ERP - Enterprise Resource Planning ( An Introduction)

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Presentation on theme: "ERP - Enterprise Resource Planning ( An Introduction)"— Presentation transcript:

1 ERP - Enterprise Resource Planning ( An Introduction)

2 Definition Of ERP Software 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

3 What is ERP ? Facilitates Company-wide integrated Information Systems Covering all functional Areas and processes. Performs core Corporate activities and increases customer service augmenting Corporate Image. Organizes & Optimizes the data input methodologies systematically.

4 A process map

5 Why ERP ?

6 Increase in sales - Say 30% Reduce Procurement Cost - say by 5-10 %
Profitability You have Two Choices : Increase in sales - Say 30% OR Reduce Procurement Cost say by 5-10 %

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

8 Demands on the Industry
Better products at lower costs Tough competition Need to analyze costs / revenues on a product on customer basis Strength to respond to changing business requirements More informed management decision making

9 What are your Problems Areas
Unable to get accurate, timely information Applications not complete for existing business practices Modifications are time consuming or not feasible

10 A Typical IT Story Finance Manufacturing location 1 My growth
will be OK . No? Corporate office Manufacturing location 2 Sales Group

11 ERP - The Enabler

12 What is that ERP enables ?
Systematic Look into your Systems & procedures Optimizing the processes Enables you to adapt yourself to new technologies Discipline across the functions

13 What does ERP integrate ?
Database Applications Interfaces Tools

14 What drives ERP ? Business Customer Satisfaction
Business Development - new areas, products, services Ability to face competition Efficient processes required to push the company to top gear IT Present Software does not meet growing business needs Legacy systems difficult to maintain, Y2K Problem , Euro currency or upcoming issues Obsolete hardware/software difficult to maintain

15 Subsystems of ERP Logistics Bill Of Materials Sales & Marketing
Master Scheduling Capacity Planning Purchasing Shop Floor Control Accounts Payable/Receivable HR

16 Understanding ERP

17 Integration of Information Systems
IS messages IS messages Manufacturing Head Quarters Marketing/Sales Local purchasing, invoice verification Inventory management shipping and billing Profit/loss Capacity utilization Information Systems: Project Mgmt Inventory Purchasing Sales Budget Cash Management Sales, shipping and billing Purchasing of trading goods Inventory Management Customer service

18 Enabling Best Business Practices
Customer Business Engineering Workbench Customer Require- ments Supplier’s Reference Model Best Business Practices New Business Concepts New Technologies

19 Changes of Customer Information
Change customer master data Please Accept my new order for 1000 more sets Customer Representative Launch Workflow Increase credit limit Schedule customer visit Prepare production Credit Manager Product Manager Sales Manager

20 Go Ahead with ERP

21 Understand, Simplify, Automate
The USA Principle Understand, Simplify, Automate Automate the Process Understand Existing Practices Simplify Processes by Eliminating waste Diagramming Story-boarding Brain storming Eliminating Combining Rearranging ERP

22 ERP Selection Check whether all functional aspects of your Business segment are covered Check whether all the business functions and processes are integrated Check whether all latest IT trends are covered Check whether the vendor has customizing & implementing capabilities Check the Service options available Check your purse & calculate ROI

23 Prepare Base for ERP Do not start without Management commitment
Allocate sufficient funds Identify Core Project Team Select specialists from all functional areas Evaluate and select ERP package Evaluate Implementation Partner Make an Implementation Plan Present plan to Management Committee for sanctions Present plan to Employee groups for feedback/acceptability Plan for User Training Plan for Future upgrades

24 Define Requirements Determine the hardware required
Analyze the existing Processes Fine tune the processes to be in line with those of ERP defined Analyze effect of system changes. Prototype and present Refine the prototype & freeze the specifications

25 ERP Implementation Commitment from Management
Form a task force with personnel from all functional Areas Take care of Hardware requirements Step-by-step rather than big-bang introduction Be patient. ERP implementation takes Time.

