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  • 1. ERP- Enterprise Resource Planning( An Introduction)<br />GAURAV SHARMA<br />
  • 2. Definition Of ERP<br />Software solution that addresses all the needs of an enterprise with the process view of an organization to meet the organizational goals and integrate all the functions of the enterprise<br />
  • 3. What is ERP ?<br />Facilitates Company-wide integrated Information Systems Covering all functional Areas.<br />Performs core Corporate activities and increases customer service augmenting Corporate Image.<br />Organizes & Optimizes the data input methodologies systematically.<br />
  • 4. Evolution of Planning Systems<br />Materials Requirement Planning (MRP)<br />Manufacturing Resource Planning ( MRP II)<br />Enterprise Resource Planning ( ERP)<br />Other terminologies are :<br />Money Resource Planning (MRP III)<br />Supply Chain Management<br />Value Chain Management<br />
  • 5. Is It Only a Jargon ?<br />No. MRP and MRP II were there for a long time. <br />ERP is an enhancement over these.<br />It is true that Year 2000 problem accelerated the sales and acceptance of ERP.<br />Introduction of ERP provides you a chance to have a new look at your working.<br />
  • 6. Is It Going to be there long?<br />Yes and No.<br />ERP will be there for a long time, if you are willing to upgrade to new versions with new features as and when the are released in the market<br />Your ERP may still work after a long time without enhancements, if your company is not growing!<br />Moral : Upgrading the systems are a must!<br />
  • 7. Can We wait ?<br />Wait if you have :<br /> Good systems running.<br /> No immediate threat of Y2K, Euro and other known/unknown problems.<br /> No management commitment.<br /> Financial problems.<br />Do not wait if you have :<br /> Tough competition in the market.<br /> Multiple location operations.<br /> Plans to grow Globally.<br /> Management Commitment for change.<br />
  • 8. Why ERP ?<br />
  • 9. Profitability<br />You have Two Choices :<br />Increase in sales - Say 30%<br />OR<br />Reduce Procurement Cost - say by 5-10 %<br />
  • 10. What IT Dept. shall look into?<br /><ul><li> Automatic Identification System
  • 11. Hardware & Networking
  • 12. Software DBMS/RDBMS
  • 13. Communication
  • 14. ERP
  • 15. Supply Chain Management
  • 16. EDI
  • 17. Intranet
  • 18. Internet</li></li></ul><li>For Healthy Operations<br /><ul><li>Integration of Systems across the Functional Departments in a Company as well as across the Enterprise as a Whole.
  • 19. Better Customer Service.
  • 20. Introduction of Latest Technologies as and when the are ready for the Industry acceptance
  • 21. Expertise database
  • 22. Avoids data redundancy</li></li></ul><li>Competition In the Market!<br />Manufacturing Challenges.<br /> Manufacturing Globally.<br /> Distribution network spread.<br /> New Product introduction.<br /> Lower manufacturing lead time.<br />Focus on industry markets.<br />Satisfying the needs of customers.<br />Develop specific business methods and processes.<br />Integration with third party products.<br />
  • 23. Demands on the Industry<br /><ul><li>Better products at lower costs
  • 24. Tough competition
  • 25. Need to analyze costs / revenues on a product or customer basis
  • 26. Flexibility to respond to changing business requirements
  • 27. More informed management decision making</li></li></ul><li>What are your Problems ?<br /><ul><li>Unable to get accurate, timely information
  • 28. Applications not complete for existing business practices
  • 29. Modifications are time consuming or notfeasible</li></li></ul><li>ERP - The Enabler<br />
  • 30. What is that ERP enables ?<br />Systematic Look into your Systems & procedures<br />Optimizing the processes<br />Enables you to adapt yourself to new technologies<br />Discipline across the functions<br />
  • 31. What does ERP integrate ?<br />Database <br />Applications<br />Interfaces<br />Tools<br />
  • 32. What drives ERP ?<br />Business <br />Customer Satisfaction<br />Business Development - new areas, products, services<br />Ability to face competition<br />Efficient processes required to push the company to top gear<br />IT <br />Present Software does not meet business needs<br />Legacy systems difficult to maintain, Y2K Problem , Euro currency<br />Obsolete hardware/software difficult to maintain<br />
  • 33. Problems Taken Care of<br /><ul><li> Availability check at the time of Accepting Sales order
  • 34. On-line Material Status & Shortages
  • 35. Productivity Enhancements
  • 36. Material Planning
  • 37. Customer Service
  • 38. Cash Management
  • 39. Inventory
  • 40. Quality</li></li></ul><li>Subsystems of ERP<br />Logistics<br />Bill Of Materials<br />Sales & Marketing<br />Master Scheduling<br />Materials Requirement Planning<br />Capacity Requirements Planning<br />Purchasing <br />Shop Floor Control<br />Accounts Payable/Receivable<br />HR<br />
  • 41. Understanding ERP<br />
  • 42. Integration of Information Systems<br />IS messages<br />IS messages<br />Manufacturing <br />Head Quarters<br />Marketing/Sales<br /><ul><li>Local purchasing, invoice verification
  • 43. Inventory management
  • 44. Internal sales, shipping and billing
  • 45. Profit/loss
  • 46. Capacity utilization
  • 47. Information Systems:
  • 48. Project Mgmt
  • 49. Inventory
  • 50. Purchasing
  • 51. Sales
  • 52. Budget
  • 53. Cash Management
  • 54. Sales, shipping and billing
  • 55. Purchasing of trading goods
  • 56. Inventory Management
  • 57. Customer service</li></li></ul><li>The Integrated Supply Chain<br />Control<br />Profit/Loss<br />Finance<br />Balance sheet<br />Capital<br />Costs<br />Procurement<br />market<br />Purchasing<br />Production<br />Sales.<br />Machines<br />Human resources<br />Operating resources<br />Managing Resources<br />
