the need of any expediting, de-

expediting, and cancellation of open orders etc. in case of unexpected situations.

Basic steps in Material requirement planning are as follows:

1. Identifying requirement.
2. Running MRP- creating the suggestion.
3. Firming the suggestion.

Material Requirements Planning solution consist of modules for inventory

management, product definition and costing, master scheduling and materials
requirement planning, capacity planning, work order management, purchase
order management, sales order management, shipping and receiving, and sales
analysis. Material requirements planning software can also include a full
accounting package, if desired.

Advantages of MRP: Material requirement planning is framework to give

valuable information for decision makers. Main benefits from any MRP system
are the capability of the inventory planner to use the information well. The
particular benefits of MRP include the following:
1. Increased customer service and satisfaction
2. Improved utilization of facilities and personnel
3. Better inventory planning and scheduling
4. Faster response to market changes and shifts
5. Reduced inventory levels without reduced customer service

Major issues of using procedure of Material requirements planning are that they
are not fully perfect. If there is some error in the system, then it is going to throw
off all the other numbers thus making the outputted data inaccurate. The issue
with MRP systems is the integrity of the data. If there are any errors in the
inventory data, the bill of materials, that are called 'BOM data, or the master
production schedule, then the outputted data will also be incorrect. Data integrity
is impacted by imprecise cycle count adjustments, mistakes in receiving input
and shipping output, scrap not reported, waste, damage, box count errors,
supplier container count errors, production reporting errors, and system issues.
Many of these types of errors can be minimized by implementing pull systems
and using bar code scanning. Most sellers of this type of system recommend at
least 99% data integrity for the system to give valuable results. Another problem
is that Material requirements planning systems do not necessarily factor in other
warehouses in other cities or states. Therefore, the system will explain that
company do not need to order anymore parts when in fact those parts are in
other factories. Other major factor is that the MRP system can not consider
manpower.

To summarize, material requirements planning is a computer-based inventory

management system designed to help production managers in scheduling and
placing orders for items of dependent demand. Material Requirements Planning
is software based production planning, which utilizes an inventory system to
systematize various manufacturing processes. Principally when a company is
going to produce products to sell, this software organizes all inventories, while
making sure that all the products and materials are in place in order for this to be
possible.

How MRP Works

A Material Requirements Planning (MRP) system accelerates the
manufacturing production process by determining what raw materials,
components and subassemblies are needed, and when to assemble the
finished goods, based on demand and bill of materials (BOM). It does this by
asking three main questions:
 What is needed?
 How much is needed?
 When is it needed by?
The answers to these questions provide clarity into what materials are
needed, how many and when to fulfill the required demand and help facilitate
an efficient and effective production schedule.

Why Is MRP important?

MRP gives businesses visibility into the inventory requirements needed to
meet demand, helping your business optimize inventory levels and production
schedules. Without this insight, companies have limited visibility and
responsiveness, which can lead to:

 Ordering too much inventory, which increases carrying costs and ties up more
cash in inventory overhead that could be used elsewhere.
 Inability to meet demand because of insufficient raw materials, resulting in lost
sales, canceled contracts and out-of-stocks.
 Disruptions in the production cycle, delaying sub-assembly builds that result in
increased production costs and decreased output.
Manufacturing companies rely heavily on MRP as the supply planning system
to plan and control inventory, scheduling and production, but MRP is also
relevant in many other industries, from retail to restaurants, to create balance
between supply and demand.

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 MRP Steps and Processes
The MRP process can be broken down into four major steps:

1. Identifying requirements to meet demand.

The first step of the MRP process is identifying customer demand and
the requirements needed to meet it, which starts with inputting customer
orders and sales forecasts.

Using the bill of materials required for production, MRP then

disassembles demand into the individual components and raw materials
needed to complete the build while accounting for any required sub-
assemblies.

2. Checking inventory and allocating resources.

Utilizing the MRP to check demand against inventory and allocating
resources accordingly, you can see both what items you have in stock
and where they are—this is especially important if you have inventory
across several locations. This also lets you see the status of items,
which gives visibility into items that are already allocated to another
build, as well as items not yet physically in the warehouse that are in
transit, or on order. The MRP then moves inventory into the proper
locations and prompts reorder recommendations.

3. Scheduling production.
Using the master production schedule, the system determines how
much time and labor are required to complete each step of each build
and when they need to happen so that the production can occur without
delay.
 The production schedule also identifies what machinery and
workstations are needed for each step and generates the appropriate
work orders, purchase orders and transfer orders. If the build requires
subassemblies, the system takes into account how much time each
subassembly takes and schedules them accordingly.

4. Identifying issues and making recommendations.

Finally, because the MRP links raw materials to work orders and
customer orders, it can automatically alert your team when items are
delayed and make recommendations for existing orders: automatically
moving production in or out, performing what-if analyses, and
generating exception plans to complete the required builds.

MRP steps include identifying requirements, checking inventory, scheduling production, and identifying
issues.

MRP Inputs
How well your MRP system works depends on the quality of the data you
provide it. For an MRP system to work efficiently, each input must be accurate
and updated. Here are some of the inputs an MRP depends on:
 Demand
Including sales forecasts and customer orders. When working with predicted
demand, a system that is integrated with an enterprise-wide ERP system
allows forecasting using historical sales vs. just sales forecasts.

 Bill of materials (BOM)

Keeping a single updated version of the bill of materials is essential for
accurate supply forecasting and planning. A system that’s integrated into the
enterprise-wide inventory management system avoids version control issues
and building against outdated bills, which results in reworks and increased
waste.

 Inventory
It’s essential to have a real-time view of inventory across the organization to
understand what items you have on hand and which are en route or have
purchase orders issued, where that inventory is and what the inventory’s
status is.

 Master production schedule

The master production schedule takes all build requirements and plans
machinery usage, labor and workstations to account for all outstanding work
orders to be completed.

MRP Outputs
Using the provided inputs, the MRP calculates what materials are needed,
how much is needed to complete the build and when in the build process they
are needed.

With this information defined, businesses can execute on just-in-time (JIT)

production, scheduling production based on material availability. This
minimizes inventory levels and carrying costs, as inventory is not stored in the
warehouse for future production but arrives as needed. By scheduling
materials to arrive and production to begin soon after, businesses can move
materials through the workflow process without delay.
The MRP lays out the plan of when materials should arrive, based on when
they’re needed in the production process, and when subassemblies should be
scheduled. Using a master production plan and taking into account
subassembly build times minimizes materials sitting on shelves and
bottlenecks in the build process.

Benefits of MRP
MRP systems allow you to plan and schedule production efficiently, making
sure materials move through the work order quickly and helping businesses
fulfill customer orders on time.

An MRP system that is integrated across an organization eliminates manual

processes, such as pulling historical sales and existing inventory. You spend
less time building Gantt charts and production flows to understand when and
where you need product available, which frees up time and removes a layer of
complexity.

When builds are complex and require multiple sub-assemblies within the work
order, it’s easy to miscalculate timing. An MRP helps you understand all of the
components that go into each sub-assembly and how long it takes to
complete each step, preventing delays in the production cycle and increasing
production yield.

MRP Challenges
Although using an MRP solution is a far better than using spreadsheets for
supply planning, it’s only as good as the data you put into it. The better a
business understands and documents its processes, the better an MRP
system can serve them.
You need to make sure you input correct inventory availability, time to
complete a subassembly, waste calculations and lead-times from vendors.
Otherwise, your production schedule will be inaccurate—an MRP can’t define
the production build timeline and materials required if the data isn’t accounted
for in the inventory record, bill of materials and master production schedule

MRP vs. ERP

MRP systems focus specifically on planning and controlling how goods are
assembled using multiple raw materials or components by controlling
inventory, componentry and the manufacturing process.

Enterprise resource planning (ERP) systems are an offshoot of MRP systems,

spurred by businesses finding a need for the same level of planning and
oversight for other operations such as payroll, finances and supplier
management. ERP systems plan for resources across the entire organization,
including: financial management, order management, customer relationship
management, people, procurement, warehousing and fulfillment.
 DISTRIBUTION REQUIREMENTS PLANNING:
Distribution requirements planning (DRP) is a systematic process to make the delivery of goods
more efficient by determining which goods, in what quantities, and at what location are required
to meet anticipated demand. The goal is to minimize shortages and reduce the costs of
ordering, transporting, and holding goods.

