By Roin Banerji S7 Me, Snmimt Roll No.33

By
Roin Banerji
S7 ME ,SNMIMT
Roll No.33
Enterprise Resource Planning
Enterprise Resource Planning(ERP) is a term
originally used in 1990 by the Gartner Group. ERP is a way
to integrate the data and processes of an organization into
one single system. Usually ERP systems will have many
components including hardware and software, in order to
achieve integration, most ERP systems use a unified
database to store data for various functions found
throughout the organization.
History and Evolution of ERP
1960’s - Systems Just for Inventory Control
1970’s - MRP – Material Requirement Planning
1980’s - MRP II – Manufacturing Resources Planning
1990’s - ERP – Enterprise Resource Planning
2000 onwards – ERP II – Collaborative Commerce

FEATURES OF ERP
ERP facilitates company-wide Integrated Information System
covering all functional areas like Manufacturing, Selling and distribution, Inventory,
Accounts, Human resources, Purchases etc.
ERP performs core corporate activities and increases customer
service and thereby increasing the Corporate Image.
ERP bridges the information gap across the organization.
ERP provides for complete integration of Systems not only across the
departments in a company but also across the companies under the same management.
ERP eliminates the most of the business problems like Material
shortages, Productivity enhancements, Customer service, Cash Management, Inventory
problems, Quality problems, Prompt delivery etc.
ERP allows automatic introduction of latest technologies like
Electronic Fund Transfer (EFT), Electronic Data Interchange (EDI), Internet, Intranet,
Video conferencing, E-Commerce etc.
ERP provides business intelligence tools like Decision Support Systems
(DSS), Executive Information System (EIS), and Early Warning Systems (Robots) for
enabling people to make better decisions and thus improve their business processes.
Order Processing in an ERP System
The Components of an ERP System
ERP Software
Module based ERP software is the core of an ERP system.
ERP Users
The users of ERP systems are employees of the organization at all levels, from
workers, supervisors, mid-level managers to executives.
Hardware and Operating Systems
UNIX ,Windows NT and Linux
Functional Modules of ERP Software
ERP software is made up of many software modules. Each ERP software
module do a major functional area of an organization. Common ERP modules
are
1. Manufacturing and production planning

2. Material Management
3. Plant Maintenance
4. Finance
5. Human resource management
6. Quality Management
7. Sales and distribution etc.
Production Planning Module
Production planning optimizes the utilization of manufacturing capacity,
parts, components and material resources using historical production data
and sales forecasting
Materials Management Module
The Material Management module optimizes all purchasing processes
inventory management, warehouse management, material requirements
planning
Plant Maintenance Module
Plant Maintenance Module provides an integrated solution for
supporting the operational needs of an enterprise.
Financial Module
It can gather financial data from various functional departments, and
generates valuable financial reports such as balance sheet, trail balance, and
quarterly financial statements etc.
Quality Management Module
The quality Management module fulfills the following functions:
1.Quality planning
2.Quality inspection
3.Quality Control
Human Resources Module
HR module streamlines the management of human resources and human
capitals. HR modules routinely maintain a complete employee database
including contact information, salary details, attendance, performance
evaluation and promotion of all employees
Sales and Distribution Module
Sales module implements functions of order placement, order scheduling,
shipping . Sales module is closely integrated with organizations' e-commerce
websites
Implementation Of ERP in Organizations
Implementing ERP software is typically too complex so it is desirable and highly
advised to hire outside consultants who are professionally trained to
implement these systems.
There are three types of services that may be employed for –
Consulting , Customization , Support
 Consulting Services
A consulting team was responsible for the entire ERP implementation
including planning, training, testing, implementation, and delivery of any
customized module.
 Customization Services
Customization is the process of extending or changing how the system works
according to new user interfaces.
 Maintenance and Support Services
Once your system has been implemented, the consulting company will
typically enter into a Support Agreement to assist your staff keep the ERP
software running in an optimal way.
Evaluation Criteria
Some important points to be kept in mind while evaluating ERP software
include:
 Functional fit with the Company’s business processes.

 Degree of integration between the various components of the ERP system
 Flexibility and scalability
 User friendliness
 Ease of implementation
 Technology
 Availability of regular upgrades
 Amount of customization required
 Reputation and sustainability of the ERP vendor
 Total costs, including cost of license, training, implementation, maintenance,
customization and hardware requirements.
Suppliers of ERP
 Baan
 CODA
 D&B
 IBM
 JD Edwards
 Marcarn
 Oracle
 Peoplesoft
 Platinum
 Ramco
 SAP
 SMI
Steps to make ERP User friendly
Proper Training
This is the most crucial factor in making ERP user friendly. The training
program has to be designed based on the requirements of the users.
Making the Employees a part of ERP committee
The employees will have to be included in the core committee of ERP decision
making team for expressing difficulties and making representations and as
when needed.
Make the necessary Alterations
According to the suggestions obtained from core committee of ERP and do
necessary Alterations to make ERP user-friendly. These alterations should be
reviewed before deciding on the ERP software vendor.
Advantages of ERP
Business Integration
Flexibility
Use of Latest Technology
Reduction of lead time
Better inventory management
Better communication
Operational cost savings
Better customer satisfaction
Improved resource utilization
Improved information accuracy
Disadvantages of ERP Systems
ERP implementation is very difficult
ERP systems are very expensive to implement
It takes time to realize the benefits of an ERP system
Require specialized people to maintain
Customization in many situations is limited
Security Issues
The system can suffer from the "weakest link" problem - an
inefficiency in one department or at one of the partners may affect other
participants.
 The system may be too complex measured against the actual need of
customer
summary
 ERP is an enterprise-wide information system designed to coordinate
all the resources,information, activities needed to complete business
processes such as order fulfillment ,billing etc
 A typical ERP system would use multiple component of computer
software and hardware to achieve integration
 Companies that use a proper System Selection Methodology reap the
benefit not only during the implementation phase but also and most
significantly during the life of the ERP System.

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1970’s - MRP – Material Requirement Planning

1980’s - MRP II – Manufacturing Resources Planning

1990’s - ERP – Enterprise Resource Planning

2000 onwards – ERP II – Collaborative Commerce

1. Manufacturing and production planning

 Functional fit with the Company’s business processes.

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