The document discusses the evolution of enterprise resource planning (ERP) systems from the 1960s to present day, how ERP systems address issues related to functional conflicts within organizations by taking a process-oriented view, and the benefits ERP systems provide such as reduced costs, improved productivity, and increased customer satisfaction through tighter integration of business functions.

1. Snoop M.K
Deepti Kanjani
Manoj Kumar Sharma
Poulomi Sen
Shaswati Sen
Chaitanya Banal

2. Definition :
ERP (Enterprise resource planning) can be defined
as a “ software solution that addresses the enterprise
needs taking the process view of the organization, to
meet the organizational goals tightly integrating all
functions of an enterprise ”

3. Evolution of
ERP System

4. Till 1960’s (Pre-computer age)
 Re-order point
# Kardex Card (Bin Card)
# Visual Checking (2-bin sys)
# ‘A’ Class more often (monthly)
# Fixed Quantity / Period
Consumption
 Once in a Quarter

5. 1960’s (IBM 1401 ERA)
 Purchase Order issue, and not only IC
 Stock Figure available only at Month end
 Purchase schedules & inventory adjusted by shortage
every month for 3-4 months
All Run Once-A-Month
5

6. 1970’s (IBM 370 ERA)
 CLOSED-LOOP MRP
 Importance of MPS (in weeks)
 Planning, rescheduling in weeks
All Weekly
6

7. 1980’s MRP-II (burrows
20-30 terminals)
 Planning & Monitoring all resources
 Mfg. Mkt. , Fin., Engg., Mat’ls
7

8. 1990’s (C/S tech.)
According to Gartner
 ERP is an integrated application software suite that
balances manufacturing, distribution and financial
business functions when fully implemented, ERP can
enable enterprises and allows for necessary
management
 ERP is the technical evolution of MRP-II through the
introduction of RDBMS, CASE, GUI, 4GL
Development Tools and Client Server Architecture.
8

9. Evolution of Mfg. Systems
DEM
ERP
MRP II
MRP
IC
1960 1970 1980 1990 2000
9

10. Enterprise by Function
The 1980’s Enterprise
MFG. Distribution
Finance Projects
Purchasing Sales
10

11. Functional Applications
The 1980’s Enterprise
MRP then
Distribution
MRP II
Finance Projects
Purchasing Sales
11

12. Simplifying Baan ERP into
Components
MFG. Distribution
ERP
Finance Projects
Purchasing Sales
12

13. Extended Enterprise
Today’s Enterprise
Customers
MFG. Dist.
Suppliers
Finance Projects
Pur. Sales
Value Chain 13

14. Beyond ERP : Extending
the Enterprise
Today’s Enterprise
Customers
MFG. Dist.
Suppliers
Finance Projects
Pur. Sales
Baan Front Office Baan ERP Baan SCS 14

15. Competing in Your Market
Enterprise 1
MRP New potential
Customer
FIN
Enterprise 3
Enterprise 2
MFG DIST
Suppliers
Customers
MFG DIST
FIN PCS
FIN PCS
SLS
PUR
SLS
PUR
15

16. Why ERP :
Helps in reduction of organization’s operating costs can
be reduced.
Integrates all parts of an organization
Increases the efficiency of operations as a result of this
integration
Integration of information systems which enables
seamless flow of information across the organization.
Enables consolidation of different software in the
organization
Helps in better customer service

17. Capability of ERP
 Delivery Time (Speed) :Explicitly
 Flexibility (Customization) :Explicitly
 After Sales Services :Explicitly
 Quality / Reliability :Implicitly
 Cost :Implicitly
17

18. Implementation of ERP
The implementation of most of the ERP packages
begin with the ENTERPRISE MODELING which
defines 1.The enterprise structure,
2.The authority functions,
3. The process and the business rules .
oThe enterprise modeling is the platform for the
ERP system implementation.
oThe ERP solution is structured in the modular
fashion to cover the entire business operation.

19. A typical ERP package solution has the following
modules :
1. Sales , Marketing , Distribution
2. Manufacturing
3. Stores Management
4. Finance
5. Personnel
6. Maintenance
7. Purchase Inventory
8. Planning and Control.

20. The modules are designed for
1. Data capture,
2. Data transaction validation
3. Its analysis
4. Accounting upgradation and
5. Reporting.

21. ERP Features :
1. Security Authorization
2. Referencing Responsibility
3. Implementation of business rules
 These features are provided to
1. Safeguard the business of the organization from
illegal practice
2. To protect the valuable information from misuse.

22. Authorization is a feature provided for ensuring
that the transaction is completed with regards to
the business rules set by the management.
Referencing is a feature for tracking the chain of
events for monitoring , progress checking and
control.
The business organization runs through the rules
and responsibility allocation. A strict adherence to
them is essential for creation of controlled
environment.
The ERP satisfies this need of the business.

23. ERP Architecture :
Any information system has three basic
components :-
1. Data Management
2. Application Logic
3. Presentation

24. The architecture of ERP can be a two tier or three
tier :
Data Management
Application Logic
Presentation
Two Tier Architecture

25. Data Server
Data Management
Function
Application
Application Logic
Server Function
Presentation Client Function
Three Tier Architecture

26. Data Management
Server
Application Logic
Application Logic
Client
Presentation
Client / Server Architecture

27. Present Complexities of
Business
Solutions
Problems
Process thinking
Functional role conflict
Mfg. & Dist. Strategies
Product Variety
Geo. Distributed core Multi-site enterprises
competencies
ERP support to these complexities
27

28. Traditional Organization
Structures
CEO
GM GM GM GM
GM
MAT’L
PRODUCTION
MKT/SALES FINANCE IT
28

29. Functional Role Conflicts
 Marketing/Sales VS. Finance
High Availability Low Cost
High Stocks Low Stocks
 Marketing/Sales VS. Production
Customer Satisfaction Employee morale
High Variety Ease of opn.
Frequent Set-up Changes Low Set-up Changes
29

30. Functional Role Conflicts…
 Purchase VS. Production
Low Cost Low Shortages
Low Wip High Wip
 Purchase VS. Quality
 Production VS. Quality
 Distribution VS. Production
 IT VS. Production
30

31. Result ?
 PIECE-MEAL
 OPTIMIZATION
 COMPUTERIZATION
 AUTOMATION
31

32. Solutions ?
 Business process Re-engineering (BPR)
 ‘Process thinking’ rather than ‘Functional thinking
 Cross-functional team working
ERP Supports all these
32

33. Benefits Of ERP:
1. Better Management of resources reducing the cost of
operations.
2. Planning at function and process level . Simultaneous
increase in the productivity of the business possible.
3. Customer satisfaction increases due to shorter delivery
cycle. Closer contact with the customer.
4. As ERP is scalable architecture, it remains valid solution
with expansion of business.
5. The process becomes faster due to work group
technology and application of workflow.

34. Limitations of ERP
 Strategic Thinking
 Environment Scanning
 Innovation
 Product Design