Enterprise Resource Planning


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Enterprise Resource Planning

  1. 1. Enterprise Resource Planning <ul><li>Presented by: </li></ul><ul><li>Sandeep Tiwari </li></ul><ul><li>PGDM 3 rd sem. </li></ul>
  2. 2. ERP – General Concepts <ul><li>1. What is ERP? </li></ul><ul><li>2. Evolution </li></ul><ul><li>3. Why ERP? </li></ul><ul><li>4. Definition </li></ul><ul><li>5. Expectations </li></ul>Enterprise Resource Planning
  4. 4. Enterprise resource planning (ERP) is the industry term used to describe a broad set of activities supported by multi-module application software that helps a manufacturer or other business manage the important parts of its business. These parts can include product planning, parts purchasing, maintaining inventories, interacting with suppliers, providing customer service, and tracking orders. ERP can also include application modules for the finance and human resources aspects of a business. Some of the bigger players in the ERP outsourcing market are SAP, Peoplesoft, and J. D. Edwards. New comers include Oracle, IBM, and Microsoft. MEANING OF ERP Enterprise Resource Planning
  5. 5. What is ERP? <ul><li>ERP is a solution, which </li></ul>Enterprise Resource Planning <ul><li>facilitates company-wide integrated </li></ul><ul><li>information systems, covering all </li></ul><ul><li>functional areas </li></ul><ul><li>performs core Corporate activities and </li></ul><ul><li>increases customer service augmenting </li></ul><ul><li>Corporate Image </li></ul>
  6. 6. FUNCTIONS OF MANAGEMENT Enterprise Resource Planning
  7. 7. Why ERP? <ul><li>For Management – to know what is happening </li></ul><ul><li>in the company </li></ul><ul><li>One solution for better Management </li></ul><ul><li>For cycle time reduction </li></ul><ul><li>To achieve cost control & low working capital </li></ul><ul><li>To marry latest technologies </li></ul><ul><li>To shun the geographical gaps </li></ul><ul><li>To satisfy the customers with high expectations </li></ul><ul><li>To be Competitive & for survival </li></ul>Enterprise Resource Planning
  8. 8. ERP – Expectations <ul><li>Integrating all the functions </li></ul><ul><li>Integrating the systems running in all the locations </li></ul><ul><li>Transparency of information using a single </li></ul><ul><li>data source across the organization </li></ul><ul><li>Software must be responsive </li></ul><ul><ul><ul><li>Modular </li></ul></ul></ul><ul><ul><ul><li>Flexible </li></ul></ul></ul><ul><ul><ul><li>Easy to add functionalities </li></ul></ul></ul><ul><ul><ul><li>Provide growth path </li></ul></ul></ul>Enterprise Resource Planning
  9. 9. Evolution of ERP <ul><li>1960’s - Systems Just for Inventory Control </li></ul><ul><li>1970’s - MRP – Material Requirement Planning </li></ul><ul><li>(Inventory with material planning & procurement) </li></ul><ul><li>1980’s - MRP II – Manufacturing Resources Planning </li></ul><ul><li>(Extended MRP to shop floor & distribution Mgnt.) </li></ul><ul><li>Mid 1990’s - ERP – Enterprise Resource Planning </li></ul><ul><li>(Covering all the activities of an Enterprise) </li></ul><ul><li>2000 onwards – ERP II – Collaborative Commerce </li></ul><ul><li>(Extending ERP to external business entities) </li></ul>Enterprise Resource Planning
  10. 10. Information Islands Enterprise Resource Planning
