Erp1

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Erp1

  1. 1. ERP- Enterprise Resource Planning( An Introduction)<br />GAURAV SHARMA<br />
  2. 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. 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. 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. 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. 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. 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. 8. Why ERP ?<br />
  9. 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. 10. What IT Dept. shall look into?<br /><ul><li> Automatic Identification System
  11. 11. Hardware & Networking
  12. 12. Software DBMS/RDBMS
  13. 13. Communication
  14. 14. ERP
  15. 15. Supply Chain Management
  16. 16. EDI
  17. 17. Intranet
  18. 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. 19. Better Customer Service.
  20. 20. Introduction of Latest Technologies as and when the are ready for the Industry acceptance
  21. 21. Expertise database
  22. 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. 23. Demands on the Industry<br /><ul><li>Better products at lower costs
  24. 24. Tough competition
  25. 25. Need to analyze costs / revenues on a product or customer basis
  26. 26. Flexibility to respond to changing business requirements
  27. 27. More informed management decision making</li></li></ul><li>What are your Problems ?<br /><ul><li>Unable to get accurate, timely information
  28. 28. Applications not complete for existing business practices
  29. 29. Modifications are time consuming or notfeasible</li></li></ul><li>ERP - The Enabler<br />
  30. 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. 31. What does ERP integrate ?<br />Database <br />Applications<br />Interfaces<br />Tools<br />
  32. 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. 33. Problems Taken Care of<br /><ul><li> Availability check at the time of Accepting Sales order
  34. 34. On-line Material Status & Shortages
  35. 35. Productivity Enhancements
  36. 36. Material Planning
  37. 37. Customer Service
  38. 38. Cash Management
  39. 39. Inventory
  40. 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. 41. Understanding ERP<br />
  42. 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. 43. Inventory management
  44. 44. Internal sales, shipping and billing
  45. 45. Profit/loss
  46. 46. Capacity utilization
  47. 47. Information Systems:
  48. 48. Project Mgmt
  49. 49. Inventory
  50. 50. Purchasing
  51. 51. Sales
  52. 52. Budget
  53. 53. Cash Management
  54. 54. Sales, shipping and billing
  55. 55. Purchasing of trading goods
  56. 56. Inventory Management
  57. 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. 58. Go Ahead with ERP<br />
  59. 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. 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. 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. 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. 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. 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. 65. ERP Involves<br /><ul><li>Project Planning
  66. 66. Business & Operational Analysis, including Gap Analysis
  67. 67. Business Process Re-engineering (BPR)
  68. 68. Installation & Configuration
  69. 69. Project Team Training
  70. 70. Business Requirements Mapping to Software
  71. 71. Module Configuration
  72. 72. System Modification and Interfaces
  73. 73. Data Conversion
  74. 74. Custom Documentation
  75. 75. End User Training
  76. 76. Conference Room Pilot
  77. 77. Acceptance Testing
  78. 78. Production
  79. 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. 80. Evaluation of current processes,</li></ul> business practices, requirements<br /><ul><li>Set-Up Project Organization
  81. 81. Map Organization
  82. 82. Map Business Processes
  83. 83. Define Functions and Processes
  84. 84. ERP S/w Configuration
  85. 85. Build ERP System Modifications
  86. 86. Create Go-Live Plan & Documentation
  87. 87. Integrate Applications
  88. 88. Test the ERP Customization
  89. 89. Train Users
  90. 90. Run Trial Production
  91. 91. Maintain systems
  92. 92. Accepted norms & Conditions
  93. 93. Project Organization Chart
  94. 94. Identify Work Teams
  95. 95. Organization Structure
  96. 96. Design Specification
  97. 97. Process Flow Diagrams
  98. 98. Function Model
  99. 99. Configuration Recording
  100. 100. Systems Modification
  101. 101. Testing Environment report
  102. 102. Customization Test Report
  103. 103. Implementation Report
  104. 104. Reconciliation Reports
  105. 105. Conversion Plan Execution</li></li></ul><li>Advantages Of ERP<br />
  106. 106. Advantages Of ERP Package<br /><ul><li> Highly Graphics based User Interface.
  107. 107. Zero Down time/ planned down time.
  108. 108. Readymade solutions for most of the Problems.
  109. 109. Only Customization required.
  110. 110. Integration of all functions ensured.
  111. 111. ROI earlier than the software developed in-house.
  112. 112. Easy enterprise wide information sharing.
  113. 113. Suppliers and Customers can be on-line communication.
  114. 114. Knowledge transfer between industries guarantees innovation.
  115. 115. Automatic adaptation to new technology.</li></li></ul><li>DecideMake Or Buy !<br />
  116. 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. 117. Embrace <br />New Technologies<br />
  118. 118. Summary<br /><ul><li>Optimum utilization of resources
  119. 119. Customer satisfaction
  120. 120. Seamless integration between Functions
  121. 121. Reduced overheads & inventory
  122. 122. Timely responsiveness
  123. 123. Market share & image enhancement
  124. 124. Faster design to manufacturability
  125. 125. Keep up with technology changes
  126. 126. Only way for integrated systems for a client with multiple locations</li>

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