overview of erp system

ERP & WEB BASED SUPPLY Chain Management

Chapter 3Overview of ERP Systems

Overview of ERP Systems

Basic ERP SystemBasic ERP system has a central database which is used for financial,manufacturing & inventory applications..There are service applications connected with HR management and customers.Customers and corporate reporting guide the sales and distribution system which has interface with common database.The diagram on shown on next slide outlines the basic structure of an ERP system

Basic ERP System

Basic ERP System

In Basic ERP model there are four basic elements1) Strategic & business planning.2) Sales & operations planning.3) Master Production Schedule with Bill of Material (BOM)4) Material requirement planning.

Basic ERP System

1)Strategic & business planning.In an ideal ERP system ,outputs are integrated to business plans.A strategic Plan is long term Plan.A business plan is short term tactical plan.A business plan sets the objective taking into account the environment,the competition and the SWOT analysis( strength,weakness,opportunities &threat analysis)

Basic ERP System

2) Sales & operations plan.Sales & operational plan is derived from the overall business plan.It is mainly detected bythe sales forecast figures for the various products.operational plan is derived from sales plan.The aggregate production plan indicates the general operational range

Basic ERP System

3) Master Production Schedule with Bill of Material (BOM)It deals with items or output of the production function.All future demand for the work in progress and raw materials are dependent on the master schedulePast demand does not always get extension in future& this is kept in mind while planning for raw materials and work in process

Basic ERP SystemThe aggregate plan & master production schedule for computers

MonthComputer Production

1 2800 850

1 2 3 4 5 6 7 8

200 350 150 100

100 75 125 100

75 175 200

Type1

Type2

Type3

Weeks

Basic ERP SystemTime facing Master Production Schedule (MPS).

MPS has element of flexibilityMany factors decide this production lead time,commitment of parts & component,buyer-seller relationship,excess capacity available & tendency to make or not to make changes.Time fencing ensures a reasonable controlled flow through production system.There are opportunities to introduce changesMPS is frozen in initial period when orders are received.A moderate changes allow changes in specific products if parts are available

Basic ERP SystemTime facing Master Production Schedule (MPS).

Time in weeks8 15 26

Capacity

From CustomerOrders

Frozen Moderate Flexible

Forecast & available capacity

Basic ERP SystemBill of Materials(BOM)

A particular finished product is made up of raw material ,parts,assemblies,sub- assemblies.They are arranged in sequential order as per production requirement.The BOM file is important input to ERP.It is also called product structure or product tree.It can be sorted as part number ,assembly wise or level of procurement wise.BOMs are constantly revised as per latest changes& correct version is used for production

Basic ERP SystemBill of Materials(BOM)

Basic ERP SystemBill of Materials(BOM)

Basic ERP SystemBill of Materials(BOM)

Basic ERP SystemBill of Materials(BOM)

Basic ERP SystemMaterial Requirement Planning

This program works on the inventory file.,the master production schedule and BOM fileMPS provide a list of items in specific time period.BOM describes the materials and the parts needs to make each item in specific time period.The stock position is shown by the inventory file.The MRP program accesses the segment of the inventory file and at the same time refers to BOM to compute quantities of each item required.There can multiple masters schedulers for each major product line and they compete resources

Basic ERP SystemMaterial Requirement Planning

Basic ERP SystemMaterial Requirement Planning

Structure of ERP System

Client Server Functions

ERP system is client server based.To run ERP system ,Powerful PCs are required at both ends.The functions are performed by three layers of logic.Presentation Layer Graphic user interface or browser for data entry.or accessing system functionsApplication Layer Business rules,functions,logic & programmes acting on data received/transformed from to database servers.Database layer Management of organization’s operational or transactional data including metadata

Client Server Functions

PCPC PC PC

Client Work Station

Application Servers

Database Servers

Presentation Layer

Application Layer

Database layer

ERP Strengths & Weaknesses

End of Chapter 3

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