Introduction To Erp

Tech Solution Computer Institute
INTRODUCTION TO ERP
DEFINITION OF ERP:
ERP covers the techniques and concepts employed for the integrated management of
the business from the viewpoint of effective use of resources to improve the enterprise. It
helps a manufacturer or other businesses to manage all the important parts of the
organization. It is an integrated information system that serves all the departments in an
enterprise. The goal of ERP systems is to maximize production while minimizing cost and
wastage.
(M’ MS)
It is a software package that integrates the various departments and functions of an
organization onto a single centralized system thereby enabling easy access to all in the
enterprise.
FINANCE
STRATEGIC AND HUMAN

OPERATIONAL PLANNING RESOURCE
MANUFACTURING LOGISTICS MGMT

ERP
SYSTEM
MATERIAL MGMT MAINTAINENCE MGMT
QUALITY MGMT SALES AND DISTRIBUTION
INFORMATION INTEGRATION THROUGH ERP SYSTEMS

REASONS FOR GROWTH OF ERP:
The market for Enterprise Resource Planning (ERP) systems is in great demand. The
reasons for this demand are as follows.
1. To enable, improved business performance:
Cycle time reduction.
Increasing business agility.
Inventory reduction.
Fulfilling orders on time.
2. To support business growth requirements:

Global requirements for multiple languages and currencies.
New products/ product lines and new customers.
3. To provides flexible, integrated, real time decision support:

ERP improves the responsiveness across an organization.
4. To Eliminate all limitations of the legacy system:

Century dating issues.
Fragmentation of data and processing.
No support of latest technology.
Inflexibility to change.
5. To take advantage of the untapped mid-market:

Increased functionality at reasonable costs.
Client-server open systems technology.
Vertical market solutions.
ADVANTAGES OF ERP
Installing an ERP system has many advantages both direct and indirect.
The indirect advantages include:
1. Better corporate image.
2. Improved customer goodwill.
3. Customer satisfaction.
The direct advantages include:

1. Improved efficiency.
2. Information integration.
3. Better decision making.
4. Faster response time to customer queries.
5. Business Integration.
6. Flexibility
7. Better Analysis and Planning Capabilities
8. Use of Latest Technology.
Business Integration:
In case of ERP packages, the data of related business functions is automatically updated
at the time a transaction occurs. For this reason, one is able to grasp business details in real
time and carry out various types of management decisions in a timely manner based on that
information.
Flexibility:
It provides for flexibility in a business organization by enabling any-where and any-time
access. It supports various languages and currencies, making the business truly global.
Better Analysis and Planning Capabilities

ERP provides better analysis and planning capabilities by implementing real time
decision support . It provides for improved information accuracy and decision making
capabilities.
Use of Latest Technology

They quickly adapt the systems to latest technologies like open systems, client server
technology, CALS(Computer-Aided acquisition and logistics support).
Why do many ERP implementations fail?

1. ERP packages, if chosen properly, implemented judiciously and used efficiently, will
raise the productivity and profits of companies dramatically.
2. But many a company fail in this because of a wrong product, incompetent and
haphazard implementation and inefficient or ineffective usage.
3. To work successfully, the ERP solutions need a lot of factors to click.
4. There should be good people who know the business.
5. The vendor should be good and his package should be the one best suited for the
company’s needs
6. The ERP consultant should be good. The implementation should be planned well and
executed perfectly.
7. The end-user training should be done so that the people understand the system and the
effect of their efforts on the overall success of the program.
8. The introduction of the ERP system will dramatically change the job description and
functions of many employees.
9. Employees who were earlier doing the work of recording information will, overnight, be
transferred into decision makers.
10. Many employees find this transaction difficult to accept.
11. If the employees are not given proper training, well in advance, then the systems will
fail.
12. Another factor is the fear of unemployment.
13. When procedures become automated, the people who were doing those jobs become
redundant. So it is natural to have resistance from employees.
14. But the same employee can be trained in the new system.
Without support from the employees even the best system will fail.
15. So it is very important that the management should take the necessary steps, well in
advance, to alleviate he fears of, and provide necessary training to their employees.
ENTERPRISE
DEFINITION
An enterprise is a group of people with a common goal which has certain resources at
its disposal to achieve that goal.
1. The enterprise acts as a single entity.

2. The various departments are compartmentalized and have their own goals and
objectives, which from their point of view are in line with the organizations objectives.
3. Each of these departments functions in isolation as a result of which conflicts arise.
4. So the information that is created or generated by the various departments is available
only to the top manager and not to the other departments.
5. The result is that instead of taking the organization towards the common goal, the
various departments end up pulling it in different directions.
6. In the enterprise, the entire organization is considered as a system and all the
departments are its sub-systems.
7. Information regarding all aspects of the organization is stored centrally and is available
to all departments.
8. ERP systems help to make the task easier by integrating information systems.
INTEGRATED MANAGEMENT INFORMATION
DEFINITION:
An information system is an open, purposive system that produces information using
the ‘input-process-output’ cycle
1. It consists of 3 elements :
i. People
ii. Procedures
iii. Data
2. It is an organized combination of people, hardware, software, communication networks
and data resources that collects, collates transforms information in an organization.
3. MIS systems lacked the integrated approach.
4. The key resource of any organization is information.
5. The three fundamental characteristics of information are:
i. Accuracy
ii. Relevancy
iii. Timeliness
6. The information has to be accurate, must be relevant for the decision maker and must
be available to decision maker when he needs it.
7. If all this is present in the organization it will enable the employees to make better
decisions.
8. The company must act as true owner of the project and should be more interested in
the success of the work and must do everything to comply with what was originally set
forth in the schedule.
9. The consultants should know the warning signs and must also know when to take the
corrective action.
10. The most important and critical activity is to designate right people to lead the project.
11. These individuals must acquire a reasonable degree of knowledge about ERP package.
12. In most cases, the vendors documentation will also help in understanding the system
and its working.
13. The employee should only be careful where to look and how to use this information.
ROLE OF ENTERPRISE IN IMPLEMENTING THE ERP PACKAGE:

1. An ERP implementation project does not depend solely on software consultants and
vendors.
2. Success of the project depends largely on each party playing its role, because roles are
singular in nature.
3. In this task the integration of various components play a very vital role.
4. Apart from playing a role as a facilitator the organization needs to play several roles in
implementation.
5. Thus the success depends partially on which employee are allocated the project.
6. They should attain a level of proficiency in managing the ERP package.
7. In short the company should create an environment in which the ERP system can grow,
thrive and produce benefits it is capable of.
BUSINESSMODELING
1. Business modeling or creating a business model is the very first activity in any ERP
project.
2. A Business model is not a mathematical model, but it is the representation of the
business as one large system showing the interconnections and interdependencies of
the various subsystems and business processes.
3. The business model is developed based on the goals, objectives and the strategic plans
of the organization.
4. Based on the business model, the ERP system is developed with the aim of providing
the individual with the required information and the necessary assistance they require
in order to run the business efficiently and effectively.
5. The business model is thus the representation of the actual business – what are the
various business functions of the organization, how they are related, what are their
interdependencies, and so on.
6. It is usually represented in graphical forms using flow charts and flow diagrams.
REAL WORLD
INTERRELATIONSHIP
PROCESSE AND
INTERDEPENDENCIES
PLANT MATERIAL
CUSTOMER
CONTRAC INVOICE
INTEGRATED DATA MODEL

1. One of the most critical steps of ERP implementation is creation of the integrated data
model.
2. The advantage of having an ERP system is that the all the employees from the different
departments get access to the data – the integrated data. The company uses this
integrated data for its analysis and decision making.
3. For the integrated database to be effective, it should clearly depict the organization,
reflect the day-to-day transactions and it should be updated continuously.
4. At any given time, the database should give a snapshot of the organization at that point
of time. So if an order is entered, sales are done and the goods are dispatched, then the
database should reflect those changes.
5. All these updates should happen instantaneously and automatically.
6. So, when designing an integrated data model for the ERP systems the most important
thing to be kept in mind is the information integration and the process/procedure
automation.
REAL WORLD
INTERRELATIONSHIP
PROCESSE S AND
INTERDEPENDENCIES
PLANT MATERI
CUSTOMER
CONTRACT INVOICE
DATA MODEL PROGRAM MODEL

TABLES PROGRAMS
FIELDS FUNCTIONS
VIEWS
DATA MODEL AND THE RELATIONSHIP WITH THE REAL WORLD

ERP AND RELATED TECHNOLOGIES

LIMITATIONS OF THE ERP SYSTEM
The ERP system has 3 significant limitations:
1. Managers cannot generate custom reports or queries without the help from a
programmer and this inhibits them from obtaining information quickly, which is
essential for making a competitive advantage.
2. ERP systems provide current status only, such as open orders. Managers often need to
look past the current status to find trends and patterns that aid better decision-making.
3. The data in the ERP application is not integrated with other enterprise or division
systems and does not include external intelligence.
There are many technologies that help to overcome these limitations. These technologies
when used in conjunction with the ERP package, help in overcoming the limitations of a stand-
alone ERP system and thus help the employees to make better decisions.
Some of these technologies are:

1. BUSINESS PROCESS RE-ENGINEERING (BPR)
2. MANAGEMENT INFORMATION SYSTEMS (MIS):
3. DECISION SUPPORT SYSTEMS (DSS)
4. EXECUTIVE INFORMATION SYSTEMS (EIS)
5. DATA WAREHOUSING
6. DATA MINING
7. ON-LINE ANALYTICAL PROCESSING (OLAP)
8. SUPPLY CHAIN MANAGEMENT(SCM)
BUSINESS PROCESS RE-ENGINEERING (BPR):
DEFINITION :
Dr. Michael Hammer defines BPR as “ the fundamental rethinking and radical redesign of
business processes to achieve dramatic improvements in critical, contemporary measures of
performance such as cost, quality, services and speed ”
1. One of the main tools for making this change is the Information Technology(IT).
2. Any BPR effort that fails to understand the importance of IT, and goes through the pre-
BPR analysis and planning phases without considering the various IT options available,
and the effort of the proposed IT solutions on the employees and the organization is
bound to crash during take off.
ADVANTAGES:
It helps in integrating the various business processes of the organization.

2. With good ERP package, the organization will be able to achieve dramatic
improvements in areas such as cost, quality, speed, etc.
Hence, many BPR initiatives are used in ERP implementation.
MANAGEMENT INFORMATION SYSTEMS (MIS):
DEFINITION :
MIS is a computer – based system that optimizes the collection, collation, transfer and
presentation of information throughout an organization, through an integrated structure of
databases and information flow.
The main characteristics of MIS are:
1. MIS supports data processing functions of transaction handling and record keeping.
2. MIS uses an integrated database and supports a variety of functional areas.
3. MIS provides operational, tactical and strategic levels of organization with timely,
structured information.
4. MIS is flexible and can adapt to the changing needs of the organization.
MIS DPS( DATA PROCESSING SYSTEM)
1 It uses an integrated database 1 It does not use an integrated database.
2 It provides greater flexibility 2 It provides no such flexibility

to the management
3 Integrates the 3 DPS tends to support a single

information flow between functional functional area.
areas.
4 focus on information needs 4 DPS focus on Departmental-level

of all levels of management support
DECISION SUPPORT SYSTEMS (DSS)

DEFINITION:
Decision support systems are interactive information systems that rely on an integrated
set of user-friendly software and hardware tools, to produce and present information
targeted to support management in the decision making process.
1. Managers spend a lot of time and effort in gathering and analyzing information before
making decisions. Decision support systems were created to assist managers in this
task.
2. A DSS can help close this gap and allow managers to improve the quality of their
decisions.
3. To do this, the DSS hardware and software employ the latest technological innovations,
planning and forecasting models, 4 th generation languages and even artificial
intelligence.
The main characteristics of a DSS are:
1. A DSS is designed to address semi-structured and unstructured problems.

2. The DSS mainly supports decision-making at the top management level.
3. DSS is interactive, user-friendly and can be used by the decision maker with little or no
assistance from a computer professional.
4. DSS makes general purpose models, simulation capabilities and other analytical tools
available to the decision maker.
DSS MIS
1 It focuses on decision – making. 1 It emphasizes on planning
reports on a variety of subjects.
2 Quite unstructured and is 2 It is standard, scheduled,
available on request. structured and routine.
3 It is immediate and user-friendly. 3 It is constrained by the
organizational system.
EXECUTIVE INFORMATION SYSTEMS (EIS)
DEFINITION:
EIS is a decision support system especially made for senior level executives.
1. Top level executives and decision makers face many problems and pressures. They have
to make the right decisions at the right time to take the company forward.
2. An EIS is concerned with how the decisions affect an entire organization.
3. An EIS takes the following into considerations:
i. The overall vision and mission of the company and the company goals.
ii. Strategic planning and objectives.
iii. Organizational structure.
iv. Crisis management/ contingency planning.
v. Strategic control and monitoring of overall operations.
4. Successful EIS are easy to use, flexible and customizable and use the latest technological
innovations.
DATA WAREHOUSING
1. If operational data is kept in the database of the ERP system, it can create a lot of
problems.
2. As time passes, the amount of data will increase and this will affect the performance of
the ERP system.
3. However once the operational use of the data is over, it should be removed from the
operational databases.
IMPORTANCE OF DATA WAREHOUSING

1. The primary concept of the data warehousing is that the data stored for the business
analysis can be accessed most effectively by separating it from the data in
operational systems.
2. The most important reason for separating data for business analysis, from the
operational data, has always been the potential performance degradation on the
operational system that can result from the analysis processes.
3. High performance and quick response time is almost universally critical for
operational system.
DATA MINING
DEFINITION:
Data mining is the process of identifying valid, novel, potentially useful and ultimately
comprehensible information from databases that is used to make crucial business decisions.
1. The main reason for needing automated computer systems for intelligent data analysis
is the enormous volume of existing and newly appearing data that require processing.
2. The amount of data accumulated each day by various businesses, scientific and
governmental organizations around the world is daunting.
3. Research organizations, academic institutions and commercial organizations create and
store huge amounts of data each day.
4. It becomes impossible for human analysts to cope with such overwhelming amounts of
data.
5. Two other problems that surface when human analysts process data are:
i. The inadequacy of the human brain when searching for complex multi-factorial
dependencies in the data.
ii. The lack of objectiveness in analyzing the data
ADVANTAGES:
1. A human expert is always a hostage of the previous experience of the investigating
other system.
2. Sometimes this helps, sometimes this hurts, but it is almost impossible to get rid of
this fact.
3. While data mining does not eliminate human participation in solving the task
completely, it significantly simplifies the job and allows an analyst, who is not a
professional in statistics and programming to manage the process of extracting
knowledge from data.
ON-LINE ANALYTICAL PROCESSING (OLAP)
DEFINITION:
OLAP can be defined in five words – Fast Analysis of Shared Multi-dimensional Information.
Fast: means that the system is targeted to deliver most responses to users within about 5
seconds, with the simplest analysis not taking more than one second and very few
taking more than 20 seconds.
Analysis: means that the system can cope with any business logic and statistical analysis that
is relevant for the application and the user, and keep it easy enough for the target user.
Shared : means that the system implements all the security requirements for confidentiality
and if multiple write access is needed, concurrent update locking at an appropriate
level.
Multi-dimensional : means that the system must provide a multi-dimensional conceptual view
of the data, including full support for hierarchies and multiple hierarchies.
Information : is refined data that is accurate, timely and relevant to the user.
Importance:
1. OLAP technology is being used in an increasingly wide range of applications.
2. The most common are sales and marketing analysis, financial reporting and
consolidation and budgeting and planning.
3. OLAP is being used for applications such as product profitability and pricing analysis;
activity based coating; manpower planning and quality analysis or for that matter any
management system that requires a flexible, top down view of an organization.
SUPPLY CHAIN MANAGEMENT(SCM)
DEFINITION:
A supply chain is a network of facilities and distribution options that performs the
function of procurement of materials, transformation of these materials into intermediate and
finished products and the distribution of these finished products to the customers.
1. Supply chains exist in both service and manufacturing organizations, although the
complexity of the chain may vary greatly from industry to industry and firm to firm.
2. Traditionally, marketing, distribution, planning, manufacturing and the purchasing

organizations along the supply chain operated independently.
3. These organizations have their own objectives which are often conflicting.
4. There is a need for a mechanism through which these different functions can be integrated
together.
5. Supply chain management is a strategy through which such integration can be achieved.
ERP A MANUFACTURING PERSPECTIVE

