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CHAPTER 2
EVOLUTIONOF ERP
SYSTEMS
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The evolution of
ERP systems
closely followed
the spectacular
developmentsin
the field ofcomputer
hardware and
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software systems.
During the
1960smost
organizations
designed,
developed andimplemented
centralizedcompu
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ting systems,
mostly
automating their
inventory control
systems
usinginventorycontrol packages
(IC). These were
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legacy systems
based
on programming
languages such as
COBOL, ALGOL
and FORTRAN.Materialrequirem
ents planning
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(MRP) systems
were developed
in the 1970s
whichinvolved
mainly planning
the product orparts
requirements
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according to
themaster
production
schedule.
Following this
route newsoftware systems
calledmanufacturi
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ng resources
planning (MRP
II)
were introduced
in the 1980s
withan emphasison optimizing
manufacturing
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processes by
synchronizing
thematerials with
production
requirements.
MRP II includedareas such as
shopfloor and
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distribution
management,
project
management,
finance,
humanresourceand engineering.
ERP systems first
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appeared in the
late 1980s and
the beginning of
the 1990s with
the power of
enterprise-wideinter-
functionalcoordin
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ation and
integration. Based
on the
technological
foundations of
MRPand MRP II,ERP systems
integrate business
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processes
includingmanufac
turing,
distribution,
accounting,
financial, humanresourcemanagem
ent, project
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management,
inventory
management,
service
andmaintenance,
andtransportation,
providing
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accessibility,
visibility
andconsistency
across the
enterprise.During the 1990s
ERP vendors
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added more
modules and
functions asadd-
ons to the
core modules
giving birth to theextended ERPs.
TheseERP
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extensions includ
e advanced
planning and
scheduling
(APS), e-
businesssolutionssuch as customer
relationship
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management
(CRM) and
supply
chainmanagement
(SCM). Figure2.1 summarizes the
historical eventsrelated
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