1. ERP systems like SAP R/3 comprehensively manage business functions from sales to production to logistics but consider constraints separately. SCM systems like I2 and Manugistics optimize the entire supply chain by simultaneously considering demands, capacities, and material constraints.
2. While ERP systems provide good planning capabilities, SCM systems enable more dynamic planning through real-time simulations. SCM systems also provide enhanced visibility into the entire supply chain.
3. ERP vendors are adding more advanced SCM functionality to their products while SCM vendors expand into ERP areas, leading to convergence between the two types of systems.
In this presentation, we will analyze the strength and weakness of ERP systems. Implementation cost, investment required, hidden costs and benefits of implementing ERP will also be covered in this presentation. We will discuss advantages and disadvantages of ERP and analyse the reason behind the failure of ERP in some specific projects.
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In this presentation we will discuss the basics of ERP system and its structure. We will also talk about client server functions.
To know more about Welingkar School’s Distance Learning Program and courses offered, visit: http://www.welingkaronline.org/distance-learning/online-mba.html
In this presentation, we will analyze the strength and weakness of ERP systems. Implementation cost, investment required, hidden costs and benefits of implementing ERP will also be covered in this presentation. We will discuss advantages and disadvantages of ERP and analyse the reason behind the failure of ERP in some specific projects.
To know more about Welingkar School’s Distance Learning Program and courses offered, visit: http://www.welingkaronline.org/distance-learning/online-mba.html
In this presentation we will discuss the basics of ERP system and its structure. We will also talk about client server functions.
To know more about Welingkar School’s Distance Learning Program and courses offered, visit: http://www.welingkaronline.org/distance-learning/online-mba.html
In modern supply chain management ERP is used for transactional data while tools like Advanced Planning and Optimization is used for forecasting, planning, scheduling and confirmation. Further, in processes such as production planning there is a technique termed SNP optimizer. This is used for calculation of costs and Total cost is calculated as the sum of Delay cost, Non-delivery cost, storage cost and production cost. An ERP-enabled Supply Chain Process helps the organization to create a supply chain that is reliable, flexible and responsive. It also enables in enhancing the visibility across the supply chain.
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Sap erp and oracle erp alternatives for small manufacturersMRPeasy
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Enterprise resource planning (ERP) is a system that integrates all of these functions into a single system, designed to serve the needs of each different department within the enterprise. ERP is more of a methodology than a piece of software, although it does incorporate several software applications, brought together under a single, integrated interface.
Enterprise resource planning (ERP) systems integrate primary business applications; all the applications in an ERP suite share a common set of data that is stored in a central database. A typical ERP system provides applications for accounting and controlling, production and materials management, quality management, plant maintenance, sales and distribution, human resources, and project management.
The topic of ERP can sometimes seem complicated and overwhelming, but the ERP experts at MAX are here to help. This eBook covers all the bases, helping manufacturing professionals understand the ins-and-outs of ERP and how they apply to your business. Read on to learn the basics of ERP, what type of companies benefit most and how, the fundamentals of implementation, how to select the right software, and more.
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MBALN-670 Operations Management Title of the topic 6 .docxARIV4
MBALN-670 Operations Management
Title of the topic 6
Resource Planning and Scheduling
Topic’s learning objectives
1. Identify and critique the strategic frameworks of operations and quality
management within a global business environment.
2. Comprehensive knowledge of the main concept and methods related to
designing and managing operations and supply chains.
3. Systematic application of a range of fundamental operational improvement
concepts.
4. Critically evaluate the role of operations within different business models /
functions..
Introduction
Learning Material
Start by flicking through the presentations, this will provide you with a quick overview
of the topics. Pay particular attention to Resource Planning.
You will find these in the folder “presentations”.
There are various ways in defining an Enterprise resource Planning System. This is
how it has been defined by American Inventory and Production Control System
(APICS) dictionary:
“Enterprise Resource Planning: An accounting oriented information system for
identifying and planning the enterprise-wide resources to make ship and
account for customer orders.”
Again in Internet encyclopedia, it has defined as: “An enterprise planning system is
an integrated computer based application used to manage internal and external
resources, including tangible assets, financial resources, material and human
resources”.
