all about erp

7/31/2019 All About ERP

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ERPAN INTRODUCTION

Enterprise resource planning (ERP) systems are commercial software systems that can be

defined as customizable, standard application software which integrates business solutions

for the core processes (e.g. product planning and control, warehouse management) and the

main administration function (e.g. accounting, human resource management) of an

enterprise[1]

.

Enterprise resource planning (ERP) systems integrate internal and. external management

information across an entire organization, embracing finance/accounting, manufacturing,

sales and service, customer, etc. ERP systems automate this activity with an

integrated software application. Their purpose is to facilitate the flow of information between

all business functions inside the boundaries of the organization and manage the connections

to outside stakeholders[1]

. ERP systems can run on a variety ofcomputer

hardware and networkconfigurations, typically employing a database as a repository for

information. ERP is a method of effective planning of all the resources in an organization.

Enterprise Resource Planning (ERP) covers the techniques and concepts employed for the

integrated management of businesses as a whole, from the viewpoint of the effective use of

management resources, to improve the efficiency of an enterprise. ERP packages are

integrated (covering all business functions) software packages that support the ERP concepts.

ERP software is designed to model and automate many of the basic processes of a company,

from finance to the shop floor, with goal of integration information across the company and

eliminating complex, expensive links between computer systems that were never meant to

talk to each other[2]

.

Best practices are incorporated into most ERP systems. This means that the software reflects

the vendor's interpretation of the most effective way to perform each business process.

Systems vary in the convenience with which the customer can modify these

practices. Companies that implemented industry best practices reduced timeconsuming

project tasks such as configuration, documentation, testing and training. In addition, best

practices reduced risk by 71% when compared to other software implementations[7]

.
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HISTORY OF ERP

Enterprise Resources Planning (ERP) is an outgrowth of Material Requirements Planning

(MRP) initiated in the 1970's as a new computer-based approach to planning and scheduling

of material requirements and inventory, featuring the time-phased order point. MRP evolved

to MRP II (Material Resources Planning) the "closed loop" process, to Business

Requirements Planning (BRP) and eventually to ERP. As MRPII came into vogue in the late

1970's and early 1980's, software companies began to develop software packages around

MRPII concepts.

ORIGIN OF ERP

The idea of the integrated data base as the engine for fully integrated software was probably

one of the greatest outgrowths of Ollie Wight's MRP. Eventually, the acronym ERP was

conceived to represent what had already been developed by software companies. In

1990 Gartner Group first employed the acronym ERP as an extension ofmaterial

requirements planning (MRP), later manufacturing resource planning and computer-

integrated manufacturing[3]

. Without supplanting these terms, ERP came to represent a larger

whole, reflecting the evolution of application integration beyond manufacturing. Not all ERP

packages were developed from a manufacturing core. Vendors variously began with

accounting, maintenance and human resources. By the mid1990s ERP systems addressed all

core functions of an enterprise. Beyond corporations, governments and nonprofit

organizations also began to employ ERP systems[4]

.

The early software packages were developed by way of a transactional approach, and were

highly unfriendly to a user. With the advent of the personal computers, the development of

Microsoft's Windows NT, and the mid-range IBM AS/400 computer, client-server systems

began to emerge. Windows, used as the base operating system, allowed software packages to

become more and more user-friendly[5]

MATERIAL REQUIREMENT PLANNING (MRP)

When the manufacturing activities were gradually growing complex, the Shop floor people

realized that just knowing Bill of material does not help the total planning, because of the fact

that Bill of Materials tells only the information about material requirements. Equally

important factor is the information on Process of manufacturing such as manufacturing
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activities to be performed, the time taken for each activity, sequence in which they need to be

performed etc. In 1970s the concept arrived to a complete shape and was known as Material

requirement planning. This Planning is popularly known as MRP. A refined MRP briefly

takes the demand, important item related information (such as Ordering rules, safety stock

Inventory information), Bill of Material, routing and existing Shop floor schedule as inputs.

MATERIAL RESOURCE PLANNING II (MRP II)

The concept of MRP seemed to be complete and perfect, but some more inputs were

identified as essential for reasonably realistic planning. The original MRP as defined was

looking at the Material requirements and Process requirements as the major deliverables from

the planning process. However this information is not sufficient to go ahead with production.

For example, what if you do not having sufficient finance to perform the production to meet

the demand, even if you have material and machines to make the item?