26 ERP Involves Project Planning
Business & Operational Analysis, including Gap Analysis Business Process Re-engineering (BPR) Installation & Configuration Project Team Training Business Requirements Mapping to Software Module Configuration System Modification and Interfaces Data Conversion Custom Documentation End User Training Conference Room Pilot Acceptance Testing Production Post-Implementation Audit/Support

27 Design & Customization
Implementation Approach Phase Tasks Deliverables Detailed Discussions Design & Customization Implementation/ Prepare to Go Live Production/ Go Live Project Initialization Evaluation of current processes, business practices, requirements Set-Up Project Organization Map Organization Map Business Processes Define Functions and Processes ERP S/w Configuration Build ERP System Modifications Create Go-Live Plan & Documentation Integrate Applications Test the ERP Customization Train Users Run Trial Production Maintain systems Accepted norms & Conditions Project Organization Chart Identify Work Teams Organization Structure Design Specification Process Flow Diagrams Function Model Configuration Recording Systems Modification Testing Environment report Customization Test Report Implementation Report Reconciliation Reports Conversion Plan Execution

28 Advantages Of ERP

29 Advantages Of ERP Package
Highly Graphics based User Interface. Zero Down time/ planned down time. Readymade solutions for most of the Problems. Only Customization required. Integration of all functions ensured. ROI earlier than the software developed in-house. Easy enterprise wide information sharing. Suppliers and Customers can be on-line communication. Knowledge transfer between industries guarantees innovation. Automatic adaptation to new technology.

30 Decide Make Or Buy !

31 In house Development ERP package
Project Development takes time . Ready made Projects. Reinventing the wheel. Needs only customization Process specific to your industry Optimized Business practices followed are implemented Documentation may not be present Documentation is part of system EDI implementation modifications EDI Compatible. Universally accepted to be taken care of Enterprise implementation is The package itself is designed as difficult as each unit follows Enterprise Package. different S/W option Latest Developments to be studied Constant Updates on Technology as and when they are introduced. and Processes assured

32 Summary Customer satisfaction Optimum utilization of resources
Seamless integration between Functions Reduced overheads & inventory Timely responsiveness Market share & image enhancement Faster design to manufacturability Keep up with technology changes Only way for integrated systems for a client with multiple locations

33 Customer Relationship Management (CRM)

34 Definition Customer relationship management (CRM) covers methods and technologies used by companies to manage their relationships with clients. Information stored on existing customers (and potential customers) is analyzed and used to this end. Automated CRM processes are often used to generate automatic personalized marketing based on the customer information stored in the system.

35 What is CRM? It is a “comprehensive approach which provides seamless integration of every area of business that touches the customer- namely marketing, sales, customer services and field support through the integration of people, process and technology” CRM is a shift from traditional marketing as it focuses on the retention of customers in addition to the acquisition of new customers “The expression Customer Relationship Management (CRM) is becoming standard terminology, replacing what is widely perceived to be a misleadingly narrow term, relationship marketing (RM)” .

36 Purpose To create value for the customer and the company.
Competitive advantage.

37 Importance “Today’s businesses compete with multi-product offerings created and delivered by networks, alliances and partnerships of many kinds. Both retaining customers and building relationships with other value-adding allies is critical to corporate performance” . “The adoption of CRM is being fuelled by a recognition that long-term relationships with customers are one of the most important assets of an organisation”

38 What does CRM involve? CRM involves the following :
Organisations must become customer focused Organisations must be prepared to adapt so that it take customer needs into account and delivers them Market research must be undertaken to assess customer needs and satisfaction

39 “Strategically Significant Customers”
Customer relationship management focuses on strategically significant markets. Not all customers are equally important . Strategically significant customers need to satisfy at least one of three conditions : Customers with high life-time values (i.e. customers that will repeatedly use the service in the long-term) Customers who serve as benchmarks for other customers Customers who inspire change in the supplier

40 Information Technology and CRM
Plays a pivotal role in CRM . Technological approaches involving the use of databases, data mining and one-to-one marketing can assist organisations to increase customer value and their own profitability This type of technology can be used to keep a record of customers names and contact details in addition to their history of buying products or using services This information can be used to target customers in a personalised way and offer them services to meet their specific needs This personalised communication provides value for the customer and increases customers loyalty to the provider

