6_guest lecture_ibs blr_erp – a competitive advantage_session i_2009
DESCRIPTION
ERPERP –– A competitive advantageAcompetitiveadvantage Subhajit Mazumder Email: [email protected] Views expressed are personal and do not include any point of view of the speaker’s organization — Introduction and background — Evolution — Business modeling for ERP — ERP functional blocks — Impact on Competitive Advantage AgendaAgendaTRANSCRIPT
ERP ERP –– A competitive advantageA competitive advantageConcepts – Session I9 am – 10.15 amICFAI Business School – Executive MBA
Subhajit MazumderEmail: [email protected]
Views expressed are personal and do not include any point of view of the speaker’s organization
AgendaAgenda
� Introduction and background� Evolution� Business modeling for ERP� ERP functional blocks� Impact on Competitive Advantage
Introduction & backgroundIntroduction & background
� Increasing need for information flow and data exchange◦ Within the organization◦ Cross-organization
� Growing complexity of business processes◦ Non-standardization◦ People specific
Introduction & backgroundIntroduction & background
Typical scenario prior to ERP
Manufacturing, Plant
Maintenance Logistics
Distribution, Supply Chain
HR, Payroll
Financial Accounting
Warehouse,Inventory
management
Introduction & backgroundIntroduction & background
Typical scenario after ERP
Shipping
Order Entry
Raw Material
FinishedProductReceiving
Make/Buy
Shop Floor Control On Time
Forecast & Planning
Quality
Customer
Quality
Inventory Management
Production Process
CollectionsPayments
Purchasing
Financial Reporting
Introduction & backgroundIntroduction & background� Enterprise Resource Planning
◦ Integrate all functions◦ Single database◦ Business process oriented◦ Adopts Industry best practices◦ Ensures process controls◦ Strict audit trails◦ Orchestrates an entire organization◦ Brings agility in business response◦ ERP+ : CRM and SCM
EvolutionEvolution
� An evolution over 5 decades◦ Economic Order Quantity (EOQ)◦ Materials Requirement Planning (MRP)◦ Closed Loop MRP◦ Manufacturing Resource Planning (MRP II)◦ ERP◦ E-commerce◦ ERP+ / ERP II
Business ModelingBusiness Modeling
� A diagrammatic representation of◦ Business systems◦ Business Processes ◦ People / Actors of the processes◦ Business rules◦ Inter-connections / Inter-dependencies
Business ModelingBusiness Modeling
Business ModelingBusiness Modeling
ERP functional blocksERP functional blocks� Any ERP has more or less standard
functional coverage◦ Finance & Accounts◦ Materials mgmt. / Purchase / Inv. Mgmt.◦ Sales / Distribution◦ Production planning / Manufacturing◦ Maintenance / Service management◦ Quality mgmt.◦ HR / Payroll◦ Projects management◦ SRM / CRM◦ APS
ERP functional blocksERP functional blocks
Finance
Purchase / Inventory / Materials mgmt.Sales / Distribution
Production planning / operations
Maintenance / Service
CRM
SRM
HR / PayrollAPS
ERP functional blocksERP functional blocks� Finance & Accounts
◦ General ledger◦ Cash / Bank management◦ Asset management◦ AP / AR◦ Project finance◦ Vouchers◦ Financial statements◦ Cash flows◦ Budgeting◦ Costing◦ Compliance / Statutes
ERP functional blocksERP functional blocks� Materials mgmt. / Purchase / Inv. Mgmt.
◦ Materials mgmt. / Vendor mgmt.◦ PR / Indents◦ RFQ / Enquiries◦ PO◦ GR / Challan◦ Invoicing◦ Debit notes◦ Cash flows◦ Budgeting◦ Costing
ERP functional blocksERP functional blocks� Sales / Distribution
◦ Customer mgmt.◦ Sales forecasting / planning ◦ Quotations / Analysis◦ SO◦ Shipment / Delivery◦ Transportation modes◦ Incoterms ◦ Invoicing◦ Credit memos◦ Trans-shipments
ERP functional blocksERP functional blocks� Sales / Distribution
◦ Customer mgmt.◦ Sales forecasting / planning ◦ Quotations / Analysis◦ SO◦ Shipment / Delivery◦ Transportation modes◦ Incoterms ◦ Invoicing◦ Credit memos◦ Trans-shipments
ERP functional blocksERP functional blocks� Production planning / manufacturing
◦ Plant organization◦ Bill of Materials◦ Routing◦ Work Centers◦ Operations: processing time, lead times etc.◦ Planning (MRP / MRPII)◦ Different planning horizons◦ Scheduling◦ Interfaces with materials, orders, maintenance◦ Job sheets / Route cards
ERP functional blocksERP functional blocks
� Maintenance / Service management◦ Plant organization / Storage locations◦ Scheduled maintenance◦ Break-down maintenance◦ Condition based maintenance◦ Maintenance orders◦ Service orders◦ Service items / Scope of Work◦ RA billing
ERP functional blocksERP functional blocks
� Quality mgmt.◦ Definition of quality standards / parameters◦ Definition of quality lots / inspection lots◦ Visual / Chemical testing / Mechanical tests / Physical
tests◦ Defect tracking (root cause analysis) ◦ Usage decision ◦ Interfaces from purchase, production, sales / dispatch◦ TCs◦ 3rd party quality inspections
ERP functional blocksERP functional blocks
� HR / Payroll◦ Employee details mgmt.◦ Attendance recording◦ Leave mgmt.◦ Training / HRD ◦ Performance appraisal ◦ Travel mgmt. / Advance / Loan mgmt.◦ Pay structures and payroll processing◦ Pay slip generation◦ Income tax / other statutes
ERP functional blocksERP functional blocks
� Projects◦ Projects definition◦ Evaluation (techno-commercial)◦ WBS◦ Project activity schedules◦ Link to orders / R&D / Service management◦ Project tracking (link with project tracking tools)◦ Project finance – costs and billing◦ Project completion
ERP functional blocksERP functional blocks
� SRM / CRM◦ Link with the external supply chain partners◦ Relationship mgmt. (beyond business SLAs)◦ xRM
� APS◦ Advanced planning & scheduling◦ Demand mgmt. / Demand planning◦ Forecasting techniques◦ Transportation planning
Impact on Competitive AdvantageImpact on Competitive Advantage
� Competitive advantage over others to◦ Attract new business◦ Retain existing new business
� Competitive priorities (focus)◦ To create advantages in the marketplace◦ Driven by business plan objectives and
customer preferences◦ High quality, Low cost, Speed, Flexibility,
Convenience
Impact on Competitive AdvantageImpact on Competitive Advantage
� Some tangible results from ERP implementation◦ Supply Chain visibility◦ Synchronization of all planning aspects to
deliver optimally◦ Reduced process cycle times◦ Higher inventory turns◦ Faster accounts closure◦ Cost reduction◦ Ensuring quality throughout the processes
ExperiencesExperiences� A leading non-profit healthcare research
organization goes for ERP◦ Transformational impact◦ Cross-functional integration◦ Online validations, checks and controls◦ MIS – enhanced reporting and dashboards◦ Online workflows with business rules
embedded◦ Better funds management and utilization◦ Better accountability