Wu yunzhou

1.introduction

Winning in today’s business climate requires more than just providing high-quality, low-cost products to customers, when and how the customers want them. Customers and suppliers also require information that is fully integrated throughout the supply chain, and executives in manufacturing companies require the integration of their strategies and tactics into all facets of their companies, so that all people throughout the organization make the best decisions and take actions that consistently move toward achieving the corporate objectives. Enterprise Resource Planning (ERP)is the latest high end solution, information technology has lent to business application. The ERP solutions seek to streamline and integrate operation processes and information flows in the company to synergise the resources of an organization namely men, material, money and machine through information. Initially implementation of an ERP package was possible only for very large Multi -National Companies and Infrastructure Companies due to high cost involved. The incremental improvement in the information technology and the drastic reduction in prices of computers have made it possible even for the small organization to think about ERP systems.

What is ERP

Enterprise Resource Planning ERP is integrated, multi-module application software packages that are designed to serve and support multiple business functions.It attempts to integrate all departments and functions across a company onto a single computer system that can serve all those different departments particular needs.

Evolution of ERP

. The development of ERP has experienced a few phases, they are:

· Management Information Systems (MIS)

· Integrated Information Systems (IIS)

· Executive Information Systems (EIS)

· Corporate Information Systems (CIS)

· EnterpriseWide Systems (EWS)

· Material Resource Planning (MRP)

· Manufacturing Resource Planning (MRP II)

· EnterpriseResource Planning(ERP)

Why we need ERP?

There are three reasons why companies undertake ERP:

1. to integrate financial Data: As the CEO tries to understand the companys overall performance, he or she may find many different versions of the truth. Finance has its own set of revenue numbers, sales has another version, and the different business units may each have their own versions of how much they contributed to revenues. ERP creates a single version of the truth that cannot be questioned because everyone is using the same system

2. To standardize manufacturing processes Manufacturing often find that multiple business units across the company make the same widget using different methods and computer systems. Standardizing those processes and using a single, integrated computer system can save time, increase productivity and reduce headcount

3.To standardize HR information. —Especially in companies with multiple business units, HR may not have a unified, simple method for tracking employee time and communicating with them about benefits and services.

What does ERP integrate?

ERP integrates the following together:

· Database

· Applications

· Interface

· Tools

· BPR(Business Process Re-engineering)

  Problems Tackled By ERP Systems:

· Material shortages

· Productivity Enhancements

· Customer Services

· Cash Management

· Inventory Problems

· Quality Problems

  Core subsystems of ERP:

· Sales and Marketing

· Master Scheduling

· Material Requirement Planning

· Capacity Requirement Planning

· Bill of Materials

· Purchasing

· Shop floor control

· Accounts Payable/Receivable

· Logistics

· Asset Management

· Financial Accounting

  There are some leading ERP suppliers in the world wide market, they are:

· Baan

· CODA

· D&B

· IBM

· JD Edwards

· Marcarn

· Oracle

· Peoplesoft

· Platinum

· Ramco

· SAP

· SMI

· Software 2000

How does ERP work?

· ERP works like grease for information

· It eases the exchange of data among corporate divisions

· Unites all major business practices within a single family of software modules

· Modules run on client/server networks

· PC’s are connected to more powerful computers that feed them data

· Each module works separately performing specific data-processing functions

There is a simple example shown how ERP processes an customer order

1. Clerk enters order.

2. ERP checks the BOM module to see what parts are needed.

3. Inventory-management module automatically determines if enough material is on hand and sets up the purchasing procedure for the materials needed

Other modules determine that machines will be needed to make the “widgets”.

5. Finally, the shop floor module creates the work order.

6. Later, the billing module creates an invoice

Through the use of bar-codes, it is possible to track the progress of an order through every step of the manufacturing process which helps customer service respond to requests for early delivery or order status

Technologies employed by ERP

1.WorkFlow

2.Object Orientation

3.Client/Server

4.E-Commerce

5.Data warehousing

6.Internet

7.Outsourcing

8.Security

WorkFlow is extensively used in modern ERP system, automatically enforces company policies and procedures.

Object Orientation:primary object-oriented language used by ERP system is C++, Java

advantages: Encapsulation & Inheritance

Disadvantage: Designing object-oriented application is difficult

Client/Server:2-Tier Client server

central computer server/ PC Client

3-Tier Client server

Enterprise server, Application server, PC client

EDI/E-commerce:EDI(Electronic Data Interchange) is expensive, especially for small companies, due primarily to the expense of dialing EDI service provider

E-commerce : communicating data by internet, is inexpensive, some companies are already adapted for it with most of rest following behind .

Data Warehousing: OLTP/OLAP. OLAP(on line analytical processing) is the tool

That enables a person to “slice and dice” the data in an almost infinite variety of ways to find relationships that can provide the basis for better decisions.it can provide a high-level, aggregated view of the data by using MDBMS(multidimensional database management) tools. OLTP(on line transaction processing) are characterized by many users creating ,updating ,or retrieving individual records, OLTP databases are optimized for transaction updating.

Outsourcing: it means that the manufacturer does not to buy a license for the software , provide the hardware or database and son on, those services are all covered by the outsourcing services provider.

BPR & ERP

Business Process Reengineering is a pre-requisite for going ahead with ERP

The advantages of implementing BRP are:

1).brings out deficiencies of the existing system

2)and re-organizing the human resources as well as divisions and departments in the organization to maximize productivity

in general, take the following six steps to implement BPR:

· Study the current system

· Design and develop new systems

· Define Process, organization structure and procedure

· Develop customize the software

· Train people

· Implement new system

How do companies organize their ERP projects?

Franchising strategy—This approach suits large or diverse companies that do not share many common processes across business units. Independent ERP systems are installed in each unit, while linking common processes, such as financial book keeping, across the enterprise.

This has emerged as the most common way of implementing ERP

Slam-dunk—ERP dictates the process design in this method, where the focus is on just a few key processes, such as those contained in an ERP systems financial module.

The slam-dunk is generally for smaller companies expecting to grow into ERP.

Cost & Time

A organization named Meta Group recently made a study among 63 small, media and big companies to look at the e TCO(total cost of Ownership) of ERP, the result shows that

The Average TCO is $15 million, and if install and use the ERP system correctly, the time consuming from installing to getting payback is about 3 years. So it is a long way to go for ERP can work efficiently and result good ROI for companies.