Similarly how will you tackle the sudden break down of a critical machine while executing

the manufacturing process? In fact the planning needs the output information from the shop

floor execution as the input to replan according to the current shop floor condition. Based on

such realizations, MRP was continuously refined. After a decade MRP reached such as stage

that it was entirely different from what was originally defined as MRP. So a new name MRP

II was coined. MRP II is defined as Manufacturing resource Planning.

ENTERPRISE RESOURCE PLANNING (ERP)

In the early 1990s, increased complexity of businesses and the need to integrate all the

functions within an enterprise to sustain in the dynamic environment lead to development of

what is called Enterprise Resource planning (popularly known as ERP). ERP was extension

of MRP II to cover the range of activities within any enterprise.

EXTENDED ERP (ERP II)

ERP could attend the most wanted needs of Business in 1990s such as reliable delivery

commitments, high quality, low and controlled inventory and reasonably low prices etc. But

the competitive advantage too vanished. Many performance capabilities that previously

provided distinct competitive advantage became normal expectations. Capabilities such as

reliable delivery commitments, high quality, and low prices became the minimum to

participate, not the Order winners previously experienced. The competition within


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manufacturing industry has created many new concepts, business models, and techniques that

have influenced the evolution of Extended ERP.

Major factors that contributed the evolution of Extended ERP is the Requirement to focus on

the core strength and grow family of partners that work together to deliver the end product

and share directly or indirectly the revenue and competitive advantage. This is because it was

practically impossible to maintain strength in all areas that are needed to satisfy the

expectations of customer. Extended ERP is a subsequent outcome of progressive refinement

of planning systems through MRP, MRPII, and ERP. In addition, it reflects the influences of

relatively modern philosophies such as JIT/ Lean manufacturing as well as taking advantage

of the latest technologies.

EXPANSION

ERP systems experienced rapid growth in the 1990s because the year 2000 problem and

introduction of the Euro disrupted legacy systems. Many companies took this opportunity to

replace such systems with ERP. This rapid growth in sales was followed by a slump in 1999

after these issues had been addressed.
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ERP systems initially focused on automating back office functions that did not directly

affect customers and the general public. Front office functions such as customer relationship

management (CRM) dealt directly with customers, or ebusiness systems such as e

commerce, egovernment, etelecom, and efinance, or supplier relationship

management (SRM) became integrated later, when the Internet simplified communicating

with external parties[6].

Today, ERP systems have proliferated extensively, and have reached a stage where

development has become industry specific. Thus it is plausible to search for an ERP package

developed for one's specific industry idiosyncrasies.

WHY IS ENTERPRISE RESOURCE PLANNING IMPORTANT?

Some of the major features of ERP and what ERP can do for the business system are as

below[8]

:

ERP facilitates company-wide Integrated Information System covering all functional

areas like Manufacturing, Selling and distribution, Payables, Receivables, Inventory,

Accounts, Human resources, Purchases etc.

ERP performs core corporate activities and increases customer service and thereby

augmenting the Corporate Image.

ERP bridges the information gap across the organization.

ERP provides for complete integration of Systems not only across the departments in

a company but also across the companies under the same management.

ERP is the only solution for better Project Management.

ERP allows automatic introduction of latest technologies like Electronic Fund

Transfer (EFT), Electronic Data Interchange (EDI), Internet, Intranet, Video

conferencing, E-Commerce etc.

ERP eliminates the most of the business problems like Material shortages,

Productivity enhancements, Customer service, Cash Management, Inventory

problems, Quality problems, Prompt delivery etc.
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ERP not only addresses the current requirements of the company but also provides the

opportunity of continually improving and refining business processes.

ERP provides business intelligence tools like Decision Support Systems (DSS),

Executive Information System (EIS), Reporting, Data Mining and Early Warning

Systems (Robots) for enabling people to make better decisions and thus improve their

business processes.

ERP systems centralize business data, bringing the following benefits:

They bring legitimacy and transparency in each bit of statistical data.

They enable standard product naming/coding.

They provide a comprehensive enterprise view (no "islands of information"). They

make realtime information available to management anywhere, any time to make

proper decisions.

They protect sensitive data by consolidating multiple security systems into a single

structure.

CONCEPTUAL COMPONENTS OF ERP

It is important to understand the high concept or ERP model. The model consists of 4

components which are implemented through methodology[9]

.

