1 enterprise resource planning (erp) 정 석 화 department of computer information systems college...
Post on 18-Dec-2015
216 views
TRANSCRIPT
1
Enterprise Resource Planning(ERP)
정 석 화
Department of Computer Information SystemsCollege of Business
Eastern Michigan University
2
Agenda
• What is ERP?
• Why ERP?
• ERP Vendors
• SAP R/3 & Modules
• ERP Trends
• Questions/Answers
3
ERP
• A collection of software systems that help to manage business processes for an entire organization
• Designed to integrate all information processing support for an entire organization
4
Organization
• A group of people engaged in purposeful activity over extended time
• A tool used to coordinate in order to obtain Value for organizational goals
6
Business Process
• Work activities across time and place, with a beginning, an end, and clearly identified inputs and outputs (Davenport, 1993)
• Has sequence, purpose, interaction
7
TRAINING
BENEFITSPAYROLL
RECRUITING
payroll programs, personnel files, health plan documents, recruiting, Servers & networks, etc.
Example – ERP HR Module
IT resources
HR processes
8
Theme of ERP
• Reflects assumptions about the way companies operate
• Provides the integration of all the information flowing through a companyi.e., – Financial/accounting information– HR information– Customer information
9
• A process-oriented organization
• Data at the core of the enterprise
• ERP as a major part of the enterprise architecture
An Organization with ERP
10
Differences between Function & Process
Function Process
Focus on “What” Focus on “How”
Vertical Horizontal
Static Dynamic
Task-centered Customer-oriented
Individual/Specialist Team/Generalist
Parochial Holistic
11
Cross-functional Processes i.e., Product Development
MARKETING PRODUCTIONR & D
Product development
com
petit
or a
naly
sis
mar
ket r
esea
rch
new
pro
duct
prot
otyp
e
needs analysisresearchmarket test
component designproduct testproduct release
process designequipment designproduction start
12
ERP for Organizational Value Chain
− Stream of activities
− Applies to both products and services
Pro
fit
Mar
gin
Support:
Primary:
Infrastructure, HR, R&D, Procurement
Inboundlogistics
OperationsOutboundlogistics
Marketing& Sales
Service
13
Business Process Reengineering (BPR)
An organization fundamentally and radically
redesigns its business process to achieve
dramatic improvement
− From the restructuring of an organization
− To the redesigning of individual processes
14
Follow-up processing
pre- qualification
documentgeneration
applicationprocessing
credit analysis& underwriting
approval& closing
paymentprocessing
escrowmanagement
customerservice
collections& foreclosures
valuation &risk analysis
transfer tosecondary mkt
BPR Example - Loan processingDesk-to-desk approach credit
reporting
Servicing of loan
Origination of loan
15
BPR example - Loan processingTeam approach
Field replaptop
Regionalproduction
center
Loanorigination
team
Loanservicing
team
16
ERP Strategic Issues
• Compelling reasons - efficiencies
• Organization change - better than current
• Strategic advantage - gaining an advantage
17
ERP Tactical Issues
• Functional /Cross-functional integration
• Supply chain integration
• Decision support
18
Operational Issues – ERP Implementation
• Configuration – Methodology & Processes
• Plan vanilla to start
• Populating the data with integrity
• Modifications made
• Cut over or Phased rollout
• Add-ons
19
ERP Benefits – Eli Lilly SAP R/3 Implementation
Process Improvements− Eliminate redundant
transactions− More efficient staff and
succession planning
IT− Reduced support costs− Reduced infrastructure costs
Strategic Direction− Improved resource allocation− More flexible organization− Better future decision making
Highlights:• 45 global sites• Implementation by 2002 –
delayed to 2004• Single client, servers in Indianapolis• Approx. 70 person implementation – now over 100 involved
20
ERP Vendors
Over 100 vendors globally 5 major vendors
– Lawson Healthcare
– JDEdwardsInternet
– Oracle Database
– PeopleSoft HRM originally
– SAP German, pioneer of ERP
21
ERP Market (META Group, 2003)
$15B globally in 2002 and growing at 12%-15% annually
Satisfied at least 75% of the overall business application requirements
Mission-critical functionality ERP regarded as core IT investments
22
Key Findings about ERP Market
Mature and concentrated The five vendors - more than 80% of the
investment ERP purchases - 10+ year commitments Vendor size does not guarantee high
performance, and the smaller ones perform to the leaders for specific criteria
Vendors must be compared to that of best-of-breed vendors (e.g., Siebel for CRM, i2 for SCM)
24
About SAP AG from www.sap.com
Founded in W. Germany in 1972 World's largest enterprise software and
third-largest software supplier SAP R/3 - Collaborative business solutions
for all types of industries 12 million users, 88,700 installations, and
over 1,500 partners $7.5B revenue in 2004, More than 32,000
employees in over 50 countries
27
R/R/33
FIFIFinancialFinancial
AccountingAccounting
COCOControllingControlling
PSPSProjectProjectSystemSystem
WFWFWorkflowWorkflow
ISISIndustryIndustry
SolutionsSolutions
MMMMMaterialsMaterials
Mgmt.Mgmt.
