ERP - Session 1

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ERP

Enterprise Resource Planning Term was introduced by research andanalysis firm Gartner in 1990.

http://en.wikipedia.org/wiki/Gartner

http://en.wikipedia.org/wiki/Gartner



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Subject Data

Subject Hours/week Credit C/NC Type

ERP 1.5 Theory1.5 Self Study

2.5 NC PB



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A Foundation for Understanding

Enterprise Resource Planning Systems



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Agenda

What is ERP?Evolution of ERP (Transition from MRP to ERP)

Advantages and Disadvantages

Common solutions provided by an ERP

implementation.MRP I – Nature of functioning

MRP II – Key elements



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Textile & Apparel ManufacturingIndustries:

labour intensiveraw material intensive

capital intensive

product intensive

inventory intensiveprofit margins – Non intensive



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survival of the fittest

to produce the best quality of productwith cheaper rate

……. integrate with Information Technology



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ERP Market

One of the fastest growing markets insoftware industry

34.5% of companies with revenues over $1billion plan to purchase or upgrade

$180 billion in sales in 2002Maybe as much as $1 trillion by 2010



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Pre Scenario of ERP

Operational Planning

QualityManageme

ntFinance MaterialManageme

ntHumanResource

Sales &Distributio

nLogistic

Management

Production

DB

Maintenance



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What is ERP?

An Enterprise is a group of people with acommon goal, which has some key functionsand resources at its disposal to achieve thatgoal.

Resources included are man, money,material and all the other things that arerequired to run the enterprise.

Planning is done to ensure that nothing goeswrong. Planning is putting necessary functionsin place and more importantly, putting them

together.



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What is ERP?

So, ERP is a method of effective planning of allthe resources in an organization.



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What is ERP?

Is a packaged business software system thatallows company to

Automate and integrate the majority of itsbusiness processes

Share common data and practices across theenterprise

Produce and access information in real-timeenvironment



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Integration and share data

Marketing Finan

ce

Sales &Distribut

ion

Production

R&

D

Production

Planning

CentralDatabase



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Integration is Key to ERP

ERP is a way to integrate the data and processesof an organization into one single system.

ERP's main goal is to integrate data andprocesses from all areas of an organization and

unify it for easy access and work flow.



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ERP Modules

Finance

Manufacturing and Production Planning

Sales and Distribution

Maintenance Management

Quality Management

Materials Management Customer Relationship Management

Human Resource Management, etc.



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Modules in Apparel Manufacturing ERP

MerchandizingCreate Garment and Fabric Catalogs

Time and Action

Costing/ Budgeting

Import Orders from excel sheetsProcurementCreate and Track Purchase Orders

Track inventory

Multi Currency, Multi Location, Multi Company



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Production PlanningCapacity Booking and Planning

Line Planning

Machine planning

Production MonitoringSetup unlimited process templates

Monitor WIP at each process

Planned Vs. Actual Tracking

HR & Payroll ManagementEmployment History

Integration with Biometric devices

Compliance Reports



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Financial AccountingSpecialized Bill Entry Screens

Order Wise Profitability

Integration with Tally

ShippingSpecific Buyer Invoice/Packing List formats

Pre and Post Shipment Tracking

Web Integration

View Reports from the web



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Retail IntegrationPoint-of-Sale integration

Track warehouse and store inventory

Sales Analysis

Wholesale IntegrationManage Textile/Apparel Wholesale

Full integration with Tally

Supply Chain Management

Vendor managementCustoms Clearing/Tracking



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Advantages of ERP Systems

Reduction in cycle timeCost savings

Reduction in machinery downtime

Improvement in sales

Customer satisfaction



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Disadvantages of ERP Systems

Customization in many situations is limited

The need to reengineer business processes

ERP systems can be cost prohibitive to install andrun

Technical support can be shoddyERP's may be too rigid for specific organizations

that are either new or want to move in a newdirection in the near future.



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Vardhman Group – A case

The Vardhman Group is the largest producerand exporter of yarns in India and hassizeable sales of gray and processed fabrics.

The group has strong presence in evolvedmarkets like USA, the EU and Japan.

Group production activities are spread over 18plants located throughout India with asupporting marketing and logistics networkacross the nation. With a workforce of over20,000, large production capacities and astrong international presence, the VardhmanGroup is a leading global player in the textile

sector.



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Vardhman Group – A case

The Group experienced immediate benefitsfrom the new solution: “The seamlessintegration and connectivity of all operationshas resulted in precisely monitoring customerservice and stock levels. This has led to anoverall reduction in inventory levels andcustomer satisfaction. Customer orders cannow be tracked from the shop floor towarehouses and shipping details. There is a

great improvement in customer satisfaction.”



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Evolution of ERP

1960s: software packages with inventorycontrol1970s: MRP systemsProduction schedule with materials management

1980s: MRPII systemsAdds financial accounting system

1990s: MRPII Integrated systems for manufacturing execution

Late 1990s: ERP Integrated manufacturing with supply chain



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In the beginning there was MRP

1960’s



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Then came closed loop MRP…

1970’s



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Then, Manufacturing ResourcePlanning (MRP II)

1980’s



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Integrated System Approach

Integrated and Consistent real-timeinformation

Supports coordination across businessfunctions

Integrated dataUniform maintenance. Changes affect multiple

systems

Common interfaces across systems

Client-server modelConsistent business processes

Single application

Late1990’s Andonwards



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Benefits of ERP

TangibleReduction in lead time

On-time shipments

Business growth

Improved cycle time

WIP reduction



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Benefits of ERP

IntangibleBetter customer satisfaction

Improved vendor performance

Increased flexibility

Reduced quality cost

Improved resource utility

Improved information accuracy

Improved decision making capability



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ERP Cost Components

Software

Hardware

Consulting

Training

ImplementationMaintenance



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Resources for online research

www.amrresearch.com

www.technologyevaluation.com

www.computerworld.com/softwaretopics/erp

www.erpfans.com

www.apics.org/resources/magazine/current

Online databases: ABI inform, ProQuest, FirstSearch, Wilson select plus

http://www.amrresearch.com/

http://www.technologyevaluation.com/

http://www.computerworld.com/softwaretopics/erp

http://www.erpfans.com/

http://www.apics.org/resources/magazine/current

http://www.apics.org/resources/magazine/current

http://www.erpfans.com/

http://www.computerworld.com/softwaretopics/erp

http://www.technologyevaluation.com/

http://www.amrresearch.com/

ERP - Session 1

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