Chapter 3 provides an overview of ERP systems, highlighting their central database which integrates various applications including financial, manufacturing, and HR management. It outlines the four key elements of a basic ERP system: strategic and business planning, sales and operations planning, master production scheduling, and material requirement planning. The chapter also describes the structure of ERP systems, emphasizing the importance of client-server architecture and the roles of different software layers.

1. ERP & WEB BASED SUPPLY
Chain Management
Chapter 3
Overview of ERP Systems

2. Overview of ERP Systems
Basic ERP System
Basic ERP system has a central database which is
used for financial,manufacturing & inventory
applications..There are service applications
connected with HR management and
customers.Customers and corporate reporting guide
the sales and distribution system which has interface
with common database.
The diagram on shown on next slide outlines the
basic structure of an ERP system

3. Basic ERP System

4. Basic ERP System
In Basic ERP model there are four basic
elements
1) Strategic & business planning.
2) Sales & operations planning.
3) Master Production Schedule with Bill of
Material (BOM)
4) Material requirement planning.

5. Basic ERP System
1)Strategic & business planning.
In an ideal ERP system ,outputs are
integrated to business plans.A strategic Plan
is long term Plan.
A business plan is short term tactical plan.
A business plan sets the objective taking into
account the environment,the competition and
the SWOT analysis(
strength,weakness,opportunities &
threat analysis)

6. Basic ERP System
2) Sales & operations plan.
Sales & operational plan is derived from the
overall business plan.It is mainly detected by
the sales forecast figures for the various
products.operational plan is derived from
sales plan.The aggregate production plan
indicates the general operational range

7. Basic ERP System
3) Master Production Schedule with Bill of Material
(BOM)
It deals with items or output of the production
function.
All future demand for the work in progress and raw
materials are dependent on the master schedule
Past demand does not always get extension in
future& this is kept in mind while planning for raw
materials and work in process

8. Basic ERP System
The aggregate plan & master production
schedule for computers
Month 1 2
Computer Production 800 850
Weeks
1 2 3 4 5 6 7 8
Type1
200 350 150 100
100 75 125 100
Type2
Type3 75 175 200

9. Basic ERP System
Time facing Master Production Schedule (MPS).
MPS has element of flexibility
Many factors decide this production lead
time,commitment of parts & component,buyer-seller
relationship,excess capacity available & tendency to
make or not to make changes.
Time fencing ensures a reasonable controlled flow
through production system.
There are opportunities to introduce changes
MPS is frozen in initial period when orders are
received.A moderate changes allow changes in
specific products if parts are available

10. Basic ERP System
Time facing Master Production Schedule (MPS).
Frozen Moderate Flexible
Forecast &
available capacity
Capacity
From
Customer
Orders
8 15 26
Time in weeks

11. Basic ERP System
Bill of Materials(BOM)
A particular finished product is made up of raw
material ,parts,assemblies,sub- assemblies.They are
arranged in sequential order as per production
requirement.
The BOM file is important input to ERP.
It is also called product structure or product tree.
It can be sorted as part number ,assembly wise or
level of procurement wise.
BOMs are constantly revised as per latest changes
& correct version is used for production

12. Basic ERP System
Bill of Materials(BOM)

13. Basic ERP System
Bill of Materials(BOM)

14. Basic ERP System
Bill of Materials(BOM)

15. Basic ERP System
Bill of Materials(BOM)

16. Basic ERP System
Material Requirement Planning
This program works on the inventory file.,the master
production schedule and BOM file
MPS provide a list of items in specific time period.
BOM describes the materials and the parts needs to
make each item in specific time period.
The stock position is shown by the inventory file.
The MRP program accesses the segment of the
inventory file and at the same time refers to BOM to
compute quantities of each item required.
There can multiple masters schedulers for each
major product line and they compete resources

17. Basic ERP System
Material Requirement Planning

18. Basic ERP System
Material Requirement Planning

19. Structure of ERP System

20. Client Server Functions
ERP system is client server based.To run ERP system ,
Powerful PCs are required at both ends.
The functions are performed by three layers of logic.
Presentation Layer Graphic user interface or browser for
data entry.or accessing system functions
Application Layer Business rules,functions,logic &
programmes acting on data received/transformed from to
database servers.
Database layer Management of organization’s operational
or transactional data including metadata

21. Client Server Functions
PC PC PC PC
Presentation Layer
Client Work Station
Application Layer Application Servers
Database layer Database Servers

22. ERP Strengths & Weaknesses
End of Chapter 3

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