Overview of ERP System


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In this presentation we will discuss the basics of ERP system and its structure. We will also talk about client server functions.
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Overview of ERP System

  1. 1. ERP & WEB BASED SUPPLYChain Management Chapter 3 Overview of ERP Systems
  2. 2. Overview of ERP SystemsBasic ERP SystemBasic ERP system has a central database which isused for financial,manufacturing & inventoryapplications..There are service applicationsconnected with HR management andcustomers.Customers and corporate reporting guidethe sales and distribution system which has interfacewith common database.The diagram on shown on next slide outlines thebasic structure of an ERP system
  3. 3. Basic ERP System
  4. 4. Basic ERP SystemIn Basic ERP model there are four basicelements1) Strategic & business planning.2) Sales & operations planning.3) Master Production Schedule with Bill ofMaterial (BOM)4) Material requirement planning.
  5. 5. Basic ERP System1)Strategic & business planning.In an ideal ERP system ,outputs areintegrated to business plans.A strategic Planis long term Plan.A business plan is short term tactical plan.A business plan sets the objective taking intoaccount the environment,the competition andthe SWOT analysis(strength,weakness,opportunities &threat analysis)
  6. 6. Basic ERP System2) Sales & operations plan.Sales & operational plan is derived from theoverall business plan.It is mainly detected bythe sales forecast figures for the variousproducts.operational plan is derived fromsales plan.The aggregate production planindicates the general operational range
  7. 7. Basic ERP System3) Master Production Schedule with Bill of Material(BOM)It deals with items or output of the productionfunction.All future demand for the work in progress and rawmaterials are dependent on the master schedulePast demand does not always get extension infuture& this is kept in mind while planning for rawmaterials and work in process
  8. 8. Basic ERP System The aggregate plan & master production schedule for computers Month 1 2 Computer Production 800 850Weeks 1 2 3 4 5 6 7 8Type1 200 350 150 100 100 75 125 100Type2Type3 75 175 200
  9. 9. Basic ERP System Time facing Master Production Schedule (MPS).MPS has element of flexibilityMany factors decide this production leadtime,commitment of parts & component,buyer-sellerrelationship,excess capacity available & tendency tomake or not to make changes.Time fencing ensures a reasonable controlled flowthrough production system.There are opportunities to introduce changesMPS is frozen in initial period when orders arereceived.A moderate changes allow changes inspecific products if parts are available
  10. 10. Basic ERP System Time facing Master Production Schedule (MPS). Frozen Moderate Flexible Forecast & available capacityCapacityFromCustomerOrders 8 15 26 Time in weeks
  11. 11. Basic ERP System Bill of Materials(BOM)A particular finished product is made up of rawmaterial ,parts,assemblies,sub- assemblies.They arearranged in sequential order as per productionrequirement.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 orlevel of procurement wise.BOMs are constantly revised as per latest changes& correct version is used for production
  12. 12. Basic ERP SystemBill of Materials(BOM)
  13. 13. Basic ERP SystemBill of Materials(BOM)
  14. 14. Basic ERP SystemBill of Materials(BOM)
  15. 15. Basic ERP SystemBill of Materials(BOM)
  16. 16. Basic ERP System Material Requirement PlanningThis program works on the inventory file.,the masterproduction schedule and BOM fileMPS provide a list of items in specific time period.BOM describes the materials and the parts needs tomake each item in specific time period.The stock position is shown by the inventory file.The MRP program accesses the segment of theinventory file and at the same time refers to BOM tocompute quantities of each item required.There can multiple masters schedulers for eachmajor product line and they compete resources
  17. 17. Basic ERP SystemMaterial Requirement Planning
  18. 18. Basic ERP SystemMaterial Requirement Planning
  19. 19. Structure of ERP System
  20. 20. Client Server FunctionsERP 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 fordata entry.or accessing system functionsApplication Layer Business rules,functions,logic &programmes acting on data received/transformed from todatabase servers.Database layer Management of organization’s operationalor transactional data including metadata
  21. 21. Client Server Functions PC PC PC PCPresentation Layer Client Work StationApplication Layer Application Servers Database layer Database Servers
  22. 22. ERP Strengths & Weaknesses End of Chapter 3
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