The document discusses Enterprise Resource Planning (ERP) systems. ERP systems integrate various business functions like manufacturing, sales, inventory, accounting etc into a single system. The document outlines the evolution of ERP from earlier software packages, describes key components and benefits of ERP like improved efficiency and information integration. It also discusses challenges in ERP implementation like costs, changes to business processes and resistance to change.

1. Presented By:
Gurwinder Kaur
3804
Enterprise Resource
Planning (ERP) Systems

2. What is ERP?
• The practice of consolidating an
enterprise’s planning, manufacturing, sales
and marketing efforts into one management
system.
• Combines all databases across
departments into a single database that can
be accessed by all employees.

3. Evolution of ERP
 1960s: software packages with inventory control
 1970s: MRP systems
 Production schedule with materials management
 1980s: MRPII systems
 Adds financial accounting system
 1990s: MRPII
 Integrated systems for manufacturing execution
 Late 1990s: ERP
 Integrated manufacturing with supply chain

4. Major Reasons for Adopting ERP
• Integrate financial information
• Integrate customer order information
• Standardize and speed up operations
processes
• Reduce inventory
• Standardize Human Resources information

5. How do ERP System Work
5
Employees
Managers and
Stakeholders
Central
Database
Reporting
Applications
Human
Resource
Management
Applications
Financial
Applications
Manufacturing
Applications
Inventory
And Supply
Applications
Human
Resource
Management
Applications
Service
Applications
Sales and
Delivery
Applications
Sales Force
And Customer
Service Reps
Customers Back-office
Administrators
And Workers
Suppliers

6. Components of ERP System
 Finance: modules for book keeping and making
sure the bills are paid on time. Examples:
General ledger
Accounts receivable
Accounts payable
 HR: software for handling personnel-related tasks
for corporate managers and individual employees.
Examples:
HR administration
Payroll
Self-service HR

8. 8
Customers
Customer
Demographic
Files
Sales Dept.
Vendor
Orders
Parts
Accounting
Accounting
Files
Purchasing
Purchasing
Files
Order is placed
with Vendor
Invoices
accounting
Inventory
Files
Warehouse
Checks for Parts
Calls back “Not in stock”
“We ordered the parts”
“We Need parts #XX”
“We ordered the parts”
Sends report
Sends report
Sends report
Ships parts

9. 9
An ERP Example: After ERP
Database
Customers Sales Dept.
Purchasing
Warehouse
Accounting
Vendor
Inventory Data
If no parts,
order is placed
through DB
Orders
Parts
Order is submitted
to Purchasing.
Purchasing record
order in DB
Order is placed
with Vendor
And invoices accounting
Financial Data exchange;
Books invoice against PO
Books inventory
against PO
Ships parts

10. Potential Benefits of ERP
 Internal Benefits
 Integration of a single source of
data
 Common data definition
 A real-time system
 Increased productivity
 Reduced operating costs
 Improved internal communication
 Foundation for future improvement

11. Potential Benefits of ERP
External Benefits
• Improved customer service and order
fulfillment
• Improved communication with suppliers and
customers
• Enhanced competitive position
• Increased sales and profits

12. Benefits of ERP
Direct benefits include:
1. improved efficiency
2. information integration for better
decision making
3. Faster response time to customer
queries

13. Benefits of ERP
Indirect benefits include:
1. Better corporate image
2. Improved customer goodwill
3. Customer satisfaction

14. Potential Benefits are
1. Reduction of Lead-Time
2. On-Time Shipment
3. Reduction in cycle time
4. Better customer satisfaction
Others are
1. Improved supplier performance
2. Increased Flexibility
3. Reduction in quality costs
4. Improved resource utility
5. Improved information accuracy and decision-
making ability

15. Risks with ERP Implementation
 Expensive (can costs 100 thousands to
millions of dollars)
 Time-consuming (can take months to years)
 Great risk for the organization
 Transfer of Knowledge
 Acceptance with the company

16. Before ERP & After ERP
 Stand alone System.
 Lack of coordination
among business
function(Manufacturing &
sales)
 Non Integrated data: Data
have different meanings.
 System are maintained on
a procedural basis
 Redundant data and
inconsistent information.
 Difficult to manage.
 Integrated System.
 Support coordination
among business functions.
 Integrated Data: Data have
the same meaning across
multiple functions.
 Changes affect multiple
functions or Systems
 Common interfaces across
systems.

17. Modules of ERP
 Finance
 Material
 Sales
 Marketing
 Personnel

18. Popular ERP Modules
ERP
Finance
Sale
Planning
Inventory
Operation
HR

19. ERP Finance Module
In This Data is collected From
various functional departments
and generate financial reports
ledger, Trail Balance, Balance
Sheets etc.

20. ERP HR(Human Resource) Module
 HR Module routinely maintain a complete
employee database including contact information,
Salary details Attendance, Promotions of all
employees.
 Produce pay check Reports
 Maintain personnel Record
 Training
 Time and Attendance Benefits

21. ERP Purchasing Module
Purchasing module is tightly
integrated with the inventory
control and production planning
Modules.

22. ERP Inventory Module
 Inventory Module facilitates processes
of maintaining the appropriate level of
stock in a warehouse.

23. BPR

24. ERP Implementation Approaches
 The big bang – install a single ERP system across
the entire organization
 Franchising – Independent ERP systems are
installed in different units linked by common
processes, e.g., bookkeeping.
 Slam dunk – install one or several ERP modules
for phased implementation of key business
processes

25. Major Phases of ERP Implementation
 Initiation – develop business case, project scope,
and implementation strategy
 Planning – establish implementation team,
determine goals and objectives, establish metrics
 Analysis and process design – analyze and
improve existing processes, map new processes to
be adopted by the system

26. Major Phases of ERP Implementation
 Realization – install a base system,
customization, and test the system
 Transition – replace the formal system with
the new system, data conversion
 Operation – monitor and improve system
performance, provide continued training and
technical support

27. Major Challenges to ERP Implementation
 Limitations of ERP technical capabilities
 Inconsistency with existing business processes
 Costs - implementation (hardware, software,
training, consulting) and maintenance
 Changes in employee responsibilities

28. Major Challenges to ERP Implementation
 Flexibility of software system upgrades
 Implementation timelines
 Availability of internal technical knowledge
and resources
 Education and training
 Implementation strategy and execution
 Resistance to change

29. New Developments In ERP
 Availability of web-based and wireless ERP
systems
 Adoption of easy-to-install ERP systems
 Linkage to other software systems, e.g., supply
chain management system, e-commerce, customer
relationship management system

30. Advantages of ERP
 Quicker completion of Processes
 Single system
 Modular software
 Database
 Easier to track various tasks
 Manage globally Data

31. Disadvantages of ERP
 Cost
 Time Consuming
 Training to employees