An Introduction to ERP

1. INTRODUCTION
TO
ENTERPRISEWIDE RESOURCE
PLANNING
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2. The 3-C Crisis
Customer
Competition
Change
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3. Evolution of Business system
Dynamic
Models
Functional View ERP
MRPII
MRP Value Chain View
Inventory
control
1970 1980 1990 2000
1960
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4. What is ERP?
A way of doing Business
- With more clear and accurate
information available at right time
- Without constraints of distance and
time
- With optimal resources
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5. Defining ERP...
An Accounting oriented Information
System for identifying and planning
the enterprise wide resources to
take
make
ship
account for
customer orders.
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6. Why ERP? -- the objective
Better visibility and tracking of operations
Lower costs across the value chain
Reduction of lead-times
Better Planning
Low inventory
Expand and improve product/service
offerings to achieve customer satisfaction
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7. Why ERP ?
Dynamic marketplace
New markets across the globe
Increased competition
Higher customer expectations
Manage business across geographically
dispersed market locations
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8. What is an ERP package ?
Major business processes combined
into a single & integrated software
solution
Accounts Finance
Inbound Outbound
Logistics Production
Logistics
Infrastructure & Human Resources
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9. Forecast
Master
Order
Scheduling
Entry SOP
RCCP MRP BOM
Shop
Floor Inventory
AR CRP
HRD
FA
Purchase
Cash Mt
PA
GL AP
Reporting
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10. Attributes of a true ERP package
Flexibility Intercompany
Comprehensive Planning provision
Open & Modular Adaptable to new
technologies
Integrated
New millenium
Low implementation compliant
life-cycle
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11. Phases in implementation
Analysis of client’s business requirements
Demonstration/evaluation of different
packages
Conference room pilot
Gap Analysis
Customization development
Identification of interfaces
Implementation on the pilot site
Go live
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12. Other Side
One Third of ERP projects failed,
globally
Companies Like HLL and Reliance
have stumbled once before coming
through successfully
Some corporate still struggling to
complete the implementation
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13. Areas of concern….
BPR changes should be well thought of
Improper setting of business parameters
Resistance to change from employees
Loss of patience in implementation phase
Improper phasing of module implementation
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14. Stumbling Blocks in
implementation
Lack of top management involvement
Lack of preparation
Improper package selection
Inappropriate use of the ERP package
Too high Expectations
Too much Customisation
Cost & Schedule Overrun
Scale of Operation
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15. Conclusion...
An ERP is much more than an
application that supports a few
essential enterprise functions like
finance, payroll, inventory etc. It is an
application that promises to induce a
certain way of life within the
organization where it gets
implemented, irrespective of LOB &
size
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16. Attributes of the ERP
package
A total solution towards a definite
vision
A powerful business tool to manage
the business processes efficiently.
Renders tangible and intangible
benefits.
Package features known before hand
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17. Attributes of ERP
The implementation life cycle less.
Adaptable to business changes and
needs
Upgradable with the Latest
Technology
Supports EDI/EC
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18. Legacy system
Plant/site specific
Not process oriented
Functionally based
Ineffective support of EC/EDI
Proprietary mainframe and
minicomputer architecture
Supplier hardware and software
dependent
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19. Legacy system
Lacking in Basic IT Strategy, Vision
Lengthy, complex, costly
development, implementation and re-
engineering process
- Difficult to document
- Old technology
- Home Grown
Limited flexibility and adaptability to
changes in business environments
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20. Legacy System
Features of Legacy system
Multiple systems and sources of
information for same functions and
data
Limited
- Data availability/accessibility
- Data continuity
- Data timeliness
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21. Present Scenario
150 Indian Companies
including Reliance, Telco, HLL, UTI,
L&T, M&M and Blue Star, Kirloskar,
spent over 130 crores on software to
put their organisation through ERP
World Over 20,000 companies spent
$13 billion
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22. Major Enterprise Solutions
Com pany Applicat ion Applicat ion sit es
SAP AG SAP R3 Over 15000 sit es
Germ any Rs. 2.5 lak hs per
licence
Oracle Or acle Applicat ions Over 3000sit es
Sof t w are SC 10.7
I ndia Lt d
Baan BaaN lV Upt o 4800 sit es
I nf oSyst em
I ndia Pvt Lt d
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23. Major Enterprise Solutions
Com pany Applicat ions Sit e
Ram co syst em s Ram co Marshal 46 Sit es
QAD I nc MFG/ PRO 3250 sit es
JD Edw ards USA ONEWORLD 4300 sit es
People Sof t People sof t 6 1300 sit es
Mast ek Lt d MAMI S 31 Sit es
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24. ERP Software market in India
400 400
350
300
240
250
200
136.6 Rs in Crore
150
100
50
0
1997- 1998- 1999-
98 99 2000
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25. Who are using ERP !
BaaN Oracle SAP QAD Ram co
Discr eet e 14 7 18 6 6
Mf g
Aut om ot ive 4 1 4 2 1
Mf g
Process Mfg 2 1 4 2 4
Services 3 6 4 2
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26. ERP EXPERIENCES
Cadbury Schweppes Plc
Decided to implement ERP in 1994
SAP R3 was Selected
Policy decision to re-engineer the
process than to customise the
package
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27. ERP Experiences ...
By 1997 Cadbury India had different
way of working
Coco Sourcing Head Office
26 Depots
point- Kerala Mumbai
6 Factories
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28. ERP Experiences
Pre ERP Process at Cadburys
Calcutta Request
Head Office
Telephone
Fax
Pi c
nic
ch
o co
la te
Picnic chocolate
shortage Depots
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29. ERP Experiences
Post ERP Process at Cadbury
Request ERP on-line,
Calcutta
Calcutta
Pic
nic
Ch Request
oc
ola
t e
Picnic Chocolate Nearest
Demand Depot
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30. ERP Experience
Tangible Benefit to Cadbury
The Turnover has doubled since ERP
was implemented but manpower has
not been added
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31. ERP Experiences
Novartis India has Lowered its
inventories by 30-35%
HLL - 240 locations , 120 depots ,40
factories, and 13 branches are under
ERP and the Benefits realised :
-Depot Replenishment cycle of two
weeks is cut by half a week
-64 new products added last year
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32. Who Wins ?
Return on Investment
25-30 % / year
Corporate
and Customer Implementation and
consultancy service provider
2500 crores by 2000 AD
400 crores ERP Software Vendors
by 2000 AD
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33. Questions Normally asked
What would be the implementation time ?
The size of oraganisation and the Preparation time
affect the implementation time.Typically it takes
18 months just to implement the software and
make the system live
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34. Can one ERP package handle all the
Functionality efficiently ?
Each package is strong in one feature and
suited for certain business needs
Can more than one ERP package used
together?
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35. Questions Normally asked
What is the cost involved ?
Can ERP system work with other systems.?
How to handle customised portions
during upgradation?
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