By Gaurav Mehta & Mehul Raval
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BY GAURAV MEHTA & MEHUL RAVAL
What is ERP? Why ERP? How it works? How to implement it? Benefits of ERP. Other issues, concerns.
Enterprise Resource Planning (ERP), is a concept that addresses the enterprise needs taking the process view of an organization to meet the organizational goals, tightly integrating all functions(marketing, sales, finance, production and HR).
Enterprise-wide system which integrates the business functions and processes of an organization
Integration of business functions into one seamless application Links business processes
Utilizes a common information system It helps in effective forecasting, planning, and scheduling
Properly implementing ERP will give you a competitive advantage and help you run your business more effectively, efficiently, and responsively.
1960’s:
Inventory Control Systems
1970’s:
MRP: Material Requirement Planning
1980’s:
MRPII: MRP & Distribution
1990’s:
MRPII ERP with introduction of other business functions
Today:
Web Enabled ERP – Connecting ERP Externally
Obtain the right mix of people, processes and technology!!
On time deliveries
Reduced cycle time
Better Customer Satisfaction
Reduced overheads and inventory
Timely responsiveness ,customers and suppliers can be in online communication
Market share and image enhancement
Reduced quality costs
Direct Costs ◦ Represent a portion of total cost ◦ Hardware, Software and People on project ◦ Largest is personnel
Indirect Costs ◦ Back-filling positions ◦ Increasing salaries ◦ Total life cycle costs of ERP ◦ Maintenance and Upgrades
Training Integration and Testing Customization Data Conversion Consultants Post ERP depression Waiting for ROI
•Requirement Study •ERP Selection (Which module?) •Selection Of Implementation Partner •Project Sponsor •Project Leader / Project Team •ERP Awareness Program
Failures more due to human factors than the system itself
Inadequate user training (Ex EXCEL CROP CARE) Resistance to change and fear of unemployment Lack of discipline in feeding information to the system at transaction level(salesperson should enter his name, time and order no. date etc)
Inexperienced consultants (configuration incomplete)
Wrong package selection
for the industry and the
SAP Oracle Applications BAAN SSA Ramco Marshal IBM PeopleSoft JDE D&B
The Promise of Integration - SAP R/3 View of Manufacturing Sales and Distribution Sales planning Profit planning SOP Planned requirements Forecasts Customer order processing Shipping, billing, transport
Production Planning Demand management Master planning Rough-cut capacity planning MRP/Planned orders Order - Creation - Release - Confirmation Shop floor control Capacity leveling Process planning
Materials Management Direct requisition Purchasing Inventory management Goods receipt Material valuation Invoice verification Warehouse management
Quality Management Lot inspection Process charting
Preventive Maintenance Project system
Planned repair Emergency
Cost Complexity Inflexibility Dependence Integration Upgrades
Biggest ERP supplier 55% global share, and rising fast One of world’s most successful software firms Huge web of connections More than 1,000 “partners” Consulting firms Makers of add-on software, etc, More than 12,000 customers More than 10 million licensed users 22 versions tailored to specific industries
World-wide usage
Designed to satisfy the information needs for business sizes (small local to large all international) ◦ Multi-lingual ◦ Multi-currency
Designed to satisfy the information needs for all industries (industry solutions)
Enables a company to link it’s business processes
Ties together disparate business functions (integrated business solution)
Helps the organization run smoothly
Real-time environment
Scalable and flexible
Excel Crop Care Limited (ECCL) operates numerous offices, manufacturing plants and warehouses but was unable to automatically share key business information across the sites.
BUSINESS NEED: With continued growth planned, the company wanted to make enterprise-wide data sharing easier. Rather than upgrade its already complex custom applications, the company needed help migrating all its operations to a single centralized SAP solution.
SOLUTION: IBM Global Business Services helped ECCL design and implement an enterprise-wide my SAP solution to manage the company's supply chain operations. This enabled ECCL staff at any company location to obtain the real-time information they need to do their jobs.
BENEFITS: The company has realized cost savings up to 60,66,000 Rs annually. Process improvements and faster data sharing increase overall company efficiency and productivity, and a standardized platform will scale to match company growth.
SAP Enterprise System PCs, Laptops, etc.