41 Information Technology and CRM: Examples
Here are examples of how technology can be used to create personalised services to increase loyalty in customers: Phone calls, s, mobile phone text messages, or WAP services. Cookies Loyalty cards CRM software- “Front office” solutions

42 Benefits of CRM Reduced costs Increased customer satisfaction
Growth in numbers of customers Maximisation of opportunities Increased competitor information Highlighting poor operational processes Long term profitability and sustainability

43 Implementing CRM A CRM system should: - Identify factors important to clients. - Promote a customer-oriented philosophy - Adopt customer-based measures - Develop end-to-end processes to serve customers - Provide successful customer support - Handle customer complaints - Track all aspects of sales - Create a holistic view of customers' sales & services information

44 Uses of CRM Providing online access to product information and technical assistance Identifying what customers value and devising appropriate service strategies Providing a mechanism for handling problems and complaints Providing a mechanism for correcting service deficiencies Storing customer interests in order to target customers selectively Providing mechanisms for managing and scheduling maintenance, repair, and on-going support Providing mechanisms for managing and scheduling follow-up sales calls

45 Technical Considerations
Scalability Communication channels Workflow Assignment Database Customer privacy

46 Compiere Open Source ERP & CRM

47 About Compiere (Overview)
Compiere ( is the world’s No.1 Open Source ERP+CRM application. It is a comprehensive solution for small-to-medium sized enterprises (SME’s). Compiere is a fully-integrated ERP, CRM, supply chain management and accounting system. It works on business processes rather then departmental boundaries and is based on advanced technology which allows users to get new functionality fast. Scalable, flexible, extensible and fully customizable. As a Compiere user, you have the option of customizing Compiere functionality as per your needs. ‘Safe-Fail’ architecture for 100% availability. It is an extremely competitive application and has the best ROI of any ERP available in the market.

48 Who Can Use Compiere? (Users)
Small-to-Medium Enterprises (SME’s). Distribution Chains. Franchise Networks. Outlets of Manufacturers. Application Service Providers. Used in varied industries such as Footwear, Garment and Apparel Manufacturing, OEM Manufacturers, Tire Manufacturers, Drug Manufacturers and Logistics Companies.

49 Compiere Functionality
Compiere is based on business process rather than departmental boundaries.

50 Quote to Cash

51 Requisition to Pay

52 Customer Relations Management

53 Partner Relations Management

54 Supply Chain Management

55 Performance Analysis

56 Web Store

57 Compiere Modules The main modules of Compiere are: Business Partners
Products Purchasing Material Management Sales Performance Analysis (Accounting) Information and Reporting

58 Warehouse Control Compiere supports the following features of advanced warehousing: Multiple physical warehouses with each physical warehouse broken into multiple logical warehouses such as receiving, quality assurance and testing,bulk storage and picking Stock in each warehouse at a bin locations referenced with a 3- axis (aisle,bin and level) user defined pointer Multiple Units of Measurement (e.g. store in Boxes and sell in Pieces) Picking priorities to ensure that picking takes place from bin locations in a prescribed sequence User priority for shipments or receipts Inventory movements between bin locations and between warehouses can be configured to produce appropriate shipping documentation and manage ‘in transit’ stock

59 Stock counts and stock valuation adjustments can be processed in parallel with sales activity. The difference between the book stock quantity and the count quantity is processed so that sales activity continues in parallel with the stock take data entry process Stock used for internal purposes is written off with the stock record decrement and consequent financial entries recorded in the Financial Ledger “Available to promise” is calculated after allowing for reservations for committed future customer shipments and expected vendor receipts Inventory replenishment rules generate the Material Replenishment report. This, inturn, can be configured to automatically generate Requisitions and Purchase Orders Shipment documentation created in batches or individually on a per order basis. Goods received from vendors can be compared directly with the purchase order or the vendor invoice.

60 Distribution Process that allows you to distribute a set quantity of a product to a list of Business Partners, based on the ratios that you define. Comprised of two entities :- - Distribution List defines the BPs, their ratio and any minimum quantity. - Distribution Run defines the products to be distributed, the quantity, the Distribution List and document type to be created.

61 Snapshot (a) The Login screen:

62 Snapshot (b) Preference setting screen:

63 Snapshot (c) Main Window:


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