Unit-1 ERP

download Unit-1 ERP

of 49

  • date post

    01-Jun-2018
  • Category

    Documents

  • view

    223
  • download

    0

Embed Size (px)

Transcript of Unit-1 ERP

  • 8/9/2019 Unit-1 ERP

    1/49

    Enterprise ResourceEnterprise Resource

    PlanningPlanningCourse Code: MS- 235Course Code: MS- 235

    Credits: 3Credits: 3

  • 8/9/2019 Unit-1 ERP

    2/49

  • 8/9/2019 Unit-1 ERP

    3/49

  • 8/9/2019 Unit-1 ERP

    4/49

    4

    ERP Key Concepts

    Enterprise Resource Planning (or

    ERP in short) systems attempt tointegrate all data and processes oan organi!ation under one um"rella#

  • 8/9/2019 Unit-1 ERP

    5/49

    $e%nition o ERP$e%nition o ERP

    EEnterprisenterprise◦ &usiness En'ironment or &usiness cti'ities&usiness En'ironment or &usiness cti'ities

    conductedconducted

    RResourceesource◦

    arious Resources a'aila"le *ithin anarious Resources a'aila"le *ithin anenterprise such as+ ,inance+ Materials+enterprise such as+ ,inance+ Materials+Manpo*er+ Euipment+ ,acilities andManpo*er+ Euipment+ ,acilities andinrastructure etc#inrastructure etc#

    PPlanninglanning◦

    cti'ity to optimi!e the utili!ation o resourcescti'ity to optimi!e the utili!ation o resources

      ERP attempts to integrate all departmentsERP attempts to integrate all departmentsand unctions o a company into a singleand unctions o a company into a singlesystem that can ser'e all those di.erentsystem that can ser'e all those di.erent

    departments/ needs#departments/ needs#

  • 8/9/2019 Unit-1 ERP

    6/49

    Myth a"out ERPMyth a"out ERPERP means more *or0 and procedure#

    ERP *ill ma0e many employee redundantand 1o"less#

    ERP is the sole Responsi"ility o themanagement#

    ERP is 1ust or the Managerdecisionma0ers

    ERP is 1ust or Manuacturing

    rgani!ationsERP is 1ust or the 4mplementation eam

    ERP slo*s do*n the organi!ation

    ERP is 'ery e6pensi'e

  • 8/9/2019 Unit-1 ERP

    7/49

    E'olution o ERP

      789;s - Systems Manuacturing ResourcesPlanning  (E6tended MRP to shop Aoor ? distri"utionMgnt#)

      Mid 788;s - ERP > Enterprise ResourcePlanning  (Co'ering all the acti'ities o anEnterprise)

    > >

       E  n   t  e  r

      p  r   i  s  e

       R  e  s  o

      u  r  c  e

       P   l  a  n  n

       i  n  g

  • 8/9/2019 Unit-1 ERP

    8/49

    Reason or the gro*th o theReason or the gro*th o the

    ERP mar0etERP mar0et

    Ena"led impro'ed &usinessperormance

    4# Cycle time reduction

    44#4ncreased "usiness agility#

    444#4n'entory Reduction4#rder ,ul%llment 4mpro'ement

    Support &usiness gro*th reuirement :-

    4#  Be* productsproduct lines +ne*customers

    44# lo"al reuirements includingmultiple currencies+ language

  • 8/9/2019 Unit-1 ERP

    9/49

     o "e continued o "e continued

    Pro'ide Ae6i"le+ integrated+ real-timedecision support#

    7# 4mpro'e responsi'eness across theorgani!ation #

    Eliminate Dimitation in legacy system

    7# Century dating issues

    2#,ragmentation o $ata and

    processing3#4nAe6i"ility to change

    #4nsupporta"le echnologies

  • 8/9/2019 Unit-1 ERP

    10/49

    d'antages o ERPd'antages o ERP&usiness integration

    ,le6i"ility

    &etter analysis and PlanningCapa"ilities

    Fse o latest echnology

  • 8/9/2019 Unit-1 ERP

    11/49

    Ghy implement an ERPGhy implement an ERP

    SystemHSystemH  o support "usiness goals

    ◦ 4ntegrated+ on-line+ secure+ sel-ser'ice processes or "usiness

    ◦ Eliminate costly

    mainrameragmented technologies 4mpro'ed 4ntegration o Systems and

    Processes

    Do*er Costs

    Empo*er Employees Ena"le Partners+ Customers and

    Suppliers

  • 8/9/2019 Unit-1 ERP

    12/49

    Ghy ERPH

      ,or Management > to 0no* *hat is happeni  in the company

      ne solution or "etter Management

      ,or cycle time reduction  o achie'e cost control ? lo* *or0ing capit  o marry latest technologies  o shun the geographical gaps