Basically, an ERP combines several traditional management functions into a logical
integrated system and facilitate flow of information across these functions. It is
designed to model and automate basic processes across the organization over a
centralized database and eliminates the need of disparate systems maintained by
various units of the organization.
Figure below shows how information is integrated in a typical organization using a
ERP system.
ERP system is thus a mirror image of the major business processes of an
organization.
Need for Enterprise Resource Planning - Why ERP?
Separate systems were being maintained during 1960/70 for traditional business
functions like Sales & Marketing, Finance, Human Resources, Manufacturing, and
Supply Chain Management. These systems were often incongruent, hosted in
different databases and required batch updates. It was difficult to manage business
processes across business functions e.g. procurement to pay and sales to cash
functions. ERP system grew to replace the islands of information by integrating these
traditional business functions.
The successful implementation of an ERP system will have many advantages,
as indicated below:
Business integration and Improved Data Accuracy: ERP system is
composed of various modules/ sub modules where a module represents a
particular business component. If data is entered in one module such as
receiving, it automatically updates other related modules such as accounts
payable and inventory. This ...
Exploiting Artificial Intelligence for Empowering Researchers and Faculty, In...Dr. Vinod Kumar Kanvaria
Exploiting Artificial Intelligence for Empowering Researchers and Faculty,
International FDP on Fundamentals of Research in Social Sciences
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1. ERP vs. SCM
What’s the difference?
This report will first explain the basic functionality of an ERP (Enterprise
Resource Planning) system, using SAP R/3 as an example. Then it will contrast SAP
with SCM (Supply Chain Management) software such as I2 and Manugistics. Finally,
integration between the two types of systems will be examined, as well as future
prospects for ERP and SCM vendors.
The most distinguishing characteristic of ERP systems is their
comprehensiveness. R/3 broadly covers Sales and Distribution, Business Planning,
Production Planning, Shop Floor Control, and Logistics. On the surface, this would seem
to cover anything that SCM claims to provide. However, “the devil is in the details”.
Therefore, it helps to review the relevant functions of R/3 in detail, to be able to contrast
to SCM software later. First, Sales and Distribution covers order entry and delivery
scheduling. This module also naturally checks on product availability to ensure timely
delivery, and checks the customer’s credit line. Business Planning consists of demand
forecasting, planning of product production and capacity, and the detailed routing
information that describes where (in which work cells) and in what sequence the product
is actually made.
The capacity and production planning gets very complex, and simulation tools are
provided as part of R/3 that can help managers to decide how to overcome shortages in
materials, labor, or time. Once the Master Production Schedule is complete, that data is
fed into the MRP (Materials Requirements Planning) module. The MRP has three
2. principle pieces of output: An exception report, an MRP list, and order proposals. The
exception report brings to attention situations that need attention, such as late delivery of
materials, and rescheduling proposals. The MRP list shows the details of shipments and
receipts for each product and component. Order proposals are used to order materials and
issue production orders.
This naturally leads to Shop Floor Control. The planned orders from the MRP are
converted to production orders. This leads to production scheduling, dispatching, and job
costing. Finally, the Logistics system takes care of the rest, assuring timely delivery to
the customer. Logistics in this case consists of inventory and warehouse management,
and delivery. The purchasing function is also usually grouped under logistics. The
overall process summary looks like:
1) Sales & Forecasting Data
2) Production & Capacity Planning
3) Production Execution
4) Logistics
This functionality is representative of all the major ERP vendors, including SAP,
Oracle, Baan, and PeopleSoft. However, it also seems to be very close in functionality to
SCM products such as those from I2 and Manugistics. So what’s the difference?
The Manugistics web site (http://www.manugistics.com) has the following
description of supply chain management: “Effective supply chain management enables
you to make informed decisions along the entire supply chain, from acquiring raw
materials to manufacturing products to distributing finished goods to the consumer.”
3. This sounds a lot like what R/3 does also. R/3 has detailed functionality to order needed
materials, schedule and track the manufacture of products, and to schedule and track
distribution. So really, what’s the difference? The description of I2’s Rhythm product
line (found at http://www.i2.com) is slightly different: “RHYTHM’s Supply Chain
Planner provides advanced planning capabilities to leading companies in many industries.
