Introduction to Enterprise Resource Planning by Sanket Senapati

1. Introduction to Enterprise Resource
Planning
Learning Advisor
Sanket Senapati

2. Evolution of Enterprise Application
A method of using computer technology to plan for the
raw materials required for production in line with the
expected demand was developed(MRP) in Mid 1960s
A number of businesses had started using this method to
manage their inventory effectively by mid 1970s
Many companies realized the need for automation in their
capacity planning, production scheduling and shop floor control
functions in the 1980s which gives rise to MRP II with a central
database which recorded,generated and managed reports on
various activities
In late 1980s ,MRP II transformed into ERP where HR,Financial
accounting etc were integrated with MRP II

3. 2000s Extended ERP
1990s
Enterprise Resource Planning
(ERP)
1980s
Manufacturing Resources Planning (MRP II)
1970s
Material Requirements Planning (MRP)
1960s
Inventory Control Packages

4. ERP : An Overview
ERP is a software application that helps an organization
integrate various functions, make optimum utilization of
management resources and improve it’s process efficiency
Data entered in any one module is available to other
modules that need the data(Proves consistency and
Integrity of data)

5. 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.
 ERP automates the tasks involved in performing a
business process.
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6. How Do ERP Systems Work?
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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

7. ERP Requires
 Strong executive support to implement
 Process approach rather than “silos”
 Change in business procedures (BPR)
 Change in organizational structure, culture,
strategy
 Technology change

8. ERP
 Difficult to install
 Very large and complex software
 Provides info about all aspects of the business --
worldwide
 Reduces inventory, waste
 Easy communication with customers, suppliers

9. Before ERP
 Multiple systems, different interfaces,
difficult to extract info about customers,
sales,...
 Hard to maintain, many languages,
databases, inconsistencies
 Can take weeks or months to obtain info
about customers, or where systems
changes are needed

10. An ERP Example: Before ERP
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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

11. After ERP
 Integrated systems
 Consistent interface
 One database
 Access to current data
 Improved planning capabilities
 Multinational capabilities

12. An ERP Example: After ERP
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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

13. System automatically:
 Schedules shipping
 Reserves material
 Orders parts from suppliers
 Schedules assembly
 Checks customer credit limit
 Updates sales & production forecasts
 Creates MRP & bill-of-material lists

14. System automatically:
 Updates salesperson's payroll
 commission
 travel account
 Calculates product cost & profitability
 Updates accounting, financial records

15. Definition of Enterprise Architecture
The enterprise architecture is the organizing logic for a
firm’s core business processes and IT capabilities captured
in a set of principles, policies and technical choices to
achieve the business standardization and integration
requirements of the firm’s operating model.

16. Enterprise Architecture Planning
 ERP Architecture is multi layered which communicates
and transact among the members of Supply Chain with
ease
 It’s comprises hardware layer, relational database
layer,database access layer and application software
layers)
 One of the first activities of ERP
 A ERP architecture ensures management that the ERP
system supports the business processes intended

17. Does Your IT Architecture Look Like…

18. Why Enterprise Architecture
 IT costs too much
 Costs of managing complexity
 Eliminate redundancy
 Growing IT ecosystem
 Demanding rate of change
 Need for info sharing
 Outsourcing (BPO)
 Future-proofing
If you don’t have strong architecture strategy, everyone does their
own thing and you end up with six kinds of servers and (software)
platforms … you get silos of everything and that explodes your
costs”
Andy Miller VP of Technical Architecture, Corporate

19. Factors responsible for successful ERP
Ipmlementation
 Understanding Corporate needs and Culture
 Complete Business Process Changes
 Communicate Across the Organization
 Strong Project Leadership
 Efficient and Capable Project Leader
 Balanced Teams

20. ERP Vendor Selection
Whether to buy a module or whole package ??
Features and benefits of ERP Implementation
outlined
Decision on evaluation team building with senior IT
Managers and
senior business managers
Invitation of bids from vendors by specifying
requirements
The vendors are asked to
Submit scope of their ERP Software
The Plan
Their methods of Implementation
The final vendor selection should take not more
than six months of the bid being announced

21. After Bid….
 Commercial and Technical evaluation
Basis
 knowledge of vendor in the respective
industry
 Skill of the implementation team of vendor
 Past implementation history of vendor
 Now RFP is prepared with the help of consulting companies with all
aspects of ERP Selection criteria i.e
hardware,software,support,functionalities,implementation and cost.
 Vendors are supposed to demonstrate how their product will meet the
objectives.Here the Evaluation team should be careful enough .

22. Next….
 A team of representatives collect the data of the
clients of the vendor
 Representatives meet the people of the clients and
collect their feedback on vendor and the service
provided by the vendor.
 These meetings normally excludes the vendors
 Contract is awarded on overall scores to a vendor

23. ERP Implementation
 “As-is” Process Study
 “To-Be” Process Design
 Simulation
 Actual Implementation

24. Factors responsible for successful ERP
Ipmlementation
 Understanding Corporate needs and Culture
 Complete Business Process Changes
 Communicate Across the Organization
 Strong Project Leadership
 Efficient and Capable Project Leader
 Balanced Teams

25. Operational Advantages of ERP
Implementation
 Lead time Reduction
 Punctuality in Shipment
 Reduction in Cycle Time
 Improved Supplier Performance
 Flexibility and Reduction in Quality Cost
 Improved resource utility

26. Reasons for Failure
 Cultural
 Lack of commitment of top management
 Political
 Failure to follow “proper” system selection
methodology
 Lack of sufficient implementation planning/ project
management

27. Next Generation ERP…
 Provides IDSS and Integration capabilities
 Supported by SCP Systems
 SCP systems extracts data from each component of
supply chain & present it in a proper format that helps the
management understand the entire market scenario & get
a clear picture of where the organization is heading
 Management can develop a production plan and review it
with the help of the SCP system
 SCP helps management to analyze the impact of a plan
across the supply chain as well as on the customer demand

28. Thank You