      o satisy the customers *ith high e6pectati  o "e Competiti'e ? or sur'i'al   E

      n   t  e  r

      p  r   i  s  e

       R  e  s  o

      u  r  c  e

       P   l  a  n  n

       i  n  g

  • 8/9/2019 Unit-1 ERP

    13/49

    $e%nition o ERP$e%nition o ERP

    EEnterprisenterprise◦ &usiness En'ironment or &usiness cti'ities&usiness En'ironment or &usiness cti'ities

    conductedconducted

    RResourceesource◦

    arious Resources a'aila"le *ithin an enterprisearious Resources a'aila"le *ithin an enterprisesuch as+ ,inance+ Materials+ Manpo*er+such as+ ,inance+ Materials+ Manpo*er+Euipment+ ,acilities and inrastructure etc#Euipment+ ,acilities and inrastructure etc#

    PPlanninglanning◦ cti'ity to optimi!e the utili!ation o resourcescti'ity to optimi!e the utili!ation o resources

      ERP attempts to integrate all departmentsERP attempts to integrate all departmentsand unctions o a company into a singleand unctions o a company into a singlesystem that can ser'e all those di.erentsystem that can ser'e all those di.erentdepartments/ needs#departments/ needs#

  • 8/9/2019 Unit-1 ERP

    14/49

    Iey "ene%tsIey "ene%ts

    Standardi!ation o processes+Standardi!ation o processes+ 4ntegration o all the "usiness units+ Encompassing employees+4ntegration o all the "usiness units+ Encompassing employees+

    endors+ Suppliersendors+ Suppliers ,le6i"ility to modiy the operating processes,le6i"ility to modiy the operating processes 4m"i"e e6cellence perormance+ increase operating eJciency+4m"i"e e6cellence perormance+ increase operating eJciency+

    le'erage technology#le'erage technology#

    nline inormation to all mem"ers#nline inormation to all mem"ers# Pro1ect monitoring or time and costPro1ect monitoring or time and cost'aila"ility o Material to a'oid the e6tra purchase etc#'aila"ility o Material to a'oid the e6tra purchase etc#Ftili!ation o Manpo*er in 'alue added tas0#Ftili!ation o Manpo*er in 'alue added tas0#Real-time inormation or all the "usiness > no need oReal-time inormation or all the "usiness > no need o

    any reconciliationany reconciliation

    $e'elop &est &usiness Practices in organi!ation$e'elop &est &usiness Practices in organi!ation

  • 8/9/2019 Unit-1 ERP

    15/49

    Characteristics o ERPCharacteristics o ERP

    Flexibility:-ERP is Ae6i"le torespond to the changing needs o anorgani!ation#

    Modular & open:-4t has opensystem architecture #i#e# any modulecan "e interaced or detached*hene'er reuired *ithout a.ecting

    the other modulesComprehensive:-support 'ariety o

    organi!ational unctions#

  • 8/9/2019 Unit-1 ERP

    16/49

    Characteristics o ERPCharacteristics o ERP

    Beyond the company:-not con%nedto the organi!ational "oundariesrather support on-line connecti'ity toother "usiness entities#

    Best Business practices:- mustha'e a collection o the "est "usinessprocesses applica"le *orld *ide#

    Simulation of reality: it simulatethe reality o "usiness processes oncomputers#

  • 8/9/2019 Unit-1 ERP

    17/4917

    ERP Application Providers

    Some ERP 'endors are:

    ◦ SP

    ◦ racle Corporation+

    ◦ Microsot Corporation+

    ◦ 4nor ERP (ormerly &aan)+

    ◦ Ramco Systems

      (4ndia &ased)

  • 8/9/2019 Unit-1 ERP

    18/49

    ERP > E6pectations

      4ntegrating all the unctions

      4ntegrating the systems running in all the location

      ransparency o inormation using a single  data source across the organi!ation

      Sot*are must "e responsi'e

      Modular  ,le6i"le  Easy to add unctionalities  Pro'ide gro*th path

       E  n   t  e  r

      p  r   i  s  e

       R  e  s  o

      u  r  c  e

       P   l  a  n  n

       i  n  g

  • 8/9/2019 Unit-1 ERP

    19/49

    ERP > ptions

    P!"# $ % M'E ()sing "nternal resources*

    $e'eloping a custom-"uilt ERP pac0age+ speci%c to thereuirements o the organi!ation+ *ith the help o thein-house 4 department