Browser Client
Network
Internet Transaction Server
Presentation
Application
Application Servers
Database Database
Web Server
SAP Enterprise System
Pre-Sales Activity
Sales Order
Availability Check
Billing
Accounts Receivable
Goods Issued to Delivery
In Inventory
Plant or Warehouse YES
Inventory Postings
General Ledger Accounts
Goods from Production Order
NO
Planned Order
Delivery
Production Order
Completion Confirmation
Accounts Payable
SAP Enterprise System
Logistics • Materials Management (MM) • Sales and Distribution (SD) • Production Planning (PP) • Quality Management (QM) • Plant Maintenance (PM) • Service Management (SM)
Materials Management (MM)
Integration
Procurement Process (Procure-to-Pay) Purchase Requisition
Purchase Order Notify Vendor
Payment to Vendor Invoice Receipt
Vendor Shipment Goods Receipt
Sales and Distribution (SD)
Shipping Transport
Sales and Distribution (SD)
Sales Information System
Sales Support Master Data
Billing Foreign Trade
Sales Credit Mgmt.
Financial Accounting (FI)
Accounts Receivable
Financial Accounting (FI)
General Ledger
Fixed Assets Accounts Payable
Banks Special Purpose Ledger
- An Introduction to Accessing and Navigating the SAP R/3 System -
SAP Enterprise System
SAP Enterprise System
Table Client 400 400 400 410 410 410
User STEVE BOB JERRY STEVE BOB JERRY
Valid From Password ******** 1/1/2000 ******** 1/1/2000 ******** 1/1/2000 ******** 1/1/2005 ******** 1/1/2005 ******** 1/1/2005
Valid To 12/21/2000 12/21/2000 12/21/2000 12/31/2008 12/31/2008 12/31/2008
SAP Enterprise System
System Menus System Navigation
Transaction Name Transaction Icons Transaction Work Area
Status Messages
Create
Create a
ortcut
top sh
ession
icons Help i con Optio ns
a desk
new s
Scroll
Save Back E Cancxeit l Print Find/E xpand icons
Comm and Field
Enter
SAP Enterprise System
SAP Enterprise System
An SAP session is a window in which the user may perform a particular task Users may have up to nine sessions open at one time
SAP Enterprise System
System Messages • E = Error – An invalid entry has been made – The cursor moves to the field where the error has occurred
• W = Warning
– –
A possible error has been made The user can continue without changing
• I = Information – Feedback from the system
Q&A
What is ERP? Why ERP? How it works? How to implement it? Benefits of ERP. Other issues, concerns.
Enterprise Resource Planning (ERP), is a concept that addresses the enterprise needs taking the process view of an organization to meet the organizational goals, tightly integrating all functions(marketing, sales, finance, production and HR).
Enterprise-wide system which integrates the business functions and processes of an organization
Integration of business functions into one seamless application Links business processes
Utilizes a common information system It helps in effective forecasting, planning, and scheduling
Properly implementing ERP will give you a competitive advantage and help you run your business more effectively, efficiently, and responsively.
1960’s:
Inventory Control Systems
1970’s:
MRP: Material Requirement Planning
1980’s:
MRPII: MRP & Distribution
1990’s:
MRPII ERP with introduction of other business functions
Today:
Web Enabled ERP – Connecting ERP Externally
Obtain the right mix of people, processes and technology!!
