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ERPEnterprise Resource Planning
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A Typical Scenario
Isla n d s o f In fo rm a tio n
&D ifficu lt to g e t tim e ly a ccu ra te in fo rm a tio n
Po o r in fo rm a tio n co n n e ctivity b e tw e e n d iffe re n to rg a n iza tio n a l u n its e sp e cia lly lo ca tio n s
, ,In a b ility to d rill u p a n d d o w n la ck o f g ra n u la rity,la ck o f kn o w le d g e o f ro o t cau se la ck o f in fo rm e d
( )bad decisions
&H e te ro g e n e o u s H a rd w a re S o ftw a re p la tfo rm s
S tick in g w ith o ld e v e n o b so le te te ch n o lo g y
R e sista n ce to ch a n g e in clu d in g E R P h o rro r sto rie sa n d N IH
, ,C ost of ch a n g e la ck o f in ve stm e n t fu n d in g
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Information Islands
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Disparate System Architecture
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Characteristics of UsefulInformation
R e le va n t ,reduces uncertainty improves decision making,and prediction confirms or corrects their expectations Reliable ,free from error accurately reflects the
organization
Complete does not omit important aspects of events itmeasures or reports on
Timely ( ) ,provided when and where it is needed!especially for forecasting eg the 3 day close
Understandable useful and intelligible format Verifiable would it withstand an audit?
-Accessible ( )provided when and where it is needed and TRANSPARENT
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What is ERP?
-facilitates company wide integrated,information sharing covering two to all
functional areas
,addresses the Enterprise s needs taking aprocess view of the whole organization
-Enables Enterprise wide goal congruenceby integrating functions under a common
platform
utilizes a single integrated database to,aid in data integrity single holistic
views and therefore improved service
,ERP is a software solution which
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The Origin: MRP vs. ERP
Manufacturing management systems haveevolved in stages from a simple means ofcalculating materials requirements to theautomation of an entire enterprise
Around 1980, over-frequent changes insales forecasts, entailing continualreadjustments in production, as well asinflexible fixed system parameters, ledMRP (Material Requirement Planning) toevolve into a new concept : ManufacturingResource Planning (or MRP2) and finally
the generic concept Enterprise Resource
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A n In te g ra te dA ccou n tin g S yste m
C o re E R PFu n ctio n s
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The ERP Evolution
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The Current Generation
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ERP II
Coined in the early 2000s, is often usedto describe the next generation ofERP software.
This generation is web-based andallows both employees and externalresources (such as suppliers and
customers) real-time access to thesystem's data.
EAS Enterprise Application Suite is anew name which include (almost) all
segments of business using COTS
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Manufacturing Engineering, bills of material,scheduling, capacity, workflow management,quality control, cost management, manufacturingprocess, manufacturing projects, manufacturing
flow Supply chain management Order to cash,
inventory, order entry, purchasing, productconfigurator, supply chain planning, supplierscheduling, inspection of goods, claim processing,
commission calculation Financials General ledger, cash management,
accounts payable, accounts receivable, fixed assets
Project management Costing, billing, timeand expense, performance units, activitymanagement
ERP Functionality (1)
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ERP Functionality (2)
Human resources , ,Human resources payroll, ,training time and attendance benefits
Customer relationship management , , ,Sales and marketing commissions service customercontact and call center support
Data services " - "various self service, , /interfaces for customers suppliers and or employees
Access control management of userprivileges for various processes
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ERP Advantages
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ERP Drawbacks
C o stly so ftw a re
La rg e in fra stru ctu re to im p le m e n t
D e d ica te d te a m to im p le m e n t
Tim e co n su m in g to im p le m e n t
S p e cia lize d p e o p le to m a in ta in
C u sto m izatio n is n o t re co m m e n d e d b u t n e e d s to
b e d o n e to su it o rg a n izatio n a l n e e dE x te n sive u se r tra in in g
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The Supply Chain:
Consumer
Retail
Distributor
Manufacture
MaterialsSupplier
Finance Balance sheetCapital Costs
ControlProfit/Loss
Machines Operating resources Human resources
anaging Resources
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, .Pharmaceuticals Inc
Inbound Logistics
Operations
Outbound Logistics
&Marketing Sales
Service
ERP: The Supply Chain
.Smith Supply CoInbound Logistics
Operations
Outbound Logistics&Marketing Sales
Service
Customer PharmacyInbound Logistics
Operations
Outbound Logistics&Marketing Sales
Service
The linking of these separate value chainscreates a larger system known as a supply
chain.
Information technologycan facilitate
synergistic linkagesthat improve theperformance of each
.company s value chain
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G Steele Case Study
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G Steele Case Study
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Key Benefits
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Key Success Factors
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Key Success Factors