Erp

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Erp

  1. 1. Enterprise Resource Planning <ul><li>Enterprise Resource Planning - a software system that integrates core business areas such as manufacturing, distribution, financials and human resources. </li></ul><ul><li>Example: A warehouse in Singapore enters a customer order </li></ul><ul><ul><li>data automatically flows to other areas of the company. </li></ul></ul><ul><ul><li>It would flow to the financial and accounting people in New York </li></ul></ul><ul><ul><li>Automatically update accounts receivable. </li></ul></ul>
  2. 2. Enterprise Resource Planning <ul><li>The order would also flow to the manufacturing operations in Europe instructing them to make another component. </li></ul><ul><li>Inventory levels would automatically be reduced in the warehouse and an order would be placed to replenish inventory . </li></ul>
  3. 3. Benefits of ERP <ul><li>One common system - less duplication, more efficient </li></ul><ul><li>Customer focus - better customer service </li></ul><ul><li>Open communications among business partners </li></ul><ul><li>Adherence to standard business practices </li></ul>
  4. 4. Benefits of ERP <ul><li>Y2K compliant </li></ul><ul><li>Removes need for in-house development </li></ul><ul><li>Good reporting capabilities </li></ul><ul><li>Support for multiple currencies and languages. </li></ul>
  5. 5. Disadvantages of ERP <ul><li>High cost </li></ul><ul><li>Forced change of processes </li></ul><ul><li>Very complex software </li></ul><ul><li>Lack of trained people </li></ul><ul><li>Not Internet-ready </li></ul>
  6. 6. ERP Vendors <ul><li>SAP - S ystems A pplications P roducts in Data Processing </li></ul><ul><ul><li>29% market share - Honda, IBM, Bank of Canada, P & G </li></ul></ul><ul><li>BAAN - Dutch - 5% - Russell Stover Candy, Mercedez Benz, Boeing, Nortel </li></ul><ul><li>Peoplesoft - California - 6% - NBA, Adidas, Anderson Consulting, Hilton Hotels, NYNEX </li></ul>
  7. 7. ERP Vendors <ul><li>Oracle - California - 10% - USPS, CBS, Nike, Kodak, Toronto Dominion Bank </li></ul><ul><li>J.D. Edwards - Colorado - 7% - Harley Davidson, Saab Automobile, BellSouth Cellular Corporation, Holiday Inns, Fox Television Stations </li></ul>
  8. 8. Success Stories <ul><li>Autodesk (computer aided design software maker) </li></ul><ul><ul><li>Reduced delivery time from two weeks to less than 24 hours </li></ul></ul><ul><li>IBM Storage Systems Division </li></ul><ul><ul><li>Reduced time to re-price – 5 days to 5 minutes </li></ul></ul><ul><ul><li>Time to ship a replacement part – 22 to 3 days </li></ul></ul><ul><ul><li>Time to complete a credit check – 20 minutes to 3 seconds </li></ul></ul>
  9. 9. Success Stories <ul><li>Fujitsu Microelectronics </li></ul><ul><ul><li>Reduced the cycle time for filling orders – from 18 days to 1.5 days </li></ul></ul><ul><ul><li>Time to close financial books – from 8 to 4 days </li></ul></ul>
  10. 10. Horror Stories <ul><li>FoxMeyer Drug – software helped drive the company into bankruptcy </li></ul><ul><li>Dell computer – software will not fit its decentralized management model </li></ul><ul><li>Applied Materials – overwhelmed by the organizational changes involved </li></ul><ul><li>Dow Chemicals – spent seven years and 500 million dollars on R/2 – now starting again with R/3 </li></ul><ul><li>Hershey’s – missed timely deliveries </li></ul>
  11. 11. Reasons for failure <ul><li>Software logic and the company strategy may not match! </li></ul><ul><li>Examples – p. 125 of Devenport article </li></ul>

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