ERP

Evolution of ERP1960s - Materials Requirements Planning (MRP I)Late 1970s To Early 1980s - Manufacturing Resource Planning (MRP II)Today Enterprise Resource Planning (ERP) system

Vendors

Customers

MRP MRP II ERP Stage 1 ERP Stage 2

Customers

Vendors

Customers

Vendors

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Perception of ERP

ERP system has following technical enhancements:

Graphical User Interface (GUI)Relational databaseUse of 4th Generation languagesUse of Computer Aided Software Engineering (CASE) tools in developmentClient / Server architectureOpen system portability

Expectations from ERP

GENERIC BENEFITS:Integration - Data & CommunicationFlexibilityDesigned for all types of businessWorldwide UsageInteractive ProcessingOpen System

Expectations From ERP

• Availability of the best International Practices

• Availability of International Expertise to address issues

• On-line Service Support• Scalability of Functionality• Phenomenal Computational Power• Excellent Data Transfer Facility

Expectations from ERP

TANGIBLE BENEFITS:• Increase in Sales • Increase in Productivity• Reduction in Purchase Cost and

Purchase Lead Times • Reduction in Inventory Levels• Reduction in Overheads

Expectations from ERP

INTANGIBLE BENEFITS:• Faster Response to Customer Needs• Increased Accountability throughout the

Organization• Improved Resource Utilization• Improved Information Accuracy• Availability of Time• Quality of Work and Work Culture• Do the Things Right the First Time• Improved Co-ordination between

Departments

Critical Success Factors Top Management Vision Top Management Mission Top Management Commitment Spare the Un-sparable resources to the Core Team Complete Empowerment of the Core Team

members Capability of HANDLING Complete Empowerment Adequate infrastructure Organization Culture :Caring, Sharing & Learning

Environment

Critical Success Factors

Performance Measure Performance targets Appropriate Technology: LAN, WAN, H/W Correct ERP Package Selection Experienced Consultants Ownership Team Spirit: One for All & All for One

(Complementing & Supplementing)

ERP Components Hardware Software Networking: LAN & WAN Change Management Challenges :

Organization Structure Organization Processes Training

Strategic Information Flow Data Management

Implementation Methodology

ERP Solution

Enterprise Resource Planning Integrated systems Examples

SAP PeopleSoft Oracle Financials

Basic features included

Accounting Purchasing HRM Investment

management

International environment Multiple currencies Multiple languages Procedures and practices Follows local (national) rules Follows consolidation rules Example

U.S. firm with European subsidiaries.

Data is entered once European reports are generated

for subsidiaries following local rules

Results are converted and consolidated to U.S. firm following international and U.S. rules

SAP Based in Germany,

now worldwide Support for

international transactions and multinational firms

Runs on multiple database and hardware platforms

Can handle large and small companies

Expensive, but price is relative.

Financials Logistics Human resource

management

SAP Financials

Treasury Cash management Treasury management Market risk management Funds management

Enterprise Control Executive information

system Business planning and

budgeting Profit center accounting Consolidation

Financial Accounting General ledger Accounts

receivable/payable Special ledgers Fixed assets Legal consolidation

Investment Management Investment

planning/budgeting/control Depreciation

forecast/simulation/calculate

Controls Overhead cost Activity based costing Product cost Profitability analysis

SAP Logistics Purchasing Materials

management Manufacturing Warehousing Quality management Plant maintenance Service management Sales Distribution

Product data management

Master data management Design and change process Product structure Development projects

Sales and distribution Sales activities Sales order management Shipping and

transportation Billing Sales information system

SAP Logistics Production planning

and control Production planning Material requirements

planning Production control and

capacity planning Costing Order information

system Shop floor information

system

Project system Work breakdown

structures Network planning

techniques, milestones Cost, revenue, financial,

schedule, and resource management

Earned value calculation Project information

system

SAP Logistics Materials management

Purchasing Inventory management Warehouse management Invoice verification Inventory controlling Purchasing information

system Quality management

Quality planning Quality inspections Quality control Quality notifications and

certificates Quality management

information system

Plant maintenance Structuring technical

systems Maintenance resource

planning Maintenance planning System for technical and

cost accounting data Maintenance information

system

SAP Logistics Service management

Customer installed base administration

Service contract management

Call management Billing Service information

system

Integration When the clerk enters a

sale, bills are generated automatically (mail, fax, or EDI).

Sales and revenue are instantly updated in financial and control modules.

The sales information system and EIS provide various up-to-date views and reports.

SAP HRM Personnel management

HR master data Personnel administration Information systems Recruitment Travel management Benefits administration Salary administration

Organizational management

Organization structure Staffing schedules Job descriptions Planning scenarios Personnel cost planning

Payroll accounting Gross/net accounting History function Dialog capability Multi-currency capability International solutions

Time management Shift planning Work schedules Time recording Absence determination Error handling

SAP HRM Personnel

development Career and succession

planning Profile comparisons Qualifications

assessments Additional training

determination Training and event

management

Other features SAP Business workflow Internet scenarios Employee self-service

SAP Integration Financial general ledger

holds all base totals. Sub-ledgers are defined

for important accounts Accounts payable Manufacturing User-defined etc.