Advantages of Distribution
Requirements Planning (DRP)
The advantages of distribution requirements planning (DRP) pertain to the following:
 DRP always connects to the current inventory and forecasts of field demand to manufacturing’s MPS and
MRP. DRP allows for a fully integrated system and a continuous flow of information throughout the network.
This pushes for a much more efficient and adequate production process/flow that ultimately cut costs and
waste within a manufacturing operation.

 DRP is also accurately able to anticipate future requirements in the field. This enables for decreased inventory
and costs within an operation and ultimately increases the organization’s profit. Anticipation of future
 requirements is by far one of the most beneficial aspects pertaining to distribution requirements planning
(DRP).

 DRP matches material supply to demand, once again ultimately matching inventory to the customer service
requirements and cutting costs within an operation. DRP also pushes for faster decision making, utilization of
demand forecasting, planning initiation accuracy, and enhances overall customer service.

Utilizing DRP within a manufacturing operation is absolutely essential for manufacturing

facilities that are seeking to increase overall effectiveness, utilization, cut costs, and
increase profits

JUST IN TIME

The Just-In-Time technique based manufacturing system, developed and implemented in the Toyota
Motor Company may be defined as manufacturing only the necessary items in exact quantities and at
the required time

The purpose of JIT is to produce a unit, such a way that there is only one unit of work in process and
minimum stock of finished goods in inventories. Excess inventories invite troubles and bad causes. Those
goods, which are to be consumed only, are to be produced and replaced. Based on the above idea,
system has to be developed to produce one unit just in time to go into the next process in an ideal
situation. An ideal situation is near about impossible, and even Japanese firm has not attained such a
situation. They work aggressively to get as close as possible to stockless production.

JIT deliveries involve getting exactly the right amount ofitems at exactly the right place at just the right
time. The JIT philosophy basically aims to achieve Five zeros. db Zero inventory efo Zero defect cfc Zero
Material handling &b Zero Lead time 4b Zero Setup time The primary goal of JIT is to promote better
better, faster customer service while reducing inventory and labour costs. This is accomplished by
reducing the amount of Work-In-Process (WIP) on the shopfloor and shortening cycle times. There are
several policies and methods, companies use to achieve a successful JIT program. Some simplify bills
ofmaterials and part routing. Some have eliminated work orders. Setup times between jobs have been
minimized to further reduce cycle times. JIT also helps produce goods economically, quickly and safely.
The structure ofJIT is designed based on the factor that significant cost saving can be achieved by
producing the necessary quantities. This can emerge into a pull system wherein the subsequent station
waits for the preceding station to perform the operation to cater to the demand. This can be done
effectively by proper line balancing the operations in the manufacturing line.

Just in time (JIT) “Just-in-Time” means making “only what is needed, when it is needed, and in the
amount needed”. Supplying “what is needed, when it is needed, and in the amount needed” according
to this production plan can eliminate waste, inconsistencies, and unreasonable requirements, resulting
in improved productivity. A production strategy that strives to improve return on investment by
reducing inventory and associated costs To meet JIT objectives, the process relies on signals or (Kanban)
between different points, which are involved in the process, which tell production when to make the
next part. Kanban are usually “tickets” but can be simple visual signals, such as the presence or absence
of a part on a shelf. Implemented correctly, JIT focuses on continuous improvement and can improve a
manufacturing organization's return on investment, quality, and efficiency. To achieve continuous
improvement key areas of focus could be flow, employee involvement and quality. JIT relies on other
elements in the inventory chain as well. For instance, its effective application cannot be independent of
other key components of a lean manufacturing system or it can. “end up with the opposite of the
desired result.” In recent years manufacturers have continued to try to hone forecasting methods such
as applying a trailing 13-week average as a better predictor for JIT planning; however, some research
demonstrates that basing JIT on the presumption of stability is inherently flawed. Philosophy. The
philosophy of JIT is simple: the storage of unused inventory is a waste of resources. JIT inventory
systems expose hidden cost of keeping inventory, and are therefore not a simple solution for a company
to adopt it. The company must follow an array of new methods to manage the consequences of the
change. The ideas in this way of working come from many different disciplines including statistics,
industrial engineering, production management, and behavioral science. The JIT inventory philosophy
defines how inventory is viewed and how it relates to management. Inventory is seen as incurring costs,
or waste, instead of adding and storing value, contrary to traditional accounting. This does not mean to
say JIT is implemented without awareness that removing inventory exposes pre-existing manufacturing
issues. This way of working encourages businesses to eliminate inventory that does not compensate for
manufacturing process issues, and to constantly improve those Downloaded by Thamaraiselvi.M grdcs
SCIB (thamaraiselvi.m@grd.edu.in) lOMoARcPSD|5329935 processes to require less inventory.
Secondly, allowing any stock habituates management to stock keeping. Management may be tempted
to keep stock to hide production problems. These problems include backups at work centers, machine
reliability, process variability, and lack of flexibility of employees and equipment, and inadequate
capacity. In short, the Just-in-Time inventory system focus is having “the right material, at the right time,
at the right place, and in the exact amount”, without the safety net of inventory. The JIT system has
broad implications for implementers. Effects/Considerations 1. Transaction cost JIT helps in keeping
inventory to minimum in a firm. However, a firm may simply be outsourcing their input inventory to
suppliers, even if those suppliers don’t use JIT investigated this effect and found that suppliers in Japan
charged JIT customers, on average, a 5% price premium. 2. Environment JIT, multiple daily deliveries.
Increased scale has required a move to vans and lorries. Potential and actual problems with regard to
gridlock and burning of fossil fuels. This violates three JIT waste guidelines: Time—wasted in traffic
jams Inventory—specifically pipeline being transported Waste—fuel burned in deliveries 3. Price
More orders equals more deliveries more handling equals increased cost, which translates into price
increase. 4. Quality JIT implicitly assumes that input parts quality remains constant over time. If not,
firms may hoard high-quality inputs. As with price volatility, a solution is to work with selected suppliers
to help them improve their processes to reduce variation and costs. Longer-term price agreements can
then be negotiated and agreed-on quality standards made the responsibility of the supplier. Fixing up of
standards for volatility of quality according to the quality circle 5. Demand Highlights the importance of
relatively stable demand, which helps Downloaded by Thamaraiselvi.M grdcs SCIB
(thamaraiselvi.m@grd.edu.in) lOMoARcPSD|5329935 ensure efficient capital utilization rates. 6. Supply
stability Strikes and natural disasters can affect supply. Implementation Benefits 1. Reduced setup time.
Cutting setup time allows the company to reduce or eliminate inventory for “changeover” time. 2. The
flow of goods from warehouse to shelves improves. Small or individual piece lot sizes reduce lot delay
inventories, which simplifies inventory flow and its management. 3. Employees with multiple skills New
skills are acquired and are used more efficiently. Having employees trained to work on different parts of
the process allows companies to move workers where they are needed. 4. Production scheduling Work
synchronized with demand. If there is no demand for a product at the time, it is not made. This saves
the company money, either by not having to pay workers overtime or by having them focus on other
work or participate in training. 5. Increased emphasis on supplier relationships. A company without
inventory does not want a supply system problem that creates a part shortage. This makes supplier
relationships extremely important. 6. Supplies Supplies come in at regular intervals throughout the
production day and are synchronized with production demand and the optimal amount of inventory is
on hand at any time. When parts move directly from the truck to the point of assembly, the need for
storage facilities is reduced. 7. Minimizes storage Less stock needs less space. Downloaded by
Thamaraiselvi.M grdcs SCIB (thamaraiselvi.m@grd.edu.in) lOMoARcPSD|5329935 8. Stock age Reduced
chance of inventory being out of date (life or fashion), damaged, stolen Problems 1. Supply shocks The
JIT operation leaves suppliers and downstream consumers open to supply shocks and large supply or
demand changes. 2. Multiple deliveries Very low stock levels means shipments of the same part can
come in several times per day. Alternate suppliers. Suppliers will improve capability and documentation.
The Toyota effect Additional benefits 1. Improved customer satisfaction By providing deliveries within a
day or two of the minimum economic shipping delay. 2. Building to order Vehicles built to order,
eliminating the risk they would not be sold. This improved the company's return on equity. 3. Quality
improvement Since assemblers no longer had a choice of which part to use, every part had to fit
perfectly. This caused a quality assurance crisis, which led to a dramatic improvement in product quality.
Eventually, Toyota redesigned every part of its vehicles to widen tolerances, while simultaneously
implementing careful statistical controls for quality control. Toyota had to test and train parts suppliers
to assure quality and delivery. In some cases, the company eliminated multiple suppliers. When a
process or parts quality problem surfaced on the production line, the entire production line had to be
slowed or even stopped. No inventory meant a line could not operate from in-process inventory while a
production problem was fixed. Many people in Toyota predicted that the initiative would be abandoned
for this reason. In the first week, line stops occurred almost hourly. But by the end of the first month,
the rate had fallen to a few line stops per day. After six months, line stops had so little economic effect
that Toyota
INTRODUCTION – PRODUCT DATA MANAGEMENT