COMPUTER AIDED DESIGN / COMPUTER AIDED MANUFACTURING (CAD / CAM)
1. Computer Aided Design (CAD) is a popular tool for product design.
2. CAD systems are computer programs or integrated packages for work station hardware
and software that allow the user to draw and easily modify product designs on a
computer screen.
3. Advanced CAD systems provide designers with at least three major benefits:
A. GRAPHICS CAPABILITIES:
1. CAD systems allow the designer to view a product from different perspectives,
including three-dimensional rotations, and various cross-sections.
2. The designer can also make proportional changes in scale, or change the angle of an
arc with the click of a computer mouse rather than having to redraw the entire
product.
B. DESIGN, STORAGE & RETRIEVAL:
1. Some CAD systems can store the design characteristics of existing products &
components.
2. Then, for example, if a company needs a gear for a new product, the designer can
enter relevant information about the gear, such as it diameter, tooth pattern and
required hardness, into the CAD system.
3. The CAD system determines whether the company is already using an identical or
sufficiently similar gear, in which case a new one in unnecessary, if not, then use the
design of this similar gear as a starting point for the new gear.
4. This capability not only promotes the use of common components but also reduces
design time.
C. AUTOMATIC EVALUATION OF SPECIFICATIONS:
1. One of the most time-consuming aspects of design for highly technical products is
calculating whether or not product specifications, such as strength, heat resistance
or aerodynamic drag, are satisfied.
2. These calculations can be programmed into some CAD systems so that whenever the
designer changes the design (by altering the shape or material to be used) these
performance characteristics are recalculated automatically and compared to the
product requirements.
3. This is sometimes called Computer-Aided-Engineering (CAE).
The overall benefits of CAD systems can be substantial. The features described above
reduce the development time and cost, and they improve product quality because more
design options can be evaluated in greater detail more quickly.
Just In Time (JIT)/KANBAN

1. JIT means to produce goods & services when needed, not too late or not too early.
2. It is time Based & often has quality and efficiency targets.
3. The JIT is a production philosophy. It is also known as zero defects & synchronous
production.
4. The JIT system also uses the method of scheduling material flow(KANBAN).
5. A JIT system aims to make goods available just in time, and these can be parts,
products or sub-assemblies.
6. The benefits are as follows:
i. Increase Flexibility
ii. Reduction of Cost
iii. Increased Quality
iv. Simplicity of System
7. The increased flexibility allows the company to react to the changing needs i.e. change
in the customer orders or design modification.
8. Increased Productivity means that the shortest time and minimum of resources are
required to make the product.
9. To achieve the objectives of the JIT three principles are applies to the organization
i. Elimination of waste
ii. Total Quality Management
iii. Total Employee Environment
ELIMINATION OF WASTE
It means that all the activities which do not add any values and do not increase product
value and are costly to the comapny should be eliminated.
For Eg: the traditional production method.
TOTAL QUALITY MANAGEMENT
Total quality management eliminates the defects in a JIT environment. The aim is to
prevent defects from occurring and this can be achieved by detecting the problem at their
source.
TOTAL EMPLOYEE ENVIORNMENT
It means that the management must provide the leadership which result in the employees to
be more participative in the process, continuous education & training is provided.
KANBAN
1. The manufacturing organization considers the making of a product as continuous
activity from design, manufacturing, distribution, sales and customer services.
2. For many companies the heart of this process is KANBAN. It is a Japanese term which
means “Visual Record” It was developed at Toyota in 1950 and it was considered to
manage the material flow on the assembly line.
3. It is a highly efficient and effective production system, which has an optimum
manufacturing environment, which leads to global competitiveness.
4. The KANBAN process involves more than fine tuning production and supplier scheduling
system, where inventories are minimized by supplying the components only when
required in production & work in progress is monitored.
5. It also encourages industrial re-engineering & group production techniques &
employees are encouraged to participate continuously.
6. The Japanese refer to KANBAN as a simple parts - movement system that depends upon
the cards & boxes to take part from one station to another.
7. The essence of KANBAN concept is that the supplier or the ware house should only
deliver components to the production line as & when they are required so that there
is no storage in the production areas.
8. It also limits in the amount of inventory.
9. KANBAN is a chain process in which orders flow from one process to another, the
production or deliver of components is made to the production line.
The advantages of KANBAN are as follows:

1. It is a simple & understandable process
2. Provides quick and precise information
3. Results in low cost
4. Provides quick response to the changes
5. Limits of over-capacity in processes.
6. Avoids over production
7. Minimizes waste
8. Maintains control
9. Delegates responsibility to the line workers.
Benefits of JIT
The benefits of a properly implemented JIT system are:
1. Increased Flexibility:
i. This can be achieved through small batch sizes which achieves faster
throughput.
ii. A flexible workforce means that the operators must be multi-skilled which is
done through training.
iii. The worker should be free to move from low demand to high demand areas.
2. Parts Reduction:
i. It seeks to continuously reduce inventory levels of raw material, work in
process and finished goods.
ii. Lower inventory means less space and less chance of the product being
obsolete, damaged or spoilt.
iii. Inventories can be reduced if products are produced, purchased, and
delivered in small lots.
3. Increased Quality:
i. When operating a JIT system, disruption has a major impact, so quality
problems need to be eliminated.
ii. Benchmarking, Quality function deployment and service design can be used
for service operations.
iii. Service employees need to learn the value of providing defect free services.
4. Simplicity of Systems:
i. product mix or volume changes as planned by the master production schedule
(MPS), can be accomplished by adjusting the number of cards in the system.
ii. Production orders are prioritized by the cards on post.
iii. Production orders for parts that are running low are moved in front of parts
that have more supply.
POTENTIAL PITFALLS OF JIT

1. Companies fail to understand what JIT is and what it can mean to them because they
fail to implement it properly.
2. The system requires the full backing of the top management so that they are aware
of the tasks, resources, time scale and costs.
3. The system will fail if an adequate education program is not provided.
4. If careful planning process and control movements are not strictly followed, they will
result in JIT not being realized.
5. The planning stage requires dedication and time and also the assistance of an
external consultant.
6. All of the above must be integrated with moves towards JIT purchasing.
7. The JIT system should not be viewed as a one off scheme but as an ongoing
continuous process.
PRODUCT DATA MANAGEMENT (PDM)

1. One of the major manufacturing challenges is to maximize the time-to-market benefits
of concurrent engineering while maintaining control of the data, and distributing it
automatically to the people who need it, when they need it.
2. The way PDM systems cope with this challenge is that the master data is secured once
in a secure ‘vault’, where its integrity can be assured as all changes to it monitored,
controlled and recorded.
3. Duplicate reference copies of the master data, on the other hand, can be distributed
freely, to users in various departments for design, analysis and approval.
4. The new data is then released back into the vault When a ‘change’ is made to the data,
signed and dated, is stored in the vault alongside the old data which remains in its
original form as a permanent record.
This is the simple principle behind more advanced PDM systems.
PROCESS MANAGEMENT
1. Process management is about controlling the way people create and modify data-active
procedures.
2. This may sound like a new name for ‘project management’, but it is not
3. Project management concerns itself only with the delegation of tasks; process
management addresses the impact of tasks on data. Process management systems
normally have three broad functions:
i. They manage what happens to the data when someone works on it (Work
Management).
ii. They manage the flow of data between people (Workflow
Management).
iii. They keep track of all the events and movements that happen in functions 1 and 2
during the history of a project (Work History Management).
PDM systems vary widely in how they perform these functions.
MAKE-TO-ORDER (MTO) and MAKE-TO-STOCK (MTS)

1. One way to classify the manufacturing operations is by the amount of processing the
product requires, after the company receives an order from a customer.
2. At one end of the processing spectrum is the make-to-order (MTO) company.
i. This company does not begin processing the material for the component or
product until it has received an order from the customer.
ii. In some cases, the company may not even procure the material and
components until after it receives the order.
iii. This type of manufacturing operations is practiced when the company

competes on the basis of production planning on firm customer orders.
3. At the opposite end of the spectrum is the make-to-stock (MTS) company, which
manufactures products and places them in inventory before it receives customer
orders.
i. Either the customer purchases the products directly from the inventory at a
retail outlet, or the company ships the product ‘off-the-shelf’ from the
finished goods inventory at the factory or at a distribution centre.
ii. MTS companies rely heavily on market analysis and demand forecasting in
planning the production of their products with respect to the product mix and
volume.
4. Following figure shows the relation between the output variety (degree of
customization) and the type of manufacturing operation.
5. As is evident from the graph, the output variety is highest when the company is
operating in the make-to-order mode, as the companies can serve each & every
individual customer in the way he/she wants.
6. But the cycle time will be more and the cost of the product will also be more.
7. But in the case of a MTS company, the products are already made and kept in the
inventory for the customer to pick up.
8. Here, the customer won’t get any individual attention or customization; he can buy
what is available with the company.
9. The MTS company will be making products in lots and the cost of the products will be
less as the economies of scale will be at work and there will not be any waiting period
for the customer after placing the order.
0 50 100
HIGH
90% MTO Company
O
U
T
P
U MEDIUM
T
V
A
R
I
E LOW
T
Y
90% MTS Company
NONE 0 50 100
% OF MAKE-TO-ORDER
MATERIALS REQUIREMENT PLANNING

1. MRP evolved into a comprehensive priority planning system.
2. MRP provides a method that helps keep order due dates valid even after the orders
have been released to the shop floor or outside vendor.
3. MRP systems can detect when the due date of an order – the date the order is
scheduled to arrive- is out of alignment with its need date the date the order is actually
required.
4. The expanded MRP system became known as closed loop MRP, because it provided
feedback from the excution function to the planning functions,so manufactures could
change plans if necessary.
5. The new system, which was called manufacturing resource planning (MRPII), was a
comprehensive approach for the effective planning of all resoures of a manufacturing
organization.
6. Production & materials planning is critical to the success of a manufacturing compny.
7. A company can hve the best product design, the newest manufacturing facilities, the
lastest equipment & all the latest production technoligies like CAD/CAM, robotics
automated guided vehicles (AGVs),etc. but not the ablity to compete.
8. MRP has proved to be an effective production & inventory planning system in a wide
variety of environments.
9. An MRP system requires 3 types of information:
Master Production schedule (MSP)
Bill of Material (BOM)
Inventory Records (IR)
10. The MSP is detailed production schedule for finished gods or end items that provides
the major input to materials requirement planning process.
11. Associated with each finished product is BOM , which describes the dependent demand
relationships that exist among the various components materials, parts, subassemblies ,
etc.- comprising the finished product.
12. The entire set of BOMs for the company finished products is called BOM file.
13. Inventory status data for each product or component such as stock-in –hand, stock-on
order, etc, .are provided by the inventory records, which also contains planning factors
like lead time, safety stock, re order, and so on.
14. MRP logic uses the MPS, the BOM file & the inventory records to determine the
following for the components:
Planned order quantities
Planned order release dates (to shop floor/suppliers)
Planned order due dates
15. The MRP system calculates the release dates & due date taking into consideration the
lead times required to produce or procure the components and by recognizing the
order in which they are assembled into the finished product.
16. If the MRP process is carried out in conjunction with the capacity planning, the
production facility should have to complete the orders on time.
MANUFACTURING RESOURCE PLANNING (MRP – II)

1. MRP was originally developed as a computer system that was ltd to materials planning.
2. MRP –II is an expansion of closed loop MRP for managing an entire manufacturing
company.
3. MRP II system provides information that is useful to all functional areas & encourages
cross- functional interaction.
4. MRP II supports sales & marketing by providing and orders- promising capability.
5. Order promising is a method of tying customers’ orders to finished goods in the MPS
6. This allow sales personnel to have accurate information on product available & gives them
the ability to give customers accurate delivery dates.
7. MRP II supports financial planning by converting materials schedules into capital
requirement.
8. A company can use MRP II to simulate the effects of different master production schedules
on material usage, labour, & capital requirement. MRP II provides the purchasing
department with information for developing long range buying plans.
9. It is common for suppliers to directly access a customers MRP system to receive up to date
information on the customers planned materials needs.
10. Information in the MRPII system is used to provide accounting with information on
materials receipts to determine accounts payable. Shop floor control information is used to
track workers hrs for payroll purposes.
11. MRP II system increases a company’s efficiency by providing a central source of
management information.
ERP MODULES
All ERP packages contain many modules. The common modules which are available in almost
all ERP software packages are as following:
1. Finance
2. Manufacturing & Production Planning
3. Sales & Distribution
4. Plant Maintenance
5. Quality Management
6. Material Management
FINANCE MODULE
1. A set of processes are required so that they can provide the financial information in the
form that is required by the user
2. The financial application component of the ERP provides us with the information of
financial functionality across the different business area.
3. The finance module of ERP also provides analysis support to the business.
4. The finance module of the most ERP system will have the following subsystems:
a. Financial Accounting (General Ledgers, Accounts Receivable / Payable, Fixed
Asset Accounting)
b. Investment Management (Investment Planning / Budgeting / Controlling,
Depreciation Forecasting/Simulation/Calculation)
c. Controlling (Overhead Cost Controlling, Activity Based Costing, Product Cost
Accounting, Profitability Analyses)
d. Treasury (Cash Management, Treasury Management, Market Risk Management,
Funds Management)
e. Enterprise Controlling (EIS, Business Planning and Budgeting, Profit Center
Accounting)
1.FINANCIAL ACCOUNTING
1. The financial accounting system objective is to provide company-wide control and
integration of financial information which is required for strategic decision making.
2. The Financial Accounting Module of an ERP system, gives you the ability to centrally
track financial accounting data within an international framework of multiple currencies,
companies and languages.
Eg: When raw material moves from inventory into manufacturing, the system reduces
quantity values in inventory and subtracts value for inventory account in the balance sheet.
I. GENERAL LEDGER
a. The general ledger is essential to both financial accounting system and to