[9]
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1. Software: Its the component that is most visible part and seen asthe ERP Product which is not true. It consists of several modules such as Finance, Human

resource, Supply chain management, supplier relationship management, customer

relationship, and business intelligent.

[9]

2.

Process flow: It illustrates the way how information flows among the differentmodules within an ERP system. By creating this model makes it easier to understand

how ERP work.

3. Customer mindset: By implementing ERP system, the old ways for workingwhich user understand and comfortable with have to be changed and may lead to

users resistance. Employee-raised facts, beliefs, and values are good indicators of

what may cause their resistance to change. For example, some users may say that they

have spent many years doing an excellence job without help from ERP system. This is

the value and belief that users have toward new ERP system. In order to lead ERP

implementation to succeed, the company needs to eliminate this kind of negative

value or belief that users have toward new system.

4. Change management: Operational and environmental changes need to be effectivelymanaged and kept up at all time and at all working levels.


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4.1User attitude resistanceIf the company needs to successfully implement a new

system, users need to understand the new system and give commitment towards it. By

doing this the company will have a better management and better implementation.

4.2 Business process change

When a new system comes, the business processes

change thus a company should plan ahead for these kinds of changes.

ERP SELECTION METHODOLOGY

For a proper system selection methodology it is important to apply key principles to the

process. Some of which are listed below:

Structured approach

The first step in selection of a new system is to adopt a structured approach to the process.

The set of practices should be presented to all the stakeholders within the enterprise before

the system selection process begins. Everyone needs to understand the method of gathering

requirements; invitation to tender; how potential vendors will be selected; the format of

demonstrations and the process for selecting the vendor. Thus, each stakeholder is aware that

the decision will be made on an objective and collective basis and this will always lead to a

high level of co-operation within the process.

Focused demonstrations

Demonstrations by potential vendors must be relevant to the business. However, it is

important to understand that there is considerable amount of preparation required by vendors

to perform demonstrations that are specific to a business. Therefore it is imperative that

vendors are treated equally in requests for demonstrations and it is incumbent on the

company and the objective consultant assisting the company in the selection process] to

identify sufficient demonstrations that will allow a proper decision to be made but will also

ensure that vendors do not opt out of the selection process due to the extent of preparation

required.

Objective decision process

"Choosing which ERP to use is a complex decision that has significant economic

consequences, thus it requires a multi-criterion approach."[4]

. There are two key points to


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note when the major decision makers are agreeing on selection criteria that will be used in

evaluating potential vendors. Firstly, the criteria and the scoring system must be agreed in

advance prior to viewing any potential systems. The criteria must be wide-ranging and

decided upon by as many objective people as possible within and external to the enterprise. In

no circumstance should people with affiliations to one or more systems be allowed to advise

in this regard.

Full involvement by all personnel

The decision on the system must be made by all stakeholders within the enterprise. "It

requires top management leadership and participation it involves virtually every

department within the company"[10]

Representatives of all users should:

Be involved in the project initiation phase where the decision making process is

agreed;

Assist in the gathering of requirements;

Attend the Vendor Demonstrations;

Have a significant participation in the short-listing and final selection of a vendor.

ERP LIFE CYLE

It is the set of activities through which ERP is implemented in an organization.

IMPLEMENTATION

The implementation stage of the ERP life cycle involves a number of activities that must be

managed effectively in order for the project to be a success. Each of these tasks calls for

specific knowledge and skills needed by internal and external resources.

Installation - The first step in installation is creating the computing environment that will

host the ERP system. Operating system updates, increased networking capacity, or backup

systems may be required. The amount of new equipment might also require the company to

expand the space in its data center to house it all. Computing upgrades also extend beyond

the servers that support the system. The presentation tier of an ERP system usually runs on a

PC, either as a client running directly on the computer or as a client served through a web

browser. Clients may require upgrades to the web browser or require the PC be upgraded or


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limited business interruption or detrimental impact to customer satisfaction. During testingthe project team fine-tunes the configuration of the software and refines the models for new

business processes. They confirm the software can meet the previously specified

requirements, identifying gaps not found during the package selection phase. Specific types

of testing include:

Unit testing - Testing small increments of functionality as discrete steps in a business

process or testing a single development object to the requirements in a functional

specification.

Integration testing- Testing end-to-end business processes including any

customizations, enhancements, or interfaces to external systems.