PDM is defined as “is the discipline of controlling the evolution of a product and
providing other procedures and tools with the accurate product information at the
right time in the right format during the entire PLC”.

Product data management (PDM) is the use of software to manage product

data and process-related information in a single, central system. This
information includes computer-aided design (CAD) data, models, parts
information, manufacturing instructions, requirements, notes and
documents.

Product data management (PDM) is a system for managing design data

and engineering processes in one central location. Engineering teams use
PDM software to organise product-related information, track revisions,
collaborate, manage change orders, generate Bills of Materials (BOMs)
and more.

What is difference between PLM and PDM?

While PDM systems begin and end with product design data, PLM software
is used to manage and track everything beyond the realm of design
software.

Why is PDM important?

Using a PDM system helps ensure that all stakeholders share a common
understanding about a product throughout its lifecycle. Ultimately, a PDM
system helps you speed up product development, reduce development
errors and costs, and use resources effectively.

What does PDM include? PDM typically encompasses multiple products'

technical specifications, engineering models, design drawings, bills of
materials (BOMs) and related documents.

PDM (Product Data Management) is not actually software; therefore it should be

called a system. This system handles the created information during the designing
process.

However, normally PLM focuses on the whole lifecycle of a product and PDM is a
storage location for all the information that is related to the product.

Because of this confusion of the terms the actual information concerning only the
PDM seems to be hard to find, or in fact hard to differentiate from PLM
information. [1] The history of PDM started in the early 1980s.

Because of the lack of computers, PDM was operated manually and designers
managed the drawings and data sheets by hand. After the escalating access to
computers and designing programs, PDM was linked to these designing systems
(CAx). The linked tools were user unfriendly, so their development continued and
in the middle of the 1990s PDM had a strong foothold in the field of engineering.

Everyone involved has to have access to the information and in this case the PDM
system can help: the system itself converts the files, for example, to pdf-format, so
that everybody can open them no matter what the native file format was.

One of the most important principles of the PDM system is that the information is
easy and swift to find. As mentioned earlier, all the created data should be put in to
the system, nothing should be based on a single engineer's knowledge. [3] As Stark
[4] wrote: “Users need support from data management systems so that they will not
discard potentially useful data”.
Product data management (PDM) or product lifecycle management (PLM) systems
provide the tools to control access to and manage all product definition data. It
does this by maintaining information (meta-data) about product information. PDM
or PLM systems, when tightly integrated with other product development tools, do
this transparently and with minimal additional effort on the part of the user. In
addition, PDM tools provide valuable functionality with process management
particularly as it relates to configuration management or engineering change
control. This environment is depicted below.

Product lifecycle management systems vary in their functionality, but some of their
common capabilities are described below.
Access Control
Access control to each element in the product definition data base can be specified.
Read only access can be given to personnel not directly involved with the design,
development and planning process. Creation and maintenance access can be given
to the individuals responsible for product and process design. As product data
management systems evolve towards collaborative product commerce (CPC)
systems which are used across multiple enterprises in a supply chain, access
control becomes more critical and requires control to limit access to specific
projects, products or parts for a specific supplier or customer.
Component / Material Classification
Components and materials can be classified and organized and attributes assigned.
This supports standardization by identifying similar components/materials,
eliminating redundancy, and establishing a preferred parts list. Establishing classes
and subclasses with attributes allows a designer to search and select a needed
material, component or assembly with minimal effort thereby avoiding having to
re-specifying an existing or similar component or material.
Product Structure
Since the relationship of a product’s parts is a logical one maintained by the
information system rather than a fixed physical relationship as represented on a
drawing, it is possible to readily maintain more than one relationship. This will
allow different views of part relationships in assemblies to correspond to the
various departmental needs (e.g., engineering and manufacturing product
structures), while maintaining rigor and consistency of the product’s definition
through this single data base. Thus, this one logical data base can support product
and process design requirements as well as maintain part relationships to serve as a
manufacturing bill of materials for MRP II/ERP. In other words, PDM provides the
ability to hold not just the physical relationships between parts in an assembly but
also other kinds of structures; for instance, manufacturing, financial, maintenance
or document relationships. So, it is possible for specialist team members to see the
product structured from their point of view. Product data can be accessed via this
complete Bill of Materials. This access includes assemblies, parts and related
documents.
An integrated approach to developing, organizing and maintaining part and product
definition data facilitates the design process, makes design data more readily
usable and enhances integration with process requirements.
Engineering Changes
Engineering changes can be facilitated with this configuration management and
administrative control embedded within the system. CAE/ CAD tools will enable
engineering changes to be more thoroughly developed and analyzed to better
define change impact. Once a design has been created, it can be checked-out
electronically to a workstation for engineering changes. When the changes have
been made, it can be returned to the central database and placed in a queue or an
email notification sent for approval by designated parties. In this manner, a Change
Control Board (CCB) can even “convene” and provide individual member’s input
electronically. In addition to supporting engineering analysis, information related
to procurement, inventory, manufacturing and cost is available for members of the
CCB to evaluate, designate the effectivity of the change and determine the
disposition of existing items.
Process Management and Workflow
PDM or PLM systems support process management by defining process steps
related to the development, distribution and use of product data. The process is
defined in the form of specified process steps and release or promotion levels that
the data must achieve. The manner in which the process is defined varies with

every PDM system.

The PDM system must have the flexibility to establish the process approach that an
organization uses for development, release, and change of engineering,
manufacturing, and other related data. It must allow appropriate rules to be
established to control the process. For example, the company could instruct the
system to prevent an engineer from signing off an assembly for release until all its
parts have been individually released.
Collaboration
Collaboration can be supported in several ways. First, a PDM system may be the
gateway that a team uses to access the information under discussion avoiding the
need to copy and distribute a series of paper documents. Second, the PDM system
may provide a synchronous or asynchronous collaboration environment for team
members to access, present, review and product feedback on product and process
information.
Benefits
A PDM or PLM system provides benefits in a number of areas:
Time-to-Market: Data is instantly available to all with access. There is no waiting
for paper documents to be distributed nor time wasted while documents sit in an
in-basket waiting for review. Time spent searching for component and product data
is reduced. Collaboration features also speed and improve the process.
Improved Productivity: Studies have shown that engineers spend 25% to 35% of
their time searching for, retrieving, handling, filing, and storing documents and
information. This time can be reduced with a PDM system and its single
repository, its classification and information structuring capabilities. The
classification and search capabilities aid design retrieval, provide the opportunity
to avoid “reinventing the wheel”, and, as a result, reduce the related development
effort.
Improved Control: Because PDM better manages configurations and assures that
everyone is working from the most current data, it avoids problems of working
with old data. Access control features assure that only authorized parties can access
or change proprietary information. Control over engineering changes is improved
with less manual effort.
ERP MODULES

Enterprise resource planning (ERP) systems have become a critical tool for
businesses over the past several decades. An ERP solution automates
critical business processes and serves as a shared database for all
financial and operational information from across the company. It pulls this
data from a number of modules built to help various departments, from
accounting to supply chain to human resources, perform their individual
functions.