strategic decision making.
b. The general ledger supports all the functions which are required in financial
accounting system. It contains of sub-ledgers.
c. The GL provides document parking, posting, reporting, and an integrated financial
calendar for automating periodic activities.
d. It provides the summary information from the other components at the user
defined level of detail.
e. According to the company requirements, the general ledger is structured in a
number of accounts, according to the requirement.
f. The output generated by the general ledger is the data summary that can be used
in planning, distribution and reporting.
g. In the general ledger we can also create our own database table and non
standard fields as per the requirement of the business organization.
PURCHASING SALES
(QUANTITY AND VALUE) (ORDER AND BILL)
VENDOR (PAYABLE) CUSTOMER (RECEIVABLE)
FIXED ASSETS EMPLOYEES (SALARY AND WAGES)
GENERAL LEDGER
TYPICAL GENERAL LEDGER
II. ACCOUNTS RECEIVABLE / PAYABLE

a. ERP system provides us a financial overview of business partner relationships by
maintaining accounts payable & receivable.
b. These accounts are integrated with general ledger and it is associated in sales and
distribution & material management.
c. They are performed automatically when related processes take place in other
modules.
d. It uses the standard business rules for the data entry and reporting to processing
payments and bank transactions.
e. The accounts receivable and payable functions include:
i. Internet Integration
ii. Document Management
iii. EDI processing
iv. Automatic Integration with Cash Management
f. The module also provides, enterprise wide credit management with workflow
integration, payment automation with EFT and check processing etc.
III. ASSET ACCOUNTING

a. This module manages the company’s fixed asset It provides the detailed
information on asset related transactions.
b. The functions performed by this module are:
i. Provides with depreciation charge.
ii. Support throughout the complete lifecycle of the asset.
iii. Management of capital assets.
iv. Integration with Plant Maintenance for management of machinery
and equipment.
c. Fixed Assets: It does not change. Eg: Land & Building
d. Current Assets: It keeps on changing. Eg: Cash
IV. LEGAL CONSOLIDATION

a. All the financial statements should be integrated effectively with the operational data.
b. The legal consolidation helps in the direct data transfer from individual statements into
the consolidated report.
c. The legal consolidation helps to create multiple views of consolidated data and thus we
can generate separate reports for the different functions of an organization.
2.CONTROLLING:
a) This module gathers the functions required for effective internal cost accounting.
b) It offers a versatile information system, with standard reports and helps in analysis.
I. OVERHEAD COST CONTROLLING:-

a) Many organizations experience a significant increase in the percentage of indirect costs,
which cannot be directly assigned to either the products manufactured or to the
services rendered.
b) While cost monitoring and optimization may be quite advanced in production areas;
transparency is often lacking in overhead cost areas.
c) The over head cost controlling system focuses on monitoring and the allocation of
overheads.
II. COST CENTER ACCOUNTING:

a) It analyses where the overheads have occurred in the organization.
b) The cost is allocated to various sub areas of the organization and the techniques are
followed so that we can come to know where the expenses have been incurred.
III. OVERHEAD ORDERS:

a) This system collects and analyses costs and also checks and monitors the budget that
has been assigned.
IV. ACTIVITY BASED COSTING:

a) This module gives a response to the growing need for monitoring and controlling cross-
departmental business processes.
b) This system automatically determines the utilization of business processes by products,
customers and other cost objects based on the cost drivers taken from the integrated
accounting environment.
V. PRODUCT COST CONTROLLING:

a) It determines the cost arising from manufacturing a product or providing a service.
VI. COST OBJECT CONTROLLING:

a) This module helps in monitoring the manufacturing orders.
b) Integration with the logistics component results in a logistical quantity flow, that
provides instant information on actual cost object costs, allowing ongoing costing
calculations at any time.
c) Follow up calculations determine and analyse the variances between actual
manufacturing cost, and the plan cost resulting from product cost planning.
VII. PROFITABILITY ANALYSIS:

a) Profitability analysis subsystem examines the sources of returns.
b) Information from profitability analysis, frames important decisions in areas such as
determining prices, selecting customers, developing conditions and choosing
distribution channels.
3. INVESTMENT MANAGEMENT:
a) Investment management process starts from the planning of an organization till the
settlement of an organization.
b) The investment programs are carried out in each and every department and it also tells
us the up to date information about funds, plant cost and actual cost from external and
internal activities.
c) The investment program allows to distribute budgets which help us to monitor the
budget and avoid over run.
d) It also helps us to manage and plan capital projects.
e) The investment measures that need to be monitored are done from time to time
according to the internal order.
4.TREASURY MODULE
a) The organization can gain a significant competitive advantage by efficiently managing
the short term, medium term and long term payment flows and managing the risk.
b) All these operating divisions are linked so that the financial transactions can be planned
and these positions in treasury have a significant impact on the organizations success.
c) It also helps in management and control of cash flow.
d) Manages the risk among all the division of organization.
e) The treasury component provides us with the following sub components:
1. Cash Management
2. Treasury Management
3. Market Risk Management
4. Funds Management
I.CASH MANAGEMENT
a. It allows us to analyze financial transaction for a given period of time.
b. It provides the information on the sources and the uses of funds to secure liquidity
so that the payment obligation can be met on time.
c. It also monitors and controls the incoming and outgoing payment flow and
provides the data for managing short term money market investment.
II.TREASURY MANAGEMENT
a. The treasurer takes the result of current liquidity, currency and the risk position on
the money and the capital market before taking decision in the form of financial
instruments in treasury management.
b. The treasury management component offers functions for managing financial deal
and position.
c. It also supports flexible reporting and evaluation structure for analyzing position.
III. MARKET RISK MANAGEMENT

a. This plays a vital role within the Treasury, in ensuring your company’s
competitiveness.
b. This module provides us with the feedback which consists of data collection risk
measurement, analysis and active planning process for the financial instruments.
c. This process deals with the treasury and corporate functions.
d. Market risk management acts as an integrated, central risk control station with
monitoring and management functions.
IV.FUNDS MANAGEMENT
This module supports the subsystems of fund management process from

budgeting all the way through payment including monitoring expenditures, activities,
resources and revenues.
5. ENTERPRISE CONTROLLING
a. Enterprise controlling comprises of those functions that will optimize share-holder value,
while meeting internal objectives for growth and investment.
b. This module includes:
i. Executive Information Systems
ii. Business Planning and Budgeting.
iii. Profit Centre Accounting.
I. EXECUTIVE INFORMATION SYSTEMS (EIS)

a) It provides an overview of the critical information necessary to manage the
organization.
b) It integrates data from other ERP components and non- ERP data sources both inside
and outside the enterprise.
c) Drill- down reporting and report portfolio are available to evaluate and present the
data.
II.BUSINESS PLANNING AND BUDGETING

a) Business Planning and Budgeting supports the management team of business units
and groups in the calculation of business targets such as return on investment.
b) It also supports central investment planning, budget release and tracking.
c) It automatically transfers data about investment requirements from transaction
applications and provides extensive analysis functions for budget monitoring.
III.PROFIT CENTRE ACCOUNTING

a) It analyses the profitability of internal responsibility centres.
b) All business transactions in financial accounting, material management, asset
management and sales and distribution which affects profit are automatically
reflected in profit center accounting.
SALES AND DISTRIBUTION MODULE
With today’s business environment characterized by growing competition shrinking

cycle times and the accelerating pace of technological innovation companies are increasingly
being forced to streamline business processes.
Here, increased efficiency in sales and distribution is a key factor to insure that
companies retain a competitive edge and improve both profit margins and customer service.
The following are the sales related business transactions:

Sales queries, such as inquiries and quotations
Sales orders
Outline agreements, such as contracts and scheduling agreements
Delivery/Shipment
Invoicing/Billing
After sales support
During sales order processing, the following basic functions are carried out:
Inquiry handling
Quotation preparation and processing
Contracts and contract management(order management)
Monitoring the sales transactions
Checking for availability
Transferring requirements to material planning(MRP)Scheduling the delivery
Calculating pricing and taxes
Checking credit limits
Invoicing/Billing
Creating printed or electronically transmitted documents (confirmations and so on)
The sales and distribution module very actively interacts with the material management
and financial accounting modules for delivery and billing.
Typically, a sales and distribution module will contain the following sub systems:
Master data management
Order management
Warehouse management
Shipping
Billing
Pricing
Sales support
Transportation
Foreign trade
MASTER DATA MANAGEMENT

1. Every company will have products, customers and will require raw materials and will
have suppliers.
2. The task of the Master data management module is to keep information about all
these entities, so that these can be made available to the decision makers and also
for the automatic generation of reports, contracts, invoices and so on.
Inquiry
Quotation
Sales
Contracts
Order
Shipping Delivery MATERIALS

MANAGEMENT
Invoice
Billing
FINANCIAL ACCOUNTING
THE SALES AND DISTRIBUTION MODULE.
3. Automatic sales processing, using ERP system, requires that the master data has been
stored in the system.
4. In addition to sales and distribution, other departments of the company, such as
accounting or materials management access the master data.
ORDER MANAGEMENT
This module usually includes sales order management and purchase order management
and supports the entire sales and purchase processes from start to finish.
i. Sales order management.

1. Applications in sales order management represents a company’s most important point of
contact with the customer.
2. These applications allow a company to manage sales operations quickly and efficiently and
provide comprehensive solutions for the management of quotes, orders, contracts, prices,
and customer discounts.
ALES ORDER MANAGEMENT.
ii. Purchase order management

1. Purchase order management is increasingly essential in today’s even more competitive
business environment because it enables a company to make the correct purchase
decisions about quality and price, where quality refers to supply lead-time as well as to
the (to be purchased) product itself.
2. Purchase order management includes online requisitioning, centralized contract
management, just in time schedules and vendor management.
Purchase order Analysis enables historical as well as statistical data to be used to assist in the
analysis of purchase activities.
iii. WAREHOUSE MANAGEMENT

This module provides real time information about inventory levels across the enterprise
and tools to manage the daily operational needs of single-site or multiple-site four wall
warehouses.
Components of a good warehouse management application include the following:
Inventory Planning: Comprises of planned inventory movements, so that customers

receive right order in the right quantity at the right time.
Inventory handling: Allows for monitoring of all warehouse order scenarios such as the
receipt, issue and transfer of inventory.
Intelligent location assignment: Used to create intelligent storage put away lists.
Inventory reporting: This function permits full visibility of inventory at single or multiple
sites.
Inventory analysis: This module enables the analysis of information that result from
warehousing activities and the use of feedback in process optimization.
Lot control: This facility offers lot tracking and tracing, so that a company can trace all
the raw materials and the finished goods that its products require.
Distribution data collection: This is an essential element in paperless warehousing that
provides the communication link between storage and shipping systems and
warehousing equipment like bar coding scanners.
SHIPPING
The shipping module supports the following functions:
Monitoring dates of orders due for delivery
Creating and processing deliveries
Planning and monitoring work lists for shipping activities
Monitoring material availability and processing outstanding orders
Picking(can be linked to the warehouse management system)
Packing deliveries
Information support for transportation planning.
Support for foreign trade requirements
Printing and sending shipping output
Data update in goods issue.
BILLING
A business transaction is completed for sales and distribution once it has been billed.
The ERP systems support billing functions like issue of invoices on the basic of goods and
services, issuing f debit and credit memos.
PRICING
1. The term pricing is used broadly to describe the calculation
of prices (for external use by customers or vendors) and costs (for internal purposes
such as cost accounting).
2. The pricing module keeps the information about the prices of the various items, the
details about the quantity discounts, the discounts to the different customer categories
and so on and enables the organization to generate documents like quotations, delivery
notes, invoices and so on.
3. Also, since this information is available to all the sales people, they can make better
decisions thus improving the sales performance.
SALES SUPPORT
1. The sales support component helps the sales and marketing department to support your
existing customers and, at the same time, to develop new business.
2. Sales support provides an environment where all sales personnel-both the field sales
people and the staff in the sales office-can contribute to and access valuable information
about customers, sales prospects, competitors and their products and contact people.
3. The sales support component functions, both as a source of information for all other
areas of sales and distribution and as an initiating force for acquiring business.
TRANSPORTATION
1. Transportation is an essential element of the logistics chain.
2. It effects both inward and outward movement of goods.
3. Effective transportation planning is required to ensure that shipments are dispatched
without delay and that they arrive on schedule.
4. Transportation costs play a considerable role in determining the price of a product.
5. It is important that these transportation costs are kept to a minimum in order to keep
the price of the product competitive.
FOREIGN TRADE
1. The entire logistics chain, from the import of raw materials, finished and unfinished
goods, to the sale of goods and the transfer of data to materials management and
financial accounts, is significantly influenced by foreign trade activities.
2. These main tasks in foreign trade processing can be carried out using the foreign trade
system.
HUMAN RESOURCE MODULE
Human resource management is an essential factor of any successful business.

The various subsystems under HR module are:
Personnel management: (HR master data, Personnel administration, information

systems, recruitment, travel management, benefits administration, salary
administration)
Organizational management: (Organizational structure, staffing, schedules, job
descriptions, planning scenarios, personnel cost planning)
Payroll Accounting: (Gross/net accounting, history function dialogue capability, multi
currency capability, international solutions)
Time management: (Shift planning, work schedules, time recording, absence
determination)
Personnel development: Career and succession planning, profile comparisons,
qualifications assessments, additional training determination. Training and event
management.)
PERSONNEL MANAGEMENT
Personnel management includes numerous software components, which allow you to
deal with human resources tasks more quickly, accurately and efficiently. You can use these
components not only as part of the company wide ERP solution but also as stand alone
systems.
i. Personnel Administration
Information is no longer owned by specific departments, but is shared by multiple
entities across an organization. This eliminates duplicate entries reduces the chance for error
and improves data accuracy.
ii.Employee master data

1. Human resource module has a centralized database with integration to multiple
components for processing employee information.
2. The system provides tools to save time and help you tailor the system to fit your needs.
3. The HR module contains features for storing any desired information about your
employees.
4. Most systems have the facility to scan the original documents for optical Storage.
5. The HR Information system displays graphical information such as organization charts or
employee data.
6. The system can produce charts and reports-both standard and customer defined.
iii.Recruitment management
1. This function helps in hiring the right people with the right skills.
2. Reducing the cost of recruiting and hiring new employees is a challenge for the HR
professional, who is responsible for placing people in the right job, at the right time, and
with the right skills and education.
3. These requirements are fulfilled only through effective automation of the entire
recruitment process.
4. The recruitment component is designed to help meet every facet of this challenge.
5. This component includes processes for managing open positions/requisitions, applicant
screening, selection and hiring, correspondence, reporting and cost analysis.
iv.Travel Management
1. This module helps you in processing the travel expenses effortlessly, in several
currencies and formants.
2. HR Travel management allows you to process a business trip from start to finish-from
the initial travel request right through to posting in financial accounting and controlling.
3. This includes any subsequent corrections and all retroactive accounting requirements.
4. Travel management automatically calculates the tax.
5. It automatically processes credit card transactions for a particular trip.
6. You reimburse costs incurred during a trip through a payroll accounting, accounts
payable accounting or by data medium exchange.
7. In addition, Travel management provides multiple report formats.
8. You can enter receipts in any currency and then print reports in your native currency.
Benefits Administration
1. Using the benefits administration component, you can define eligibility groups and rules
based on a wide range of factors.
2. You can determine the variables, rules and costs formulas for each benefits plan.
Salary Administration
1. This function helps you in simplifying the process of rewarding your employees.
2. Administration of salaries is an ongoing process within your human resource
department.
3. It is particularly important during the review processes, when your goal is to justify
reward good performance.
4. The salary administration module assists you in the salary review process by taking into
account standard salary changes within the company as well as individual competition
exceptions.
ORGANIZATIONAL MANAGEMENT
This module will assist you in maintaining an accurate picture of your organizations
structure, no matter how fast it changes. In many cases, graphical environments make it easy
to review any moves, additions, or changes in employee positions.
PAYROLL ACCOUNTING
1. The payroll accounting system can fulfill the payroll requirements and provide you with
the flexibility to respond to your changing needs.
2. Payroll accounting should address payroll functions from a global point of view.
3. You should be able to centralize your payroll processing, or decentralize the data based
on country or legal entities.
4. Most payroll accounting systems give you the options and capabilities to establish
business rules without modifying the existing payroll.
5. Many systems have the features to remind you when transactions are due for
processing.
6. With payroll accounting, you have the ability to tailor the system to your organization
requirement.
7. With country specific versions of payroll accounting, you can fulfill language, currency
and regulatory requirements.
TIME MANAGEMENT
1. It is a flexible tool designed to handle complicated evaluation rules to fulfill regulatory
requirements and determine overtime and other time related data.
2. The time evaluation component stores your organizations business rules and
automatically validates hours worked and wage types.
i. Shift Planning
1. Shift planning module helps you to plan your workforce requirements quickly and
accurately.
2. You can plan your shifts according to your requirements taking into consideration all
criteria, including absences due to leave or sickness, and employee requests for time
off.
3. Shift planning keeps you informed at all times of any staff excess or deficit.
4. Another advantage of shift planning is that it enables you to temporarily assign an
employee or employees to another organizational unit where they are needed, allowing
for a temporary change of cost centre.
PERSONNEL DEVELOPMENT
Effective personnel development planning ensures that the goals of the organization
and the goals of the employee are in harmony. The benefits of such planning include
improvements in employee performance, employee potential, staff quality, working climate
and employee morale.
i. Training and Event Management