  • 58. Go Ahead with ERP<br />
  • 59. Business Process Re-Engineering ( BPR)<br />In-depth study of existing systems/processes is required before ERP is considered.<br />This study brings out deficiencies of the existing system/process.<br />This study is called BPR<br />BPR attempts to re-structure and re-organize the human resources, functional areas, Man-Machine interfaces in the organization.<br />Hence BPR attempts to maximize productivity<br />
  • 60. If It is a Big Change, don’t do it!<br />If the Modifications are small and important to the business, you may customize and implement. <br />If the proposed changes are more, discuss with all concerned . Else you may be going towards a <br />dead-end!<br />
  • 61. ERP Selection<br />Check whether all functional aspects of your Business are covered<br />Check whether all the business functions and processes are integrated<br />Check whether all latest IT trends are covered<br />Check whether the vendor has customizing & implementing capabilities<br />Check the Service options available<br />Check your purse & calculate ROI<br />
  • 62. Prepare Base for ERP<br />Do not start without Management commitment <br />Allocate sufficient funds <br />Identify Core Project Team<br />Select specialists from all functional areas<br />Evaluate and select ERP package <br />Evaluate Implementation Partner<br />Make an Implementation Plan<br />Present plan to Management Committee for sanctions<br />Present plan to Employee groups for feedback/acceptability<br />Plan for User Training<br />Plan for Future upgrades<br />
  • 63. Define Requirements<br />Determine the hardware required<br />Analyze the existing Processes<br />Fine tune the processes to be in line with those of ERP defined <br />Analyze effect of system changes.<br />Prototype and present <br />Refine the prototype & freeze the specifications<br />
  • 64. ERP Implementation<br />Commitment from Management<br />Form a task force with personnel from all functional Areas<br />Take care of Hardware requirements<br />Step-by-step rather than big-bang introduction<br />Be patient. ERP implementation takes Time.<br />
  • 65. ERP Involves<br /><ul><li>Project Planning
  • 66. Business & Operational Analysis, including Gap Analysis
  • 67. Business Process Re-engineering (BPR)
  • 68. Installation & Configuration
  • 69. Project Team Training
  • 70. Business Requirements Mapping to Software
  • 71. Module Configuration
  • 72. System Modification and Interfaces
  • 73. Data Conversion
  • 74. Custom Documentation
  • 75. End User Training
  • 76. Conference Room Pilot
  • 77. Acceptance Testing
  • 78. Production
  • 79. Post-Implementation Audit/Support</li></li></ul><li>Implementation Approach<br />Tasks<br /> Phase<br />Deliverables<br />Detailed<br />Discussions<br />Design &Customization<br />Implementation/<br />Prepare to Go Live<br />Production/<br />Go Live<br /><ul><li>Project Initialization
  • 80. Evaluation of current processes,</li></ul> business practices, requirements<br /><ul><li>Set-Up Project Organization
  • 81. Map Organization
  • 82. Map Business Processes
  • 83. Define Functions and Processes
  • 84. ERP S/w Configuration
  • 85. Build ERP System Modifications
  • 86. Create Go-Live Plan & Documentation
  • 87. Integrate Applications
  • 88. Test the ERP Customization
  • 89. Train Users
  • 90. Run Trial Production
  • 91. Maintain systems
  • 92. Accepted norms & Conditions
  • 93. Project Organization Chart
  • 94. Identify Work Teams
  • 95. Organization Structure
  • 96. Design Specification
  • 97. Process Flow Diagrams
  • 98. Function Model
  • 99. Configuration Recording
  • 100. Systems Modification
  • 101. Testing Environment report
  • 102. Customization Test Report
  • 103. Implementation Report
  • 104. Reconciliation Reports
  • 105. Conversion Plan Execution</li></li></ul><li>Advantages Of ERP<br />
  • 106. Advantages Of ERP Package<br /><ul><li> Highly Graphics based User Interface.
  • 107. Zero Down time/ planned down time.
  • 108. Readymade solutions for most of the Problems.
  • 109. Only Customization required.
  • 110. Integration of all functions ensured.
  • 111. ROI earlier than the software developed in-house.
  • 112. Easy enterprise wide information sharing.
  • 113. Suppliers and Customers can be on-line communication.
  • 114. Knowledge transfer between industries guarantees innovation.
  • 115. Automatic adaptation to new technology.</li></li></ul><li>DecideMake Or Buy !<br />
  • 116. Inhouse Development ERP package<br />Project Development takes time . Ready made Projects.<br />Reinventing the wheel. Needs only customization<br />Process specific to your industry Best Business practices followed<br />are implemented <br />Documentation may not be present Documentation is part of system<br />EDI implementation modifications EDI Compatible. Universally accepted<br />to be taken care of <br />Enterprise implementation is The package itself is designed as<br />difficult as each unit follows Enterprise Package.<br />different S/W option <br />Latest Developments to be studied Constant Updates on Technology<br />as and when they are introduced. and Processes assured<br />
  • 117. Embrace <br />New Technologies<br />
  • 118. Summary<br /><ul><li>Optimum utilization of resources
  • 119. Customer satisfaction
  • 120. Seamless integration between Functions
  • 121. Reduced overheads & inventory
  • 122. Timely responsiveness
  • 123. Market share & image enhancement
  • 124. Faster design to manufacturability
  • 125. Keep up with technology changes
  • 126. Only way for integrated systems for a client with multiple locations</li>