An ERP solution gives all employees access to the information they need
to answer important questions about their department’s current
performance and future planning, as well as target areas for improvement.
This single source of information minimizes data accuracy and consistency
issues and ensures everyone is looking at the same numbers, no matter
their role. It also drives better decision-making that leads to more efficient
processes and cost savings. Additionally, ERP can automate many tasks,
reducing errors and freeing up employees to focus on more strategic work.

Common ERP modules support back- and front-office functions like finance
and accounting, procurement, manufacturing, inventory management,
order management, warehouse management, supply chain
management, customer relationship management (CRM) procurement and
workforce management. More functionally rich solutions may also include
professional services automation (service resource management), human
resources management, ecommerce and marketing automation.

What Are ERP System Modules?

Each ERP module is designed for specific business functions, providing the
data and supporting the processes that will help those employees do their
jobs. Every module plugs into the ERP system, so the system provides a
single source of accurate data, even as the business adds new modules. If
the ERP system is the toolbox, the modules are the screwdriver, wrench,
hammer and other tools in the box that each have specific uses.

ERP Modules and Their Features

. Finance
The finance and accounting module is the most important ERP module
because it allows businesses to understand their current financial state and
future outlook. Key features of this module include tracking accounts
payable (AP) and accounts receivable (AR) and managing the general
ledger. It also creates and stores crucial financial documents like balance
sheets, payment receipts and tax statements.
The financial management module can automate tasks related to billing,
vendor payments, cash management and account reconciliation, helping
the accounting department close the books in a timely manner and comply
with current revenue recognition standards. It also has the data
that financial planning and analysis employees need to prepare key
reports, including profit and loss (P&L) statements and board reports, and
run scenario plans.

2. Procurement
The procurement module, also known as the purchasing module, helps an
organization secure the materials or products it needs to manufacture
and/or sell goods. Companies can keep a list of approved vendors in this
module and tie those suppliers to certain items, helping with supplier
relationship management. The module can automate requests for a quote,
then track and analyze the quotes that come in.

Once a company accepts a quote, the procurement module helps the

purchasing department prepare and send out purchase orders. It can then
track that purchase order as the seller turns it into a sales order and ships
the goods, automatically updating inventory levels once the order arrives.

3. Manufacturing
The earliest version of ERP, material requirements planning (MRP)
systems, were designed for manufacturers, and manufacturing remains a
key piece of ERP. Today, ERP systems typically have a production
management or manufacturing execution system (MES). The
manufacturing module helps manufacturers plan production and make sure
they have everything they need for planned production runs, like raw
materials and machinery capacity. During the manufacturing process, it can
update the status of goods-in-progress and help companies track actual
output against forecasted production. It also provides a real-time picture of
the shop floor, capturing information on items in progress and finished
goods. It can calculate the average time to produce an item and then
compare supply with forecasted demand to plan adequate production.
4. Inventory Management
The inventory management module enables inventory control by tracking
item quantities and location down to individual SKUs. This module offers a
complete picture of not only current but also incoming inventory, through an
integration with the procurement tool. This piece of software helps
businesses manage inventory costs, making sure they have sufficient stock
without tying up too much cash in inventory. An inventory management
application can weigh sales trends against available product to helps
companies make informed decisions that boost margins and increase
inventory turn (a measure of how often inventory is sold over a certain
period). It can help prevent stockouts and delays, which enhances
customer service.

Businesses that lack other supply chain management modules may also
use the inventory management application to handle purchase orders,
sales orders and shipping. Larger organizations will need a version of this
solution that can track inventory across multiple locations.

5. Order Management
An order management module tracks orders from receipt to delivery. This
piece of the ERP feeds all orders to the warehouse, distribution center or
retail store after customers place them and tracks their status as they’re
prepared, fulfilled and shipped to the customer. The order management
module prevents orders from being lost and boosts on-time delivery rates
to keep customers happy and cut unnecessary expenses for expedited
shipping.

More advanced order management applications can help a company

determine the most cost-effective option for fulfilling an order—a store vs. a
warehouse vs. a third-party fulfillment partner, for example—based on
available inventory and the buyer’s location.

6. Warehouse Management
A warehouse management module can deliver a rapid return on investment
for businesses that operate their own warehouses. This application can
efficiently guide warehouse employees through all warehouse processes
based on the layout of the facility, from putaway when shipments arrive to
picking to packing and shipping. It can also help companies plan labor
based on expected order volume. The warehouse management module
can support different picking strategies like batch picking, wave picking and
zone picking depending on which is most efficient for a given business, and
some modules can show employees the most efficient pick path.

When the warehouse management module is integrated with inventory

management and order management applications, employees can quickly
find the right products and get shipments out the door quickly. Faster
delivery ultimately increases customer satisfaction.

7. Supply Chain Management

A supply chain management module tracks each step in the movement of
supplies and goods throughout the supply chain, from sub-suppliers to
suppliers to manufacturers to distributors to retailers or consumers. It can
also manage any materials or products returned for refund or replacement.

As noted earlier, supply chain management can include a wide array of

modules like procurement, inventory management, manufacturing, order
management and warehouse management. However, it may have
functionality beyond the core capabilities of those modules.

8. Customer Relationship Management (CRM)

The customer relationship management (CRM) module stores all customer
and prospect information. That includes the company’s communication
history with a person—the date and time of calls and emails, for example—
and their purchase history. A CRM improves customer service because
staffers can easily access all the information they need when working with
a customer.

Many businesses also use CRM to manage sales leads and opportunities.
It can track communication with prospects and suggest which customers
should be targeted for certain promotions or cross-sell opportunities. More
robust CRM modules may support customer segmentation (enabling more
targeted marketing) and advanced contact managers and reporting tools.
9. Professional Services Automation (Service Resource Management)
A professional services automation (PSA) module, also called a service
resource management module, allows an organization to plan and manage
projects. Services-based businesses often use this module. The application
tracks the status of projects, managing human and capital resources
throughout, and allows managers to approve expenses and timesheets. It
facilitates collaboration between teams by keeping all related documents in
a shared place. Additionally, the PSA module can automatically prepare
and send bills to clients based on rules around the billing cycle.

10. Workforce Management

A workforce management module is similar to a human resource
management module but is designed for companies with more hourly than
salaried employees. It can monitor workers’ attendance and hours and
measure things like employee productivity and absenteeism.

Payroll could also fall under the workforce management module. A payroll
sub-module automatically distributes paychecks to employees on a set
schedule with the appropriate taxes deducted and handles expense
reimbursement. It can also provide reports on payroll expenses, total
overtime hours and similar KPIs.

11. Human Resources Management

A human resource management (HRM) or human capital management
(HCM) module usually encompasses all the features of a workforce
management application and offers additional capabilities. HRM could be
viewed as CRM for employees. This popular module has detailed records
on all employees and stores documents like performance reviews, job
descriptions and offer letters. It tracks not only hours worked but also paid
time off (PTO)/sick days and benefits information.

Since the HRM module stores a vast amount of information on every

employee across the organization, it eliminates a lot of duplicate or
inaccurate data that many organizations store in various spreadsheets.
12. Ecommerce
Certain ERP vendors offer an ecommerce module for businesses that want
to sell online. This module allows companies to quickly launch a business-
to-business (B2B) or business-to-consumer (B2C) ecommerce website.
Leading commerce applications include user-friendly tools that allow
employees to easily add new items, update product content (item
descriptions, titles, specs, images, etc.) and change the look and feel of the
website.

When the ecommerce application is integrated with other ERP applications,

all payment, order and inventory information feeds from the ecommerce
module into the shared database. That ensures all transactions are added
to the ledger, out-of-stock items are removed from the site and orders ship
on time.

13. Marketing Automation

Like with ecommerce, certain software providers have developed
a marketing automation module. A marketing module manages marketing
campaigns across digital channels like email, web, social media and SMS.
It can automate email sends based on campaign rules and has advanced
customer segmentation features, so customers only receive relevant
messages.