1. A good HR system will have scheduled seminars, training courses and business events.
2. On completion of a training course, appraisal forms can be automatically issued.
3. Appraisals can be carried out for instructors, attendees, business events and training
courses.
PLANT MAINTAINENCE MODULE

1. The achievement of world class performance demands delivery of quality products
expeditiously and economically.
2. Organizations simply cannot achieve excellence with unreliable equipment.
3. Machine breakdown and idle time for repair was once an accepted practice. Times have
changed.
4. Today when a machine breaks down, it can shut down the production line and the
customer's entire plant.
5. The Preventive Maintenance module provides an integrated solution for supporting the
operational needs of an enterprise wide system.
6. The Plant maintenance module includes an entire family of product covering all aspects
of plant/ equipment maintenance and becomes, integral to the achievement of process
improvement.
7. The major subsystems of a maintenance module are :
1. Preventive Maintenance Control.
2. Equipment Tracking.
3. Component Tracking.
4. Plant Maintenance Calibration Tracking.
5. Plant Maintenance Warranty Claims Tracking.
PREVENTIVE MAINTENANCE CONTROL

1. Preventive Maintenance Control provides planning, scheduling and control of
facilities and equipment.
2. Preventive Maintenance Control enables organizations to lower repair costs by
avoiding downtime, machine breakage and process variability.
3. Companies achieve higher machine utilisation and improved machine reliability and
tolerance control, along with higher production yields.
EQUIPMENT TRACKING
1. Equipment is an asset that needs to be monitored and protected.
2. In many situations, equipment maintenance costs constitute the single largest
controllable expenditure of an organization.
3. All facets of plant location history and utilization history are described and tracked.
4. This history includes acquisition and disposition information and associations between
different pieces of equipment to pinpoint operational dependencies.
5. Each piece of equipment is defined by a model and a serial number.
6. All of this information can be used to create equipment specifications, which provide
detailed information for technical specialists working in equipment operations,
maintenance and transportation control.
COMPONENT TRACKING
1. Components are typically subsets of larger equipment and deserve the same amount of
cost controlling scrunity.
2. Component tracking enables equipments managers to identify components with
chronic repair problems.
3. They can determine whether a repair or replacement should be covered by warranty.
4. Planning component replacements, rather then waiting for components failures to
occur, reduces unscheduled equipment downtime.
5. Component tracking includes repair/exchange history and component service life.
PLANT MAINTENANCE CALIBRATION TRACKING

Plant Maintenance Calibration Tracking allows organization to leverage their
investment in the Plant maintenance module by providing for the tracking of equipment
calibration in support of ISO9001 requirements.
PLANT MAINTENANCE WARRANTY CLAIMS TRACKING

1. Plant Maintenance Warranty Claims Tracking is an administrative system, designed to
provide control of all items covered by manufacturer and vendor warranties.
2. It enables plant management to recover all of the warranty; reimbursements to which
they are entitled but have not been able to recover in the past.
3. Features include the ability to, establish the type-and length of warranty, for example,
elapsed day, months: mileage stipulation, or operating units.
4. A complete history is performed fur each item covered by the warranty, and
information regarding the warranty service provider is generated.
QUALITY MANAGEMENT MODULE

1. The quality management module supports the essential elements of a system.
2. It penetrates all processes within an organization.
3. The task priorities, according to the quality loop, shift from production (implementation
phase) to production planning
and product development (planning phase), to procurement and sales and distribution,
as well as through the entire usage phase.
4. It handles the traditional tasks of quality planning, quality inspection and quality
control.
5. The quality management module’s internal functions do not directly interact with the
data or processes of other modules.
QUALITY MANAGEMENT MODULE – FUNCTIONS:

The quality management module fulfills the following functions:
1. QUALITY PLANNING: Management of basic data for quality planning and inspection
planning, material specifications, etc.
2. QUALITY INSPECTION : Trigger inspections, inspection processing with inspection plan
selection and sample calculation etc.
3. QUALITY CONTROL.: Dynamic sample determination on the basis of the quality level
history, quality management information system for inspections and inspection results
and quality notifications, etc.
COMPUTER INTEGRATED QUALITY MANAGEMENT (CIQ)

1. The integration of Quality management in the ERP system provides considerable
advantages because only an integrated system can support all the elements of quality
mgmt system.
2. This integration allows the quality mgmt to influence all processes within a company,
thereby affecting all phases of a products life-cycle.
3. The quality management module is integrated with the master data and processes of
the following applications:
i. MATERIAL MANAGEMENT: Purchasing, Inventory mgmt, Warehouse mgmt, Material
Requirement Planning.
ii. PRODUCTION: Work scheduling, shop floor control.
iii. SALES AND DISTRIBUTION: Delivery, creation of quality certificates.
4. The quality management module supports the exchange of data with the other
applications in order to prevent related data from being recorded and stored
redundantly.
5. For example, the information provided by a goods receipt posting relating to the
material, vendor and lot size is automatically transferred to the inspection lot data
record when an inspection is triggered.
MATERIAL MANAGEMENT MODULE:
The material management module optimizes all purchasing processes with workflow-
driven processing functions, enables
automated supplier evaluation, lowers procurement and warehousing costs with accurate
inventory and warehouse management and integrates invoice verification.
The main module of material management are as follows:
i. Pre- Purchasing Activity.

ii. Purchasing.
iii. Vendor Evaluation.
iv. Inventory management.
v. Invoice verification and material inspection.
I. PRE-PURCHASING ACTIVITIES:
1. This system supports the complete cycle of bid invitation, award of contract and
acceptance of services and also include maintaining a service master database, in which
the descriptions of all services that are to be procured can be stored.
2. The system also keeps separate sets of service specifications that can be created for
each concrete procurement project or proposed procurement in the purchasing
documents.
3. Set of service specifications may include both items with services and items with
materials.
4. The steps that are followed in the pre-purchasing activity are shown in the diagram that
follows:
CONTRACTS
THE PRE-PURCHASING ACTIVITIES MODULE
II. PURCHASING:
1. Purchasing is a very important component of the material management module.
2. It supports all the phases of material management, material planning and control,
purchasing, goods receiving, inventory management and invoice verification.
3. Good communication between all parties in the procurement process is necessary for
purchasing to function smoothly.
4. Purchasing communicates with other modules in the system to ensure a constant flow
of information.
5. For example it works side-by-side with the following modules : Cost Accounting System
,Financial Accounting, Sales and distribution
III. VENDOR EVALUATION:

1. The vendor evaluation system supports the optimization of the procurement process in
the case of both material and service.
2. By evaluating vendors, you can improve your enterprises competitive-ness.
3. Most of the vendor evaluation systems offer you a point-based evaluation system,
based on certain selection criteria. Most systems have their own pre-defined set of
criteria, but will allow the user-defined set of criteria also.
4. Using these criteria, the performance of the vendors is measured and points are given.
5. The main criteria that are usually used are price, quality, delivery, service and support,
replacement of returns, lead time and so on.
6. The vendor evaluation system ensures that evaluation of vendors is objective, since all
vendors are assessed according to uniform criteria and the scores are computed
automatically.
IV. INVENTORY MANAGEMENT:

1. Inventory management systems allow you to manage your stocks on a quantity and
value basis, plan, enter and check any goods movements and carry out physical
inventory.
2. In the inventory management system the physical stocks reflect all transactions
resulting in a change in stock and thus in updated inventory levels.
3. The user can easily obtain an overview of the current stocks of any given material.
4. For each material not only are the stocks in the warehouse shown , but also the stocks
ordered but not yet delivered, reserved for production or for customer, and the stocks
in quality inspection can be monitored.
5. Special stocks from the vendor or from the customer are managed separately from the
company’s own stock
6. Most inventory management systems support inventory methods like periodic
inventory, continuous inventory, inventory sampling and cycle counting.
V. INVOICE VERIFICATION AND MATERIAL INSPECTION.

The invoice verification component is part of the material management system. It
provides the link between materials management components and the financial accounting,
controlling and asset accounting components.
Invoice verification material management serves the following purposes:
i. It completes the materials procurement process- which starts with the purchase
requisition, continues with purchasing and goods receipt and ends with the invoice
receipt.
ii. It allows invoices that do not originate in materials procurement (services, expenses,
etc) to be processed.
iii. It allows credit memos to be processed, either as invoice cancellations or discounts.
Invoice verification does not handle the payment or the analysis of invoices. The
information required for these processes is passed on to other departments.
MANUFACTURING MODULE:
1. A good manufacturing system should provide for multi mode manufacturing

applications that encompass full integration of resource management.
2. These manufacturing applications should allow an easier exchange of information
throughout the entire global enterprise, or at a single site within a company.
3. The manufacturing module should enable an enterprise to marry technology with
business processes to create an integrated solution.
4. It must provide the information base upon which the entire operation should be run.
5. It should contain the necessary business rules to manage the entire supply chain
process whether within a facility, btwn facilities or across the entire supply chain.
HOW DOES MANUFACTURING RESPOND TO THE CUSTOMER?

1. The manufactures must respond quickly and effectively to customer demands.

2. While agility is desirable, agility without an effective enterprise manufacturing system
results in speed without purpose.
3. Effective execution provides short cycle tem, quality assurance, continuous
improvement &quick response to process variability.
4. All three elements contribute to a management decision to install an enterprise-wide
manufacturing management system.
5. Some of the major subsystem of the manufacturing module is:
i. Materials and capacity planning
ii. Shop floor control
iii. Quality management
iv. JIT/repetitive manufacturing
v. Cost management
vi. Engineering change control
vii. Engineering data management
viii. Configuration management
ix. Tooling
x. Serialization/lot control
MATERIAL AND CAPACITY PLANNING

1. The planning systems of ERP packages are designed to provide the responsiveness your
company needs to meet those customer requirements.
2. With these systems, planners can stimulate alternative plans; gaining the information
they need to determine which parts and assemblies to make, which to buy and when to
manufacture or purchase.
3. Material plans can be developed from a wide variety of sources that include the master
schedule, sales forecasts and dependant and independent demand.
4. The company can customize planning processes because input is described by system
parameters that are easily changed.
5. To reduce effort and accelerate communication across the supply chain, planned orders
can be confirmed and converted automatically (or manually) into production and
purchase orders.
6. Graphical reporting makes potential material and capacity problems easy to identify.
7. Depending on the requirements of the company’s product and processes, production
can be scheduled using work orders or repetitive build schedules.
8. Using the shop floor control facility, the company has the visibility necessary for
managing lead-times and for carefully controlling the amount of work-in-process and
the timely release of production orders.
SHOP FLOOR CONTROL

1. Process reengineering efforts and the elimination of waste have necessitated greater
reliance upon powerful, user friendly, flexible shop floor planning and control systems.
2. Management needs timely, accurate information and the ability to manage the shop
floor by exception.
3. A shop order can be reprinted at any time with user selection of weather to relocate
material
4. This reprinting gives a shop foreman flexibility to print a duplicate copy when an order
is split between operators.
5. This feature also gives the shop scheduler, the ability to reprint the shop packet and to
reflect new material allocations that correct previous shortages.
6. Every shop order can be maintained throughout its life.
7. All systems provide a full function shop order maintenance capability, allowing the user
to evaluate and adjust operation steps and components.
8. Orders can be re scheduled either backward or forward.
QUALITY MANAGEMENT
1. All manufacturing modules track quality control activities. These systems allow a wide
variety of characteristics and parameters to be specified in a test and inspection
operations and maintain an extensive history to improve product quality and identify
recurring problems.
2. The quality management systems usually support the bench marking on optimal
product design, process engineering and quality assurance data by all functional
departments within the manufacturing enterprise thereby facilitating definitions of
repeatable processes, route cause analysis and a continuous improvement of
manufacturing methods.
3. This documentation supports the job functions of quality assurance and production
managers in validating the manufacturer’s conformance to ISO 9000, good
manufacturing practices GMP world wide, MIL-Q-9858 in the United States and a
variety specific industry standards of quality assurance.
4. Many systems not only provide high volumes repetitive manufacturing functionality,
but also provide for the transition to rate based production by allowing the use of
repetitive scheduling, even for the products are not rate based.
5. This allows a production facility to transition products from the discreet manufacture
into a JIT/repetitive focus. For eg. When the demand pattern for an item begins to
stabilize and shown a repeatable/ predictable pattern, then a productive schedule can
be initiative even though the item may not be designated as rate based.
6. Overtime, as the items demand pattern grows, the item can be switched to full rate
based production scheduling.
7. This transition capability enables production facility to adopt process reengineering, set
up production, single minute exchange of die(SMED)programs employee empowerment
work teams etc. with the confidence of knowing that the planning and control system
will effectively support the efforts.
8. GIT/repetitive includes strong analytic capabilities.
Cost management
1. ERP packages provide extensive cost information at several levels that have businesses
identify drivers and reduce product cost. You can choose the costing method that best
reflects your company’s business
2. FILO (Last in First out) FIFO (First in first out), moving average unit or lot costing
methods can be assigned by items.
3. Many vendors all support ACTIVITY BASED COSTING (ABC) with activities visibility by
cost object as well as cost for user defined groupings such as departments.
4. Manufacturing system provides extensive information about production costs at several
levels, which gives you the visibility that you need to identify costs drives and reduce
product costs.
Engineering data management

1. The 1st step to shorter product development activities. Engineering Data Management
is designed to help your company trim data transfer time, reduce errors & increase
design productivity an automated link bwtn engineering and production information.
2. Most packages allow a smooth integration, with popular CAD packages, to simplify the
exchange of information abt drawings, items BOMs and routings.
Engineering Change Control