    P!"# + , B)- 

    oing or ailor-made ERP pac0ages a'aila"le in the mar0et li0SP+ racle applications+ &aan+ PeopleSot etc#

    P!"# . % M'E (using External resources*

    $e'eloping a custom-"uilt ERP pac0age+ speci%c to thereuirements o the organi!ation+ *ith the help o asot*are solution pro'ider

       E  n   t  e  r

      p  r   i  s  e

       R  e  s  o

      u  r  c  e

       P   l  a  n  n

       i  n  g

    http:***#open-source-erp-site#com

  • 8/9/2019 Unit-1 ERP

    20/49

    ERP > Enterprise ResourceERP > Enterprise Resource

    PlanningPlanningPDBB4B the RESFRCES o an

    EBERPR4SE

    ERP is a *ay to integrate the data andprocesses o an organi!ation into onesingle system *ith modules that support

    core "usiness areas such asmanuacturing+ distri"ution+ %nancialsand human resources#

  • 8/9/2019 Unit-1 ERP

    21/49

    ERP Ks goal is to ma0e inormation Ao* dynamicand immediate+ thereore increasing theuseulness and 'alue o the inormation#

    4t act as central repository eliminating dataredundancy ? adding Ae6i"ility# the central idea

    "ehind data integration is that clean data can "eentered once and reused across all applications

    ERP is a Multi-Module pplication Sot*are

    Pac0age that automates inter-organi!ational"usiness processes across the supply chain*hich in'ol'e "usiness partners+ suppliers+customers+ and more#

  • 8/9/2019 Unit-1 ERP

    22/49

    ERPERP

    Crucial role o ERP in "usiness"eside integration is to "etterposition the organi!ation to

    change it;s "usiness processes#

    ERP sot*are has hundreds o

    "usiness processes "uilt into thelogic o the system

  • 8/9/2019 Unit-1 ERP

    23/49

    &E,RE ERP&E,RE ERP

    Problems:

    Delays, Lost Orders, Keying into different computer systems invites errors

  • 8/9/2019 Unit-1 ERP

    24/49

    ,ER ERP,ER ERP

  • 8/9/2019 Unit-1 ERP

    25/49

    25

    ERP Key Concepts Contd..

    Management ccounting

    ccountsPayable

    Finance/BookKeeping

    ccountsReceivable

    "nventoryManagement

    Sales& Shipping

    Purchase CustomerRelationship

    /umanResources

    0iscreteProduction

    typical business organi1ation usually have follo2ingbusiness processes3

      ,inance and ccounting◦ Luman Resource and Payroll (LRM)

    ◦ Supply Chain Management (SCM)

    ◦ Customer Relationship Management

    ◦ Manuacturing Resource Planning (MRP)

  • 8/9/2019 Unit-1 ERP

    26/49

    'er'ie*'er'ie* 4deally+ ERP deli'ers a single data"ase that

    contains all data or the sot*are modules+

    *hich *ould include:Manuacturing: Engineering+ &ills o Material+

    Scheduling+ Capacity+ Gor0Ao* Management+uality Control+ Cost Management+Manuacturing Process+ Manuacturing

    Pro1ects+ Manuacturing ,lo*Supply Chain Management: 4n'entory+ rder

    Entry+ Purchasing+ Product Con%guration+Supply Chain Planning+ Supplier Scheduling+4nspection o goods+ Claim Processing+

    Commission Calculation$ata Garehouse: and 'arious Sel-Ser'ice

    interaces or Customers+ Suppliers+ andEmployees

  • 8/9/2019 Unit-1 ERP

    27/49

    &PR ? ERP

    &usiness Process Re-engineering N&PRO "ringsout thede%ciencies o the e6isting setup

    &PR and ERP *ill gi'e *ay to implement ne*systems and the long pending impro'ementsin thee6isting systems