Marketing automation software, whether part of the ERP system or a

separate solution, can provide detailed reports on the performance of
campaigns to shape future marketing plans and spend. These applications
increase leads, customer loyalty and, over time, sales.

Plan maintenance in ERP

ERP for Plant Maintenance is a process that involves regular inspections,

checks and servicing of equipment and machinery to ensure the plant is in
optimum working condition with no breakdown. It also involves repairing or
replacing necessary parts, equipment and machinery.
 SAP Plant Maintenance (SAP PM) is a software product that manages all
maintenance activities in an organization. Plant Maintenance module
consists of key activities to include inspection, notifications, corrective and
preventive maintenance, repairs, and other measures to maintain an ideal
technical system.

Below we have discussed various types of plant maintenance:

 Preventive Maintenance. Preventive maintenance is one of the most
important proactive & plant maintenance types. ...
 Predictive Maintenance. ...
 Condition Monitoring Maintenance. ...
 Corrective Maintenance. ...
 Emergency Maintenance.

1.
Preventive Maintenance

Preventive maintenance is one of the most important proactive & plant

maintenance types. Preventive maintenance can be applied end two ways
first is usage-based and the second is calendar-based preventive
maintenance.

In this strategy when an asset covers a particular distance, the

maintenance is scheduled, for example, if the vehicle has covered 1000
(This distance is also set as per requirement) kilometers the organization
will provide maintenance to that asset.

On the other hand, in time-based preventive maintenance is asset work or

not it will be given after a particular time of 15 days, 30 days 3 months as
per the organization's requirements.

2. Predictive Maintenance

Predictive maintenance also enables organizations to schedule

maintenance in advance. In a predictive maintenance strategy, the
organization predicts when asset failure can occur, and right before it can
occur maintenance is provided to that asset.

For this purpose, asset monitoring, asset analytics & performance are
analyzed regularly so that anticipation can be made. This is one of the most
used plant maintenance types as no plant manager wants unexpected
asset failure.

According to Allied Market Research, “The global predictive maintenance

market size was valued at $4,331.56 million in 2019, and is projected to
reach $31,965.49 million by 2027, growing at a CAGR of 28.8% from 2020
to 2027.”

3. Condition Monitoring Maintenance

Condition monitoring maintenance can be a very effective maintenance

strategy. However, it is expensive, and a skilled maintenance team is
required. Why? Because it is proactive, and the asset is utilized to its full
capacity and potential right before asset failure maintenance is performed.

In this way, asset uptime increases and downtime decreases. For this
purpose, sensors and artificial intelligence are used so that predictions can
be made without compromising accuracy.
4. Corrective Maintenance

Some people also refer to it as breakdown maintenance. Corrective

maintenance is mostly reactive, but it can be proactive as well. When a
high-priority asset suddenly stops working then corrective maintenance is
used.

In this technique, the machine is brought back into running condition, but
the root cause is not identified. Mostly corrective maintenance is used on
those assets which are run to failure.

In corrective maintenance, no planning is required but when a failure

occurs the maintenance team is under a lot of pressure as they must fix an
issue as quickly as possible. There are several organizations that use the
plant maintenance type.

5. Emergency Maintenance

Emergency maintenance is maintenance in which asset failure has

occurred, and it needs to be brought back into running condition as soon as
possible. Emergency maintenance is utilized on those assets which are
highly reliable but are not working.

This maintenance is reactive in nature as asset failure has occurred.

Emergency maintenance is very costly.

example, a factory scheduled maintenance shutdowns to inspect and repair

equipment like a conveyor belt or machine parts.

What is need of plant maintenance?

It helps in reduction of breakdown losses. It helps in reduction of quality
defects. It increases net quality profits. It reduces maintenance cost.
Increased equipment life: Regular plant maintenance can help increase the
lifespan of equipment and machinery, reducing the need for costly
replacements or repairs.

QUALITY MANAGEMENT
The quality management module is one of the important modules in the ERP system. Quality
management helps the industry to inspect and maintain the quality of manufactured items that
match the standards for certification. Every market has specific expectations from the product
that hit the shelves.

What are the functions of quality management module?

QM is an integral part of logistic management and it is used to perform quality functions such
as quality planning, quality assurance, and quality control, at various stages such as incoming
material stage, in-process manufacturing process stage, and after production as well.

What are the 4 components of quality management?

Quality management ensures that an organization, product or service consistently
functions well. It has four main components: quality planning, quality assurance, quality
 control and quality improvement. Quality management is focused not only on product
and service quality, but also on the means to achieve it.

What are the 5 components of quality management system?

With that in mind, here are the essential elements of a high-value quality
management software system you'll need to consider.
 Quality Objectives. Start by creating quality objectives. ...
 Organizational Structure and Responsibilities. ...
 Processes. ...
 Continuous Improvement. ...
 Document Control.
Advantages of quality management systems
 greater efficiency and less waste.
 better and consistent control of major business processes.
 a better understanding of customer needs.
 regulation of successful working practices.
 improved risk management.
 increased customer satisfaction.
 improved participation of employees.

What are the 10 elements of a quality management system?

Some of the important elements of total quality management are: (i) Management's
commitment to quality (ii) Customer satisfaction (iii) Preventing rather than detecting
defects (iv) Measurement of Quality (v) Continuous improvement (vi) Corrective action
for root cause (vii) Training (viii) Recognition of high quality ...

The quality management module is one of the important modules in the ERP system.
Quality management helps the industry to inspect and maintain the quality of
manufactured items that match the standards for certification. Every market has specific
expectations from the product that hit the shelves. Quality management or quality
control module keeps those expectations in check. Quality control management
performs checks at various checkpoints to track the quality of the manufactured item.
ERP quality management module prevents defects in the manufactured items.
The ERP for quality management is also used to set up, manage, and track quality
control plan. To track the quality control plan, the plan has to be set up in the ERP
software using a quality management module. This module interacts with various
modules for assessing the quality of manufactured products. Material management and
production planning are two modules from which the quality control management
module exchanges information and data. This data is stored centrally so that the
modules can easily access the data.
ERP for quality management deals constantly with the task or operation of checking and
keeping the produced products keep up with the company standards. Lighthouse ERP
for quality management or quality control meticulously checks and maintains the high
standards and quality of the products to ensure that customers always gets the top-
notched product. Unable to keep up with standards and guidelines of quality can lead to
disaster in the industry. Some of the industries where Lighthouse ERP for quality
management is implemented and doing exemplary job are steel industries, plastic
industries, coal industries, FMCG industries, and aluminium industry.

Features of Quality Management module

User Defined Testing

Users can define various aspects and test criteria in the module for testing. The quality
control management module can be used to define these criteria.
Testing criteria include tolerance percentages, parameter testing, & mapping of test
products. These tests are done automatically and results are generated.
The products while failing these tests are put in rejected or failed list and space in the
warehouse is automatically allocated. Multiple tests are assigned and done on various
products.

Quality Inspection

Basic testing is performed on every product on a production line. The quality control
management module also enables the industry to set due dates for the tests.
Test results are also linked to the vouchers such as purchase orders or production
orders. This makes the system accessible testing results for everyone.
The status of the test results can be easily obtained with one click. The test reports are
also readily available and stored centrally on the server.

Module Integration

The ERP Software for quality management has to collect a plethora of information
and data from other modules to help it assess the quality of a product.
Module integration makes it possible to integrate quality control management module
into other modules and sub-modules. This helps tremendously for analysis.
Module integration also helps in eliminating data duplication that enriches processes &
data flow with accurate and real information. This also helps in approaching with right
strategies.

Quality Certification

Quality standards and criteria define the quality of a product. Various standards of
quality are applied to a variety of products. These standards have to be matched.
Quality certification helps the customers to know about the quality standards of the
product. Customers can also view defined standards passed by the product.
These standards are listed in the certificate. International organization for
Standardization develops various standards for different products that it must pass to
obtain an ISO certificate.

