erp supplychain

7/31/2019 ERP SupplyChain

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5-Aug-12 Ashis Mitra 1

ERP An Introduction

St. Xaviers college, Kolkata

By

Ashis Mitra


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Enterprise

Resource

Planning
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ERP

General Concepts


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What is ERP?

facilitates company-wide integrated information

systems, covering all functional areas

performs core Corporate activities and increasescustomer service augmenting Corporate Image


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The Current Scenario

Islands of Information

Difficult to get timely & accurate information

Heterogeneous Hardware & Software

platforms & practices

Poor connectivity between different

organizational locations

Sticking with obsolete technologyResist to change

Lack of proven man-power to develop

integrated software


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Information Islands


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ERP - Definition

Software solution that addresses theEnterprise needs, taking a process view of

the overall organization to meet the goals,by tightly integrating all functions andunder a common software platform


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Why ERP?

For Management to know what is happening

in the company

One solution for better Management

For cycle time reduction

To achieve cost control & low working capital

To marry latest technologies

To shun the geographical gaps

To satisfy the customers with high expectations

To be Competitive & for survival


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Evolution of ERP

1960s - Systems Just for Inventory Control

1970s - MRP Material Requirement Planning(Inventory with material planning & procurement)

1980s - MRP II Manufacturing Resources Planning(Extended MRP to shop floor & distribution Mgnt.)

Mid 1990s - ERP Enterprise Resource Planning

(Covering all the activities of an Enterprise)2000 onwards ERP II Collaborative Commerce(Extending ERP to external business entities)


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Benefits of ERP

Help reduce operating costs and transaction costs

Facilitate Day-to-Day Management

Support Strategic Planning Support supply chain management

quicker response time

improve the accuracy of the information

improve the efficiency of the supply chain

improve production

improve supplier relationship and reliability

bargaining power of trading partners


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ERP implementation challenges

Lack of top management commitment

Lack of MRP II education for the users of the system

Inaccurate data

Poorly managed MPS

Over-sophistication/Addition of fancy options

Lack of user control

Time consuming implementation process delayed payback

Behavioral problems


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Why Implement an ERP?

To support business goals

Integrated, on-line, secure, self-service processes for

Business, thereby Integrating all the functions

Eliminate costly mainframe/fragmented technologiesImproved Integration of Systems and Processes

Lower Costs

Empower Employees

Integrating the systems running in all the locationsEnable Partners, Customers and Suppliers

Transparency of information using a single data sourceacross the organization


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How to Implement an ERP?

Obtain the right mix of , and!

Project Structure

Should be aligned to processes

Implementation Process (outlined in detail)

Adapt your processes to those of the ERP.

HardwareSoftware

Integrated Systems


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BPR & ERP

Just automating the existing business practiceswill not help ERP to achieve the anticipated results

Business Process Re-engineering [BPR] brings out the

deficiencies of the existing setup

BPR and ERP will give way to implement newsystems and the long pending improvements in theexisting systems

BPR may be time consuming but the scope can berestricted & controlled by the Management


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Stages of an ERP Implementation

Pre-implementation stage Implementation stage Post Implementation stage

BPR - Steps

Understand Simplify/Improve Automate

Understand theexisting systemsassociated with all

the functionalities

Draft & frame thepossibilities & ways tosimplify or Improve or

eliminate the processes

Implement withthe help of ERP


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Pre Implementation Stages

The implementation of an enterprise resource planningsystem was an expensive, difficult and time taken task.

In-house/outsource development.

Adaptation of standardize package

Representative from Senior ManagementDepartment ManagersInformation System ManagerConsultant


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For the relevant personnel to understandintegrated computer system.For the relevant personnel to understand ERP

and its advantage and disadvantage.

Drivers

Inhibitors

Operation requirement of individual departmentComputer access and control of individual staff within

different department.ReportsData exchange between individual department as well as

outside parties.Physical layout of computer equipments

Extract the critical and/or representative data from themajor operation (department) required for the

selection of standardize package


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Functions and features should capable for the futuredevelopment (atleast can lasted for three years) of

the organizations.Ability of the solution provider on future development and

maintenance.Data and procedures set up and standardization.Implementation methods and qualities.


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Implementation Stages

The sample schedule in this section is at a high level but indicates relativetime frames for individual tasks and overall project accomplishment. It isintended to suggest the type of tasks that make up the schedule.

You should break the high level tasks into detailed steps complete withresponsibilities and timeframes that fit your company's specific project.

Who are the resistance individuals and/or groups?

What are their needs?What beliefs and values do they have?What are their interest?Effective communicationProject management

Project championMonitoring and evaluation of performance


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Experience has shown that selection and implementation ofthese types of systems takes 6 months or less depending on

what is being installed and the condition of the

company's data.This depends on the system and the user's motivation.

One of the most important tasks in implementing an ERPsystem is getting the information or data that the

system requires in a condition that will allow the systemto function properly.

Another important area that needs specific attention ispreparation of the physical site for acceptance of

the new system.Here again the magnitude of this task is dependent on whatis being installed and the current condition of the facility.

However, the following items usually will needattention as a result of the system implementation -


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Converting and loading all required data into the newsystem is a formidable task. Before you begin it is

advisable to understand the magnitude of the entire

task.As part of your system search be sure to understand from

the vendor what assistance they can offer yourparticular conversion effort.

If you are converting from a computerized system, find out

if they have conversion programs that can formatand move the data from your old system to the new.If not, ask what other options are available.It is important to understand the total logistics of this task.


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ERP Options

OPTION 1 MAKE [Using Internal resources]

Developing a custom-built ERP package, specific to therequirements of the organization, with the help of thein-house IT department

OPTION 2 - BUY

Going for Tailor-made ERP packages available in the market likeSAP, Oracle applications, Baan, PeopleSoft etc.

OPTION 3 MAKE [using External resources]

Developing a custom-built ERP package, specific to therequirements of the organization, with the help of asoftware solution provider


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Preparation Phase

Framing ERP Implementation Strategies

Formation of Apex & Steering committees

Functional & IT team formation

Training on ERP functions & features

Scope finalization

GAP analysis

Action plan to resolve the gaps


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Key ProcessIntegration

via ERPProductLifecycle

Management

Supply ChainManagement

CustomerManagement

SupplierCollaboration

DesignPartners

Consumersand Channels

Beyond ERP
http://www.iconbazaar.com/computer/server03.gif


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R/3

FIFinancial

Accounting

COControlling

PSProjectSystem

WFWorkflow

ISIndustry

Solutions

MMMaterials

Mgmt.

HRHuman

Resources

SDSales &

Distribution

PPProduction

Planning

QMQuality

Management

PMPlant Maintenance

SMServiceManage-

ment Integrated SolutionClient / ServerOpen Systems

ECEnterpriseControlling

AMFixed Assets

Mgmt.


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Supply Chain Process

Customer Order Picking Goods Issue

BillingAccounts ReceivableFinal Payment


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The Critical Success Factors

Clear Vision & support of the Management Capabilities of the software development vendor Scope & Expectations finalization towards

meeting the ERP concepts Strict implementation schedules & periodical

monitoring The involvement of the IT & functional teams


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