The document provides an overview of common ERP modules like finance, plant maintenance, quality management, and materials management. It describes the objectives and key functions of each module. For example, it states that the finance module handles accounting, controlling costs, treasury management, and enterprise reporting. It also provides detailed descriptions of sub-modules and processes within each ERP module.

1. Chapter 5
ERP Modules
By
Sonali Chauhan
UDIT, TYBSc. IT
7/3/2010 1
Objective: ERP Modules
• Introduction
• Finance
• Plant Maintenance
• Quality Management
• Materials Management
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• ERP Packages contains many modules
• Features vary with ERP packages
• Most common modules in ERP are:
– Finance
– Manufacturing & Production Planning
– Sales and Distribution
– Plant maintenance
– Quality Management
– Materials Management etc
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1

2. FINANCE : Introduction
• Concept of Information technologies
means providing:
– Right information
– Right time
– Right people
– Can make critical difference to the
organization
• Financial data provides key information
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The finance module of most ERP system will
have the following sub-system
– Financial Accounting
• (General Ledger, Accounts Receivables/
Payable, Fixed Assets Accounting, Legal
consolidation)
– Investment Management
• (Investment planning, Budgeting, controlling,
Depreciation, Forecast Simulation Calculation)
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Cont...
– Controlling
• (Overhead cost controlling, Activity based
costing Product cost Accounting Profitability
analysis)
– Treasury
• (Cash Management, Treasury Management,
Market Risk Management, Funds Management)
– Enterprise Controlling
• (Executive Information System (EIS), Business
Planning and Budgeting, Profit centre
Accounting)
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2

3. Financial Accounting...
• Objective :
– Integration of financial information
essential for strategic decision-making
– Centrally track financial accounting data
within international framework
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Financial Accounting...
General Ledger :
• Essential for financial accounting and
decision making
• Serves as a central pool of financial
data and in accounting area, Origin of a
transaction can be traced,
• Supports all the functional needs in
financial accounting.
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Financial Accounting...
Typical General Ledger contains i.e.
summary information of other
components:
– Purchasing (Quantity and value)
– Sales (order and bill)
– Vendor (Payable)
– Customer (Receivables)
– Fixed assets
– Employees (salary and wages)
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3

4. Financial Accounting...
Accounts Receivables/ Payable:
• These subsystems are integrated with
all other subsystems where financial
data originates: both with General
Ledger ,Sales and Distribution, Material
Management.
• Transaction performed automatically
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Financial Accounting...
• Accounts Receivable and Payable
functions include:
– Internet integration
– Document management
– Important support for EDI processing
– Enterprise-wide credit management
– payment automation
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Financial Accounting...
Asset Accounting:
• Serves as a sub ledger to the General
Ledger
• Manages company’s fix assets and
provides detail info abt assets related
transaction.
• Integration with plant management
• Management of leased assets and lease
under construction
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4

5. Financial Accounting...
Legal Consolidation:
• serves as a tool to make a consolidated
financial statement with operational
data
• Legal consolidation is closely integrated
with Financial Accounting system
• permit direct data transfer from
individual statement into consolidated
report
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Financial Accounting...
• Ease the workload and reduces data
entry error
• Allows multiple view of ur consolidation
data.
• Generate reports about legal entries
and segments of ur business.
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Controlling... FINANCE
• Introduction
– Gathers functions for Internal cost
accounting
– Versatile information system
• Generate reports
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5

6. Controlling... FINANCE
Overhead Cost Controlling:
• Focus on monitoring n allocation of overhead
Cost Centre Accounting:
• Analyses where overhead occurs
Overhead Orders:
• Collects and analysis cost based on individual
internal measures
• Monitors and automatically check budgets
assign to each measures
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Controlling... FINANCE
Activity Based Costing:
• Goals of the entire enterprise should
come before the goals of individual
activity
Product Cost Controlling:
• determine cost of product or services
• Use to determines the lowest price
limit
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Controlling... FINANCE
Cost Object Controlling:
• Helps to monitor manufacturing orders
• Integration with logistics, provides actual
cost of the object costs
• Determine n analysis Variance betw actual
manufacturing cost and plan cost
Profitability analysis:
• Examines the sources of returns.
• Revenues are assigned according to market
segment
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6

