Introduction to ERP (Enterprise Resource Planning)

Introduction of ERP(Enterprise Resource Planning)1What is ERP?Software tools Manages business systemsManufacturing, Supply chain, receiving, inventory, customer orders, production planning, shipping, accounting, human resource, finance, customer services etc.Allows automation and integration of business processesEnables data and information sharingEnterprise-wide systemIntroduces best practices

2Definition of ERPERP software integrates all departments and functions onto a single system that can serve the needs of the entire company and Supply Chain

3Definitions of ERPERP is a process of managing all resources and their use in the entire enterprise in a coordinated manner.ERP is integrated software that supports the information flows among the processes in the Supply Chain.Business solution that addresses all the needs of an enterprise with the process view of an organization to meet the organizational goals and integrate all the functions of the Enterprise.

4ERP SOFTWARESSAPBANNJD EdwardsKarenSageMicrosoft Great Plains (GP)Engineer Link

People SoftOracleClient Serve ThreeezijobzMRP(II)Lease SofteX.e.ge.Sys

5Source: http://www.navyerp.net/erp-market-share-sap-oracle-and-microsoft-in-the-lead/ERP Market Share

6ERP MODULEsSales and DistributionProduction PlanningFinancial AccountingHuman ResourcesMaterial ManagementPlant MaintenanceQuality ManagementProject Management7MRP: MaterialRequirement PlanningPayrollGL: General LedgerAP: Accounts PayableAR: A/C ReceivableEDI-Electronic Data Interchange PlanningSchedulingDistributionMRP:Mfg Requirement PlanningHR: Human ResourceFMIS:Financial MgmtInformation SystemsE-CommerceSFA: Sales ForceAutomationCRM: Customer Relationship MgmtSCMSupply ChainManagementERPEnterprise ResourcePlanningE-BusinessESCMExtended SCMEERPExtended ERP1970198019902000*source: HPEvolution of Business Systems8Common Business Challenges Availability of the Items cannot be checked at the time of Accepting Sales order On-line Material Status is not available & Shortages Poor Productivity Enhancements Poor Material Planning Poor Customer Service Poor Cash Management Mismanagement of Inventory Poor Quality Management

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Common Business Challenges Manufacturing Challenges.Manufacturing Globally.Distribution network spread.New Product introduction.Lower manufacturing lead time.Focus on industry markets.Satisfying the needs of customers.Develop specific business methods and processes.Integration with third party products.

10Benefits of ERPCommon set of dataHelp in integrating applications for decision making and planningAllow departments to talk to each otherEasy to integrate by using processed built into ERP softwareA way to force BPR (reengineering)Easy way to solve Y2K problem

11Benefits of ERPDecision support system Smooth flow of routine processAutomatic record keepingCommon inter-department resource poolBetter planning at all levelsData warehousing & various self-service interface for customers, suppliers & employees

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13Department BenefitsSalesIncreased efficiencyReduced lead time, improved responsivenessManufacturingConcurrent engineeringFaster design and productionData ServiceAccurate customer service history and warranty informationAccounts PayableSuppliers paid accurately

14Department BenefitsSupply Chain ManagementSupply Chain Planning, Claim Processing, Commission calculations, Supplier scheduling, Inspection of goods, order entry, InventoryProject ManufacturingCosting, billing, time & expense, activity managementFinancials Cash Management, Fixed assets, General ledger, Accounts Payables, Accounts Receivables Data Warehouse Self-service interface among Suppliers, Customers, Employees

15Authorization and SecurityUser / Password level authenticationUser wise activity permissionTracking of changes made by usersFacility of authorization/approval of transactionRestriction in modifying the transaction after approval is done

16DisadvantagesLimited training budgetLack of Skills and ExperienceCost estimate is $ 30,000 to 500,000,000Limited technical staffSystems difficult to useToo rigid system High employee turnoverReturn on investment

17Assignment 1Q1: what are the characteristics of ERP and MRP?

Q2: Difference between SAP and ORACL?18Introduction of

19About SAPSAP AG, the pioneer in ERP systems is on 1972 by five former IBM employees in Germany.Rank as top ERP Software providing company. Revenues more than 9 billion.Initial breakthrough was R/2 for mainframes in 1979R/3 was in 1992 with user of more than one million worldwide

20About SAPMore than 46,100 customers in more than 120 countries run SAP applicationsSAP currently employs more than 43,800 people in more than 50 countriesProviding 35 Industry SolutionsMore than 100,000 installations.

21About SAPSAP R/2 & SAP R/3Advantage of SAP R/3Highly customizedSuited to all types of organizationsAllow data sharingEmployee use concurrentlySystem built on a three-tieredClient/server architectureProprietary programming language ABAP/4Compatible with all major vendors software

22SAP R/3SAP R/3 signifies a three tier system consisting of Data Base at the backendApplicationGUI (Graphical user interface)

An Open Distributed System is made up of components that may be obtained from a number of different sources, which together work as a single distributed system.

23SAP Industry SolutionWhy Industry solutionAerospace IndustryDefense IndustryUtilities IndustryAutomotiveBankingHealth CarePharmaceuticals and OthersImproved speed, Accuracy, Efficiency, Productivity, Revenue

24SAP Projects in PakistanSiemens PakistanPakistan Refinery LtdPackages LtdJahangir Siddiqui & CompanyICI Pakistan (Pvt) LtdIndus MotorsEngro Chemical Pakistan Limited

Auditor General of Pakistan (PIFRA)Pakistan Petroleum LimitedPakistan State Oil (PSO)Atlas Honda Ltd.National Refinery LimitedThal Jute MillsLakson Tobacco

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