Benefits of Quality Management Module

Quality management module reduces the inspection cost as the industry itself is
competent in assessing the quality of the items.
Quality control management effectively increases the efficiency of resource usage
so that nothing is wasted.
Production methods can have a huge impact on them by collecting the right data
from the production process.
Products manufactured in the industry maintain the same quality as all so that
uniformity of products is formed.
Customers seeking good quality products can receive them without any defect, so
customer satisfaction is guaranteed.
Customer satisfaction ensures that more orders for the products are placed, thus
increasing the profitability of the business.
Quality management and control can help is a reduction of operational cost due to
the elimination of defective products on a production line.
Quality control & management plays a significant role in improving the overall quality of
the products thus improving the working of ERP module. Quality management is ERP
software that ensures that the products are safe to use and are exactly as they should
be. This module also ensures that the products match the guidelines and specifications
to pass the quality certification process. Lighthouse Info provides industry-specific ERP
software to all the industries. Lighthouse ERP is one of the best ERP software and can
improve the workflow of the industries tremendously. This makes the software an
absolute digital solution in all industries. 35+ years of experiences and constant
upgrades make the software cater to all the needs of modern industries.
I

Material Management Module in ERP System

Determines needs, identifies a potential source of supply, compare
alternative quotations, create a purchase order, track the status of the
purchase order, receive goods, and verify invoices upon receipt of goods.
An ERP System provides a needed integration between Material
Management System and other sub-modules. For example, All purchase
orders are assigned to a cost center in the Management Accounting
module. In production planning, the inventory function post component
needed to fill Production Orders. This shows purchasing and financial
accounting share common vendor data.
Importance of Material Management Module :
The efficient and structured Material Management Module is very
advantageous for many companies. Also, customer satisfaction is can be
noticeably increased because only a well-functioning material is available
at the right time in the right place and in the required quantity and quality.
This in turn is the basis for high adherence to deadlines and the lowest
possible throughput times.
Material management is also important with regard to the warehouse
management because companies will know how many raw material,
finished products, and spare parts, etc. are available in Warehouse at all
the time.
Also, with the help of the material management module following below
tasks can be handled much easier:
 Collecting material
 Shipping planning
 Container Management
 Inventory Management
Key Components for setting up Material Management Module
 When multiple projects are being managed then assigning of Unique
Project Number Schema reduces the ambiguity.
 Material Storage Location must be clearly defined and marked.
 Inspection, Certifications, Quality Management, Tracked Digitally.
 The unit of measure and material classifications must be descriptive
and accurate to ensure all material can be found quickly and efficiently.
Objective of Material Management
 Get at Right Price
 High Turnover
 Low Procurement and Storage Cost
 Consistency in Quality
 Continuity Of Supply
 Inter-Department harmony
 New Material and Product
 Product Improvement
Advantages of Material Management System
i) Material Valuation: Material Valuation helps in:
 Determining the price of the material.
 Helps in recording tracking and moving material.
 It provides divergent inventory valuation methods such as LIFO, FIFO,
Moving Average, etc.
ii) Multi-location Inventory: For Manufacturing units that produce goods
on large scale and for consumer goods there are more than one
Distribution Unit for making Supply Chain Management Easier. In different
distribution units lot tracking, serialized inventory, and specific costing,
etc. are properly maintained.
iii) Traceability: Consumer goods and Raw Material consist of Lot
number or serialized number which is used to track the location of goods.
For example, if the product is sent to the consumer, importing raw
material, amount of goods available in the Warehouse can be easily
traced by an organization which makes the work of organization much
easier.
iv) Product Life Cycle Management: New products and old products are
the backbones of an organization. So every organization make the
analysis of the new and old product and measure the demand and supply
of that product. So the product which is more demanded having a high life
span.

For example: Let us take 2 products from a company suppose A and B.

Out of its product A highly demanded and Product B is very less
demanded. So in that company Product A is manufactured more and the
company will spend more on Advertising of that Product.
A new product in an Organization when manufactured have gone through
five stages:
 Introduction Stage
 Growth Stage
 Maturity Stage
 Decline Stage
 Abandonment Stage
Disadvantages Of Material Management:
 Data integration issue cause when Material is placed in Multi-Location.
 Engineering requisition issues are also caused.
 Inaccurate Inventory level caused due to Shipping and Receiving Error.

BENEFITS OF ERP SYSTEM:

ERP stands for Enterprise Resource Planning .

ERP systems integrate all business management functions including

planning, inventory/materials management, engineering, order processing,
manufacturing, accounting and finance, human resources etc. The biggest
advantage of an ERP system based on its real-time capabilities and the
ability to see what is going on with the organization as it happens.
Installation of an ERP system has many advantages. The advantages
may be both direct and indirect. The direct advantages include efficiency
improvement, integration of information, faster response time to customer
queries, etc. Example of indirect benefits include better corporate image,
improved customer goodwill, customer satisfaction and so on. Some of
the benefits are as follows :
 Integrating and sharing of information across different departments.
 Reducing redundant data entry and processes.
 Guarantee for the security of organization data.
 Better communication across various departments.
 Improving workflow and security.
There are also some benefits which are both tangible and intangible which
are as follows :
1. Information Integration :

The most important benefit is promotion of integration. It is because it

has the ability to update data between related business functions and
components. Also the people involved in a project are interlinked to
each other, thus it help in improvement of productivity.
2. Reduction of Lead-Time :
 Lead-Time is the elapsed time between placing an order and receiving
it. By reducing Lead-Time organization should have an efficient
inventory management system, which is integrated with the purchasing,
production planning and production departments.
3. On Time Shipment :

ERP system are designed to help your company to reduce data

transfer time, reduce errors and increase design productivity. By using
steps of ECO i.e. Engineering Change Order, ERP system
automatically implements change in production database. Thus by
using these, an ERP system ensures on time delivery of goods to
customers.
4. Reduction in Cycle Time :

It is time between the placement of order and delivery of product. There

are two types of situations; one is make-to-order and second one is
make-to-stock. In both cases cycle time can be reduced but more time
is saved in make-to-order case because in this ERP system save time
by integrating with CAD/CAM systems.
5. Better Customer Satisfaction :

ERP system is capable of producing goods in a flexible way with

consideration of time and cost management. It means will get individual
attention and get services without spending more money or waiting for
long period.
6. Increased Flexibility :

Product flexibility is type of ability of the operation to efficiently produce

highly customized and unique products. ERP system not only improve
flexibility of manufacturing operations, but is also improve flexibility of
organization.

7. Collaboration

So many of the benefits we’ve already covered here facilitate

collaboration. Visibility into the way other teams work and what
information they’re looking at makes it far easier to work hand-in-
hand and for staff to reach out proactively when they see an
 opportunity to help colleagues. No longer are teams operating on an
island and using applications that only they have access to and that
aren’t integrated with other back-end systems.

When employees communicate more frequently and work together,

the entire business benefits. Together, they may uncover duplicate
work that can be eliminated or brainstorm better ways to take care of
daily processes. Lapses in communication or unawareness of what
others are working on only leads to problems, but an ERP solution
helps prevent those.

8. Operational Efficiency

An ERP solution increases efficiency across your organization since it

touches every piece of the business. Everyone from recruiters to
warehouse managers to C-level executives should see improvements
that help them thanks to greater automation and availability of
information. Processes become less time-intensive, which often
benefits not just the company, but customers as well. That can
reduce operating costs in a big way and generate higher profits.

Consider a manufacturer that makes 10 products and has an average

profit margin of 20%. With an ERP system, it can easily spot its least
profitable products, then work through the data to find that labor costs
are much higher for the two items with the lowest margins. After
talking to staff, the company discovers that most of the work that
goes into making those items is manual and time-consuming. So the
manufacturer decides to purchase a piece of machinery that can
automate the production of those goods and sees its average profit
margin climb to 25%. Just like that, the ERP software has saved the
business hundreds of thousands of dollars annually.

9. Organized Workflows

As you go through an ERP implementation, it’s a good idea to work

with an expert on your system to evaluate processes and determine if
there’s a better way to complete that task in the new system. Often,
 work is done a certain way because that’s how it’s been done for
years, not because it’s the best option. So an ERP can help in that
way, cutting out steps and making other improvements to make it
faster and easier to get things done.

