erp1 radm introduction

Christ University RADM ERP June 20111-*Enterprise Resource Planning

Understanding Enterprise Resource Planning Systems

Christ University RADM ERP June 2011

1-*Enterprise Resource Planning

Text book & Reference books recommended :-

ERP Mahadeo Jaiswal & Ganesh Vanapalli, Mac Millan,ERP Alexis Leon, Lean Publications.ERP Monk Ellen & Wagner Bret, Thomas Publications.Christ University RADM ERP June 2011


1-*ObjectivesUnderstanding ERP & its potential in business transformation to improve the effectiveness of information systems in organizationsRecognize the business benefits of ERP systemsUnderstand the Evolution and Demand of ERPChrist University RADM ERP June 2011


1-*What is ERP?ERP Definition : ERP covers the techniques and concepts employed for the integrated management of businesses as a whole, from the viewpoint of the effective use of management resources, to improve the efficiency of an enterprise.Set of Software tools Manages business systemsMaterials Procurement , Logistics, Supply chain, receiving, inventory, customer orders, production planning, shipping, Finance & Accounting, HR, Plant maintenance, Quality management and Project Management. Allows automation and integration of business processesEnables data and information sharing, Real time on line information for analysis and decision making. Industry specific solutions and company -wide systemIntroduces best practicesChrist University RADM ERP June 2011



1-*ERP Market & Demand for ERPOne of the fastest growing markets in software industry, 40 % growth ?34.5% of companies with revenues over $1 billion plan to purchase or upgrade. Close to 65 Billion INR.$ close to 500 billion in sales in 2008Maybe as much as $1 trillion by 2015


1-*ERP Market & Demand for ERPMajor investmentCost between $50,000 and $100,000,000+Variety of business justificationsNeed for IT infra to improve business efficiency/ performance.Replace fragmented legacy information systems with integrated single system.Reduce cycle times and improve efficiency across all functions.Re-engineering to process based management system.Adopt global best practices inbuilt in ERP.Lower operating costsERP is a proven system benefiting the industry.Enables better management decisionsReal-timeOn-line



1-*Evolution of ERP

1960s: software packages with inventory control1970s: MRP systemsMaterials management in relation to production schedule1980s: MRPII systemsAdds Distribution system, Production planning.1990s: MRPII - ModifiedIntegrated systems for manufacturing execution covering Engineering, Finance, HR, S & D, PM.Late 1990s: ERPIntegrated manufacturing with supply chainThe ERP II latest with CRM, SCM,BIS & CPM, SRM, ELM,PLM,EAM




1-*ERP ENABLED BUSINESS TRANSFORMATIONIn India, business enterprise are undergoing the business transformation on a/c of :Globalization & de-regulation of Indian economyEmergence of IT based business practices.Most of the enterprises implementing ERP as part of organizational transformation and process re-engineering which provides the benefit of transformation in quality, productivity and profitability.



1-*ERP ENABLED BUSINESS TRANSFORMATIONBrings transparency in the various activities and demands flexibility and empowerment in decision making processes.For survival, companies have to transform their internal business processes with deployment of ERP systems.ERP happens to be the first large scale corporate IT application being adopted by large no. of corporate firms forcing them to change their business processes, structures and even business strategies.


1-*BENEFITS OF ERPEnterprise Integration functional / geographically dispersed enterprise.Forces Organizations to re-engineer its obsolete function oriented processes. Better to align with ERP processes enabling integration of BPR and IT.Standardizing systems & Procedures across with emphasis on transparency.Overcomes inefficiencies of independent systems ensuring efficient business networking for sharing the information.Integrated data supports multiple business functions. ERP emerging as global IS infrastructure due to their capability of supporting multiple currency, multinational trade and multi industry transactions.Best Global management practices All ERP packages like SAP R/3, BaaN IV, IFS, PeopleSoft, Oracle etc have got world class best business practices inbuilt Christ University RADM ERP June 2011



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1-*Overall Business BenefitsInformationMaximizes information throughputProvides timely information Integrates information throughout supply chainMinimizes response timePushes decision making down to lowest levelsReduces costsCuts inventoryImproves operating performance


1-*Department BenefitsSalesIncreased efficiencyLower quotes, reduced lead time, improved responsivenessManufacturingConcurrent engineeringFaster design and productionData ServiceAccurate customer service history and warranty informationAccounts PayableSuppliers paid accuratelyChrist University RADM ERP June 2011


1-*Systems BenefitsEliminating legacy systemsReduces incompatible dataCan cause fragmentationAllows sharing and monitoring of information across organizationFoundation of eBusinessBack-office functionsStandardization Helps obtain and maintain competitive advantageImproved interactions with customers and suppliers



1-*Christ University RADM ERP June 2011



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1-*ERP MODULESERP system has variety of functions that are linked together.Various Modules are : -Financial Accounting (FI/FA)Costing & controlling(CO)Sales & Distribution(SD)Materials Management (MM)Production Planning(PP)Quality Management(QM)Plant Maintenance(PM)Human Resource(HR)Project Systems(PS)Service Management (SM)Reports Management(RM)