Customer acceptance testing - Usually a final round of integration testing in which

key users develop realistic business scenarios that represent how the system will need

to work after go-live. The users are tasked with testing the system to their approval or

acceptance. This milestone is critical to proceeding with go-live cut-over activities.

Security testing- Testing all of the user roles and authorizations that are being set up

in the system. These tests include both positive and negative tests to demonstrate that

allowed functionality can be accessed or that unauthorized access is appropriately

denied.

Performance load testing - Business transaction volumes and concurrent user

activities are tested with expected peak load (and then some) to confirm that response

times are acceptable. These stress tests must pass predetermined acceptance criteria or

performance thresholds[11]

.

Interfacing with other systems - Often, an ERP system becomes the "center of the universe"

for an organization, but because of time and cost constraints, gaps in functionality, andpolitical issues, there are usually interfaces to other systems that must be developed and

maintained. The ERP system may exchange data with other client server systems as well as

legacy systems. These interfaces must have the ability to handle complex data sources and

legacy data types and may involve connections to mainframes and systems using a variety of

technologies such as Linux or Windows.

Training - According to research, training is the most overlooked and under-budgeted ERP

cost component. Training expenses are high because employees almost invariably have to


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learn a new set of processes, not just a new software interface. According to research, training

is the most overlooked and under-budgeted ERP cost component. Training expenses are high

because employees almost invariably have to learn a new set of processes, not just a new

software interface. There are various ways to train employees such as on-site or off-site

instructor-led training classes, or computer-based training.

MAINTENANCE

Most ERP systems do not reveal their value until after organizations have had them running

for some time. Maintenance activities also begin shortly after go live. Annual maintenance

expenses for ERP systems cost approximately 20% of initial ERP implementation costs and

upgrade costs as much as 25-33% of the initial implementation[11]

.

Typical ERP maintenance activities include:

Preventive maintenance - These are regularly scheduled tasks that must be

performed to keep the system functioning properly.

Emergency maintenance - These are tasks that must be performed immediately. For

example, if a software bug is discovered that has potentially damaging effects to the

business, then that bug needs to be fixed as soon as possible, even if it may affect

regularly scheduled operations.

Software updates - ERP vendors constantly fix bugs, implement new best practices

and incorporate the feedback of customers in their software.

Maintenance activities should be tested in a non-production instance of the ERP system to

minimize the chance of a problem to the live system. According to research, up to 70% of

companies total ERP costs relate to service and maintenance, yet most companies fail to see

the value in these services[9]

.

Upgrade - Companies choose to upgrade their ERP systems for the following reasons:

Competitive advantage - New features and capabilities give the company an edge over

its competitors.

Globalization - Features and updates designed to increase the flow of information to

customers and business partners can increase the ability to operate globally.


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Integration - Enhancing the flow of information between the ERP system and other

systems within the company increases operational efficiency and improves

communication.

Best practices - Incorporating new best practices allows the firm to operate more

efficiently.

Cost reduction - Lowering administrative overhead and improving the support offered

by the ERP vendor results in lower operating costs.

[12]

WHY ERP IMPLEMENTATION FAILS

There are twelve major reasons why companies get bogged down or fail in implementing

ERP.

1. Lack of top management commitment - The oversight of an ERP implementation to

lower management levels often results in (1) being "out of touch" with critical events,

or (2) the lack of understanding of the size, scope, and technical aspects of the project.

2. Inadequate requirements definitions - Surveys have shown that inadequate

definition of functional requirements accounts for nearly 60% of ERP implementation

failures. This is simply a matter of not comprehensively and systematically

developing a quality set of functional requirements definitions[5]

.

3. Poor ERP package selection.

Reasons why companies do not upgrade systems


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4. Inadequate resources - Companies will attempt to "save money" by doing

everything on an overtime basis, whether or not there are adequate skills within the

company, extending individual workloads to 150%. This approach can be a "kiss of

death" for the program.

5. Resistance to change.

6. Miscalculation of time and effort - Another cause of ERP implementation failure is

the miscalculation of effort and time it will take to accomplish the project.

Companies who treat an ERP selection, evaluation and implementation comparable to

buying a washing machine are doomed to failure.

7. Misfit of application software with business processes - This failure to examine

underlying business process flaws, and integrate the applications with the business

processes, causes loss of productivity and time, and ultimate benefits.