7. Investment management... FINANCE
• Investment planning – Where to invest, what is
the expected profit of each ventures. Which
department to need more investment?
• Budgeting – Financial layout of new or existing
project – Availability and cost of finance
• Controlling – The expenses, the overheads
• Depreciation - Budgeted balance sheets and cost
planning are always on current values.
• Forecast – Speculation and forecast of market
trend. Rising or declining?
• Simulation Calculation: Making a mathematical
model and deriving alternatives to choose from.
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Treasury Modules... FINANCE
• Managing long ,short, medium
payment flow
• Managing Risk factor
• Planning financial transaction.
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Treasury... FINANCE
Cash Management:
• Analysis financial transaction for given period
• Manages cash inflow and outflow
• Distinction is made according to time period (short
medium long)
• Information is available to make cash management
decision and for analyzing purpose.
Treasury Management:
• Current liquidity, Currency, Risk position
• Conditions prevailing on the money and capital
market
• Consider all those before taking decision
• Securities and loans
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7

8. Treasury... FINANCE
Market Risk Management:
• Ensures competitiveness
• Complex feed back loop: from data collection, risk
management, analysis and simulation
• Assessing the interest rates
• Assessing the currency rates
• Simulate market data – “what if” analysis
Funds Management:
• From budgeting to payment on one side and
• From Billing to actual receiving on the other
• Enables to control funds commitments and
determine the budget utility.
•
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Helps to identify budget bottleneck 22
Enterprise Controlling... FINANCE
Introduction
• Compromise to optimize share holder
value, for growth and investment.
• Modules includes :
– Executive information system
– Business planning and budgeting
– Profit centre Accounting
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Enterprise Controlling... FINANCE
Executive Information System:
• Provides overview of critical parameters
• Gets both internal and external data
• Drill-Down reporting to evaluated data
Business Planning and Budgeting:
• Business targets such as Return on investment
• Central investment planning, budget release and
tracking
Profit Centre Accounting:
• Analysis profit
• Possible to analysis selected balanced sheet items
and use for calculation of ratio such as ROI
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8

9. PLANT MAINTENANCE ...
• Introduction
– Preventive Maintenance control
– Equipment Tracking
– Component Tracking
– Plant Maintenance Calibration Tracking
– Plant Maintenance Warranty Claims
Tracking
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Plant Maintenance...
Preventive Maintenance Control:
• Planning • Keeping track of
• Scheduling – Hours of usage
Production produced
• Control of facilities
– Consumables (fuel)
and equipment
– Days in operation
• Equipment lubrication – Life of each component
• Component • Lower repair cost
replacement
• Avoiding downtime, m/c
• Safety inspection breakage etc.
• Monitoring • Improve m/c reliability
whc leads to higher
production
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Plant Maintenance...
Equipment tracking:
• Equipment is an asset to be used, monitored and
protected
• History of equipment: acquisition to write off
• Operational dependencies
• (special features, imported spare parts, their cost
and expected life ,Guarantee period, Next service
due)
• Information (model and serial no) for each
equipment to be made available.
• Provide detail information to technical specialist.
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9

10. Plant Maintenance...
Component Tracking:
• Components are typically sub-set of large
equipment.
• Enable to identify chronic repair problem of
component – replacement or repair
• Do not wait for components to fail, replace it
before that
• Reduce downtime
• Also include repair/exchange history and
component service life.
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Plant Maintenance...
Plant Maintenance Calibration
Tracking :
• Allows organization to leverage their investment in
Plant Maintenance module by providing for tracking
of equipment calibration in support of ISO 9000
requirement
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Plant Maintenance...
Plant Maintenance Warranty Claim
Tracking :
• Administrative system designed to provide control
of all items covered by manufacturer and vendor
warranty
• Recover imbursement to which they are entitled.
• Type and length of warranty – elapsed time
,operating unit
• generate Complete information regarding warranty
service provider
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10

11. QUALITY MAINTENANCE...
• Introduction
– ISO Standards defines:
• Functions of QM
• Elements of QMS
– In Production, Quality Assurance
• No longer just “Inspection” and “Elimination”
• But also the production process becomes the
focus of attention.
– Quality spreads to the entire loop: Product
development – procurement of sales and
distribution – (entire usage phase)
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Quality Maintenance...
CAQ and CIQ:
• CAQ : Computer Aided Quality Management
– Isolated, cnt carry out comprehensive tasks of
QMS
• CIQ: Computer – Integrated Quality Management
– More appropriate
• Supports quality management in procurement,
product verification, quality documentation,
processing of the problem
• Module do not direct interact wit other modules
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Quality Maintenance...
The quality Management Module fulfills the
following functions:
• Quality Planning :
– Management for basic data for quality planning
and Inspection planning, Material Specification
• Quality Inspection:
– Trigger inspections, Inspection processing with
inspection plan selection and sample calculation,
– Print shop papers for sampling and inspection.
– Records results and defects
– Makes the usage decision and trigger follow up
action
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11