Much like an ERP standardizes data, it also standardize workflows.

The way one department handles a certain process may differ from
that of another department. Even two employees within the AP
department may not follow the same steps to make payments, for
example. An ERP system should eradicate those discrepancies,
ensuring everyone is following the same best practices.

10. Real-time Reporting

Reporting is without question one of the biggest and most immediate

benefits of using an ERP system. The possibilities are endless with
the ability to customize reporting across all functions — finance,
inventory, orders, procurement, sales and marketing, HR and
anything else you can dream up. Whatever you want to measure, or
whatever KPIs matter most to your company, an ERP solution can
calculate it. You can not only track the performance of different
components of the business, but also compare departments to
understand what’s driving the business forward and what’s holding it
back.

It’s essential that your report reflects the latest data, and that’s why
real time is so important. If it takes two weeks to receive revenue
numbers from the last quarter, that’s not very useful because the
information is already outdated and may not be relevant. But if
revenue totals update in real time, as each sale happens, you can
immediately use it to inform decision-making. This has become
critical in today’s fast-paced, hyper-competitive environment.

11. Mobility

Employees have become very comfortable using smartphones and

tablets instead of computers to complete many tasks, and in light of
 that trend, today’s ERP systems are mobile-friendly. Since users
access cloud systems through the web, they can pull up all the
dashboards, reports and other information they need to see in a
mobile browser. Many vendors now have mobile apps, as well, that
can provide a better user experience on smaller screens.

For some companies, mobility is not just a nice-to-have but a need-

to-have. They may have workers in the field or employees who travel
frequently and must be able to see an up-to-date view of their
business from devices other than a computer. These employees can
also take care of critical tasks like approvals and monitoring cash flow
(AR and AP) when they have a mobile-friendly ERP solution.

UNIT III-HARDWARE AND SOFTWARE’S OF ERP AND SAP

AN INTRODUCTION TO OPERATING SYSTEMS:
An operating system acts as an intermediary between the user of a computer and
computer hardware.
The purpose of an operating system is to provide an environment in which a user can
execute programs conveniently and efficiently.
An operating system is software that manages computer hardware.
The hardware must provide appropriate mechanisms to ensure the correct operation of
the computer system and to prevent user programs from interfering with the proper
operation of the system.
A more common definition is that the operating system is the one program running at all
times on the computer (usually called the kernel), with all else being application
programs.
An operating system is concerned with the allocation of resources and services, such as
memory, processors, devices, and information. The operating system correspondingly
includes programs to manage these resources, such as a traffic controller, a scheduler,
a memory management module, I/O programs, and a file system.
History of Operating System
The operating system has been evolving through the years. The following table shows the
history of OS.
Generation Year Electronic device usedTypes of OS Devices

First 1945-55 Vacuum Tubes Plug Boards

Second 1955-65 Transistors Batch Systems

Third 1965-80 Integrated Circuits(IC) Multiprogramming

Since
Fourth Large Scale Integration PC
1980

Characteristics of Operating Systems

Some of the important characteristic features of operating systems:
 Device Management: The operating system keeps track of all the devices. So, it is
also called the Input/Output controller that decides which process gets the device,
when, and for how much time.
 File Management: It allocates and de-allocates the resources and also decides who
gets the resource.
 Job Accounting: It keeps track of time and resources used by various jobs or users.
 Error-detecting Aids: These contain methods that include the production of dumps,
traces, error messages, and other debugging and error-detecting methods.
 Memory Management: It keeps track of the primary memory, like what part of it is
in use by whom, or what part is not in use, etc. and It also allocates the memory when
a process or program requests it.
 Processor Management: It allocates the processor to a process and then de-allocates
the processor when it is no longer required or the job is done.
 Control on System Performance: It records the delays between the request for a
service and the system.
 Security: It prevents unauthorized access to programs and data using passwords or
some kind of protection technique.
 Convenience: An OS makes a computer more convenient to use.
 Efficiency: An OS allows the computer system resources to be used efficiently.
 Ability to Evolve: An OS should be constructed in such a way as to permit the
effective development, testing, and introduction of new system functions at the same
time without interfering with service.
 Throughput: An OS should be constructed so that It can give maximum
throughput (Number of tasks per unit time).
Functionalities of Operating System
 Resource Management: When parallel accessing happens in the OS means when
multiple users are accessing the system the OS works as Resource Manager, Its
responsibility is to provide hardware to the user. It decreases the load in the system.
 Process Management: It includes various tasks like scheduling and termination of
the process. It is done with the help of CPU Scheduling algorithms.
 Storage Management: The file system mechanism used for the management of the
storage. NIFS, CIFS, CFS, NFS, etc. are some file systems. All the data is stored in
various tracks of Hard disks that are all managed by the storage manager. It
included Hard Disk.
 Memory Management: Refers to the management of primary memory. The
operating system has to keep track of how much memory has been used and by
whom. It has to decide which process needs memory space and how much. OS also
has to allocate and deallocate the memory space.
 Security/Privacy Management: Privacy is also provided by the Operating system
using passwords so that unauthorized applications can’t access programs or data. For
example, Windows uses Kerberos authentication to prevent unauthorized access to
data.
The process operating system as User Interface:
1. User
2. System and application programs
3. Operating system
4. Hardware
Every general-purpose computer consists of hardware, an operating system(s), system
programs, and application programs. The hardware consists of memory, CPU, ALU, I/O
devices, peripheral devices, and storage devices. The system program consists of
compilers, loaders, editors, OS, etc. The application program consists of business
programs and database programs.

Every computer must have an operating system to run other programs.

The operating system coordinates the use of the hardware among the various system
programs and application programs for various users.
It simply provides an environment within which other programs can do useful work.
The operating system is a set of special programs that run on a computer system that
allows it to work properly.
It performs basic tasks such as recognizing input from the keyboard, keeping track of
files and directories on the disk, sending output to the display screen, and controlling
peripheral devices.
Purposes and Tasks of Operating Systems
Several tasks are performed by the Operating Systems and it also helps in serving a lot of
purposes which are mentioned below. We will see how Operating System helps us in
serving in a better way with the help of the task performed by it.
Purposes of an Operating System
 It controls the allocation and use of the computing System’s resources among the
various user and tasks.
 It provides an interface between the computer hardware and the programmer that
simplifies and makes it feasible for coding and debugging of application programs.
Tasks of an Operating System
1. Provides the facilities to create and modify programs and data files using an editor.
2. Access to the compiler for translating the user program from high-level language to
machine language.
3. Provide a loader program to move the compiled program code to the computer’s
memory for execution.
4. Provide routines that handle the details of I/O programming.

Components of an Operating Systems

There are two basic components of an Operating System.
 Shell
 Kernel
Shell
Shell is the outermost layer of the Operating System and it handles the interaction with
the user. The main task of the Shell is the management of interaction between the User
and OS. Shell provides better communication with the user and the Operating System
Shell does it by giving proper input to the user it also interprets input for the OS and
handles the output from the OS. It works as a way of communication between the User
and the OS.
Kernel
The kernel is one of the components of the Operating System which works as a core
component. The rest of the components depends on Kernel for the supply of the
important services that are provided by the Operating System. The kernel is the primary
interface between the Operating system and Hardware.
Functions of Kernel
The following functions are to be performed by the Kernel.
 It helps in controlling the System Calls.
 It helps in I/O Management.
 It helps in the management of applications, memory, etc.
Types of Kernel
There are four types of Kernel that are mentioned below.
 Monolithic Kernel
 Microkernel
 Hybrid Kernel
 Exokernel
Advantages of Operating System
 It helps in managing the data present in the device i.e. Memory Management.
 It helps in making the best use of computer hardware.
 It helps in maintaining the security of the device.
 It helps different applications in running them efficiently.
Disadvantages of Operating System
 Operating Systems can be difficult for someone to use.
 Some OS are expensive and they require heavy maintenance.
 Operating Systems can come under threat if used by hackers.
AN INTRODUCTION TO DATABASE SYSTEMS

Data: Facts, figures, statistics etc. having no particular meaning (e.g. 1, ABC, 19 etc).
Record: Collection of related data items, e.g.
in the above example the three data items had no meaning. But if we organize them in the following
way, then they collectively represent meaningful information. Roll Name Age 1 ABC 19

Database is a collection of data and Management System is a set of

programs to store and retrieve those data. Based on this we can
define DBMS like this: DBMS is a collection of inter-related data and
set of programs to store & access those data in an easy and
effective manner.
Data: It is a collection of information.