8. Unrealistic expectations and benefits and ROI When the total costs of the project

have been understated. Often left out of the total costs are costs of planning,

consulting fees, training, testing, data conversions, documentation, replacement

staffing, and the learning curve performance drop. When this happens, a company

doesn't stand a chance of achieving the ROI it anticipated.

9. Inadequate training and education - ERP-related training is crucial as most

employees must learn new software interfaces and business processes which affect the

operation of the entire enterprise.

10.Poor project design and management - Major mistake is to short-cut critical events

in the project plan, such as time for documentation, redefining and integrating

processes, or testing before "going live."

11.Poor communication - Poor communications prevent different parts of the

organization from assessing how they will be impacted by changes in processes,

policies, and procedures. Communications are a vital part of managing change in a

corporate environment.

12.Ill advised cost cutting - In an effort to avoid temporary conversion costs, some

companies take a very risky route and go live at multi-plant sites simultaneously;

subjecting all plants or some plants to a total shutdown should there be a false start

up.


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PRAGMATIC APPROACH FOR BETTER ERP UNDERSTANDING

The first corollary of ERP implementation is: ERP systems are part of a company

infrastructure, and therefore are strategic to the company's survival and success.

The second corollary of ERP is: ERP and information systems are there to support

business functions and increase productivity, not to do the reverse.

The third corollary of ERP or implementation is: Learn from the successes and failures of

others and don't attempt to reinvent the wheel of ERP implementation practice[5]

.

Some time-proven approaches that can enhance the success of the ERP implementation are:

1.

High employee involvement - Use a knowledgeable team to review and select

packages. Get as many employees as practicable involved in the implementation

phase. This will foster ownership and buy-in.

2. A comprehensive and systematic approach - Use a comprehensive and systematic

master plan that addresses all parts of an ERP systems implementation: development

of IT strategy, requirements definition, review/selection of software, hardware,

communications, unit testing, systems testing, conversion, resources,

education/training, resistance to change, etc.

3. Adequate resources - Provide adequate technical and administrative resources to

allow employees breathing room. Perform cost/benefit analyses so that you know how

much the entire implementation is going to cost and identify the results that will be

achieved.

4. Extensive education and training at all levels.


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USE OF ERP IN APPAREL SECTOR

Before the implementation of ERP all departments in the organization would function

separately leading to a situation somewhat similar to the one shown below.

[2]

Benefits of ERP in apparel sector include:

Supplier benefitManagement

benefitEmployee benefit

Customer

benefit

Information in

time about

material to be

provided.

Cost savings,

improvement insavings. Good

customer

relationships.

Satisfaction in

working andachieving goals

with good team

work.

Good services.Good quality at

cheaper price.

[2]

A post ERP scenario clubs all the departments into a single unit and all information of every

department is updated and extracted from a single database.

Pre ERP scenario

A post ERP scenario


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Reduction in cycle time:

As of now, allocation of material to specific customer order is not possible with the current

system. Such allocations are useful for making deliveries as planned, as there is no possibility

of the material, which is required by one order, getting consumed for different order. In suchcases earlier order would get delayed if material were not available in the stock while

production time is spent on other order, which could have waited without causing any

problem.

Cost savings:

Company losses 2% of its sales value in discounts, which are the result of surplus production,

implementing quality management system can help to bring down excess production, as

management will be assured of the quality right from the raw material itself. Supplier

developer module would be useful in proper selection of suppliers, which can focus on

quality, cost and delivery aspects of supplier.

Reduction in machinery downtime:

5 % machinery downtime is attributed to non-availability of raw material in the stores. This is

due to absence of proper planning system and due to communication delays at every place

because of information recompiling. Prompt communication coupled with effective supplier

selection module and planning system would be useful in bringing down the machinery

downtime.

Improvement in sales:

75 % customers place repeat orders. Three factors-price, order and delivery affect orders.

Integrated system will definitely be useful on this account. Price is one of the causes of losing

customers; there is ample scope for cost reduction and therefore company can offer lower

prices and incentives to attract customers through integrated information management

solution.

Customer satisfaction:

Current system is ineffective in tracking problems related to customers. The response

regarding effectiveness falls in unsatisfactory category. Capacity planning for received order

also falls in average category. Efficient capacity management system can bring down the

delivery time for execution of the order and improve customer satisfaction. This management

scheme can be very useful in maintaining better customer relations with prompt response and

by knowing their past history. Well formulated procedures for customer dialog will be useful


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in having better customer relations. It takes approximately 3 days to answer any of

customers queries. This period can be brought down to a day, which will have very good

impact on customers perception of the organization.