  11. 11. The Current Scenario <ul><li>Islands of Information </li></ul><ul><li>Difficult to get timely & accurate information </li></ul><ul><li>Heterogeneous Hardware & Software platforms & practices </li></ul><ul><li>Poor connectivity between different </li></ul><ul><li>organizational locations </li></ul><ul><li>Sticking with obsolete technology </li></ul><ul><li>Resist to change </li></ul><ul><li>Lack of proven man-power to develop </li></ul><ul><li>integrated software </li></ul>Enterprise Resource Planning
  12. 12. ERP – Options <ul><li>OPTION 1 – MAKE [Using Internal resources] </li></ul><ul><li>Developing a custom-built ERP package, specific to the </li></ul><ul><li> requirements of the organization, with the help of the </li></ul><ul><li>in-house IT department </li></ul><ul><li>OPTION 2 - BUY </li></ul><ul><li>Going for Tailor-made ERP packages available in the market like </li></ul><ul><li>SAP, Oracle applications, Baan, PeopleSoft etc. </li></ul><ul><li>OPTION 3 – MAKE [using External resources] </li></ul><ul><li>Developing a custom-built ERP package, specific to the requirements of the organization, with the help of a software solution provider. </li></ul>Enterprise Resource Planning
  13. 13. ERP Product selection Criteria <ul><li>Goal: To select the </li></ul><ul><li>Most Suitable Software </li></ul><ul><li>Package Solution </li></ul>5 Strategic Requirement Levels Functionality Technology Vendor Support Costs Enterprise Resource Planning
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  15. 15. How can Engineers benefit from ERP systems ? Enterprise Resource Planning
  16. 16. Usesful SAP Modules for Engineers <ul><li>MM- Material Management </li></ul><ul><ul><ul><li>Better Procurement Handling </li></ul></ul></ul><ul><ul><ul><li>Org a nized Inventory Management </li></ul></ul></ul><ul><ul><ul><li>Easy Purchase Organization </li></ul></ul></ul><ul><ul><ul><li>Faster Storage Location </li></ul></ul></ul><ul><li>PM – Plant Maintenance </li></ul><ul><ul><ul><li>Maintenance Order Management </li></ul></ul></ul><ul><ul><ul><li>Equipment and Technical Objects Coordination </li></ul></ul></ul><ul><ul><ul><li>Preventive Maintenance </li></ul></ul></ul><ul><ul><ul><li>Workflow Scenarios </li></ul></ul></ul><ul><ul><ul><li>Work Clearance Management </li></ul></ul></ul>
  17. 17. Istanbul Fast Ferries (IDO) Uses SAP Software
  19. 19. <ul><li>Annually 91 million passanger </li></ul><ul><li>Annually 5,5 million vehicles </li></ul><ul><li>Daily 1,200 navigation capacity </li></ul><ul><li>90 Ships </li></ul><ul><li>82 Terminals </li></ul><ul><li>3,200 personel </li></ul><ul><li>314 Million YTL endorsement </li></ul>Istanbul Fast Ferries (IDO) Enterprise Resource Planning
  20. 20. <ul><li>SAP Systems arranges relationship between ; </li></ul><ul><li>shipping condition s , </li></ul><ul><li>route determination, </li></ul><ul><li>shipping point , </li></ul><ul><li>employee conditions, </li></ul><ul><li>fuel supply, </li></ul><ul><li>maintenance </li></ul>Enterprise Resource Planning
  21. 21. Controlling Module (CO) <ul><li>IDO pass e nger can send SMS to IDO SAP system and get the information about shipping route times. </li></ul><ul><li>This process is a service of Controlling Module. </li></ul>Enterprise Resource Planning
  22. 22. OUTPUTS of ERP Systems DOCUMENTS Proposal Orders approval Delivery plans Shipping papers Warehouse check list Material document Accounting document Delivery/shipping document Invoice Dept & credit doc.
  23. 23.