All transactions automatically flow through

Including currency conversions

Special rules can be defined

Simple example Manufacturing uses an

item from inventory The quantity on hand is

updated The inventory value is

automatically changed On any sub-ledgers On the general ledger

Reports are generated in any currency

New orders and payments can be generated through EFT.

Supply Chain Management

Vendors Customers

Design &Engineering

Marketing

Distribution

Manufacturing

Purchasing

Administration & Management

HRM Accounting Finance MIS

Just-in-Time

Quality control & Custom orders

QuickResponse

Designs and Quality

MassCustomization

Demand-pull

Design feasibility& production costs

product planning

partnerships& jointdevelopment

partnerships& jointdevelopment

planning& monitoring

planning& monitoring

Purchasing/LogisticsBuyer

Suppliers

Identify product features

Request for ProposalEvaluate suppliersNegotiate contractIdentify exact items and costs

Correct errors

Receive productsMatch receipts against orderReturn itemsPay supplier

Provide product details

Negotiate contracts

Verify orders and timesCorrect errorsSchedule deliveryMonitor shipments

Handle returnsMonitor payments

CASE ERP PROGEN ERP of Progen ERP

Systems MODULES

Human Resources Financial Manufacturing

Front End /Back End – Visual Fox

HUMAN RESOURCES (Module) Personal Information Human Resources

Development Leave and Attendance Payroll

HUMAN RESOURCES Personal Information

Define Organizational setup Department,categories,grades and position

Maintaining complete employee information including name, address, qualifications, family details such as sex, blood groups, mother tongue, religion

Maintaining complete service record Process placement transaction such

appointments, Confirmation, Promotions, Transfer, Increment, Suspension, Lay-off etc

Access all information on-line

HUMAN RESOURCES Human Resource Development

Education and Training Career Planning Promotions and Transfers Performance appraisal Awards and Disciplinary actions

HUMAN RESOURCES Leave and Attendance

Define various types of leaves and rules related to entitlement, carry forwards etc

Automatically create leave cards Process leave transactions such as leave

applications, cancellation and encashment. Interface with Attendance Machine Generate absenteeism, late coming, early

going and unauthorized absence reports.

HUMAN RESOURCES Payroll

Comprehensive Payroll Structure, which lets you define payment and deduction elements and various rules

Enter one time payment and deductions Enter Fitments or promotions / increments Process payroll and print reports such as Pay

slips, Pay sheet Register, Cash & Bank statements, recovery statements such as LIC Premium, Loans, Advances etc. PF statements and ESI statements

HUMAN RESOURCES Payroll

Print TDS certificates Print all statutory reports such as Form

#A, Form 6A etc. Calculate Bonus/Ex-gratia easily Automatically calculate Income Tax Pay arrears of any period due to price

index change, wage revision or attendance

FINANCIAL (Module) Currency

Management General Ledger Budgeting Accounts

Payable Account

Receivables Bank

Reconciliation Sales Tax

TDS Fixed Assets Fixed Deposits

Currency Management Define currency Enter daily exchange rates Fully EURO compliant

General Ledger Define Accounts Chart Define cost center charts with budgets Define Analysis charts Multiple accounting periods may be

opened simultaneously Enter voucher online Full multi currency support in vouchers Online posting of vouchers in General

ledgers and Sub ledger

General Ledger Print Payment Advices, Cheques, Debit

Notes, Credit Notes and Vouchers online Automatic generation of debit and credit

entries base of information entered in the voucher

Automatic calculation of exchange gain/ loss for foreign currency transactions

Generate bank book, cash books and other day books , Ledgers and Sub Ledgers

General Ledger Generate four level grouped trial

balance instantly Generate Cost Allocation and Analysis

Report quickly Find Account’s position from balance

to transaction using drill down queries Generate Closing Entries automatically Generate Profit and loss a/c and

balance sheet

Budgeting Define budget for Cost Center,

GL A/c and Analysis heads Budgets may be fixed or

variable Generate Budget provisions

and Budgets v/s Actual report

Accounts Receivables Access complete customer information Create sales Vouchers automatically

form sales invoice generate G/L entries Create Receipt Vouchers on settlement

of bills Track receivables by Party/Due Date Generate Age wise analysis for any

period Send reminder letters for paymants due Track party wise receivables from

balances to transactions using drill down queries

Bank Reconciliation Enter Pass-Book on-line and

match with Bank Book Create commission /interest

vouchers while entering in the pass book

Generate Bank Reconciliation Statement

Calculate interest for any period

Sales Tax Generate Purchase Register Generate Sales Register Track sales Tax Forms to be

issued Generate sales Tax Forms issue

register Track Forms to be received form

buyers

TDS Calculate TDS on payments Generate TDS register Record deposits of TDS Challans in

bank Generate and issue TDS certificates Generate annual returns Record TDS on receivables Track certificate to be received