1. By using Engineering Change control, business can give effective control over
engineering change orders.
2. Your company can define the authorization steps for improving and implementing
an engineering Change Orders.
3. When these steps are completed, the system automatically the change in the
production database.
Configuration Management
1. The Configuration management dramatically reduce order cycle time by eliminating the
lengthy engineering review, typically associated with determining feasibility and the
costs associated with the configured end item.
2. This reduction is achieved by creating a flexible user-defined knowledge base that is
accessed by a powerful analytic engine.
Serialization / Lot Control

1. The lot control system provides for the pre-allocation of lot numbers.
2. This Feature is available throughout the product offerings and includes MRP, shop floor
control, order processing and JIT.
Tooling
1. For many manufacturers, ensuring that proper tooling is available is just as critical to
production schedules as the availability of material.
2. The ERP system extends capacity and inventory management to include these valuable
resources.
3. These systems help to ensure that tools and materials arrive together at scheduled
operations by storing tools in inventory and planning and allocating the required tools
as part of the production order.
ERP MARKET
Some of the top-tier ERP vendors are SAP-AG, BAAN, PeopleSoft, Oracle Application and
J.D.Edwards.
These companies are covering the major ERP market revenue.
SAP AG:
COMPANY PROFILE:
SAP (System Applications & Products in data processing) based in Walldorf, Germany is
one of the top most ERP vendors providing the client server business application
solutions.
SAP serves as a standard in the industries like chemicals, customer products, oil & high
technology & electronics.
The SAP group has offices in more than 50 countries worldwide & employs a workforce
of over 19300.
SAP is most successful vendor of standard business application.
In 1988 SAP AG reported revenues of DM 847 billion & 41% increase over 1997’s
revenues & at the same time sales of SAP R/3 rose by 31%.
Since 1988, SAP AG has been a publicly held corporation, with its shares being traded
on the German & Swiss stock exchange. In 1995, the company was added to the DAX,
the index of Germany blue-chip companies.
S P listed its RD’s ( merican Depository Rights) on the NYSE (New York Stock
Exchange) in August 1998.
S P’s ERP package comes in 2 versions i e mainframe version (S P R/2) & client server
version (SAP R/3).
SAP provides the enterprise application suit R/3 for open client/server systems.
With SAP, customers can install the core system & one or more of the fundamental
components, or purchase the software as a complete package.
PRODUCTS & TECHNOLOGY:

SAP has developed extensive library of more than 800 predefined business processes.
These processes may be selected from SAP library & can be included within installed
SAP application solution to suit the user exact requirements.
SAP software has special features like, linking a company’s business processes &
applications, & supporting immediate responses to change throughout different
organizational levels & real time integration.
Also, the new technologies are available regularly to cop-up with the changes of the
new business trends.
The international standards have been considered while designing the software like
support of multiple currencies simultaneously, automatically handles the country
specific import/export, tax, legal & languages requirements e.g. the R/3 system has an
unbeatable combination of functionality & technology.
The modules of R/3 can be used individually as well as user can expand it in stages to
meet specific requirement.
R/3 – An Overview:
R/3 employs a three-tire client/server architecture widely recognized by SAP customers,
technology partners & industry analysts as a winning approach to solving some of
today’s most demanding information- managements challenges.
The three-tiered architecture separated a system into three functional layers, each
structured to support the demands of its function.
1. Database layer resides on central servers or mainframe host computer.
2. The application layer holds the processing logic of the system, preparing &
formatting data for individual offices or department.
3. The presentation layer, typically on personal computers, handles all the task related
to the presentation of data, including user interfaces that enable easy access to
complex applications & data.
SAP has also incorporated & integrated the intranet & internet technologies into
business solutions for its customers.
Both internally & together with its partners, the company is defining & creating a
number of Internet standards-based interfaces, application & business processes that
will extend the usefulness of SAP software in entirely new ways & to new classes of
customers.
THE R/3 SYSTEM:

S P’s R/3 system is the world’s most-used standard business software for client/server
computing.
This enables you to respond quickly making you more flexible
The R/3 system is ideal for companies of all sizes & industries.
It gives them both a forward-looking information management system & means to
optimize their business processes.
t R/3’s core are powerful program for accounting & controlling, production &
materials management, quality management & plant maintenance, sales & distribution,
human resources management & project management.
All these applications support decision making at the top level as warehouses
conveniently edits external data & internal data.
The R/3 system is an unbeatable combination of functionality & technology.
lthough designed as an integrated system, R/3’s modules can also be used individually
It is a quick & efficient to install.
R/3 overcomes the limitations of the traditional hierarchical & function-oriented

structures like no other software.
R/3 APPLICATION MODULE:

The R/3 system provides a flexible organizational structure.
It can connect all the business processes together & every employee could have fast
access to the required information.
The in house staff can do work easily with reference ABAP/4R development workbench,
which is an integral part of R/3. R/3 application modules are either used alone or in
combination with other solutions.
Following are some R/3 modules:
1. Financial Accounting:it collects & controls the data relevant to financial accounting.
It provides reports & documentations & comprehensive information.
2. Treasury:this module provides a complete solution for efficient financial
management. Treasury module helps in ensuring the liquidity of your company
worldwide structures, the asset profitability & minimizes risks.
3. Controlling:This module has a uniform reporting system for company wide
controlling with all procedures & controls content of the company’s internal
processes.
4. Enterprise Controlling:This module has been designed to monitor the company’s
success factors & performance indicators on the basis of management information.
5. Investment Management: This module offers integrated management & processing
of investment measures. This also participates in pre investment analysis,
depreciation simulation. Investment management monitors the projects from
planning to settlement.
6. Production Planning: this provides all types of manufacturing strategies, from
repetitive MTO & ATO, through processes, lot & MTS manufacturing, to integrated
supply chain management.
7. Material Management: It manages the purchasing processes with workflow driven
processing functions. This also handles warehouse management & integrates invoice
verification.
8. Plant Maintenance & Service Management: this allows the planning, control &
processing of the inspection, maintenance, damages & service management.
9. Quality Management: this offers all processes relevant to your quality assurance
along with supply chain, co-ordinates inspection processing & integrates laboratory
information systems.
R/3 also provides its applications in HR managements, project management, sales &
distribution with all standard business processes & functionality.
SAP ADVANTAGES:
R/3 offers integrated solution for client/server information system to create smoothly
functioning communication networks along with network administration & back up
solutions.
S P’s partnership with technology, service companies, hardware manufactures &
database providers helps to provide a complete business solution.
The server coordinates with actual applications & controls communication with the
database, while client level shares this database with the end user by distributing it
across the various levels.
This client/server solution is infinitely expandable & can be used with anywhere
between 30 & several thousand end users. This ensures that R/3 can always grow with
the growing requirement of company.
BAAN
1. Baan company was founded in Netherlands in 1978 by brothers Jan and Paul Baan..
2. The BAAN Company is the leading global provider of enterprise business software.
3. The BAAN company products reduce complexity and cost, improve core business
processes, are faster to implement and use, are more flexible in adapting to business
changes.
4. The products offered by the company supports several business tools.
5. The tools are based on multi-tier architecture.
TECHNOLOGY AND PRODUCTS:

1. The BAAN products are having open component architecture.
2. The special feature of BAAN product is the use of BAAN DEM (Dynamic Enterprise
Modeling).
3. Baan DEM provides a business view via a graphical process/model based views.
4. BAAN products has multi-tiered architecture for maximum and flexible configuration.
5. The application supports the new hardware, OS, networks and user interfaces w/o any
modification to the application code.
6. The Baan series based products include :
-BAAN Enterprise Resource Planning.
-BAAN Front Office.
-BAAN Corporate Office Solutions.
-BAAN Supply Chain Solutions.
7. The main advantages of Baan series-based family of products are the best in class
components version independent integration and evergreen delivery.
BAAN ERP MODULES

1. BAAN ERP is a proven enterprise resource planning s/w application.
2. It is fully integrated and provides all the functionality which is required across the
enterprise.
3. BAAN ERP consists of a number of interdependent components that can be deployed to
meet business needs.
4. The flexibility with BAAN ERP allows customers to maximize the benefits of both best in
class solution and a fully integrated high performance system.
5. BAAN ERP includes the following components –
I. Manufacturing Module: This includes bills of material, cost price calculation, shop
floor control, material requirement planning, etc.
II. Finance Module: This includes accounts payable, accounts receivable, cash
management, fixed assets, etc
III. Project Module: This includes project budget, project definition, project estimation,
project planning, etc
IV. Distribution Module: This includes sales management, purchase management and
warehouse management.
BAAN ERP TOOLS

1. BAAN ERP Tools can be described as a computing platform that provides independent,
flexible, open and distributed computing and development environment.
2. The open architecture of the BAAN ERP Tools make it possible to –
a. Quickly react to the changes that take place in the market, in-turn change the s/w
configuration.
b. Develop the BAAN product in such a way that it is independent of third party
product such as hardware, OS and DB.
c. Easily integrated with third party product.
d. Gives customer specific solutions.
RUN TIME TOOLS

The main objective of these tools is to make the BAAN ERP packages, independent from
computing environment specific issues.
a. It allows the developers to focus on application issues.
b. Removes the overhead cost of generating application code for each combination of
platforms.
c. Reduces maintenance of product updates.
d. Reduces the overhead by ensuring cross platform compatibility.
SOFTWARE DEVELOPMENT AND ADMINISTRATION TOOLS

Tools environment contains functionality for the installation, configuration,
administration and modification of the BaanERP applications.
The key features are:
1. Software configuration management.
2. Authorization management system.
3. Database management system.
4. Exchange control
5. Dynamic form editor
6. 4GL Program Editor ,etc
CUSTOMERS AND PARTNERS

1. BAAN company and its partners work closely to ensure the success of every installation
and enable the customers to achieve the highest level of satisfaction.
2. The BAAN company is committed to provide solution that meets the requirements of
all the vertical markets.
3. The company aims to ensure that every interaction with customers has its ‘Three I’
philosophy-
Integrity : In its interaction with the customers, colleagues, partners and shareholders.
Innovation : In what is built and how it delivers.
Initiative : In the speed and focus it brings to all aspects of the market opportunity.
4. B N company and developing partnership, hardware and software company’s having
such good contact with the alliances the BAAN company offers the solution which has
the best capability.
SERVING VERTICAL INDUSTRIES(NOT IMPORTANT)

1. Aerospace & Defence
a. BAAN offers specific vertical industry solutions for aerospace and defence
companies which are engaged in multi-level projects and contracts.
b. It helps in the effective mgt of the key functional areas ant the industry specific
approach solves the problems which are faced by many organizations engaged in
large projects.
2. Automated Automobile Industry
a. BAAN offers vertical industry solution for automotive companies. The companies use
the BAAN business application to support world-wide manufacturing, distribution
and financial operations.
b. The automated companies are able to use the best components and provide the
functionality without complex and costly upgrades.
ORCALE CORPORATION
INTRODUCTION
1. Oracle Corporation was founded in the year 1977 and is the world’s largest s/w
company and the leading supplier for enterprise information management.
2. This is the first s/w company to implement internet computing model for using the
enterprise s/w across the entire product line.
3. It provides databases and relational servers, application development, decision support
tools and enterprise business applications.
TECHNOLOGY
1. ORACLE software runs on the network computers, work stations & micro computers,
mini computers, etc.
2. ORACLE 8i is the leading database for internet computing.
3. ORACLE database allow the corporation to access on any data, on any service, over any
network, from any client device.
4. ORACLE Warehouse Technology Initiative (WIT) is one of the fastest flowing &
comprehensive programs in the data warehousing industry which provides the
customers a complete data warehousing solution.
5. OR CLE’s integrated Business Intelligence Solutions provides us with a solution to
deliver powerful processing capabilities to the user anywhere in the enterprise at
anytime.
6. Oracle business intelligence family product includes:
1. Oracle report
2. Oracle enterprise reporting tools
3. Oracle discoverer
4. Ad-Hoc Queries and analysis tools
5. Oracle online analytical processing engine, etc.
1. Oracle Applications provides front office and ERP solutions for the enterprise.
2. It allows the customers to execute the strategies quickly
3. It manages the risk of change.
4. Oracle application exploit low cost and universal access in the internet computing model.
5. It provides a set of applications which are designed for security, self-service business
transactions across the internet.
MODULES OF ORCALE APPLICATIONS:

Oracle application consists of 45 plus software modules which are divided into following
categories
1. Oracle Financials
2. Oracle Human Resource
3. Oracle Projects
4. Oracle Manufacturing
5. Oracle Supply Chain
6. Oracle Front Office
1. ORACLE FINANCIAL
a. This application transforms a finance organization into a strategic force and also
helps to access the financial management functions.
b. By working with these applications the companies can work globally, lower the
administrative cost & improve the cash management.
c. It also provides strategic information to make timely & accurate decisions.
2. ORACLE PROJECTS
These applications improve operational efficiency by providing an integrated project
management environment that supports the full lifecycle of a project and increases the
revenue growth and profitability
3. ORACLE HUMAN RESOURCES

a. This application helps in managing the human resources which directly improve
profitability and contribute to competitive advantage
b. It also helps in the ability to hire motivate & retain the most capable working force and
also helps in providing comprehensive and up-to-date information.
4. ORACLE MANUFACTURING
a. Oracle manufacturing application enables the companies to achieve market leadership
by becoming more customer responsive & efficient.
b. This module also supports the companies to increase revenue, profitability & customer
loyalty by capturing the demand & planning the manufacturing process in an efficient
way.
5. ORACLE SUPPLY CHAIN

a. This application manages the supply chain process by providing a single integrated
environment.
b. It helps in effective partner collaboration & supply chain optimization capabilities.
c. It helps in increasing market share while improving customer service & minimizing the
cost.
6. ORACLE FRONT OFFICE

a. These applications provide a better understanding for customer relationships, their
values & profitability
b. These applications increase top line revenues & maintain customer satisfaction &
retention
c. It also helps to attract and retain profitable customers through deployment channels
including mobile & call centre.
VERTICAL SOLUTION
Oracle provides vertical solutions with the modular product component which are
aimed at the unique requirements of the major industries including defense, communication
financial services etc.
PEOPLESOFT
COMPANY PROFILE
PeopleSoft Inc. was established in 1987 to provide innovative software solutions that
meet the changing business demands of enterprises worldwide.
It employs more than 7000 people worldwide.
The annual revenue for the year 1998 was $ 1.3 million.
PeopleSoft’s mission is to provide innovative software solutions that meet the changing
business demands of organizations worldwide.
PeopleSoft develops markets and supports enterprise-wide software solutions to
handle core business functions including human resources management, accounting
and control, project management, treasury management performance measurement
and supply chain management.
PeopleSoft provides industry-specific enterprise solutions to customers in select
markets, including communications, finance services, healthcare, manufacturing, higher
education, public sector, services, retail, transportation, US federal government and
utilities.
The company also offers PeopleSoft Select, a complete packaged solution including
software, hardware and services to address the needs of medium-sized organizations.
PeopleSoft’s innovative use of technology empowers individuals to make informed
decisions and delivers the flexibility that allows dynamic organizations to manage
constant change.
PeopleSoft products support clients running, Microsoft Windows and popular Web
browsers, as well as a range of mainframe, midrange and LAN relational database
server platforms.
PeopleSoft solutions run on a variety of leading hardware and database platforms,
including Compaq, Hewlet-Packard, IBM, Sun Microsystems, Informix, Microsoft SQL
Server, Sybase, DB2 and others.
PeopleSoft delivers Web-enabled applications, workflow, online analytical processing
(OLAP) etc.
The PeopleSoft application serves the whole business management solutions,
commercial solutions & industry solutions.
BUSINESS MANAGEMENT SOLUTIONS
PeopleSoft solutions extend across the globe.

