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ERP

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ERP – General Concepts E

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2. Evolution

3. Why ERP?

4. Definition

5. Expectations

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THREE KEY POINTS

ERP

ENTERPRISE RESOURCE PLANNING

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Enterprise resource planning (ERP) is the industry term used to describe a

broad set of activities supported by multi-module application software that

helps a manufacturer or other business manage the important parts of its

business. These parts can include product planning, parts

purchasing, maintaining inventories, interacting with suppliers,

providing customer service, and tracking orders. ERP can also include

application modules for the finance and human resources aspects of a

business.

Some of the bigger players in the ERP outsourcing market are SAP,

Peoplesoft, and J. D. Edwards. New comers include Oracle, IBM, and

Microsoft.

MEANING OF ERP

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What is ERP?

ERP is a solution, which

facilitates company-wide integrated information systems, covering all functional areas

performs core Corporate activities and increases customer service augmenting Corporate Image

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FUNCTIONS OF MANAGEMENT

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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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ERP – Expectations

Integrating all the functions

Integrating the systems running in all the locations

Transparency of information using a single

data source across the organization

Software must be responsive Modular

Flexible

Easy to add functionalities

Provide growth path

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Evolution of ERP

1960’s - Systems Just for Inventory Control

1970’s - MRP – Material Requirement Planning

(Inventory with material planning & procurement)

1980’s - MRP II – Manufacturing Resources Planning

(Extended MRP to shop floor & distribution Mgnt.)

Mid 1990’s - 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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Information Islands

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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 technology

Resist to change

Lack of proven man-power to develop

integrated software

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ERP – Options

OPTION 1 – MAKE [Using Internal resources]

Developing a custom-built ERP package, specific to the

requirements of the organization, with the help of the

in-house IT department

OPTION 2 - BUY

Going for Tailor-made ERP packages available in the market like

SAP, Oracle applications, Baan, PeopleSoft etc.

OPTION 3 – MAKE [using External resources]

Developing a custom-built ERP package, specific to the requirements of the organization, with the help of a software solution provider.

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ERP Product selection Criteria

Goal: To select the

Most Suitable Software

Package Solution 5 Strategic

Requirement

Levels

Functionality

Technology

Vendor

Support

Costs

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How can Engineers benefit from

ERP systems ?

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Usesful SAP Modules for

Engineers

MM- Material Management Better Procurement Handling

Organized Inventory Management

Easy Purchase Organization

Faster Storage Location

PM – Plant Maintenance Maintenance Order Management

Equipment and Technical Objects Coordination

Preventive Maintenance

Workflow Scenarios

Work Clearance Management

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Istanbul Fast Ferries (IDO) Uses

SAP Software

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SAP CENTER

EMPLOYEE

PASSENGER

PASSENGER PASSENGER

FUEL

MAINTENANCE

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Istanbul Fast Ferries (IDO)

Annually 91 million passanger

Annually 5,5 million vehicles

Daily 1,200 navigation capacity

90 Ships

82 Terminals

3,200 personel

314 Million YTL endorsement

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SAP Systems arranges relationship between;

shipping conditions,

route determination,

shipping point,

employee conditions,

fuel supply,

maintenance

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Controlling Module (CO)

IDO passenger can send SMS to IDO

SAP system and get the information

about shipping route times.

This process is a service of Controlling

Module.

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OUTPUTS of ERP Systems

DOCUMENTS

Proposal

Orders approval

Delivery plans

Shipping papers

Warehouse check list

Material document

Accounting document

Delivery/shipping document

Invoice

Dept & credit doc.

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The Cost of ERP Systems

Major suppliers are SAP AG, Peoplesoft,

Oracle, and Baan. Also smaller PC based

suppliers.

Costs for larger ERP systems range from

hundreds of thousands to several million

dollars.

Outside consultants are usually involved in

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The Cost of ERP Systems

Consultant costs can run up to 3 times the

cost of the system itself according to a Gartner

Group study.

Added costs also include additional people,

new computer hardware, and the cost to

develop a new, integrated database

Successful implementation requires

leadership and top management

commitment to a vision for the business

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ERP Software Companies

& Marketshares

SAP; 15,6

Peoplesoft;

4,9

Oracle ; 4,8

Baan; 3

CA; 3

JDE; 2,2

SSA; 2,1

GEAC; 2

IBM; 1,8

JBA; 1,7

Others ; 59

Software Market Share

SAP 15.6

Peoplesoft 4.9

Oracle 4.8

Baan 3.0

CA 3.0

JDE 2.2

SSA 2.1

GEAC 2.0

IBM 1.8

JBA 1.7

Others 59.0

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How ERP systems are

implemented within companies?

ERP Software Companies start

analysing the prospective company(s),

identifing their individual needs.

Setup of ERP systems

For Mid-size companies 5-12 months

Large Companies 6-18 months

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Secretary’s New printer

application

Transfer to

Accounting Office

Example: Before ERP Systems

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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

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VENDOR REVENUE(NATIVE

CURRENCY)

YEAR

SAP 9.4 billion EUR 2006

Oracle Applications 14.38 billion USD 2006

Info global solutions 2.1 billion USD 2006

The Sage Group 935.6 million GBP 2006

Microsoft Dynamics 44.2 billion USD 2006

Unit 4 Agresso 352.6 million EUR 2005

CDC Software 409.1 million USD 2008

Lawson Software 390.776 million USD 2006

Epicor 384.1 million USD 2006

Visma 1,907 million NOK 2005

IFS 288 million USD 2005

QAD 225 million USD 2006

Consona Corporation 130 million USD 2007

COA Solutions Ltd 50.5 million GBP 2007

Net Suite 67.2 million USD 2006

ABAS Software 45 million EUR 2006

Ramco Systems 2,648 million INR 2006

CDC Software 14.2 million EUR unknown

VENDORS OF POPULAR ERP SOFTWARE

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Solutions of ERP

Financial Management

Inventory Management

Purchasing

Sales Management

Production Planning

Advanced Visual Planning

Manufacturing Management

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In this real case there the benefits of

the ERP systems

Online Data Flow decreases the process time

Fast & Online Confirmation

Less Paperwork

No need for folder storage

Database Security

Less Employee needed

Easy Financial Management

Better Inventory Management

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ERP PACKAGE LANGUAGE BASE

Adempiere Java

BlueErp PHP

Compiere Java

Dolibarr PHP

ERP5 Python

GNU Enterprise

GRR (software) PHP, MySQL

JFire Java

Kuali Foundation

LedgerSMB

OFBiz Apache, Java

Openbravo Java

OpenERP Python

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Summary

Optimum utilization of resources

Customer satisfaction

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

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Open

Session

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Thanks for your

Participation &

Co-operation

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THANK

‘U’