    &PR may "e time consuming "ut the scope can"erestricted ? controlled "y the Management   &

      u  s   i  n  e  s  s

       P  r  o  c  e  s  s   R

      e -  e  n  g   i  n  e  e

      r   i  n  g

  • 8/9/2019 Unit-1 ERP

    28/49

    &PR - Steps

    Step 1 Step 2 Step 3

    Understand Simplify!mprove "utomate

    Understand t#ee$istingsystemsassociated %it#

    all t#efunctionalities

    Draft & frame t#epossi'ilities & %aysto simplify or!mprove or eliminate

    t#e processes

    !mplement%it# t#e #elpof ()*

       &  u  s   i  n  e  s  s

       P  r  o  c  e  s  s   R

      e -  e  n  g   i  n  e  e

      r   i  n  g

    http:***#open-source-erp-site#com

  • 8/9/2019 Unit-1 ERP

    29/49

    $e%nition$e%nition

    &PR is de%ned "y Lammer andChampy as

    the undamental reconsideration

    and radical redesign oorgani!ational process in order toachie'e drastic impro'ement o

    current "usiness perormance incost+ ser'ice and speed#Q

  • 8/9/2019 Unit-1 ERP

    30/49

    $e%nition$e%nition

    cc to et#al  &PR is the critical analysis and radical

    redesign o e6isting "usinessprocesses to achie'e "rea0throughimpro'ements in perormancesmeasures

      &PR is also 0no*n as "usiness processredesign+ "usiness transormation+ or"usiness process change management

  • 8/9/2019 Unit-1 ERP

    31/49

    &PR cycle&PR cycle

  • 8/9/2019 Unit-1 ERP

    32/49

    ,i'e steps in process,i'e steps in process

    redesignredesign

    $esign and "uild a prototype o the process

  • 8/9/2019 Unit-1 ERP

    33/49

    Ghat is reengineeringGhat is reengineering

    Reengineering is not do*nsi!ing oronly automation#

    4t in'ol'es rede%ning and rethin0ing

    e'erything#Reengineering in'ol'es si6

    peripheral and one central R;

    4# Reorchestrate:- as the central Lu"44#Reali!ation +Reuirement+ Rethin0+

    Redesign+ Retool and Re'aluate

  • 8/9/2019 Unit-1 ERP

    34/49

  • 8/9/2019 Unit-1 ERP

    35/49

    ERP > ptions

    P!"# $ % M'E ()sing "nternal resources*

    $e'eloping a custom-"uilt ERP pac0age+ speci%c to thereuirements o the organi!ation+ *ith the help o thein-house 4 department

    P!"# + , B)- 

    oing or ailor-made ERP pac0ages a'aila"le in the mar0et li0SP+ racle applications+ &aan+ PeopleSot etc#

    P!"# . % M'E (using External resources*

    $e'eloping a custom-"uilt ERP pac0age+ speci%c to thereuirements o the organi!ation+ *ith the help o asot*are solution pro'ider

       E  n   t  e  r  p  r   i  s  e

       R  e  s  o

      u  r  c  e

       P   l  a  n  n

       i  n  g

    http:***#open-source-erp-site#com

    h 0 h i hi 0Gh M 0 h & i hi 0

  • 8/9/2019 Unit-1 ERP

    36/49

    Ghat Ma0es he &usiness o hin0Ghat Ma0es he &usiness o hin0::

     he Challenges lo"ali!ation

    Fnprecedented De'els Competition#

    Shiting Mass Production System o Mass

    Customi!ation System

    $eals Gith Multiple Countries+ Multiple Currencies

     rade &arriers re ,alling

    Consumers re 4n $emand

    Change &ecomes Constant

  • 8/9/2019 Unit-1 ERP

    37/49

    Ghat 4s 4normation System:Ghat 4s 4normation System:

     

    n 4normation System 4s n pen+ Purposi'eSystem hat Produces 4normation &y Fsing

    4nput-process-outputQ Cycle ,rom he 'aila"le$ata#

     

  • 8/9/2019 Unit-1 ERP

    38/49

    Ghy inormation systemGhy inormation system

     o Remain Competiti'e+ $esired 4normation 4sReuired to he

    Right People t he Right ime#

    4normation Systems Fsed o Ena"le 4normation ,lo*

    Githin nd &et*een Processes EJciently ndE.ecti'ely#

     hrough 4normation System Competiti'e d'antageCan &e ained ia Cost Reduction+ ProductEnhancement+ nd Customer Ser'ice 4mpro'ements#

    4normation Systems re Fseul ools o Ena"le ndManage

    &usiness ransormation r Change

  • 8/9/2019 Unit-1 ERP

    39/49

    Management inormationManagement inormation

    systemsystem Pro'ide System ,or

    Collecting+Processing+Storing+Retrie'ing+nd ransmitting 4normation o he Fsers

    *rocessing  Dissemination 

    )etrieval

    Source

    source

    sourcesource

    users

    users

    users

    users

    Storages

    Data

    capturing

  • 8/9/2019 Unit-1 ERP

    40/49

    Characteristics M4S:Characteristics M4S:

    Management riented: Management $irected:

    4ntegrated:

    Common $ata ,lo*:

    Lea'y Planning Element Dong erm Planning: Su"-system Concept:

    ,le6i"ility nd Ease Fse:

    Beed &ased:

    E6ception &ased:

    ,uture riented

  • 8/9/2019 Unit-1 ERP

    41/49

    Ghy Enterprise Resource Planning:Ghy Enterprise Resource Planning:

    4normation Systems re &ecoming Morend More Comple6

    $ue o he Stum"ling &loc0s: ime+ Cost+

    "1ecti'e $ata+ Fnstructured Process

    $e'elopment ision 4ntegrated4normation System

    $issimilar Systems&usiness &ecomes lo"al

    4ncoherent &usiness Process

  • 8/9/2019 Unit-1 ERP

    42/49

    M4S s# ERPM4S s# ERP

    &oth M4S nd ERP Systems ,ocus n heutomation &usiness Processes+ $ata ranser+nd 4normation Sharing across he rgani!ation#

    M4S 4s n 4normation System $esigned ,orPro'iding 4normation o Support perational

    Control+ Management Control+ nd $ecision- ma0ing,unctions 4n n rgani!ation

    ERP Systems re Some he Most d'anced+State-o-the-art o Management 4normation Systems4n oday;s &usiness Gorld#

    n ERP System 4ntegrates 4normation Systems nd&usiness Processes o Ena"le 4normation Enterednce o &e Shared hroughout he rgani!ation#

  • 8/9/2019 Unit-1 ERP

    43/49

    M4S s# ERP:M4S s# ERP:

    M4S;s Role:7# o enerate Reports-or E6ample2# o ns*er Ghat-i uestions s0ed &y Management3# o Support $ecision Ma0ing

    ERP;s Role:

    7# Sta. utili!ation 2# &etter 4n'entory Management 3# 4mpro'e Customer Responsi'eness # EJcient Procurement 5# Enhanced ,inancial Management nd Corporate

    o'ernance: 9# Sot*are Security: E## Serade6 ERP =# Encouraging Fniueness @# Changing he Gor0ing Pattern

    8# Ge"-ena"le ERP

  • 8/9/2019 Unit-1 ERP

    44/49

    ERP nd &PR:ERP nd &PR:

    Shit ,rom EJcient o E.ecti'e+ Passi'e o cti'e+ actical o

    Strategic nd utomation o ptimi!ation+ 4s he Motto ERP

    &usiness Process Re-engineering N&PRO &rings ut :-

     he $e%ciencies he E6isting Setup+

    Sol'es ld Pro"lems+ Redesigns Selected Processes+ etc

    &PR nd ERP Gill i'e Gay o 4mplement Be* Systems nd he

    Dong Pending 4mpro'ements 4n he E6isting Systems

    4mplementing n ERP System Fsually Reuires Company oPerorm &usiness Process Reengineering (&PR) r &usinessProcess Re-design (&PR$)#

  • 8/9/2019 Unit-1 ERP

    45/49

    ERP 4ntegrationERP 4ntegration

    4ntegration has to "e le'eragedalong three dimensions:-

    4normation integration

    Cogniti'e integration(proessional realm in'ol'ed in

    the process are matched)

    Managerial integration (personalcommitment o each manager toul%ll the common goals)

  • 8/9/2019 Unit-1 ERP

    46/49

    Enterprise integrationEnterprise integration

    leads to :-leads to :- More agile(responsi'e) enterprise# Lelp in eliminating redundant or non 'alue added

    acti'ities #

    More eJcient system ater "eing ena"led "y 4#

    Streamlines 5 imp Ao*s in the enterprise

    a) 4normation

    ") material

    c) money

    d) Control

    e) 4ntangi"les (CS+M)

    Empo*erment o employees to ta0e action

  • 8/9/2019 Unit-1 ERP

    47/49

    Enterprise Din0agesEnterprise Din0ages

    Enterprise integration may "einitiated "y lin0ing

    ,lo* o inormation

    ,lo* o material,lo* o control

    ,lo* o decision across the orgn#

  • 8/9/2019 Unit-1 ERP

    48/49

    Esta"lishing customer > enterpriseEsta"lishing customer > enterprise

    lin0agelin0age

  • 8/9/2019 Unit-1 ERP

    49/49

    Esta"lishing 'endorEsta"lishing 'endor

    enterprise lin0ageenterprise lin0age