RHYTHM plans and optimizes the supply chain as a continuous and seamless activity
that integrates all planning functions across the supply chain. RHYTHM goes beyond
traditional planning solutions like MRP (Manufacturing Resource Planning) and DRP
(Distribution Resource Planning) by simultaneously considering demand, capacity and
material constraints.” This provides a better idea of the chief differences between ERP
and SCM systems.
According to a July 1997 study by Gartner Group, “Through 1999, enterprises
with multi-echelon distribution networks that have aggregation, disaggregation, balancing
or echelon-skipping requirements within the distribution network will need to augment
their existing ERP applications with advanced SCP functionality or risk incurring
distributions costs that are at least 10 percent higher due to expediting, low order fill rates
and inventory imbalances.” The study goes on to say that this is caused by the static
sourcing tables used in ERP systems. While ERP systems provide a great deal of
planning capabilities, the various material, capacity, and demand constraints are all
considered separately, in relative isolation of each other. The more leading edge SCM
products are able to consider all the relevant constraints simultaneously, and to perform
real-time simulations of adjustments in the constraints. ERP systems have a harder time
adding this more dynamic functionality because they are chiefly concerned with
4. transaction processing, and also have many more jobs to do than just SCM. Getting
answers from an overloaded ERP systems may take hours, whereas getting them from a
separate SCM system may take minutes or seconds.
The leading SCM products generally have many other enhancements as compared
to the ERP packages. Many employ visible maps of the entire supply chain, showing
where problems are. Here is a description of Manugistics version: “Navigating your way
through mountains of supply chain information is made easier with Supply Chain
Navigator's state-of-the-art graphical user interface. This intuitive GUI gives you
complete visibility into the inner-workings of the supply chain - through demand, supply,
manufacturing scheduling, and transportation - all at your fingertips.” Just recently, SAP
has added similar functionality. But that functionality is actually an SAP version of the
SCM product made by I2, which SAP is selling as a separate module. This is a relatively
simplistic explanation of the key differences between the ERP vendors’ SCM modules
and the leading SCM-only products, but it hits the main points.
Now, since these products have many naturally overlapping features, how is data
kept consistent between them? I2 uses SAP’s ALE (Application Link Enabling) to
exchange data between R/3 and Rhythm (I2’s SCM product suite). Oracle and the other
ERP vendors also have APIs that I2 and other vendors can use common denominator
middleware to interface to. However, this means that each vendor has to change their
middleware interface software quite often, which is often a trial and error process, doesn’t
usually perform well, and often turns into a nightmare (see
http://www.dbmsmag.com/9802d07.html). A newer, and possibly better solution to this
problem is SIS (Specialized Integration Software). This is software that is designed
5. specifically to allow ERP and other systems to share processes and data. This removes
the chore of developing an interface to every other vendors software. The major company
in this area is CrossWorlds Software Inc., although more are appearing. This software,
which runs on Windows NT, claims to work by simply pointing and clicking on a sending
application (such as SAP) and a receiving application (such as Manugistics) and then
selecting the processes to link together. No programming required. Sounds almost too
good to be true, but it certainly should make things easier for implementers.
One other key development that should be noted is the rapid convergence that is
happening between ERP and SCM software. The ERP vendors have awaken, and are
rushing to add more sophisticated SCM functionality to their ERP products. And the
SCM vendors are also expanding their functionality, further encroaching on the area
inhabited by the ERP vendors. Although it seems that all the leading SCM vendors are
partnered with the all the leading ERP vendors, this is only a temporary relationship if
SAP, Oracle, etc. have their way. Following SAP’s example, Oracle also recently added
a SCM module, and Baan and PeopleSoft both have recently acquired smaller SCM
vendors to integrate into future releases of their ERP products. As the ERP vendors move
heavily into the mid-size market with their new supply-chain bolstered products, they
should push a lot of the smaller SCM and ERP vendors out of business. With the
industry shakeout, implementations should become somewhat simpler and thus shorter
and less expensive, since there will be less products to integrate, and more experienced
implementers in job market. However, luckily for the consulting firms installing much of
this software, that day is probably still a long way off…