12. Quality Maintenance...
Cont...
• Quality Control:
– Dynamic sample determination on the basis of
Quality level history.
– Application of statistical process control
techniques using quality control charts
– Quality scores for inspection lots,
– Quality notification for processing internal or
external problems and initiating corrective action
to correct the problems
– Inspection of lot processing
– QMIS (Quality Management Information System)
for inspection and inspection results and quality
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Quality Maintenance...
CIQ (Computer – Integrated Quality
Management)
• Only an integrated system can support all the
elements of Quality Management System according
to ISO 9000.
• Quality Management function influence all the
function within company, affecting all the phase.
• QM Module integrate with other modules to link the
task on quality management.
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Quality Maintenance...
• The quality Management Module is integrated
with the master data and processes of the
following applications...
– Material Management:
 Purchasing, inventory management, warehouse
management, Material requirement planning
– Production:
 Work scheduling, shop floor control
– Sales and Distribution:
 Delivery, creation of quality certificates
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12

13. Quality Maintenance...
• The Quality Management module supports the
exchange of data with other application in order to:
– Prevent related data from being recorded and
stored redundantly.
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MATERIALS MANAGEMENT...
Introduction:
• The Material Management Module optimizes:
– All purchasing process with work-flow
driven processing functions
– Enables automated supplier evaluation,
– Lowers procurement and warehousing
costs
– Integrates invoice verification
– In short decides - When to buy, What to
buy and How much to buy!
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Material Management...
• The main Modules of Material Management
Module are:
– Pre-purchasing Activities
– Purchasing
– Vendor Evaluation
– Inventory Management
– Invoice Verifications and
– Material Inspection
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13

14. Material Management...
Pre-Purchasing Activities :
• Maintain service master database.
• Service specification which include service
wit item and item with material.
• Manual entry effort is reduced
• 2 ways of entering service specification
– PLANNED
– UNPLANNED
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Material Management... Cont...
• Planned Serviced Specification:
– service whose precise nature n intended scope is
known at the beginning of the project
– Price n quantities are both stipulated
• Unplanned Serviced Specification:
– Services which cannot be initially specified in
detail
– No description
– Entered in the form of money value limit
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Pre-purchasing activities modules
Requirements Calculation
Requisition for Quotations
Vendor Rating
Quotation Evaluation
Vendor Selection
7/3/2010 Contracts 42
14

15. Material Management...
Purchasing :
• Important component of Material Management.
• Integrated with other modules and communicates
with them for constant flow of data
• Support all phase:
– Material planning and control, purchasing,
– goods receiving
– Inventory management
– Invoice management
• Follows task like
– Procurement of material, n service ,determine source of
supply , planning n control of material, monitoring
delivery n payment of vendors
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Material Management...
Vendor Evaluation:
• Integrated into MM
• Information like delivery dates ,prices
n quantity are taken from purchase
order
• Also used data of QM
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Material Management...
• In procurement of material:
– Select suppler according to existing supply
relationship
– Provide with proper information on prices n
terms of payment and delivery
– Evaluate vendors
• In procurement of service:
– Check reliability of vendors
– Check vendors performance
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15

16. Material Management...
Inventory Management:
• Allows to manage stocks
• Obtain overview of current stock
• Shows all entries of stocks like
– warehouse,
– stock orders but not delivered,
– reserved for production or for customers,
• quality and quantity inspection and monitored of
stock
• Stocks frm vendors and from customers managed
separately
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Material Management...
Cont...
• Stocks are managed by values and quantity basis
• Prerequisite cost accounting
• With every goods movement following are updated
– Stock value for inventory Management
– Account assignment for cost accounting
– G/L account
• Both quantity n values are updated automatically
with the goods movement
• Goods movement includes
– Internal movement (goods from production,stock transfer)
– External movement (goods from sales order)
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Material Management...
Cont...
• Inventory management includes inventory
methods:
– Periodic Inventory
– Continuous Inventory
– Inventory Sampling
– Cycle Counting
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16

17. Material Management...
Invoice Verification and Material
Inspection:
• Link between MM and financial management,
controlling and asset accounting components
• It serves the following propose:
– Completes the material procurement
– Allows invoice that do not originate in material
procurement
– Allows credit memos
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Material Management...
Cont...
• Donot handle payment or invoice
• Information is passed on to other department
• Invoice contains many information which has to be
posted i.e. enter into the system.
• Refers to current transaction, purchase transaction
• posting invoice completes invoice verification
• System now contains data necessary for invoice to
be paid.
• Accounting department retrieve this data for
appropriated payment
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Thank you
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