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ERP - Unit 1

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Anna university

MBA-III semester

Enterprise Resource planning


Introduction to ERP-Enterprise
resource planning
=Enterprise-Company/organisation/Business
R=Resource-Stock/materials/staff/assets
P=Planning-The process of decision over
implementing something/the process of
thinking about the activities required to
achieve a desired
goal.
Definition of ERP
It is defined as “an enterprise resource
planning system is typically defined as a
packaged business software system that
facilitates a corporation to manage the
efficient & effective use of resources such
as materials, human resources,finance
etc.,by providing a total integrated
solution for the organizations information
processing requests,through a process-
oriented view consistent across the
country”.
What is ERP?
ERP software is ready-made generic software,
it is not custom-made for a specific firm.ERP
software understands the needs of any
organisation with in a specific industry
segment. Many of the processes implemented
in an ERP software are core processes such as
order processing, order fulfillment, shipping,
invoicing, production planning,BOM(Bill of
material), purchase order, general ledger etc.,
that are common to all industry segments.
Why ERP?

 Inspite of heavy investments the organizations around the


world have gone in for ERP solutions.
 ERP introduction brings new culture, cohesion & vigor to the
organisation.
 After ERP introduction the line managers would no longer
have to chase information, check compliance to rules or
conformance to budget.
 A well implemented ERP can guarantee these benefits even
if the organisation is a multi plant, multi location global
operation spanning the continents.
Why ERP?
 ERP systems can be compared to the “Fly –
by – wire” operation of an aircraft.Just as
“Fly –by – wire operation brings in amazing
fuel efficiency to aircraft operation by
continuous monitoring of the airplane
operation, it helps to monitor the
organizational health.
 In order to face twin challenges in business
today in globalization & shortened product
life cycle ERP systems to be adopted
properly.
Evolution of ERP

1.Pre – material requirement planning


2.Material requirement planning(MRP)
3.Manufacturing Resource planning(MRP-II)
4.Enterprise Resource planning(ERP)
5.Extended ERP(E – ERP)
6.Entetprise Resource planning – II(ERP – II)
Benefits of ERP
 Business integration
 Flexibility
 Better analysis & planning capabilities
 Use of latest technology
 Reduced inventory & carrying cost
 Reduced manpower cost
 Reduced material cost
 Improves sales & customer service
 Efficient financial management
 Effective coordination of operations
Risk in implementation of ERP

Management committee towards ERP


implementation
Re engineering the business processes
Integration of several systems
ERP consultants identification
Implementation time
Fundamental technology of
ERP

1.Financial management
2.Business intelligence
3.Supply chain management
4.Human resource management
5.Manufacturing operations
6.Integeration
Issues to be considered in planning design & Implementation
of cross functional integrated ERP systems

a) Implementation costs
b) ERP vendors
c) Selecting the right employees
d) Training employees
e) Employee morale

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