1. Generally ERP deployment lead to the
tremendous benefits which are direct and
2. Direct benefits include: improved efficiency,
information integration for better decision
making, faster response time to customer
3. Indirect benefits include: better corporate
image, improved customer goodwill, customer
satisfaction and so on.
4. Fundamentally the potential benefits are:-
- Reduction of Lead-Time
- On-Time Shipment
- Reduction in cycle time
- Better customer satisfaction
5. Others are
• Improved supplier performance
• Increased Flexibility
• Reduction in quality costs
• Improved resource utility
• Improved information accuracy and decision-
The lead-time is the elapsed time between
placing an order and receiving it. It has a great
role in purchasing and inventory control.
The consequences of the non-availability of an
item that is required for production can result
in a lot of problems such as missing the
delivery schedules, losing the customer to the
Cycle time is the time between receipt of the
order and delivery of the product.
Manufacturing spectrum can be viewed in
terms of make-to-order where cycle time and
cost of production are high or make-to-stock.
In both cases ERP systems can reduce the cycle
Customer satisfaction means meeting or
exceeding customers’ requirements for a
product or service.
Degree of satisfaction can be assessed using the
Product or service has the features that are most
important to the customer.
Response to the customers’ demands in timely
Product or service is free of defects and perform as
ERP systems play a significant role in reducing
cost of quality by ensuring that the company
has an efficient and effective quality assurance
and management systems.
The ERP systems contain features which
support supplier management and control
processes that help organization in managing
the supplier relations, monitoring the vendor
activities and managing the supplier quality
Flexibility is a key issue in the formulation of
strategic plans in companies.
Product flexibility is the ability of the operation
to efficiently produce highly customized and
ERP Systems have the features that increase
flexibility in both the organization as whole
and manufacturing operations.
With ERP systems, businesses are not limited
to a single manufacturing method, such as
‘make-to-stock’ or ‘make-to-order’.
Instead, many manufacturing and planning
methods, can be combined within the same
operation, with unlimited flexibility to choose
the best method or combination of best
methods for each product at each stage
throughout its life cycle.
Manufacturers place increased emphasis upon
planning and controlling capacity.
The creation of an accurate, achievable
production schedule requires the availability of
both material and capacity.
The capacity planning features of most ERP
systems, offer both rough-cut and detailed
The system load each resource with production
requirements from Master Production
Scheduling, Material Requirements Planning,
and Detailed Capacity Planning.
The ERP systems also have simulation
capabilities that help the capacity and resource
utilization scenarios and choose the best
In order to manage the information, in order to
deliver high quality information to the
decision-makers at the right time, in order to
automate the process of data collection,
collation and refinement, organizations have to
make IT an ally, harness its full potential and
use it in the best way.
The major drawbacks of the legacy systems
was that it lacked an integrated approach.
System integrator, Panorama Consulting
Solutions, conducted the research
survey during the four-month period of
September, 2012 to January, 2013. The results
are based on data from 172 respondents who
completed a survey on the Panorama website.
Seventy-one percent reported revenues of $300
million or less and 21 percent of respondent
companies had revenues of $1 billion or higher.
27 percent of respondents
realized less than a third of
anticipated project benefits
11 percent realize no benefit at
all from their ERP
22 percent achieved between a
third and one-half their
In other words, fully 60 percent of the ERP projects in the survey realized less than
half their desired benefit. By any reasonable measure, these projects are
The survey data presents a contradictory view of ERP
success and failure. Although most ERP
implementations run late, over-budget, and do not
deliver planned results, only 10 percent of respondents
called their ERP implementation a failure. At the same
time, 60 percent called their ERP project a success and
30 percent expressed neutrality on the success / failure
issue. These numbers indicate that buyers' expectations
are too low — it is indeed unfortunate these numbers
are so low.
Important lessons. Implementing an ERP system is
always complex because the deployment drives
changes to both data and processes that extend across
departmental boundaries inside the organization.
2. BING IMAGES
3. CLASS NOTES