Topic: The Past, Present and Future of ERPdiscuss How did ERP evolve? MRP I Nature of functioning, Applications; MRP II Key elements; Transition fromMRP to ERP . Advantages and disadvantages of ERP.What are the next generation enterprise resource planning strategies and applications?analyse on success story and one failure story of ERP and summarize it.

Enterprise Resource Planning was born from its predecessor, Manufacturing Resource Planning (MRP). During its formative years in the 1960s, MRP was referred to as Manufacturing Requirements Planning. MRP and the first ERP systems were designed as an organizational and scheduling tool for manufacturing firms. The function of the next generation of ERP software systems stretched beyond the confines of what it could do for an individual manufacturing firms internal use, and began including customers and suppliers. It wasnt long before other industries began to recognize the benefits of ERP systems; government agencies and organizations in the service sector began taking advantage of the technology.A New Era in Enterprise Resource Planning SystemsThe 1990s was a time of explosive growth for the technology, particularly with ERP software systems that were meant to integrate businesses processes throughout every functional area. Purchase-to-pay and order-to-cash were being incorporated more and more regularly. New developments and the number of options in both software and hardware quickly grew, but by the early 2000s, the major software vendors began to merge. This resulted in the end of many vendors, but Oracle and SAP were the big software firms that weathered the storm. To satisfy the environment of planning and initiating, accounting, HR and supply chain business process software suites grew in functionality.ERP AdvantagesAdvantages of choosing an ERP solution are wide ranging. In terms of inventory, an enterprise resource planning system allows granular control over materials and inventory so that you make more informed decisions about product planning. IT infrastructure costs are often reduced by switching to an ERP system because applications are aggregated in the system. If you opt for a cloud-based ERP system, backup and maintenance are performed by the provider, further freeing up IT staff time.The system supports business growth and management by incorporating advanced reporting and analytics for data-driven decisions. Data gathered in the system can be used to improve decision making, generate resource policies and best practices to streamline workflow, and identify areas where staff need training to work at capacity. Additionally, systems support linking to suppliers and allow e-commerce.Finally, from an operations standpoint, switching to a fully automated ERP solution reduces cost. Traditionally, businesses had one service or software for each function, so that HR employees used one set of tools to perform their job and marketers used another set of tools. With an ERP system, both employee groups access the resources they need though the ERP interface. Productivity, task time, and cycle time benefit because business processes are automated. Collaboration and workflow also are improved because the software makes it easier for coworkers to connect and to hand off projects when a phase is completed.Enterprise Resource Planning HistoryEnterprise resource planning arose from a need to account for and better manage resources in a manufacturing setting. The field is an outgrowth of Material Requirements Planning of the 1960s, which focused on developing best practices for planning and controlling resources in the manufacturing setting. While ERP originally was developed for manufacturing, it can be successfully integrated into every type of business. Module-based software allows businesses to use only the management components they need, then add on additional modules as business needs change or grow.An enterprise resource system or ERP integrates management components across a company. They typically aggregate accounting and finance, manufacturing, customer service, human resources, sales, and other departments. The benefits of ERP software include: Easier management of connections to customers and clients Closing the supply chain loop to balance supply and demand Lower costs and inventories by producing at the level of demand Improve information flow between different departments Meets information system requirements for the organizationWhile features found in an enterprise resource system vary by system, they generally include a database and management portal that allow for flexible, in-depth reporting. Integrated search and document modules allow employees to search for, edit, and create documents as needed. Workflow or project management modules allow for project control and oversight of working groups.ERP ComponentsThe typical ERP system is implemented as individual modules that represent the functions found in each department. A complete ERP package might include modules for: Sales order processing Financials Warehouse management Human resources

1. Accounting and finance - This module aggregates financial reports, business accounts, accounts payable, accounts receivable, cash book, and general ledgers. Financial reporting and business analytics capabilities allow you to run reports and drill down to the level of granularity requires.2. Manufacturing and or Distribution - This function streamlines inventory, supply, and demand information to provide a quick snapshot of current stock, future needs, and past trends. View details on labor, equipment, existing orders, satisfied jobs, and shipments.3. Customer service - This function lets employees track customer calls, emails, and other service-oriented contact. Over time, this improves customer service because employees have access to all customer transactions, and management can analyze the qualitative data for trends, making improvements in weak areas.4. Human resources with Payroll - When HR functions are folded into an ERP system; employees can access documents, paperwork, vacation calendars, and other information through the ERP interface. This allows human resources employees to manage the information quickly and effectively, while giving employees easy access to job functions.5. Sales and Inventory - Like manufacturing, the sales and inventory module provide insight into the demand for products. View recent and past sales data, see which orders are still outstanding, manage wait lists for out-of-stock inventory, and analyze sales by client, product, and other factors.Tracking the InformationThe way that information flows through a company is called its workflow and is a major source of headaches for companies and customers. A customer calls to get a status of their order. The call gets routed to several people in different departments because no one person can tell where the order is in the process. Everyone gets frustrated.Companies still relying on a paper trail may physically pass the paper order from department to department for entry into their respective systems. The person who currently has the order on their desk to be processed knows the status, but frequently, you cant tell which person has the order.Tracking information like this is a key benefit of an ERP system because data flows from department to department while maintaining the status of the information. As the information flows through the system, it is updated to include where it has been and where it needs to go. For instance, a very simple workflow through an ERP system may be: Sales receives an order, enters the information and flags it ready for the next step Credit receives the order, processes it and flags it ready for the next step Warehouse receives the order, processes it and flags it ready for the next step

