Enterprise Resource Planning (ERP)


By

Dr. Parimalendu Bandyopadhyay
Mr. Gunamoy Hazra
Lecturer
BBA Department, B.B. College
Asansol, WB
 


Introduction

From Inventory Control in the Sixties and Material Requirement Planning (MRP) in the Seventies and now we have Enterprise Resource Planning (ERP).It refers to a software package which combines all computerized departments together with the help of a single integrated software program that uses a single database so that various department of a company can more easily share information and communicate with each other.

Need of ERP

Companies are implementing ERP for the following reasons:

    1. Complete Automation and Faster Service.
    2. Standardized Processes.
    3. Integrated Financial Data.
    4. Standardized Human Resource Information.
    5. Tailor-made.
    6. Proper Information Management.

Components of ERP

The following components may be identified as the primary components (sub-system) of ERP:

    1. Human Resources
    2. Sales and Marketing
    3. Accounts Payable/Receivable
    4. Master Scheduling
    5. Inventory/Material Requirement Planning
    6. Cost Accounting
    7. Bills of Materials
    8. Capacity Requirement Planning
    9. Purchasing
    10. Warehouse Management
    11. Service & Maintenance
    12. Logistics
    13. Plant Maintenance
    14.  Project Management
    15. Asset Management and
    16. Financial Accounting etc.

Features of ERP

The important features of ERP are:

    1. Integrated
    2. Customer Service
    3. Information Sharing
    4. Project Management
    5. E-Commerce Facilities
    6. Business Decision Making Solutions
    7. Futuristic
    8. Accommodating Variety
    9. Supply Chain Management
    10. Resource Management

Benefits of ERP

The probable benefits from an ERP package are stated below:

    1. Reduction of lead time
    2. Integrated data management
    3. Better inventory management
    4. Reduction of cycle time
    5. Operational cost savings
    6. Better customer satisfaction
    7. Improved vender performance
    8. Improved resource utilization
    9. Improved information accuracy
    10. Improved decision-making capability
    11. Faster reactions to changing business demands
    12. Build in best practices

Critical Factors for Successful ERP implementation:

    1. It needs high level of sponsor commitment.
    2. It needs strong process orientation in terms of time.
    3. It needs dedicated project team from the user.
    4. It needs strong support for changes to occur.
    5. It needs quick decision making processes and
    6. It needs empowered team.

Reference:

    B.Saravana Prasath, Cost Management, C.Sitaraman & Co. Pvt. Ltd, Chennai, 2006

    K.Aswathapa and K. Shridhara Bhat, Production & Operation Management.
     


Dr. Parimalendu Bandyopadhyay
Mr. Gunamoy Hazra
Lecturer
BBA Department, B.B. College
Asansol, WB
 

Source: E-mail May 10, 2007

       

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