The facts that can be recorded and which have implicit meaning known as 'data'. Example: Customer
----- 1.cname. 2.cno. 3.ccity.

Database: It is a collection of interrelated data . These can be stored in the form of tables.

A database can be of any size and varying complexity. A database may be generated and manipulated
manually or it may be computerized. Example: Customer database consists the fields as cname, cno, and
ccity Cname Cno Ccity
Database System: It is computerized system, whose overall purpose is to maintain the information and
to make that the information is available on demand.

Advantages:

1.Redundency can be reduced.

2.Inconsistency can be avoided.

3.Data can be shared.

4.Standards can be enforced.

5.Security restrictions can be applied.

6.Integrity can be maintained.

7.Data gathering can be possible.

8.Requirements can be balanced.

Database Management System (DBMS):

It is a collection of programs that enables user to create and maintain a database. In other words it is
general-purpose software that provides the users with the processes of defining, constructing and
manipulating the database for various applications.

Disadvantages in File Processing

Data redundancy and inconsistency.

Difficult in accessing data. Data isolation.

Data integrity. Concurrent access is not possible.

Security Problems.

. Advantages of DBMS:

1.Data Independence.

2.Efficient Data Access.

3.Data Integrity and security.

4.Data administration.

5.Concurrent access and Crash recovery.

6.Reduced Application Development Time.

Applications

Database Applications:

Banking: all transactions

Airlines: reservations, schedules

Universities: registration, grades Sales: customers, products, purchases

Online retailers: order tracking, customized recommendations

Manufacturing: production, inventory, orders, supply chain Human resources: employee records,
salaries, tax deductions .

People who deal with databases

Many persons are involved in the design, use and maintenance of any database.

These persons can be classified into 2 types as below.

Actors on the scene: The people, whose jobs involve the day-to-day use of a database are called as
'Actors on the scene', listed as below.

1.Database Administrators (DBA): The DBA is responsible for authorizing access to the database, for
Coordinating and monitoring its use and for acquiring software and hardware resources as needed.
These are the people, who maintain and design the database daily. DBA is responsible for the following
issues. 3 a. Design of the conceptual and physical schemas: The DBA is responsible for interacting with
the users of the system to understand what data is to be stored in the DBMS and how it is likely to be
used. The DBA creates the original schema by writing a set of definitions and is Permanently stored in
the 'Data Dictionary'. b. Security and Authorization: The DBA is responsible for ensuring the
unauthorized data access is not permitted. The granting of different types of authorization allows the
DBA to regulate which parts of the database various users can access. c. Storage structure and Access
method definition: The DBA creates appropriate storage structures and access methods by writing a set
of definitions, which are translated by the DDL compiler. d. Data Availability and Recovery from Failures:
The DBA must take steps to ensure that if the system fails, users can continue to access as much of the
uncorrupted data as possible. The DBA also work to restore the data to consistent state. e. Database
Tuning: The DBA is responsible for modifying the database to ensure adequate Performance as
requirements change. f. Integrity Constraint Specification: The integrity constraints are kept in a special
system structure that is consulted by the DBA whenever an update takes place in the system.
2.Database Designers: Database designers are responsible for identifying the data to be stored in the
database and for choosing appropriate structures to represent and store this data. 3. End Users: People
who wish to store and use data in a database. End users are the people whose jobs require access to the
database for querying, updating and generating reports, listed as below. a. Casual End users: These
people occasionally access the database, but they may need different information each time. b. Naive or
Parametric End Users: Their job function revolves around constantly querying and updating the
database using standard types of queries and updates. c. Sophisticated End Users: These include
Engineers, Scientists, Business analyst and others familiarize to implement their applications to meet
their complex requirements. d. Stand alone End users: These people maintain personal databases by
using ready-made program packages that provide easy to use menu based interfaces. 4.System Analyst:
These people determine the requirements of end users and develop specifications for transactions.
5.Application Programmers (Software Engineers): These people can test, debug, document and maintain
the specified transactions. Department of CSE,JBIET 4 b. Workers behind the scene: Database Designers
and Implementers: These people who design and implement the DBMS modules and interfaces as a
software package. 2.Tool Developers: Include persons who design and implement tools consisting the
packages for design, performance monitoring, and prototyping and test data generation. 3.Operators
and maintenance personnel: These re the system administration personnel who are responsible for the
actual running and maintenance of the hardware and software environment for the database system.

DATABASE SYSTEMS

What is a Database?

A Database is a collection of inter-related data. For Example, a university database

organizes the data about students, faculty, and admin staff etc. which helps in
efficient retrieval, insertion and deletion of data from it.

Another example is the library. The library contains a huge collection of books of
different genres, here the library is database and books are the data.

Modern databases are managed using a database management system (DBMS).

Database Management Systems DBMS stands for Database Management System.

We can break it like this DBMS = Database + Management System.

Database is a collection of data and Management System is a set of programs to

store and retrieve those data. Based on this we can define DBMS like this:

DBMS is a collection of inter-related data and set of programs to store & access
those data in an easy and effective manner.

What is the need of DBMS?

Database systems are basically developed for large amount of data.

When dealing with huge amount of data, there are two things that require
optimization: Storage of data and retrieval of data. Storage:

According to the principles of database systems, the data is stored in such a way
that it acquires lot less space as the redundant data (duplicate data) has been
removed before storage.

Let’s take a layman example to understand this: In a banking system, suppose a

customer is having two accounts, one is saving account and another is salary
account.

Let’s say bank stores saving account data at one place (these places are called
tables we will learn them later) and salary account data at another place, in that
case if the customer information such as customer name, address etc. are stored
at both places then this is just a wastage of storage (redundancy/ duplication of
data), to organize the data in a better way the information should be stored at
one place and both the accounts should be linked to that information somehow.

The same thing we achieve in DBMS. Fast Retrieval of data: Along with storing the
data in an optimized and systematic manner, it is also important that we retrieve
the data quickly when needed. Database systems ensure that the data is retrieved
as quickly as possible.

Purpose of Database Systems

The main purpose of database systems is to manage the data.

Consider a university that keeps the data of students, teachers, courses, books
etc. To manage this data we need to store this data somewhere where we can
add new data, delete unused data, update outdated data, retrieve data, to
perform these operations on data we need a Database management system that
allows us to store the data in such a way so that all these operations can be
performed on the data efficiently.

Examples of Database Applications

Applications where we use Database Management Systems are:

1. Telecom: There is a database to keeps track of the information regarding calls
made, network usage, customer details etc. Without the database systems it is
hard to maintain that huge amount of data that keeps updating every millisecond.

2. Industry: Where it is a manufacturing unit, warehouse or distribution centre,

each one needs a database to keep the records of ins and outs. For example
distribution centre should keep a track of the product units that supplied into the
centre as well as the products that got delivered out from the distribution centre
on each day; this is where DBMS comes into picture.

3. Banking System: For storing customer info, tracking day to day credit and debit
transactions, generating bank statements etc. All this work has been done with
the help of Database management systems.

4. Sales: To store customer information, production information and invoice

details.

5. Airlines: To travel though airlines, we make early reservations, this reservation

information along with flight schedule is stored in database.

6. Education sector: Database systems are frequently used in schools and colleges
to store and retrieve the data regarding student details, staff details, course
details, exam details, payroll data, attendance details, fees details etc. There is a
hell lot amount of inter-related data that needs to be stored and retrieved in an
efficient manner.

7. Online shopping: You must be aware of the online shopping websites such as
Amazon, Flipkart etc. These sites store the product information, your addresses
and preferences, credit details and provide you the relevant list of products based
on your query. All this involves a Database management system.