Fixed Assets

Record comprehensive details of each asset

Record additional transfers and retirement of assets

Track assets by asset number ,description location

Maintain books of depreciation as per company law as well as Income Tax rules

Post depreciation entries in GL Capitalize revenue expenditure on assets Track revaluation of assets

Fixed Deposits Record receipt of fixed deposit Renew , refund fixed deposits Calculate periodic interest And

TDS Generate Interest cheques and

advices Generate TDS certificates Handle brokerage payments

Manufacturing Engineering Material Requirement Planning Purchasing Inventory Control Quality Control Modvat Process Modeling

Manufacturing Production Planning Operations Management Distribution Planning Finished Goods Inventory Sales Excise

Engineering Define units and conversion

rule Define items and detail

properties Define Bill of Material for each

product

MRP Define Production Plan Carry out BOM explosion for

the plan and generate material requirement

Generate MRP on any interval and create Purchase Requisition based on MRP plan

Purchasing Define Payment Terms and

Standard purchase Terms Define sales tax rules, Custom

and Excise Rules for each items (as applicable)

Create vendor item catalog Send request for Quotation to

vendors

Purchasing Each quotation received and

perform comparative analysis Approve quotations for purchase Create PO online based on

requisitions Suspend , cancel or close PO Create Deliver schedule releases Create PO Amendments Track Amendment history Assess vendor performance

Inventory Control Enter all stores transaction online Track all material by Batch No./Lot

no. Generate stock ledger instantly Value inventory based on several

methods Print Excise Challans on removals Create various analysis report

(ABC, XYZ,FSN,VED)

Quality Control Define comprehensive Quality Control

specifications for each item Access GRN’s awaiting QC online Access Test Intimations for production Generate QC register for item/batches

to be analyzed and print Sampling Slips

Update test results online and match standards to approve or reject material

Quality Control Print test certificates Post accepted / rejected

quantities in stock ledger online

Tack rejections by vendors as well by items

Full compliance with FDA Rules

Modvat Automatically post entries in

RG23 Part 1 Update Modvat availed in

RG23 Part 2 Expunge modvat availed on

removals Print RG23A/C Part I & Part II

registers

Process Modeling Define production facilities in

terms of Production Center, Work Center and Machine

Define manpower assigned for each work center / machine

Process Modeling For each product define

Process Bill Sequence of manufacturing

operations Machine used for each operation Inputs , outputs yield time and

manpower for each operation Measurement required to be taken Test requirements (if any) Standard Operating Procedure

Production Planning Create Production Plan based on

Distribution Plan Project gross raw material

requirements Assess plan feasibility with respect to

capacity and manpower currently deployed

Analyse capacity utilisation w.r.t Plan Analyse manpower utilisation w.r.t

Plan Track plans vs. Actual

Operations Management Define work calendars for

production centers Create Batch Orders for execution Generate Machinery Load Schedule

and Manpower requirement Schedule

Automatically generate Stores Requisition for raw materials for a batch order

Operations Management Enter Batch Details (operation

wise) including Inputs and outputs at each operation Measurement taken Test results for outputs (if required) Operation start time and finish time Stoppages (if any) with reasons

Generate intimations for QC for testing of intermediates and finished goods

Operations Management Print batch tickets for

completed batch Generate various Production

report including capacity utilization report , manpower utilization report, Yield variance report, Batch costing report and WIP report

Distribution Planning Define each product and its complete

details such as pack size, weight etc Group products by Product Group for

planning, reporting and analysis Group marketing areas by zone, regions

and territories Define depot wise sales forecast Create depot distribution plan based on

sales forecast and inventory held Create depot Dispatch Schedules form

Distribution Plan and Production Plan

Finished Goods Inventory Enter all stores transactions online Track stocks Batch wise with

manufacturing date and expiry date details

Print stock Statements and Stock Ledger instantly with ultra fast processing engine

Print Excise Bond Stock Statement

Sales Maintain finished products price list Comprehensive Pricing Model lets

you Define state wise sales tax trade

discount,retailers margins Automatically calculate net trade price and

assessable rate (for Excise) Define free quantities under schemes Create state wise price lists for various states

for items with uniform MRP

Sales Maintaining extensive customer

information Process requests for quotations Process sales orders Create dispatch orders from

sales orders Create dispatch orders from

depot dispatch schedule

Sales Create sales invoice , depot stock,

transfer note , excise gate pass Print sales register Print daily stock & sales

statement Print various other reports Full integrated with A/c

Receivables

Excise Maintain P.L.A A/c Post Debits in PLA or RG23

part II on preparation of Excise Gate Passes

Print PLA Register Print RG23 A/c part II register Print Periodic RT-12 Return

System Requirements Network Server

Intel PII based with min 128 MB ram Network Operating System

Windows 2000 server Windows NT server Novell Netware Linux

System Requirements Networking

Fast Ethernet based Desktop Operating System

Windows 2000 Professional Windows 98 Windows 95