ERP SOFTWAREBUSINESS WORKS

Sage BusinessWorks50 Accounting is accounting software. It goes beyond off-the-shelf

bookkeeping accounting packages by offering a wide range of features such as project

management, inventory control, contact management, and more! Make the most informed

business decisions possible using the award-winning Sage BusinessWorks50 solution, which

simplifies and streamlines key business functions and daily business activities, giving you an

instant link to critical, up-to-the-minute accounting information[13]

.

[13]

\


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[13]

Business Works General Ledger - Maintain current financial information, as well as

transaction history and budget information for up to nine fiscal years, using the Sage

BusinessWorks General Ledger module, which combines flexibility with ease of use.

Business Works Cash Management - The Cash Management module for Sage

BusinessWorks Accounting provides superior management capabilities for your companyscash transaction processing and reconciliation needs. This module fully integrates with the

Accounts Payable, Accounts Receivable, Payroll, and General Ledger modules to offer a

comprehensive accounting software solution.

Business Works Accounts Payable - The Accounts Payable module for Sage

BusinessWorks Accounting efficiently manages your companys expenditures, saving you

time and money. This advanced module stores, sorts, and organizes vendor information and

transactions. The Accounts Payable module then uses the information to produce a wide


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range of reports, including graphical reports.

Business Works Accounts Receivable - The Sage BusinessWorks Accounts Receivable

module provides an efficient and reliable means of managing your entire receivables process.

From credit management to sales analysis, this powerful module provides your organization

with extensive information and reporting features to make quicker business decisions.

Business Works Inventory Control - The Inventory Control system offers comprehensive

reporting capabilities to keep you on top of inventory status. It can help you bring about the

creation of new or improved purchasing policies, sales policies, pricing methods, and even

enhanced customer service.

Business Works Payroll - Preparing payroll by hand can be a tiresome and time-consuming

task. By acquiring the power of the Sage BusinessWorks Payroll module, your in-house

payroll tasks can be completed quickly and accurately.

Business Works Job Costing - The tracking feature of the Job Cost module gives you

pinpoint details regarding every job and project so that you can make informed decisions and

more effectively manage internal and external projects. Youll also be able to compare actual

costs with estimated costs throughout all the stages of your projects. This ensures that

expenses fall within your budget and you generate profit from every job.

Business Works Custom Office - When integrated with Microsoft Office, the Sage

BusinessWorks Custom Office module can significantly increase the companys productivity.

The module offers mail merge, attachment management, and custom worksheet capabilities

that put Sage BusinessWorks information to work for. This allows the employees to do their

obs more efficiently, which can lead to increased revenue.


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SAGE BUSINESS WORKS INVENTORY CONTROL MODULE

The Inventory Control module for the Sage Business Works Accounting system provides this

level of control by offering high-end features normally reserved for large companies,

including light manufacturing capabilities, serial number tracking, and multi-warehouse

support. Inventory Control even features an image library that allows you to assign a picture

to each part.

Improved customer service leads to increased profitability. And, when integrated with the

Accounts Receivable and Order Entry modules, Inventory Control can significantly boost

your customer service levels while operating as the cornerstone of an effective manufacturing

or distribution solution. For more complex project management, Inventory Control can be

coupled with the Job Cost module to help track all inventory-related expenses for a project.

Inventory tracking is enhanced even more when integrated with the Custom Office module,

which creates detailed spreadsheets to provide further analysis of inventory performance.

The Inventory Control system offers comprehensive reporting capabilities to keep you on top

of inventory status. It can help you bring about the creation of new or improved purchasing

policies, sales policies, pricing methods, and even enhanced customer service. By leveraging

Sage BusinessWorks, you have the tools to create an inventory system with the depth to meet

your companys needs for years to come.


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General features of the module :

Tracks backorders and sales promotions when used in conjunction with the Order

Entry module.

Provides complete physical inventory capabilities and makes inventory tracking easy

with worksheets and variance reports.

Provides instant inquiry of part information, including receipts, issues, returns, and

adjustments.

Allows you to post charges to the Job Cost module for more complete tracking of

materials used on a project.

