Enterprise Resource Planning

1. ERP
Entreprise Resource planning
JEYALAKSHMI M
BBA
AYYA NADAR JANAKI AMMAL COLLEGE SIVAKASI

2. Enterprise resource planning

3. Enterprise
 An enterprise is a group of people with a common goal, which has at its disposal certain
resources for achieving the goal.
 The entreprise acts as a single entry .
 The entreprise view of a company or organisation is drastically different from the traditional
approach where the organisation is divided into different units based on the functions they
perform.

4.  In the entreprise way the entire organisation is considered as a system and all the departments are
its sub-systems.
 Information regarding all the aspects of the organisation is stored centrally and is available to all
departments.
 The ERP system has to make is task easier by integrating the information systems, enabling smooth
and seamless flow of information across departmental barriers, automating business processes and
functions and thus helping the organisation to work and move forward as a single entity.

5. ERP
 ERP is an abbreviation for Entreprise Resources Planning and means the techniques and concepts
for integrated management of businesses as a whole from the viewpoint of the effective use of
management resources to improve the efficiency of entreprise management.
 ERP software is designed to model and automate many of the basic processes of a company
from finance to the shop floor, with the goal of integrating information across the company and
eliminating complex, expensive links between computer systems that were never meant to talk to
each other.

6.  ERP software is a mirror image of the major business processes of an organisation such as customer
order fulfillment and manufacturing.
 ERP system set of generic processes produces the dramatic improvements that it is capable of only
when used to connect parts of an organisation and integrate it’s various processes seamlessly,
 For example, when a warehouse in Noida enters a customer order that should automatically flow to
others in the company who need to see it – to the finance department at headquarters in mumbai
and to the manufacturing department in chennai. The lure of information integration struck a chord
with CEOs and CFOs – ERP vendors primary targets – and sales of ERP took off in the way 90’s

7. Common myths of ERP
 ERP is too expensive
 ERP is only for big business
 ERP only benefits executives and management
 ERP solutions are only used to impress customers
 ERP means more work and procedures

8.  One ERP solution fits all
 ERP, SCM, CRM, MRP are all the same
 ERP takes too long to implement
 ERP is an IT system and belongs in the IT department
 An ERP system enables entreprise resource planning

9. Benefits of ERP
Quantitative ( Tangible)
 It is important to note that a discussion of
qualitative payback parameters does not
include the rigorous financial analysis tahts is
employed in more traditional ROI analysis. This
inability to quantify every aspect of the payback
parameters discussed does not diminish their
value.
 The fact that given customer cannot assign a
specific money value to the development of a
new business opportunity or improvement in
customer support and does not mean should
be ignored in favor of more quantifiable results.
Qualitative ( Intangible)
 It has been found that in the long run, the
more intangible payback benefits such as
new business opportunity of customer
satisfaction provide greater value than
more traditional and quantifiable measure
such as increased inventory turns and
lower material costs. So, while justifying the
ERP investment both the quantifiable and
intangible benefits should be given equal
importance.

10. Quantifiable benefits from an ERP system
 It reduced inventory and inventory carrying costs
 It reduces the manpower cost
 It reduces the material cost
 It improves the sales and customer service
 It gives efficient in financial management

11. Intangible benefits of ERP
 Improved productivity
 Better information
 Lowering the cost of products and services
 Shortening the cycles
 More and better control
 Better utilisation of resources
 Increased transparency
 Facilitates strategic planning

12. Evolution of ERP
 In 1960s ,
System used Inventory and management control.
It is the combination of information technology and business processes of maintaining the
appropriate level of stock in a warehouse. The activities of inventory management include identifying
inventory requirements. Setting targets, providing replenishment techniques and options, monitoring
item usages, reconciling the inventory balances, and reporting inventory status.

13.  In 1970s ,
System used Material requirement planning (MRP).
It utilizes software applications for Scheduling production processes. MRP generates for the
operation and raw material purchases based on the production requirements of finished goods, the
structure of the production system,the current inventories levels and the lot sizing procedure for each
operation.

14.  In 1980s ,
System used Manufacturing requirements planning ( MRP II )
It utilizes software applications for coordinating manufacturing processes, from product planning,
parts purchasing, inventory control to product distribution.

15.  In 1990s,
System used Entreprise Resources Planning
It uses multi-module application software for improving the performance of the internal business
activities across functional departments, from product planning, parts purchasing, inventory control,
product distribution, fulfilment,to order tracking, ERP software systems may include application
modules for supporting marketing, finance, accounting and human resources

16. Growth of ERP
The main reason for the growth of ERP are that it enabled improved business performance,
supprted business growth requirements, provided flexible, integrated, real time decision support and
eliminated limitations in legacy systems.
The main advantage of ERP packages are improved business efficiency, information integration for
better decision making,faster response time to customer queries,etc.

17. 1. Enabled improved business performances
 Cycle time reduction
 Increased business agility
 Inventory reduction
 Order fulfilment improvement

18. 2. Support business growth requirements
 New products, product lines, new customers
 Gobal requirements including multiple languages and currencies
3. Provide flexible , integrated, real time decision support
 Improve responsiveness across the organisation

19. 4. Eliminate limitations in legacy systems
 Century dating issues
 Fragmentation of data and processing
 Inflexibility to change
 Insupportable technologies

20. 5. Take advantage of the untapped mid- market ( medium sized organization)
 Increased functionally at a reasonable cost
 Clients – server /open systems technology
 Vertical Market solutions
These are some of the reasons for the explosive growth rate of the ERP markets and ERP vendors. As
more and more companies are joining the race and as the ERP vendors are shifting their focus from big
fortunes 1000 companies to different markets segments the future will see the fleece battle for market
share and merges and acquisitions for strategic and competitive advantage. The ultimate winner in this
race will be the customer, who will get better products and better service at affordable prices.

21. Reference
Enterprise resource planning book of Alex leon