Who Needs ERP ConsultingERP consulting refers to a variety of advisory services that consultants, vendors, or companies offer to a business in need of an ERP system. Consulting happens at several different points in time. Clients of course need help when they are choosing enterprise resource planning software or services, but that's not the only point in time. Some clients purchase bare bones ERP systems or ones with limited functionality, and then want to add on modules over time, so consulting services help with that. Other clients want help supporting the system, whether its troubleshooting, rolling out new modules, or transferring data from existing software, websites, and even print.

ERP Implementation Success Case Study: Del Monte with Kenandy, the ERP system

The Del Monte Foods,Inc., or simply Del Monte Foods, was a North American food production and distribution company headquartered in One Maritime Plaza, San Francisco, California, USA. Del Monte Foods was one of the countrys largest producers, distributors and marketers of branded food for the U.S. retail market, generating approximately $1.8 billion of annual sales. Its portfolio of brands includes Del Monte, S&W, Contadina, College Inn, Fruit Burst. Nils Lommerin, is the current Chief Executive Officer of the Del Monte Foods. Several Del Monte products hold the number one or two market share position. The company also produces, distributes and markets private label food.Del Monte Foods products are found in eight out of ten U.S. households. One of the countrys largest consumer food and pet products companieswith more than $3.8 billion in net sales in fiscal 2013the Del Monte Foods portfolio includes such iconic brands as Del Monte, Contadina, Milk-Bone, and Kibbles n Bits. While having such a powerful and growing brand portfolio has enabled the company to significantly expand its market share, the companys own on-premises corporate ERP was not only costly, it was increasingly difficult to deploy to new lines of business, and was nearing the end of its support life. Del Monte needed a new way forward in ERP; they found it in the Kenandy ERP cloud.The companys recent acquisition of Natural Balance Pet Foods, a leading producer of premium pet foods, presented the perfect opportunity to begin the rollout of Del Montes new Kenandy cloud ERP system. We decided to put Natural Balance on our chosen ERP systemKenandyfrom day one, so they would be up and running quickly, using Del Montes enterprise standards, explains David McLain, Senior Vice President, Chief Information Officer and Chief Procurement Officer at Del Monte Foods. This also helps us quickly assess potential future expansion within Del Monte. Among the many reasons Del Monte chose Kenandy was its flexibility. Unlike most other ERP systems that offer cookie-cutter capabilities, Kenandy is extremely flexible, says Stuart Kowarsky, Vice President of Operations at Del Montes newly acquired Natural Balance Pet Foods. This flexibility allows us to keep our costs down while providing excellent customer service. For example, we can easily add capabilities, and adapt the system to our clients needs.Inheriting the benefits of the Salesforce Platform on which it was built, Kenandy ERP not only provides flexibility and extensibility, its also extremely fast to deploy. Deployment is so fast, in fact, that Kenandy CEO and Chairman Sandra Kurtzig made a commitment to Del Monte to go live with Kenandy at Natural Balance just 90 minutes after the acquisition was complete. The system was up and running even faster than that. And this was for a complete ERP implementation, including order-to-cash, planning and production, procure-to-pay, and global financials, says Kurtzig. Youll never see this kind of speed with legacy software, which often takes months, if not years, to deploy.Natural Balances Kowarsky concurs, saying, This is probably the fifth or sixth ERP implementation of my career, and it was the smoothest transition Ive ever experienced. Not only did Kenandy accelerate our integration with Del Monte in a number of areasincluding customer service, logistics, and the entire supply chain networkwe were able to see these synergies immediately. Kowarsky credits Kenandys Professional Services team for enabling the successful transition. In my estimation, Kenandy has the number one services team in the business, he says.Del Monte is realizing a number of benefits from its deployment of Kenandy at Natural Balance, including better visibility through a single source of truth and the elimination of many manual processes. Kenandy also enhances productivity in production, quality management, shipping, and receiving, while seamlessly integrating Del Montes best practicesan all around win-win.Were confident that Kenandy will live up to its promise of providing a complete, enterprise-ready ERP solution that has quick time-to-value, says Del Montes McLain. At Natural Balance and in our corporate systems, were replacing a patchwork of applications with one unified, extensible solution that will grow and scale with Del Montes needs. Were optimistic that Kenandy will help provide us the visibility we need to improve the business now, and into the future.