  24. 24. The Cost of ERP Systems <ul><li>Major suppliers are SAP AG, Peoplesoft, Oracle, and Baan. Also smaller PC based suppliers. </li></ul><ul><li>Costs for larger ERP systems range from hundreds of thousands to several million dollars. </li></ul><ul><li>Outside consultants are usually involved in selection, configuration, and implementation. </li></ul>Enterprise Resource Planning
  25. 25. The Cost of ERP Systems <ul><li>Consultant costs can run up to 3 times the cost of the system itself according to a Gartner Group study. </li></ul><ul><li>Added costs also include additional people, new computer hardware, and the cost to develop a new, integrated database </li></ul><ul><li>Successful implementation requires leadership and top management commitment to a vision for the business </li></ul>Enterprise Resource Planning
  26. 26. ERP Software Companies & Marketshares Software Market Shar e SAP 15.6 Peoplesoft 4.9 Oracle 4.8 Baan 3.0 CA 3.0 JDE 2.2 SSA 2.1 GEAC 2.0 IBM 1.8 JBA 1.7 Others 59.0
  27. 27. Enterprise Resource Planning
  28. 28. How ERP systems are implemented within companies? <ul><li>ERP Software Companies start analysing the prospective company(s), identifing their individual needs. </li></ul><ul><li>Setup of ERP systems </li></ul><ul><ul><li>For Mid-size companies 5-12 months </li></ul></ul><ul><ul><li>Large Companies 6-18 months </li></ul></ul>Enterprise Resource Planning
  29. 29. Secretary’s New printer application Transfer to Finance Departmen Transfer to Accounting Office Transfer to Manager Transfer to Accounting Office Example: Before ERP Systems
  30. 30. Companies after ERP Systems Enterprise Resource Planning
  31. 31. Prepare Base for ERP <ul><li>Do not start without Management commitment </li></ul><ul><li>Allocate sufficient funds </li></ul><ul><li>Identify Core Project Team </li></ul><ul><li>Select specialists from all functional areas </li></ul><ul><li>Evaluate and select ERP package </li></ul><ul><li>Evaluate Implementation Partner </li></ul><ul><li>Make an Implementation Plan </li></ul><ul><li>Present plan to Management Committee for sanctions </li></ul><ul><li>Present plan to Employee groups for feedback/acceptability </li></ul><ul><li>Plan for User Training </li></ul><ul><li>Plan for Future upgrades </li></ul>
  32. 32. VENDORS OF POPULAR ERP SOFTWARE unknown 14.2 million EUR CDC Software 2006 2,648 million INR Ramco Systems 2006 45 million EUR ABAS Software 2006 67.2 million USD Net Suite 2007 50.5 million GBP COA Solutions Ltd 2007 130 million USD Consona Corporation 2006 225 million USD QAD 2005 288 million USD IFS 2005 1,907 million NOK Visma 2006 384.1 million USD Epicor 2006 390.776 million USD Lawson Software 2008 409.1 million USD CDC Software 2005 352.6 million EUR Unit 4 Agresso 2006 44.2 billion USD Microsoft Dynamics 2006 935.6 million GBP The Sage Group 2006 2.1 billion USD Info global solutions 2006 14.38 billion USD Oracle Applications 2006 9.4 billion EUR SAP YEAR REVENUE(NATIVE CURRENCY) VENDOR
  33. 33. Solutions of ERP <ul><li>Financial Management </li></ul><ul><li>Inventory Management </li></ul><ul><li>Purchasing </li></ul><ul><li>Sales Management </li></ul><ul><li>Production Planning </li></ul><ul><li>Advanced Visual Planning </li></ul><ul><li>Manufacturing Management </li></ul>Enterprise Resource Planning
  34. 34. In this real case there the benefits of the ERP systems <ul><li>Online Data Flow decreases the process time </li></ul><ul><li>Fast & Online Confirmation </li></ul><ul><li>Less Paperwork </li></ul><ul><li>No need for folder storage </li></ul><ul><li>Database Security </li></ul><ul><li>Less Employee needed </li></ul><ul><li>Easy Financial Management </li></ul><ul><li>Better Inventory Management </li></ul>Enterprise Resource Planning
  35. 35. Python OpenERP Java Openbravo Apache, Java OFBiz LedgerSMB Kuali Foundation Java JFire PHP, MySQL GRR (software) GNU Enterprise Python ERP5 PHP Dolibarr Java Compiere PHP BlueErp Java Adempiere LANGUAGE BASE ERP PACKAGE
  36. 36. Summary <ul><li>Optimum utilization of resources </li></ul><ul><li>Customer satisfaction </li></ul><ul><li>Seamless integration between Functions </li></ul><ul><li>Reduced overheads & inventory </li></ul><ul><li>Timely responsiveness </li></ul><ul><li>Market share & image enhancement </li></ul><ul><li>Faster design to manufacturability </li></ul><ul><li>Keep up with technology changes </li></ul><ul><li>Only way for integrated systems for a client with multiple locations </li></ul>
  37. 37. Open Session
  38. 38. Thanks for your Participation & Co-operation
  39. 39. THANK ‘U’