The applications help in managing a broad set of business processes, from human
resources and finance to supply chain management.
One can implement a single application, or a complete enterprise-wide solution.
The flexible design lets you tailor the applications to your specific needs.
The PeopleSoft’s business management solutions are in the areas given below -
1. Human Resources Management

2. Accounting and Control
3. Treasury Management
4. Performance Measurement
5. Project Management
6. Sales and Logistics
7. Materials Management
8. Supply Chain Planning
9. Service Revenue Management
10. Procurement
COMMERCIAL SOLUTIONS
Supply Chain Management - PeopleSoft has the industry’s only complete enterprise
resource planning solution that is built around supply chain optimization. A Demand
Planning module enables sophisticated forecasting, using both real-time and historical
information PeopleSoft’s complete suite of Supply Chain Management products
provides comprehensive support for any organization that products or markets a
physical product.
Services Industry Solutions – PeopleSoft also provides a complete commercial support
solution for service industries. The Service Revenue Management suite features
modules supporting the tracking of time and labor, payroll processing, project
management and billing, as well as expense and receivables processing. A suite of
Procurement modules is also available supporting purchasing, inventory management,
payables and expense processing, and asset management.
INDUSTRY SOLUTIONS
PeopleSoft supports industry-specific market initiatives in many business sectors.
The initiatives include industry-specific products, customization of existing applications,
and sales and marketing support through direct channels and business alliances.
PeopleSoft has 11 distinct business units, which provides software solutions specific to a
broad range of public and private sector industries.
The different business units are:
1. Communications
2. Federal Government
3. Financial Services
4. Healthcare
5. Higher Education
6. Manufacturing
7. Public Sector
8. Retail
9. Service Industries
10. Transportation
11. Utilities
PEOPLETOOLS
PeopleTools is an integrated set of client/server business application development and
customization tools from PeopleSoft.
These tools enable customers to implement, tailor and maintain PeopleSoft applications
as well as to extract, analyse and manipulate data.
PeopleTools includes several tools for reporting, customization and workflow.
TECHNOLOGY
PeopleSoft continually adds refines technology to optimise their customers’ information
systems.
They help customers take advantage of new and emerging technologies; giving them
more choices and freedom in develop their own innovative business processes.
Some of them are given below:
1. Self Service Applications: To improve productivity throughout the organization,
PeopleSoft focuses on providing the occasional user with easy access to information
and functionality specific to their role. They have developed a set of self-service
applications to help companies quickly and cost-effectively distribute functionality
throughout the enterprise over the Internet, intranets and extranets. Built with an
intuitive interface based on a standard Web, these Java-based, cross-platform
applications enable employees, customers, suppliers and other occasional users to
perform self-service administrative tasks easily.
2. Web Client: Self service applications use the PeopleSoft Web Client. The Web Client is
downloadable on demand and runs on a Web browser across multiple platforms. Its
affordability, open architecture and simplicity, provides an ideal framework for
delivering enterprise solutions to a large number of people. Applications don’t need to
be installed at every desktop; they are accessed easily through a browser. In addition to
supporting self-service applications, the PeopleSoft Web Client has a Worklist and
Query interface to help incorporate occasional users in the flow of a company’s
business processes and improve access to information. Furthermore, all data
transmitted between the Web Client & the application server is encrypted for added
security. Because the Web Client takes advantage of PeopleTools, self-service

applications can be deployed across the Internet or existing corporate intranet-with
common business rules workflow logic and security features.
3. Multi-tier transaction processing: The ability to support large numbers of concurrent

users, while maintaining reliable and superior performance, is critical to enterprise-wide
processing. Recognizing that PeopleSoft works in a variety of settings-over local area
networks (LANs) and wide area networks (WANs), throughout organizations of varying
sizes-there is an option of two tier or three tier processing. The application server is
designed to relieve the client from processing intense SQL transactions, thereby
reducing LAN traffic and improving performance across WANs. Three-tier architecture
also provides increased scalability to accommodate high volumes of concurrent users
while maintaining a consistent and reliable performance level.
4. Online Analytical Processing: OLAP, or online analytical processing, is powerful method

for interactively analysis data online. PeopleSoft integrates popular OLAP tools-
including Cognos PowerPlay and Arbor Essbase-that enable users to easily “slice & dice”
multidimensional data stored in various locations. With multidimensional information
presented in quick-read formats, managers can make better decisions, react faster to
competitive threats and identify inefficiencies.
5. Workflow: As essential part of our solution, people soft workflow capabilities help
communication companies achieve enterprise wide integration of information,
applications and people. Workflow enables a company to automate many time-
consuming clerical tasks, while putting useful data into the hands of users. With
workflow, the company’s PeopleSoft applications do more work Workflow can also
help the company track projects, by initiating a workflow message to the appropriate
person, when project exceeds a predetermined cost. The company can even bring non-
PeopleSoft users into the workflow process, using e-mail systems and the internet for
collecting ad distributing data.
PARTNERSHIPS
PeopleSoft has established global consulting agreements with Anderson Consulting,
Deloitte & Touche Consulting Groups, KPMG Consulting (a part of KPMG Peat Marwick
LLP) and Price Warehouse LLP, four of the world’s leading consulting and systems
integration firms.
PeopleSoft also maintains relationships with more than 150 industry-leading third-party
vendors through its six Partnership Programs-application, Database, Hardware,
Implementation, system Integration and Workflow.
PEOPLESOFT IMPLEMENTATION TOOKKIT
The PeopleSoft implementation Toolkit incorporates four phasing strategies:
1. GEOGRAPHICAL APPLICABLE: when business practices and processes in various

locations are independent enough from one another to justify separate
implementations.
2. DEPARTMENTAL: your initial phase is focused on full implementation for a given

department; additional departments are made operational during subsequent phases.
3. CORE AND SUPPORT PROCESSES: your first phase encompasses critical, core business
processes; subsequent phases focus on support processes.
4. NO PHASING: some situations do not lend themselves to phasing. Examples include

data driven implementations (regulation effective dates drive action) and formation of
new business enterprises.
You can combine your phasing choice with one of these implementation approaches:-
1. As delivered: This is the simplest approach, because you implement the applications as
delivered and adjust your business processes to match the system. By using this
approach, you are in essence reengineering your business operations with PeopleSoft
functionality driving your requirements.
2. Data modification: You will use this approach when data analysis, modification and
cleanup are a primary focus of the implementation. For example, if your
implementation is driven by legacy data held in date storage formats that don’t support
the year 2000.
3. Legacy Integration: Useful when interfaces between legacy systems and PeopleSoft
applications are a significant factor I the implementation. This approach includes
business event analysis and early resolution of interface issues.
4. Application sequencing: Applicable when your implementation involves multiple

PeopleSoft applications. Using this approach, you will focus initially on business
processes supported by the first application you implement. Then, as you implement
other applications, you will concentrate on additional business processes.
5. Business Objectives and events: Pertinent when, in order to meet a set of business
objectives and their respective business events, your implementation also involves non-
PeopleSoft applications. For example, to broadcast timely sales and collections
information to the field, you would use this approach to implement a sales force
automation application along with PeopleSoft Financials.
The PeopleSoft Implementation Toolkit is engineered to support various combinations

of phasing strategies and implementation approaches, which we call routes.
The People-Soft implementation Toolkit helps in identifying the route that best suits
your implementation.
Once a route is determined, it is then used to present guidance specific to your types of
implementation project.
By providing route-specific project plans and guidance, the implementation toolkit gives
you the focus necessary to achieve a more rapid implementation.
JD EDWARDS:
COMPANY PROFILE:
On March 17, 1977 J.D. Edwards was formed, by Jack Thompson, Dan Gregery & Ed-Mc
Vaney.
In early years J.D. Edwards designed software for small & medium sized computers.
In 1980’s it focused on IBM system/38
As the company began to out grow, its headquarter in Denver, opened branch offices in
Dallas & Newport Beach, California, Houston, San Francisco & Bakenfield. And then
internationally expanded its Europe headquarters in Brussels & Belgium.
As it grew it became obvious that servicing a large number of customers was creating a
challenge
By the mid of 1980’s, J D Edwards was being recognizes as an Industry-leading supplier
of application software for the highly successful IBM AS/400 computer.
Today J.D Edwards is a publicly traded company that has more than 4700 customers
with sites in over 100 countries & more than 4200 employees.
It’s commitment to its product quality, its corporate culture & a customer-centric
approach enable the company to deliver & support leading enterprise software
solutions that solve business problems.
J.D Edwards offers customers the means of achieving greater outgoing control of their
businesses through the ability to define & redefine the way they do business as
markets, customers & competitive conditions change.
J.D Edwards emphasizes on the following three matters:
1. Solution : JD Edwards offers a balance of technology & service options tailored by the
unique industry & its processes. This allows JD Edward to ensure timely implementation
& outgoing quality of the solution.
2. Relationships : With JD Edwards, you have a partner committed to ushering you through
changes in the business & technology.
3. Value : JD Edwards provides with an appreciating software asset – one with the
potential to increase in value over the lift of your business.
TECHNOLOGY
As the business grew company adapted new technology & instead for small computer
application; it started to design enterprise-wise software.
JD Edwards is a leading provider of integrated software for distribution, human
resource, finance, manufacturing & SCM.
These softwares are operated in multiple computing environments & also JAVA & HTML
enabled.
PRODUCTS
ActiveEra is a product, which is customer centric & allows companies to change

enterprise software after implementation if their business requires.
The company also provides the products such as OneWorld & JD Edwards SCOREX
products.
ONEWORLD
OneWorld provides a solution by integrating with legacy, bets of breed & 3 rd party
products.
This supports the industry standards such as CORBA, ODBC & other packaged
integration solutions.
It embraces change with its modular architectural foundation.
The information processing is segmented into 5 functional elements – database, data
warehouse, business objects, reporting & GUI.
The users are allowed to link these elements in variety of configurations.
It also allows to add new server, even web servers, without rewriting application for
new machines.
It has the tools & technologies that will quickly bring archived data to light.
It supports both client/server & internet modes.
With this it can distribute the enterprise application to employee, business partners &
customers.
It supports the databases like DB2, SQL server & Oracle along with hardware
technology.
This allows build highly flexible workflow solutions & execute, both predefined & ad-hoc
processes in your organization.
With OneWorld, your ability to learn, implement & maintain workflow at all levels of
your organization is simplified.
WORLDSOFTWARE & WORLDVISION

WorldSoftware’s global popularity has endured in the ERP marketplace for over a
decade.
It is flexible & easy to use.
This allows mix match & integrated software application from several industry product
lines.
Easily tailor it to ongoing business, local & organization-specific requirements.
It supports advanced GUI through WorldVision, to gain client/server benefits.
OneWorld is a network-centric solution which incorporates other computing platforms
into your network.
JD Edward WorldVision is a thin-client bridge that provides the GUI with a look & feel
common to the PC.
This also allows us to:
1. Maximize productivity by shrinking the amount of training users need.

2. Make a safe move to client /server by leveraging your existing host-centric
WorldSoftware applications.
One can have WorldVision as a Windows 95/NT for PC & as a JAVA based interface for
Internet & Intranet.
MODULES
The different product modules available from JD Edwards are:
1. Foundation suite: Back office, CASE foundation, toolkit etc.
2. Financial Suite:general accounting, accounts payable etc.
3. Logistics/Distribution Suite: forecasting, requirements planning etc.
4. Services Suite: contract billing, change management etc.
5. Manufacturing Suite: configuration suite, cost management etc.
6. Architecture, Engineering, Construction, Mining & Real Estate Suite: procurement,
inventory management etc.
7. Energy & Chemical Suite:agreement management, sales order management etc.
8. Payroll suite
9. Human Resource Suite
10. Customer Service Management Suite
11. Government, Education & Not-for-Profit Solutions
12. Utility & Energy Solutions
SSA
COMPANY PROFILE:
System Software Associates, Inc. (SSA) was founded in 1981.
It has branches in more than 91 countries & more than 2000 employees.
SSA has BPCS client/server V6 technology is implemented in more than 1000 industrial
sector firms in over 4000 sites worldwide.
SS ’s vision is to be the best global partner to the world’s industrial companies
To achieve competitive advantage for clients through ERP system, SS ’s follows its
Mission Statement 1981.
The statement has six key goals.
They are:
1. Best client satisfaction: this means that the company wants their clients to achieve
the greatest possible business benefits from their relationship with SSA.
2. Single image worldwide: this means that the client gets the same high level of
support & expertise all around the world.
3. Enterprise Solution Leadership: it means that the company is focused on building &
delivering solutions, which bring together the entire enterprise.
4. Proven leading Technology: this means that every piece of technology applied by
SSA will already be proven for high transaction volume enterprise-wide applications.
5. Highly skilled & motivated professional: it means that SSA is committed on having
the best professionals & resources in the application software business.
6. Strong financial results: this means that SSA can continue to invest in the
improvements of its software & professionals & will be a stable partner in the long
run.
TECHNOLOGY: BPCS CLIENT/SERVER

BPCS client/server is a set of integrated client/server applications
Its core systems covers applications such as, SCM, Financial applications, multimode
manufacturing & CIM application as well as EDI applications
The server is supported with HP9000, AS/400 or Windows NT.
A BPCS client/server product offers numerous industrial applications.
With the help of BPCS client/server, it is possible to improve customer’s satisfaction,
product quality & reduce the time in launching a product in the market
The Microsoft desktop is the BPCS client/server desktop.
It has a powerful graphical interface & fully complaint with Microsoft Windows 95.
BPCS client/server is used worldwide. There are more than 500 companies at 25000
sites & 3,00,000 end users.
The industries clients are automotive, chemical, consumer goods, electronics,
fabrication & assembly, food & beverage, pharmaceuticals etc.
Along with distributed object-computing architecture, BPCS designs enterprise wide

applications in industrial sector companies.
SSA reduces time to benefit implementation cycles to 6-12 months with advanced
version of BPCS client/server & allows organization to quickly & easily alter the solution.
(or)
BPCS (Client/Server)
1. It is a set of integrated client server application that addresses the core requirements of
the industrial environment.
2. It covers supply-chain management applications, multi-mode manufacturing, and e-
commerce
3. It ensures that it operates identically according to the end –user requirements i.e. the
s/w is made exactly how the end-user wants it.
4. It results in customer satisfaction, improves product quality, helps to keep the cost
competitive and reduces the time in launching a new product.
5. It is a user interface that is designed graphically and it is full complaint with windows 95
.
6. It is used world-wide.
7. It includes icons, messages, scroll-bars, tool-bars and other Microsoft desk document
features.
8. It delivers unparalleled agility and re-configurability to meet changing market demands.
9. It allows the organization to quickly and easily alter the solutions in response to new
business and market solutions.
QAD
1. It was found in 1979.
2. The company’s products include MFG/PRO, service/support management and decision
support.
PRODUCTS - MFG\PRO
1. QAD offers a variety of supply chain and enterprise resource planning s/w products to
manufacturing industries.
2. It optimizes the enterprise by increasing the speed of internet processes and
synchronizing the business operations.
3. The MFG\PRO is one of the software, product offered by QAD, which provides
multinational organization with integrated Global Supply Chain Management Solution.
4. It is one of the successful client server applications.
5. Internet enabled MFG\PRO allows you to share information and conduct commercial
transactions over the internet.
6. It increases the internal efficiency of distributed operations within the months of
purchase.
7. This s/w is comprehensive, open, flexible, scalable, interactive and designed to address
the operational requirements of the manufacturer.
8. It is available in 26 languages and supports multiple currencies.
9. It has an easy-to-understand graphical interface.
10. It can be implemented at multiple sites and it easily scales to meet the changing business
requirements.
11. It helps the organization to achieve and maintain competitive advantage and synchronizes
the distributed operation which balances the supply and demand across multiple sites.
12. It is a fully integrated s/w package available on a module by module basis. It helps the
organization to face competition.
The various modules of MFG/PRO are :

1. Distribution:(related to keeping track of inventory i.e. extra amount of goods)
The distribution module is used to monitor inventory balances and manage the
purchases and sales order entry activities.
2. Manufacturing(to keep track of all the products in manufacturing)
It is used to regulate manufacturing activity within the various types of production
environments.
3. Financial(takes care whether all the manufacturing or sales activities are properly working)
It interfaces with the distribution planning and manufacturing module to report the
financial implications of the company’s activities
4. Service/Support
This module is designed for the organization that not only manufactures and
sells the product but also provides after sales, services and support.
5. Supply Chain(takes care of sc activities)
It is used for the control of goods and information from supplier to customer.
6. Master Files (provides access to the file which will be used by MFG/PRO application)
This module provides access to a series of foundation modules that are used by the
MFG/PRO applications.
FUTURE DIRECTIONS IN ERP
New Market
1. Supplementing direct sales with reseller channels.