HRHRHumanHuman
ResourcesResources
SDSDSales &Sales &
DistributionDistribution
PPPPProductionProductionPlanningPlanning
QMQMQualityQuality
ManagementManagement
PMPMPlant MaintenancePlant Maintenance
SMSMServiceServiceManage-Manage-
mentmentIntegrated Solution
Logical Architecture
ECECEnterpriseEnterpriseControllingControlling
AMAMFixed AssetsFixed Assets
Mgmt.Mgmt.
28
Client
Highest hierarchical level in an SAP system
A complete database with all the tables necessary for an integrated system
Master records per client
29
Organizational Elements
• Structures that represent the and/or organizational views of an enterprise
• Company structure based on business processes
• A framework that supports all business activities
30
Master Data
Centrally and available to all applications and all authorized users
In the database over an extended period of time
31
Transactions
• Application programs that execute business processes
• Whenever a transaction is executed, a document is created
• The document contains all of the relevant information from the master data and organizational elements
33
FI and CO Comparison
COFI
Legal or external reportingReports by accounts Balance Sheet Income Statement
Internal managementreporting
Reports by cost centers andcost elements
Cost Center Reports
35
Company
Consolidated financial statements are created at the company level
A company can include one or more company codes
All company codes must use the same chart of accounts and fiscal year
36
Chart of Accounts
The chart of accounts contains:− A complete listing of G/L accounts in FI− Cost and revenue elements in CO
Each company code is assigned to one chart of accounts
37
General Ledger Accounts
• Every account to be posted in FI must be defined as a G/L account master record
• Each G/L account master record contains information that specifies the function of that account− e.g., balance sheet vs. P&L account
39
Procurement Process
Demand
Purchase Requisition
Vendor
Purchase Order
Goods Receipt& Inventory Mgmt.
AccountsPayable
40
Organizational Elements for the Procurement Process
• Client
• Company Code
• Plant
• Storage Location
• Purchasing Organization
• Purchasing Group
41
Company Code
A company code represents an independent accounting unit
Balance sheets and Profit/Loss statements, required by law, are created at the company code level
42
Plant
A plant is an organizational unit within a company to produces goods, renders services, or distributes goods
A plant can be one of the following types of locations:− Manufacturing facility− Warehouse distribution center− Regional sales office− Corporate headquarters
43
Storage Location
An organizational unit for the differentiation
of material stocks within a plant
44
Purchasing Organization and Groups
• Groups can be a further division of purchasing responsibility and/or structure
• Centralized or Decentralized
• Hybrid - multiple organizations buy for multiple plants
45
Vendor Master• For processing business transactions and
corresponding with vendors
• Shared between the accounting and purchasing departments
• Data is grouped into three categories:− General data− Accounting data− Purchasing data
47
Material Requirements Planning (MRP) A set of techniques utilizing
– Bills of materials (BOM)– Inventory data– Master production schedule for material
requirements A time-phased planning tool for quantity
and capacity by a given– Day– Week– Month
48
BOMs are created as relationships between one parent material and one or more sub-component materials. i.e.,
Master Data - BOM
shirtpants emblem - 2
uniform
hat boxcover
50
Forward scheduling− Starts when the order is received− Results in completion before the due date
Backward scheduling− The last operation on the routing is scheduled first− Previous operations are scheduled back from the last one
Scheduling Techniques
52
Organizational Unit
Sales Area:
Sales
Organization
DistributionChannel
Division
Plant
30003000
USUS
12
Resales
0202
MotorcyclesMotorcycles
9090
AccessoriesAccessories
40001000
CanadaGermany
12
Resale
Sales Area:
Sales
Organization
DistributionChannel
Division
Plant
Company Company
0202
MotorcyclesMotorcycles
9090
AccessoriesAccessories
40001000MSIMSI
CanadaGermanyy
30003000MSIMSIUSUS
30003000
New YorkNew York
34003400
SeattleSeattle
40001000
MontrealHamburg
41001400
TorontoStuttgart
53
SD Master Data
• Customer - Sale organization− Various relationship
− Customer account (i.e, credit, invoice payment)
• Material - Plant− Sales status, Material type, etc.
• Pricing− A technique for prices to be executed in the
order
54
SD Processes
SAP AG
R
Pre-Sales ActivitiesPre-Sales Activities
Sales Order ProcessingSales Order Processing
Inventory SourcingInventory Sourcing
DeliveryDelivery
BillingBilling
PaymentPayment
Invoice
Order Management: Business Processes inCOM Cycle
56
CourseCreditRecruitment
Hiring
Training and
Personnel Development
Payroll Administration
Managing Work Time
Compensation & Benefits
SAP HR Processes
Travel Planning
Employee Self-Service
CostPlanning
&Reporting
65
ERP Trends
1. Further integration of suppliers & customers
2. Focus on ERP system flexibility
3. Mass customization• Standard interfaces across chain
66
Extended ERP
ERP
Upward Integration (i.e., EIS)
Forward Integration(i.e, CRM)
Backward Integration(i.e., SCM)
67
ERP Motivations
• Original ERP Design - Internal• Supply chain relationships requirements
− Improved interactions & communications
− Opportunities with suppliers & customers
• Manufacturers surveyed had supply chain extensions to ERP
• More planned to have extensions• Open systems for supply chains
68
ERP Vendor Response
• mySAP.com - open, collaborative system for SAP & non-SAP software
• SAP APO - forecasting, scheduling, other logistics activities
• PeopleSoft - enterprise performance management
• JDEdwards - planning & execution• Oracle’s 11i - Planning & Scheduling