1-*ERP MODULESFINANCE MODULE

General Ledger (P&L, financial balances)Accounts Receivables receivables managementAccounts payable track payments for various headsFixed Assets depreciation (building, property, Equipment)Treasury Management Cash flow, financial investments, funding and assess investment risksCost control monitor expenses ender various heads, calculate the costs for various operations and assess costing of products/services, budgeting and variancesMIS financial statements for funding agency, Board, monthly P &L statement, cost/budget monitoring, variance reports, monthly receivables statements etc.Christ University RADM ERP June 2011


1-*ERP MODULESMATERIALS(PURCHASE) MODULE

Purchase data bank materials base, vendor base, approved vendor base, coding and classificationProcurement planning BOQ data, stock updation, procurement cycle and generate procurement plan sheet.Purchasing Release of Purchase documents, vendor selection and approval (intervals)Storage Receipt of goods, inspection, Storage and monitoring stocks, inventory Analysis and control, stock verification and updations.Control issues, WIP assessment, FG inventory and stock transfers.MIS Inventory reports, slow moving / non moving goods monitoring, sub-contracted items monitoring and reconciliations, stock value for banks/institutions.Christ University RADM ERP June 2011



1-*ERP MODULESSALES & DISTRIBUTION MODULECustomer data bank Name, type, contacts, products sold, history, coding Order processing Tracks the customer order from the receipt of order upto invoicing, delivery. At any point of time the status of the order can be derived.Distribution networking Demand & Supply status, monitoring the supplies and distribution channels and the efficiency, maintains records of stocks existing and replenishment patterns and re-order levels.Collection of receivables Monitoring the payments receivable from each customer and tracking the payments. MIS sales budget, variance reports, trends, enquiry bank, hit rate, loss of orders, customer satisfaction levels and improvements, customer complaints & status, order booking status, pending orders, receivables & forecasting.



1-*ERP MODULESPRODUCTION PLANNING MODULECapacity planning and schedulingMonthly/weekly/daily production plansProvides data for making the materials procurement planWIP stocks valuation and monitoringEfficiency of utilization of manpower and equipment monitoring Equipment downtime estimation and maintenance schedule planningOnline transmission of information reg the status of the order processing to the concerned.MIS Production plans, variance reports, capacity utilization, manpower efficiency and individual wise efficiency monitoring reports, status of pending orders, completion of orders, OTD reports, WIP stocks value.



1-*ERP MODULESHUMAN RESOURCES MODULE

Payroll Attendance & payment of salaries, statutory bodies etc.Manage Personnel admn Recruiting, induction and appraisal systemTraining capturing needs and schedulingMIS Training records, employee strength and retention % form time to time, recruitment status updation to departments,PLANT MAINTENANCE MODULEList of equipment, history updation, coding and locationGenerating Preventive maintenance schedulesSpares and repairs managementMIS machinewise downtime and efficiency reports, spares utilization and updation of history log for each equipment.



1-*ERP MODULESPROJECT SYSTEMS

Scheduling - List activities & time scheduleBudgeting and monitor the cost monitor cost during each phase of the project.Status updation - project monitoring and updation of project status to the concerned.MIS Variance reports, cost variance and status.QUALITY MANAGEMENT MODULEKey in the specifications for RM, FG and process inspection requirements.Manage the scheduling of calibration of testing / inspection instruments. Scheduling internal / external audits.ON line acceptance and approval of RM /Products / process stage clearances.



1-*Design AlternativesVanilla implementationComplete vendor packageBenefitsTotal integration across all functional areasRe-engineering of all business processesDeficitsExpensiveTime-consumingSelected ERP modulesBenefits Less costly and time-consumingDeficitsLacks total integration of dataLimited applicability and use



1-*Design Alternatives, continuedBuild in-houseBenefitsCan create system based on its needsCompetitors will not have access to similar systemDeficitsTime- and resource-consumingExpensive RiskyMay not provide competitive advantageMaintain concurrent legacy systemsBenefitsFamiliarityDeficitsMay be a competitive disadvantage



1-*Cost-Benefit AnalysisNet Present ValueTime value of money5-year timeframe for ERPNon-recurring costs:Hardware, software, consulting, training, implementationRecurring expenses:Licenses, maintenance, consulting, teams



1-*Maintaining Competitive AdvantagesImplement ERP system better than competitorsMigrate to new versions fasterUse vanilla ERP for core systems and build customized modules for othersIncrease availability of operational dataBetter use of data for analysis



1-*SummaryERP systems can improve the effectiveness of organizations through automation and integration of business processesERP systems allow data and information sharing across the organizationDepartmental benefits include increased efficiency, faster design and production, and accuracyImplementing an ERP system helps the organization obtain and maintain a competitive advantage


erp1 radm introduction

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