Tracks minimum, maximum, and order point stocking levels by part to help keep

stock quantities at optimum levels.

Maintenance features of the module:

Tracks quantities and history for up to 99 user-defined warehouses and provides a

transfer option that allows parts to be moved among warehouses easily.

Tracks serial numbers for parts and indicates when parts are received, reserved, or

issued.

Stores and displays images of your parts, allowing you to see a part and verify its

description when talking to a vendor or customer.

Leverages four costing methods: Standard, Average, FIFO, and LIFO.

Easily copies an existing part to a new part, making the setup of like items faster and

easier, with the following fields:

Part Description (all lines)

Product Line

Unit of Measure

Ship Weight

Primary Warehouse

Bin Location

Comments

Inventory Item

Taxable

Discount


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Back Orders OK

Fractional Quantity

Fractional Cost/Price

UPS Shippable Track Serial Numbers

Category Information

Sales Promotion (Promo)

Pricing Method

Pricing Matrix

Vendors

Components

Warehouses

Maintains complete information for each part, including on-hand, backorder, and on-

order quantity, vendor, substitute items, components, and up to 60-month transaction

history.

Provides model parts for easy addition of new parts to inventory.

Supports fractional costs, prices, and quantities for stock and non-stock items.

Provides four pricing methods (absolute, margin, markup, and base) for each part and

allows price differences by customer type as well as quantity price breaks.

Supports up to 25 price levels (which can be activated on a part-by-part basis) and

five quantity breaks to facilitate flexible pricing schemes.

Processing features of the module:

Builds components and labor into finished items with the subassembly option,

which automatically adds built parts to inventory and removes components from

stock.

Unbuilds or unpacks assembled parts into components or individual items.

Allows entry of receipts, issues, returns, and adjustments.

Allows inventory cost adjustment after receipt of parts.


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Reporting capabilities of the module:

Provides the information you need to maintain adequate stock levels using the Order

Recommendation report.

Sorts reports by part number, part description, vendor, product line, or bin location. Provides numerous inventory reports to analyze inventory performance.

Reports the following:

ABC Analysis Report

Adjustments

Transaction Register

Bin Ticket

Business Graphics

Component Use List

Cost List

Flash Report

Inventory Low Stock

Report

Inventory Overstock Report

Inventory Performance Report

Issues Transaction Register

Location List

Margin Analysis Report

Master Parts List

On Hand Detail Report

Physical Inventory

Variance Report

Physical Inventory

Worksheet

Pick List

Price List

Product Line List

Receipts Transaction Register

Returns Transaction Register


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Sales Promotions List

Serialized Inventory Reports

Stock Status report

Subassembly Detail Report Subassembly List

Substitute Parts List

Transaction Summary Report

Transaction Detail Report

Vendor Supply List

Warehouse Stock Report

CONCLUSION

Enterprise Resource Planning (ERP) can provide a lot of benefits to organization such as

lower cost, increase level of data consistency, enable different departments such as

Marketing, Distribution, and Manufacturing etc. to share information together, increasing

ability to do e-business. Even though, ERP can provide many benefits, it also can lead to

tragedy in implementation because of complexity to implement, time consuming, requiring a

lot resource such as money, human resource, hardware, and software. Not only resource that

is needed, but the commitment from top management and users also. All of these

requirements can lead to project failure easily as we can see that 51% of project fail rate.

Consequently, Project Management is very important in ERP implementation. In order to

manage project efficiency and reduce the risk for project failure, a company needs to know


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the high level concept, components of ERP, and the project life cycle. However, by knowing

the high level concepts, components of ERP and project life cycle is not enough. As describe

earlier, ERP implementation is such a complexity project. Thus, we need to have some

guideline and avoid the common mistakes that help project manager to prevent an unexpected

outcome and well prepare for the unexpected events.

REFERENCES

1. Mei-Yeh Fang and Dr.Fengyi Lin, Measuring the Performance of ERP System

from the Balanced Scorecard PerspectivesThe journal of

American

Academy

of

Business,Cambridge,Vol. 10 No 1, Sep 2006, pp.256-263.

2. http://www.fibre2fashion.com/industry-article/5/447/erp-in-apparel-industry2.asp

3. L. Wylie, "A Vision of Next Generation MRP II", Scenario S-300-339, Gartner

Group, April 12, 1990

4. Sheilds, Mureell G., EBusiness and ERP: Rapid Implementation and Project

Planning. (2001) John Wiley and Sons, Inc.