2. Software offerings to appeal on the basis of reduced functionality.
3. Improving the implementation methodology for faster development.
4. Removing the entry price to make it financially viable.
5. Using the platforms such as MS Windows NT.
New Channels:
As all the vendors being forced to market their product in the world of small business, they
made their software products more affordable by lowering the prices for each module and by
ramping up the total costs by basing price on user licenses.
Example:
1. Oracle offerings the lower price software from companies such as platinum software
and great plains software.
2. JD Edward provides less expensive versions of the OneWorld suit.
Faster Implementation Methodologies:
1. As to implement the whole business it has to go through reengineering process.

2. This may cause a complete change in the business model working previously and thus
also find it difficult to implement.
3. Some times only 10-15% of the implementation takes years to complete and by that
time implementation cost may increase.
4. To make the implementation of packages more convenient the ERP vendors are
searching for faster implementation methodologies e.g. Accelerated SAP (ASAP) is a
program introduced by SAP.
5. This program takes the knowledge gained from R/3 implementations and consolidates
this expertise in a product called the Business engineer.
6. This helps to configure the SAP modules to confirm to the processing style of same 100
business operating scenarios.
7. This methodology reduces SAP implementation time to less than six months in many
cases.
8. Oracle also introduced a faster implementation methodology called fast-forward.
9. This program speed up implementation of Oracle application suites and nail down the
costs up front.
10. As there is dearth of skilled consultants, ERP systems implementation often become a
difficult task.
11. To achieve system implementations the ERP vendors also provide the consulting
services with highly skilled consulting teams and charged with delivering fully trained
experienced consultant on a worldwide basis
12. Example, Oracle’s OracleOne or S P’s Platinum Consulting Services with highly skilled
consulting teams providing their services along with new channel partners and
implementation methodologies.
Business Models and BAPIs:
1. To review and simulate changes to a business model, implementation team needs

special type of business model tools.
2. The product such as Intel Corp Inc’s live model provides the views of R/3 process, data
models and functions.
3. Live model is OLE complaint; the R/3 model can be manipulated and documented
through OLE application such as Microsoft World.
4. Business Application Programming Interfaces(BAPI) are sets of methods that allow the
external application to collaborate with R/3 business objects such as accounts,
employees or customers.
5. With the help of this collaborate method, BAPIs gives the third party application
vendors a lot of flexibility to build supporting applications for R/3 system.
6. Similarly, Baan offers Orgware, business modeling tool which combine with business
specific templates that help to automatically configure the software to suit specific
operational needs.
7. To accelerate software implementation on the Windows NT platform, Baan is in the
process of enhancing Orgware with new setup wizards.
Convergence of Windows NT:
Windows NT is the most popular operating system in the world forcing all ERP vendors to
offer their products on its platform. Since 1993 R/3 has been available on NT and from 1995
on SQL-server. Baan, Oracle and PeopleSoft have announced the general availability of their
applications on back office platform in 1997. SAP has over 200R/3 installations on NT and
holds Microsoft as the company’s best customer Baan has the certification as ‘Designed for
Microsoft Back Office’ whereas PeopleSoft has also switch to Back Office as its primary
development and initial rollout platform. Oracle also supports NT based clustering technology.
Back office is becoming popular platform among the middle market vendors of accounting
and distribution software with NT/SQL server.
Application Platforms:
The ERP vendors offer central platform management tools along with comprehensive
suites of application modules. These application modules supports multinational deployment,
year 2000 compliances and Euro (European currency) e.g. To centrally support R/3 product
uses popular platform management tools. The vendors such as Computer Associates
(Unicenter TNG) and Tivoli (TME) offers these tools.
New Business Segments:
After establishing in business /enterprise environment, ERP vendors are trying to deliver
specialized variants of their products to the business segments such as government, health
care, retail environments and financial services.
Some vendors are offering their services in more specialized areas such as demand
forecasting of sales automation and marketing and supply chain management e.g. PeopleSoft
bought Red Pepper Software to improve its supply chain application, Baan bought Aurum
Software for its Aurum Customer Enterprise suit of CRM tools and also teamed up with
Hyperion Solution to strengthen its financial accounting, budgeting and reporting solutions to
Baan’s distribution and manufacturing modules
More Features:
ERP vendors are also focusing on providing improved decision support applications. ERP
vendors teamed up with various software providers e.g. JD Edwards teamed up with
Information Builders Inc to deliver a data mart i.e. Smart Mart Suit with data base access, data
transformation, reporting and OLAP Tools. Baan linking its application software to the Gentia
Software Inc’s products to provide OL P capabilities and for the setup and monitoring of key
performance indicators.
Oracle offers a data mart designer and builder tool for creating a data marts as well as
offers Oracle Discoverer, an enduser tool for reporting, charting and querying data from
Oracles Application suite.
PeopleSoft is going to include closer integration between PeopleSoft applications and both
the client based Congos Corp. Power Play multidimensional OLAP tools and Arbor Software
Corp’s multidimensional Essbase Server S P is not behind in this race It has previewed its
own Business Information Warehouse product for synchronizing the R/3 system with data
warehouse that can manage both R/3 and non R/3 data through the use of a metadata
repository and CLAP engine.
WEB ENABLING:
1. To deliver the self-services and e-commerce capabilities, ERP vendors are being forced
to move from client/server to browser/server architecture to web-enable their
software.
2. Vendors deliver java based application for web enabling software
3. Example, Baan is working to deliver a java based web interface to all its products and
also focusing on the automation of supply chain relationship via internet, on e-
commerce via Microsoft merchant server (Site Server) and on using Hyperion Software
Corp ’s Spider-Man technology for report and alert distribution across the web.
4. PeopleSoft delivers java based self service applets with its version PeopleSoft-7, J.D.
Edward is using java to its One World to be available either through a Windows client or
a web browser.
5. Oracle has used java to deliver its web employee customers and suppliers module.
6. In 1997, SAP released 25 web applications for its version 3.1 of the R/3 and also
previewed links to online catalogs for web based procurement.
7. For their first generation of web enabled application, ERP vendors are all using java
rather than Microsoft’s ctives
8. ERP vendors deliver their universal application on Java based web interface.
9. This makes them to move away from proprietary technologies to more open tools.
10. E.g. SAP solutions and PeopleSoft offers tools for customerising their products ABAPG
and PeopleTools.
11. These tools are proprietary and make the implementation expensive, whereas many
lower-tier software vendors invites their application from ends using the commercial
tools like Power Builder, VB, or Microsoft Access ERP vendors are not using these
options, thus the customers have to pay a premium for ABAG and PeopleTools.
12. Oracle is also a tool vendor and uses Oracle Forms, Developer 2000 and Designer 2000
to develop its Oracle Application.
13. The emerging trends in the enterprise packaged applications are its integration with
latest cutting-edge technology like sales force automaton (SFA), customer relationship
management (CRAM).
14. As the internet based services like e-commerce are available, the new applications get
diverted from Back-office and Front-office functioned items.
ERP IMPLEMENTATION LIFECYCLE

The different PHASESof ERP implementation lifecycle are as follows:
1) Pre-evaluation screening
2) Package evaluation
3) Project planning phase
4) Gap analysis
5) Reengineering
6) Configuration
7) Implementation team training
8) Testing
9) Going live
10) End user training
11) Post implementation
1. PRE-EVALUATION SCREENING:
Claiming for ideal solution
a. There are hundreds of ERP vendors- all sizes & shapes- all claiming to have the
solution that is ideal for one company.
b. Analyzing all the packages before reaching the decision is not a perfect solution.
Time consuming process
a. It is also a very time consuming process. So, it is better to limit the number of
packages that are evaluated to less than 5.
b. It is always better to do a through & detailed evaluation of a small number of

packages, rather than doing a superficial analysis of dozens of packages.
c. It should eliminate those packages that are not suitable for the company’s business
process.
Identify need for it
a. We need to identify which of these packages need pre-evaluation screening.
b. Once we select a few packages after the screening, we can start the detailed
evaluation process.
2. PACKAGE EVALUATION:
Important phase: decides success/failure
a. The evaluation or selection process is one of the most important phases of the
ERP implementation because the package that you select will decide the success
or failure of the project.
b. Since ERP system involves huge investments, once a package is purchased, it is
not an easy task to switch to another one.
c. The most important factor that should be kept n mind when analyzing the
different package is that none of them are perfect.
The main objective
a. The objective of the selection process is not to identify a package that covers
each & every requirement.
b. The objective is to find a package that is flexible enough to meet the company’s
needs.
After evaluation of package
a. Once the packages to be evaluated are identified, the company needs to develop
a selection criteria that will permit the evaluations of all the available packages
on the small scale.
b. To choose the best system, the company should identify the system that meets
the business needs, the matches the business profile.
c. It is impossible to get a system that will perform exactly as the company does
business, but the aim should be to get the system that has the least number of
differences.
Important points to be kept in mind while evaluating ERP software include:
a. Functional fit with the company’s business processes
b. Degree of integration between the various components of the ERP system.
c. Flexibility & scalability.
d. Complexity.
e. User friendliness.
f. Quick implementation.
g. Ability to support multiple planning and control.
h. Technology-client /server, DB, independence, security.
i. Local support, infrastructure.
j. Amount of customization required.
k. Total costs, etc.
Evaluation committee
It is always better to form a selection committee that will do the evaluation process.
Consultants or experts
The package experts or the consultants can act as mediators or play the role of
explaining the pros & cons of each package.
Diagram:
3. PROJECT PLANNING PHASE:

Project schedule
1. This is the phase that designs the implementation process.
2. In this phase the details of how to go about the implementation are decided.
3. Time schedules, deadlines, etc for the projects are arrived at & the project plan is
developed.
4. Roles are identified & responsibilities are assigned.
5. The resources that will be used for implementation efforts are decided & the people
who are going to be in-charge of implementation are identified.
6. Team members are selected & task is allocated.
7. This phase decides when to begin the project, how to do it & when is it suppose to
be completed.
8. Planning is done by the committee constituted by team leaders.
Decision of the phase
1. This phase plans ‘what to do’ in case of contingencies, how to monitor the progress
of the implementation.
2. This phase also decides what control measures should be installed & what
corrective measures or actions should be taken when things get out of control.
Team leader
1. The project planning is usually done by a committee constituted by the team
leaders of each implementation group.
2. The committee will be headed by the ERP in-charge (i.e. the CIO or COO).
3. The committee will meet periodically to review the progress & chart the future
course of action.
Diagram
4. GAP ANALYSIS:
Importance of Gap Analysis
a. Gap analysis is a phase in the ERP implementation, where the organization tries to
find out the gaps between the company’s existing business practices & those
supported by the ERP package.
b. This is the process through which companies create a complete model of where
they are now & where they want to head in the future.
Main objective
a. The main objective is to design a model, which both anticipates & covers any
function gap.
b. It has been estimated that even the best ERP package meets only 80% of the
company’s functional gaps
Different ways of finding gaps
a. One of the most affordable, but most difficult, solutions entails altering the
business to ‘fit’ the ERP package
b. Another solution is that the company can simply agree to live without a particular
function.
Other solutions include:
i.Pinning your hopes on an upgrade or updation of software.
ii.Identifying a third-party product that might fill the gap.
iii.Designing a custom program.
iv.Altering the ERP source code.
.
5. RE-ENGINEERING:
It is in this phase that the human factors are taken into account.
Two different connotations
1. 1st one is the controversial, involving the use of ERP to aid in downsizing efforts.
2. There have been occasions where high level executives have invoked the reengineering
slogan & purchased an ERP package with the aim of reducing number of employees.
3. While every implementation is going to involve some change in job responsibilities, so it
is the best to treat ERP as an investment as well as cost-cutting measure, rather than a
downsizing tool.
4. ‘Downsizing’ is a business practice that may have its place, but it should not be cloaked
within the glossier slogan of ‘reengineering’
5. The 2nd use of the word re-engineering in the ERP field refers to an ERP implementation
model initially designed & used.
6. The BPR approach to an ERP implementation implies two separate, but closely linked
implementations involved on an ERP site i.e. a technical implementation & a business
process implementation.
7. The BPR approach emphasis the human element of necessary changes within the
organization, which is generally more time consuming & has received its share of
criticism for creating bloated budgets & extended projects.
8. The ERP market shifts to a mid-market focus & as all implementation are becoming
more cost sensitive; the BPR approach has come under some real scrutiny.
6. CONFIGURATION:
IMPORTANCE OF CONFIGURATION
a. This is the main functional area of the ERP implementation.
b. Business processes have to be understood & mapped in such a way that the
arrived solution matches with the overall goals of the company.
THE PROTOTYPE
a. A prototype- a simulation of the actual business processes of the company- will
be used.
b. The prototype allows for thorough testing of the ‘to be’ model in a controlled
environment.
c.As the ERP consultants configure & test the prototype they attempt to solve any
logistical problems inherited in the BPR before the actual go-live implementation.
STRENGTHS & WEAKNESSES
a. Configuring a company’s system reveals not only the strengths of a company’s
business process but also- & perhaps more importantly- its weakness.
b. It is vital to the health of the company & to the success of the ERP
implementation that those configuring the system are able to explain what won’t
fit into the package & where the gaps in functionality occur.
7. IMPLEMENTATION TEAM TRAINING:

When the configuration is taking place the implementation team is being trained not
how to use the system, but how to implement it.
This is the phase where the company trains its employees to implement & later run the
system.
The ERP vendors & the hired consultants will leave after the implementation is over.
Good in-house team
a. For the company to be self sufficient in running the ERP system, it should have a
good in-house team that can handle the various situations.
b. Thus, it is very vital that the company recognizes the importance of this phase &
selects those employees who have the right attitude- people who are willing to
change, learn new things & are not afraid of technology- & good functional
knowledge.
8) TESTING:
This is the phase where you try to break the system.
Here we reach a point where we are testing real case scenarios.
The system is configured & now we must come up with extreme case scenarios- system
overloads, multiple users logging on at the same time with the same query, users
entering invalid data, hackers trying to access restricted areas & so on.
The test case must be designed specifically to find the weak links in the system & these
bugs should be fixed before going live.
9) GOING LIVE:
On the technical side, the work is almost complete- data conversions is done,
databases are up & running, & on the functional side, the prototype is fully
configured & tested & ready to go operational.
The system is officially proclaimed operational, even though the implementation
team must have been testing it & running successfully for some time.
But once the system is ‘live’, the old system is removed & the new system is used for
doing business.
10) END USER TRAINING:

Success & failure
a. The success or failure of an ERP system depends on how the actual users use the
system.
b. The most successful implemented ERP packages fail due to lack of end user
training.
People are divided into groups
a. ERP system changes the job descriptions of the people, so it is important to identify
the people who are going to use the system. The current skills of the people are
identified & they are divided into groups.
b. Every group is provided training on the new system.