ERP Implementation Failure Case Study: NikeNIKE, Inc. (NIKE), incorporated in 1968, is engaged in the design, development and worldwide marketing of footwear, apparel, equipment, and accessory products. NIKE sells athletic footwear and athletic apparel. It sells its products to retail accounts, through NIKE-owned retail, including stores and Internet sales, and through a mix of independent distributors and licensees, in over 180 countries around the world. Its products include running, training, basketball, soccer, sport-inspired urban shoes, and childrens shoes. It also markets shoes designed for aquatic activities, baseball, bicycling, cheerleading, football, golf, lacrosse, outdoor activities, skateboarding, tennis, volleyball, walking, wrestling, and other athletic and recreational uses. On March 3, 2008, the company acquired Umbro Ltd., which designs, distributes, and licenses athletic and casual footwear, apparel and equipment, primarily for the sport of soccer, under the Umbro trademarks. On April 17, 2008, it completed the sale of its Bauer Hockey subsidiary.

NIKEs athletic footwear products are designed primarily for specific athletic use, although a large percentage of the products are worn for casual or leisure purposes. The company sells sports apparel and accessories covering most of it product categories, which includes sports-inspired lifestyle apparel, as well as athletic bags and accessory items. It markets footwear, apparel and accessories in collections of similar design or for specific purposes. It also markets apparel with licensed college and professional team, and league logos.

It also markets shoes designed for aquatic activities, baseball, bicycling, cheerleading, football, golf, lacrosse, outdoor activities, skateboarding, tennis, volleyball, walking, wrestling, and other athletic and recreational uses. On March 3, 2008, the company acquired Umbro Ltd., which designs, distributes, and licenses athletic and casual footwear, apparel and equipment, primarily for the sport of soccer, under the Umbro trademarks. On April 17, 2008, it completed the sale of its Bauer Hockey subsidiary.

Virtually all of NIKEs products are manufactured by independent contractors. Virtually all footwear and apparel products are produced outside the United States, while equipment products are produced both in the United States and abroad.

Nikes Erp Implementation SagaSupply Chain Management Problems At Nike In February 2001, Nike, the athletic shoe and clothing giant had warned that its third-quarter footwear sales were not up to the mark and as a result, its year-over-year sales for the third quarter would be flat. Nikes stock price fell almost 20% the day this announcement came while i2s stock plunged nearly 22% (Nikes footwear division was powered by i2 Technologies.) The problem Nikes new supply-and-demand software planning systems from i2 Technologies had hiccups in June 2000. The software incorrectly output orders for thousands more Air Garnett sneakers than the market had appetite for and called for thousands fewer Air Jordans than were needed. As a result, there were huge inventory problems and overdue deliveries.

Nikes Supply Chain In 1975, Nike introduced Future Program. Supply Chain Management was inadequate. 1998, Nikes global operations were broadly divided into 5 geographic regions. Nikes profit dropped by 50% from US$ 798 million to US$ 399 million. Launched NSC Project. Initiative of Shelley Dewey, Vice President of Supply Chain and Steele. Implement its ERP, Supply Chain, & CRM Software onto a single SAP Platform.i2s Software Implementation First part of supply chain strategy. Cost of this project was US $40 million. To match supply with demand. To reduce the amount of raw material. Used it as a legacy system rather than as a part of SAP ERP project.

Solution Objective Challenge Capability

Strategic Planning Maximize profitability by optimally allocating resources Unclear parameters Optimization

Demand management Anticipate and influence demand Accurate demand estimation is difficult Demand planning, channel collaboration

Supply planning Determine what to make and when and how to profitably distribute supply Size and complexity of problem Collaboration, optimization,Speed

Production Determine what to produce and when Managing material & capacity tradeoffs is complex Fast finite material & capacity planning & scheduling

Reasons For I2s Software Failure Third party integrator. Inexperience of i2. Customization. Trying to forecast too far out ahead. Pilot test. Problems in smooth integration. Inadequate information. Changing market conditions. Complication of NSC project. Review meetings.I2 SCM Disaster

Roland Wolfram, NIKEs VP of global operations and technology, called the i2 problem a software glitch that cost NIKE more than $100 million in lost sales, depressed its stock price by 20 percent, triggered a flurry of class-action lawsuits, and caused its chairman, president and CEO, Phil Knight, to lament famously: This is what you get for $400 million, huh? a speed bump. In the athletic footwear business, only NIKE, with a 32 percent worldwide market share (almost double Adidas, its nearest rival) and a $20 billion market cap thats more than the rest of the manufacturers and retailers in the industry combined, could afford to talk about $100 million like that.

By 1998, NIKE had 27 order management systems around the globe, all highly customized and poorly linked to Beaverton. To gain control over its nine-month manufacturing cycle, NIKE decided that it needed systems as centralized as its planning processes. ERP software, specifically SAPs R/3 software, would be the bedrock of NIKEs strategy, with i2 supply, demand and collaboration planner software applications and Siebels CRM software also knitted into the overall system using middleware from STC. So what has $500 million done for NIKEs business? Wolfram claims that better collaboration with Far East factories has reduced the amount of pre-building of shoes from 30 percent of NIKEs total manufacturing units to around 3 percent. The lead-time for shoes, he asserts, has gone from nine months to six (in some periods of high demand, seven).