5. http://rockfordconsulting.com/the-12-cardinal-sins-of-erp-implementation.htm
http://www.fibre2fashion.com/industry-article/5/447/erp-in-apparel-industry2.asphttp://www.fibre2fashion.com/industry-article/5/447/erp-in-apparel-industry2.asphttp://rockfordconsulting.com/the-12-cardinal-sins-of-erp-implementation.htmhttp://rockfordconsulting.com/the-12-cardinal-sins-of-erp-implementation.htmhttp://rockfordconsulting.com/the-12-cardinal-sins-of-erp-implementation.htmhttp://www.fibre2fashion.com/industry-article/5/447/erp-in-apparel-industry2.asp


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6. Monk, Ellen; Wagner, Bret (2006).Concepts in Enterprise Resource

Planning(Second ed.). Boston: Thomson Course Technology.ISBN0-619-21663-8

7. Monk, Ellen and Wagner, Brett."Concepts in Enterprise Resource Planning"

3rd.ed.Course Technology Cengage Learning.Boston, Massachusetts.2009

8. http://www.erp.com/section-layout/337-erp-software/130-erp-features-and-

components-.html

9. http://www.umsl.edu/~sauterv/analysis/f06Papers/Wonglikphai/

10.Thomas F. Wallace and Michael H. Kremzar,ERP: Making it Happen.

11.http://modernerp.com/uploads/Sample_Chapter_-_Ch._6 ERP Life Cycle:

Implementation and Post Go Live and Maintenance

12.Kimberling, E. (2009). Four Reasons Why ERP Projects Take Longer than Expected.

Retrieved November 19, 2009 from http://it.toolbox.com/blogs/erp-roi/four-reasons-

why-erp-projects-take-longer-than-expected-31967

13.http://accounting-erp-software.shelko.com/sage-businessworks/
http://en.wikipedia.org/wiki/International_Standard_Book_Numberhttp://en.wikipedia.org/wiki/International_Standard_Book_Numberhttp://en.wikipedia.org/wiki/Special:BookSources/0-619-21663-8http://en.wikipedia.org/wiki/Special:BookSources/0-619-21663-8http://en.wikipedia.org/wiki/Special:BookSources/0-619-21663-8http://www.erp.com/section-layout/337-erp-software/130-erp-features-and-components-.htmlhttp://www.erp.com/section-layout/337-erp-software/130-erp-features-and-components-.htmlhttp://www.erp.com/section-layout/337-erp-software/130-erp-features-and-components-.htmlhttp://www.erp.com/section-layout/337-erp-software/130-erp-features-and-components-.htmlhttp://www.erp.com/section-layout/337-erp-software/130-erp-features-and-components-.htmlhttp://www.umsl.edu/~sauterv/analysis/f06Papers/Wonglikphai/http://www.umsl.edu/~sauterv/analysis/f06Papers/Wonglikphai/http://modernerp.com/uploads/Sample_Chapter_-_Ch._6http://modernerp.com/uploads/Sample_Chapter_-_Ch._6http://modernerp.com/uploads/Sample_Chapter_-_Ch._6http://it.toolbox.com/blogs/erp-roi/four-reasons-why-erp-projects-take-longer-than-expected-31967http://it.toolbox.com/blogs/erp-roi/four-reasons-why-erp-projects-take-longer-than-expected-31967http://accounting-erp-software.shelko.com/sage-businessworks/http://accounting-erp-software.shelko.com/sage-businessworks/http://accounting-erp-software.shelko.com/sage-businessworks/http://it.toolbox.com/blogs/erp-roi/four-reasons-why-erp-projects-take-longer-than-expected-31967http://it.toolbox.com/blogs/erp-roi/four-reasons-why-erp-projects-take-longer-than-expected-31967http://modernerp.com/uploads/Sample_Chapter_-_Ch._6http://www.umsl.edu/~sauterv/analysis/f06Papers/Wonglikphai/http://www.erp.com/section-layout/337-erp-software/130-erp-features-and-components-.htmlhttp://www.erp.com/section-layout/337-erp-software/130-erp-features-and-components-.htmlhttp://en.wikipedia.org/wiki/Special:BookSources/0-619-21663-8http://en.wikipedia.org/wiki/International_Standard_Book_Number

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