Training sections
a. The training section gives the overall view of the system & how the individual
actions will be affecting the entire system.
b. Every employee is also provided with the training of the job profile which he is
going to perform.
c. The training section should address about the new technologies & how people will
be successful in making the change over.
d. Atleast the end user training is important because the success of an ERP system
depends upon it & this phase is equally difficult.
Diagram:
11) POST IMPLEMENTATION (MAINTENANCE MODE):

Important factors
a. One important factor that should be kept in mind is that the post implementation
phase is very critical.
b. Once the implementation is over the vendors & the hired consultants will go.
Necessary enhancements & upgrades
a. There should be people within the company who have the technical processes to
make the necessary enhancements to the system as & when required.
b. The system must be upgraded as & when new versions or technologies are
introduced.
Training is needed
a.Everyone who uses these systems needs to be trained on how they work, how
they relate to the business process & how a transaction ripples through the entire
company whenever they press a key.
b. The training will never end; it is an ongoing process; new people will always be
coming in & new functionality will always be entering the organization.
Maximum value for these input
a. Living with ERP system will be totally different from installing them.
b. However, an organization can only get the maximum value of these inputs if it
successfully adopts & effectively uses the system.
Diagram:
VENDORS, CONSULTANTS AND USERS

WHY C N’T COMP NIES DEVELOP THEIR OWN ERP PACKAGES?
1. To develop an ERP package is a complex & time consuming activity which requires a
lot of skilled manpower & other resources.
2. Many companies have personnel in their IT department who can absorb the necessary
knowledge and who have experience in developing sophisticated systems.
3. the problem is that such specialized computer work is not the main business of these
companies.
4. they should be directing all their available resources into improving their own
products or services so that they can remain competitive, serve their customers better
and continue to grow.
5. since designing and implementing integrated software is not the business of most
companies, the systems that the in-house team comes up with will never equal in
quality, scope, functionality or technology of those systems created by software firms
whose business it is.
6. These software firms can produce sophisticated packages and provide their clients
with products that allow them to maintain focus on their own chief activities, thus
improving revenues, profits and share-holder returns.
IN-HOUSE IMPLEMENTATION – PROS & CONS

1) To setup & implement an ERP package is not an easy task. We can also not setup a trial
& error method of implementation because a large amount of investments are
involved.
2) The consequences of a failed ERP implementation will put the organization out of
business & also the ERP implementation cannot go on for a long period of time.
3) To successfully carry out the implementation within a reasonable time n-frame,
i. The people who are given the job of implementing ERP package should have good
knowledge skills.
ii.They must be familiar with the ERP package & technical issues.
iii. They must have at least 1 year experience & hands-on practical training.
4) The people who are going to implement the ERP package should have the following
skills:-
i. Knowledge of how to organize & run a project:
He must have organization skills, project management skills, team management skills
& project management skills.
ii. Enough experience in handling problems & issues that arise during the
implementation:
During implementation, process problem such as cost overrun, time overrun occurs
so it is very important to know what kind of decisions are to be taken so that there is
success to the project.
iii. Good people skills:

Whenever an ERP implementation takes place there is a fear in the mind of the
employees of unemployment, training, technology, so we must have good people in
the implementation team, so that they can handle such situations.
iv. Good leadership skills:
During ERP implementation we have to interact with a lot of people. So the
implementation team must have effective communication skills & good leadership
skills.
v. Excellent training skills:
During ERP implementation we have to provide training at the various levels of the
organization. As the end users are handling the whole system, the success of an ERP
implementation is in their hands, so it is necessary that the implementation team must
have excellent training skills.
If the company plans to do ERP implementation in-house?

i. Hire experts & have them on the company roles or positions.
ii. This is expensive proposition as once the implementation is over, there is no need to
keep the experts in the business.
iii. Wastage of resources & spending a lot of money on training
iv. It is better to give to those who are specialized into it & focus on company’s effort that
how to manage after ERP implementation.
v. Better to train employees during implementation it will solve money, effectiveness.
VENDORS
DEFINITION:
Vendors are the people to develop the ERP packages, they spent a huge amount of
time & effort in research & development to create the package solution that is flexible,
efficient and easy to use.
Now, these days the ERP have all features & function which can satisfy the need of all
the business data. The ERP vendors spent a large amount of money so that they can
become experts, to develop a flexible, efficient & easy to use ERP package.
ROLES OF VENDORS:
1. The vendor should supply the product & its documentation as soon as the contract is
signed.
2. The vendor is responsible to fix the errors which are found during the implementation
process, so it becomes necessary that the vendor should be constantly touched with the
implementation team.
3. The vendor also has to provide the training to the company’s user & also to the people
who are involved in the implementation process of the s/w.
4. The vendors training should explain how the package works, what are major
components, how the data & information flows across the system, etc.
5. The vendor gives the project support function & also takes care of the quality control
factor with respect to how the product is implemented.
6. The vendors participate in all the phases of an
implementation in which he gives advices, answers to technical questions about the
product & technology.
7. In case, there is gap between the package & the actual business process then it is the
job of a vendor to customize the s/w & make necessary modifications.
CONSULTANTS
DEFINITION:
Business consultants are professional people who develop the different methods &
techniques to deal with the implementation process & with the various problems that will
crop up during implementation.
1. They are experts in the area of the administration, management & control activities.
2. They have experience of implementation & various methods that ensures successful
implementation.
3. The only limitation with consultant is they are very expensive.
4. They consultants have to make the ERP implementation for an organization as their
own business.
5. They have to make a plan to carry the activities in the right direction during the
implementation process.
6. Since they are expensive the company should formulate a plan regarding best
optimum utilization of the money spent on consultants.
ROLE OF CONSULTANTS:
1. The consultants are involved in the implementation process of the organization.
2. They consultant should guarantee the success of the project and should be able to
show the results such as reduction in cycle time, increased response time, improved
productivity, etc to the satisfaction of the customer.
3. They are responsible for the administration of all the phases of the implementation so
that the activities occur at the scheduled time and at the desired level of quality with
effective participation with all those who must participate.
4. They add value to the project as they provide knowledge about the packages & the
implementation process which gives the employees the practical experience.
5. They also analyze & provide the suggestion where customization needs to take place.
6. They should be able to balance their loyalty to the client & the project.
7. They should have a clear cut context & scope of the work so that they can provide the
management with the decision that are to be taken for the implementation process.
8. The consultants should create a knowledge base & train the people so that the
knowledge stays in the organization when the consultants leave the project.
END USERS
DEFINITION:
They are the people who use the ERP system once it has been developed.
i. End users are the people who will be doing the functions which are automated by the
ERP system.
ii. The end user should be given the training as to how use the various functions that are
automated in the s/w.
iii. They fear among the employees of unemployment is taken out with the training
sections.
iv. The end users are provided with the skills set & more opportunities to work in a
challenging environment using the modern technologies.
Diagrams
Important Questions
What is Lead Time?

Definition: The elapsed time between placing an order & receiving it is
known as the lead time.
It plays a significant role in purchasing & inventory control.
The aim of the company should be to find out the minimum lead-time.
In order to do so the organization should have an efficient inventory
management system, which is integrated with the purchasing,
production planning & production department.
In this era of JIT manufacturing, the knowledge of the exact lead-time for
each & every item is of importance for uninterrupted production.
The ERP system’s help in automating this task & thus makes the
inventory management more efficient & effective.
ERP systems, by virtue of their integrated nature & by use of the latest
technologies like EDI, reduce the lead-time & make it possible for the
organizations to have the items at the time they are needed (JIT
inventory system).
Why is top management support essential for the success of ERP?

It is human nature to resist change.
This resistance can be due to ignorance about the new system & its
advantages, fear of unemployment & fear of new technology & so on.
To overcome this resistance at such a massive scale, the ERP
implementation team needs top management support & commitment.
It is the top management that should give assurance to the employees
that their jobs are not endangered, that the new system is not a threat,
but a solution to become competitive & remain in business.
It is the top management that has to devise plans for relocating the
employees whenever the need arises, because an ERP implementation
will involve a considerable amount of organizational restructuring.
Also, when employees know that the top management is committed to &
is firmly behind the ERP implementation, the chances of resistance are
less.
Process management of PDM

1. Work Management
A PDM system offers a solution by action as the engineer’s working
environment, meticulously capturing all new & changed data as it is
generated, maintaining a record of which version it is, recalling it on
demand & effectively keeping track of the engineer’s every move.
When an engineer is asked to carry out a design modification, he or she

will normally require more than just the original design & the
Engineering Change Order (ECO).
Current PDM systems cope with this requirement with varying degrees of
success.
One approach is that which emulates paper-based processes by using
what are known as ‘user packets’.
The packets allow the engineer to manage & modify several different
master documents simultaneously as well as provide various supporting
documents for reference.
This approach also supports the concurrent engineering principle.
2. Workflow Management
During the development of the product, many thousands of parts may
need to be designed.
For each part, files need to be created, modified, viewed, checked &
approved by many different people, perhaps several times over.
Most PDM systems allow the project leader to control the progress of the
project via ‘states’ using pre-determined ‘triggers’ & a routing list which
may vary according to what type of organization or development project
is involved.
The most rigid systems are based on procedures which can be
represented in one of the following states – ‘Initiated’, ‘Submitted’,
‘Checked’, ‘Approved’, ‘Released’.
A process management system could be seen as a way of loosening up
your working environment, instead of constraining it.
3. Work History Management
PDM systems should not just keep comprehensive database records of
the current state of the project, they should also record the state the
project has been through.
Project history management is very important as it allows you to back-
track to specific points in a projects development – to a point from where
a problem arose, as one can start a new line of development from it.
Data management of PDM

Manufacturing companies are usually good at systematically recording
component & assembly drawings, but often do not keep comprehensive
records of attributes such as size, weight etc.
As a result, engineers often have problems accessing the information
they need.
This leaves an unfortunate gap in their ability to manage their produce
data effectively.
Data management systems should be able to manage both attribute &

documentary product data, as well as relationships between them,
through a relational database system.
Classification should be a fundamental capability of a PDM system.
1. Classification Of Components:
Components will be entered in the database under a variety of
classes, which suit individual business needs.
Classes themselves can be grouped under convenient broad
headings.
This allows all the company’s working stock of components to be
organized in an easily traceable, hierarchical network structure.
Each part can be given its own set of attribute.
2. Classification of Documents:
Documents relating to components & assemblies can be similarly
classified.
Each document can have its set of attributes – part, number,
author, date entered.
And, at the same time relationships between documents & the
components themselves can be maintained.
3. Product Structure:
The product data can be accessed by its product structure.
For any selected product, relationship between its component
assemblies & between the parts that make up these assemblies
should be maintained.
One distinct advantage is the ability to compare not just the
physical relationships between parts in an assembly, but also other
kinds of structures.
So it is possible for the team members to see the product structure
from their point of view.
4. Querying The Data:
One could move up & down a classification tree.
Why are ERP systems superior to legacy systems?

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STRATEGIC AND HUMAN

MANUFACTURING LOGISTICS MGMT

MATERIAL MGMT MAINTAINENCE MGMT

QUALITY MGMT SALES AND DISTRIBUTION

INFORMATION INTEGRATION THROUGH ERP SYSTEMS

2. To support business growth requirements:

3. To provides flexible, integrated, real time decision support:

4. To Eliminate all limitations of the legacy system:

5. To take advantage of the untapped mid-market:

The direct advantages include:

Better Analysis and Planning Capabilities

Use of Latest Technology

Why do many ERP implementations fail?

1. The enterprise acts as a single entity.

INTEGRATED MANAGEMENT INFORMATION

ROLE OF ENTERPRISE IN IMPLEMENTING THE ERP PACKAGE:

INTEGRATED DATA MODEL

DATA MODEL PROGRAM MODEL

DATA MODEL AND THE RELATIONSHIP WITH THE REAL WORLD

ERP AND RELATED TECHNOLOGIES

Some of these technologies are:

BUSINESS PROCESS RE-ENGINEERING (BPR):

It helps in integrating the various business processes of the organization.

MANAGEMENT INFORMATION SYSTEMS (MIS):

The main characteristics of MIS are:

2 It provides greater flexibility 2 It provides no such flexibility

3 Integrates the 3 DPS tends to support a single

4 focus on information needs 4 DPS focus on Departmental-level

DECISION SUPPORT SYSTEMS (DSS)

The main characteristics of a DSS are:

1. A DSS is designed to address semi-structured and unstructured problems.

EXECUTIVE INFORMATION SYSTEMS (EIS)

IMPORTANCE OF DATA WAREHOUSING

ON-LINE ANALYTICAL PROCESSING (OLAP)

SUPPLY CHAIN MANAGEMENT(SCM)

2. Traditionally, marketing, distribution, planning, manufacturing and the purchasing

ERP A MANUFACTURING PERSPECTIVE

B. DESIGN, STORAGE & RETRIEVAL:

C. AUTOMATIC EVALUATION OF SPECIFICATIONS:

Just In Time (JIT)/KANBAN

The advantages of KANBAN are as follows:

POTENTIAL PITFALLS OF JIT

3. The system will fail if an adequate education program is not provided.

PRODUCT DATA MANAGEMENT (PDM)

This is the simple principle behind more advanced PDM systems.

PDM systems vary widely in how they perform these functions.

MAKE-TO-ORDER (MTO) and MAKE-TO-STOCK (MTS)

2. At one end of the processing spectrum is the make-to-order (MTO) company.

iii. This type of manufacturing operations is practiced when the company

90% MTO Company

MATERIALS REQUIREMENT PLANNING

MANUFACTURING RESOURCE PLANNING (MRP – II)

a. The general ledger is essential to both financial accounting system and to

VENDOR (PAYABLE) CUSTOMER (RECEIVABLE)

FIXED ASSETS EMPLOYEES (SALARY AND WAGES)

TYPICAL GENERAL LEDGER

II. ACCOUNTS RECEIVABLE / PAYABLE