On time deliveries
Reduced cycle time
Better Customer Satisfaction
Reduced overheads and inventory
Timely responsiveness ,customers and suppliers can be in online communication
Market share and image enhancement
Reduced quality costs
Direct Costs ◦ Represent a portion of total cost ◦ Hardware, Software and People on project ◦ Largest is personnel
Indirect Costs ◦ Back-filling positions ◦ Increasing salaries ◦ Total life cycle costs of ERP ◦ Maintenance and Upgrades
Training Integration and Testing Customization Data Conversion Consultants Post ERP depression Waiting for ROI
•Requirement Study •ERP Selection (Which module?) •Selection Of Implementation Partner •Project Sponsor •Project Leader / Project Team •ERP Awareness Program
Failures more due to human factors than the system itself
Inadequate user training (Ex EXCEL CROP CARE) Resistance to change and fear of unemployment Lack of discipline in feeding information to the system at transaction level(salesperson should enter his name, time and order no. date etc)
Inexperienced consultants (configuration incomplete)
Wrong package selection
for the industry and the
SAP Oracle Applications BAAN SSA Ramco Marshal IBM PeopleSoft JDE D&B
The Promise of Integration - SAP R/3 View of Manufacturing Sales and Distribution Sales planning Profit planning SOP Planned requirements Forecasts Customer order processing Shipping, billing, transport
Production Planning Demand management Master planning Rough-cut capacity planning MRP/Planned orders Order - Creation - Release - Confirmation Shop floor control Capacity leveling Process planning
Materials Management Direct requisition Purchasing Inventory management Goods receipt Material valuation Invoice verification Warehouse management
Quality Management Lot inspection Process charting
Preventive Maintenance Project system
Planned repair Emergency
Cost Complexity Inflexibility Dependence Integration Upgrades
Biggest ERP supplier 55% global share, and rising fast One of world’s most successful software firms Huge web of connections More than 1,000 “partners” Consulting firms Makers of add-on software, etc, More than 12,000 customers More than 10 million licensed users 22 versions tailored to specific industries
World-wide usage
Designed to satisfy the information needs for business sizes (small local to large all international) ◦ Multi-lingual ◦ Multi-currency
Designed to satisfy the information needs for all industries (industry solutions)
Enables a company to link it’s business processes
Ties together disparate business functions (integrated business solution)
Helps the organization run smoothly
Real-time environment
Scalable and flexible
Excel Crop Care Limited (ECCL) operates numerous offices, manufacturing plants and warehouses but was unable to automatically share key business information across the sites.
BUSINESS NEED: With continued growth planned, the company wanted to make enterprise-wide data sharing easier. Rather than upgrade its already complex custom applications, the company needed help migrating all its operations to a single centralized SAP solution.
SOLUTION: IBM Global Business Services helped ECCL design and implement an enterprise-wide my SAP solution to manage the company's supply chain operations. This enabled ECCL staff at any company location to obtain the real-time information they need to do their jobs.
BENEFITS: The company has realized cost savings up to 60,66,000 Rs annually. Process improvements and faster data sharing increase overall company efficiency and productivity, and a standardized platform will scale to match company growth.
SAP Enterprise System PCs, Laptops, etc.
Browser Client
Network
Internet Transaction Server
Presentation
Application
Application Servers
Database Database
Web Server
SAP Enterprise System
Pre-Sales Activity
Sales Order
Availability Check
Billing
Accounts Receivable
Goods Issued to Delivery
In Inventory
Plant or Warehouse YES
Inventory Postings
General Ledger Accounts
Goods from Production Order
NO
Planned Order
Delivery
Production Order
Completion Confirmation
Accounts Payable
SAP Enterprise System
Logistics • Materials Management (MM) • Sales and Distribution (SD) • Production Planning (PP) • Quality Management (QM) • Plant Maintenance (PM) • Service Management (SM)
Materials Management (MM)
Integration
Procurement Process (Procure-to-Pay) Purchase Requisition
Purchase Order Notify Vendor
Payment to Vendor Invoice Receipt
Vendor Shipment Goods Receipt
Sales and Distribution (SD)
Shipping Transport
Sales and Distribution (SD)
Sales Information System
Sales Support Master Data
Billing Foreign Trade
Sales Credit Mgmt.
Financial Accounting (FI)
Accounts Receivable
Financial Accounting (FI)
General Ledger
Fixed Assets Accounts Payable
Banks Special Purpose Ledger
- An Introduction to Accessing and Navigating the SAP R/3 System -
SAP Enterprise System
SAP Enterprise System
Table Client 400 400 400 410 410 410
User STEVE BOB JERRY STEVE BOB JERRY
Valid From Password ******** 1/1/2000 ******** 1/1/2000 ******** 1/1/2000 ******** 1/1/2005 ******** 1/1/2005 ******** 1/1/2005
Valid To 12/21/2000 12/21/2000 12/21/2000 12/31/2008 12/31/2008 12/31/2008
SAP Enterprise System
System Menus System Navigation
Transaction Name Transaction Icons Transaction Work Area
Status Messages
Create
Create a
ortcut
top sh
ession
icons Help i con Optio ns
a desk
new s
Scroll
Save Back E Cancxeit l Print Find/E xpand icons
Comm and Field
Enter
SAP Enterprise System
SAP Enterprise System
An SAP session is a window in which the user may perform a particular task Users may have up to nine sessions open at one time
SAP Enterprise System
System Messages • E = Error – An invalid entry has been made – The cursor moves to the field where the error has occurred
• W = Warning
– –
A possible error has been made The user can continue without changing
• I = Information – Feedback from the system
Q&A
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