ERP systems provide integrated software applications for core business functions like finance, human resources, manufacturing, and more. Implementation requires significant costs but can provide benefits like increased efficiency, standardization, and real-time information access. Key challenges include reengineering business processes and addressing structural and cultural changes during deployment. ERP modules help automate activities in areas such as sales, purchasing, production, and accounting.

1. Introduction to ERP based
Enterprise system

2. • ERP provides an integrated application
environment with fast and seamless access to
a single unified business information system.
• It cost between 50 Lakh to 500 Crores
depending on the size of the organization . It
is being used by govt , insurance companies
,banks and universities ,oil companies ,
defense.

3. • ERP is a fully integrated management system
and it includes :
• It provides real time online information for
decision making.

4. Evolution of ERP
• The evolution of SAP is from SAP R1 to SAP R2
to SAP R3 to MY SAP.
• From EOQ to MRP (MPS) to ERP.

5. • Application of ERP for a manufacturing
concern.
Bring the raw material from the supplier----
Schedule it in to production to make the
finished products-----planning preventive
maintaince(effect of such maintaince on
customer orders) -----depreciation of equipment
in financial system---scrap it from system.

6. Challenges in Implementation of ERP
• Structural & Cultural in nature.
• Most ERP projects are failed to be
implemented on time and higher cost.
• ERP needs Re-engineering of process.

7. Potential benefit of ERP(Tangible &
Intangible)
• Enterprise integration :Functional &
Geographical.
• Standardization of systems.
• Transparency
• Reduction in paper work.
• On time and accurate information.
• Better monitoring and quicker response of
queries.
• Increased customer satisfaction.

8. Modules of ERP
• ERP has a client server architecture.
• It deals with the following modules.
----- Human Resource------
1.Payroll ----Handles accounting and preparation of
cheques related to employee salary , wages and
bonuses.
2. Human resources administration: Personnel
management including recruitment ,business ,
travel and vacation allotment

9. • Financial module:
1. Accounts recievable
2. Accounts payable
3. Fixed assets
4. Treasury assets----Monitors and display cash
holding,financial deals.

10. • Manufacturing and logistics:
1.Production planning:
2Materials management
3.Sales and distribution
4.Order entry and process of customer orders
5.Warehouse management
6.Transportation management
7.Plant maintaince
8.Customer service management

11. Vendors of ERP
• ORACLE- CRM ,SCM, Financial Management
module.
• SAP
• Microsoft
• Infor
• Epicor
• ABB Automation

12. Advantages of using ERP :
• 1.Scheduling the operations to deliver the
product to the customer.
• 2.Planning preventive maintaince of
equipment.

13. Sales & Distribution ERP Module:
• Eg : A company manufacture motors. They
encountered the following problem
Subsystems Problem
Sales Order entry Incorrect pricing , incorrect
credit information , calls to
customer to get the correct
information
Inventory Incorrect inventory , delays in
inventory update ,Inadequate
inventory to fill orders.
Shipping Delay in shipping and delivery
Invoicing Inaccurate or incomplete
invoice

14. Payment Processing Incorrect posting of payment
Account receivable Delay in accounts receivable posting
,reminder letters are generated to
customers who have already paid

15. Sales & Marketing Process
Operational Prospecting , contact management,
telemarketing .
Management Control Sales management ,product pricing ,
advertising and promotion ,sales
forecasting.

16. Implementation of ERP in this SALES
and Marketing module
• Implementing ERP provide integrated
marketing support systems which include
contact files , order entry files , sales history
files , CRM software( previous experience of
customer , including purchases , product
preferences & payment history world wide).

18. • Now here with the help of ERP module:
Customer places an order-----Sales order is recorded----ERP systems
schedules shipping(works backward from shipping date to reserve
materials to order parts from suppliers and to schedule
manufacturing)------ERP checks the customer credit limit update the
sales forecast----creates the bills of materials-----sales person
commission is updated----Product cost and profitability is calculated-
Finally accounting data is updated(balance sheet , accounts payable,
Ledgers.

19. • The major advantage of Sales & Marketing
module provides the benefit of standard
codes , common data base, standard
document , audit trail.

20. ERP (CRM)
Key features Characteristics
One to One marketing Tailors product ,pricing , promotions to
the customer.
Telemarketing Facilitates customer contact and call list
management.
Call Centre automation Enables queries to a product
Sales & Marketing ERP (CRM) helps in Sales & Territory management , Contact
management ,lead management.

21. Interfacing of Sales & Marketing
Module with the other modules.

22. Accounting & Finance ERP
• Suppose a Company is selling motors :
Now the following problem can occur if there is
no Accounting & Finance ERP :
Credit Management Accounts Receivable balances on
customer can fall out of date and
result in mis -information in sales
about customer credit limits.
Product Profitability Inconsistent recordkeeping keyed
in to multiple data bases may
result in correct data on product
profitability.

23. Finished goods inventory Delays in increasing finished goods
inventory when goods are transferred
from manufacturing in to the warehouse.
Consolidating information from Difficulty closing books at the end of
subsdaries accounting period which is complicated
when multiple subsidiaries with multiple
currencies ,difficulty integrating financial
information from incompatible system
with different data base.
Management reporting Separate data base for marketing
,production and purchasing make it
difficult to provide management with an
integrated analysis of profitability and
cash flow.
Creating an audit trial Difficulty creating an audit trial of
transactions when multiple transactions
use multiple databases

24. Accounting & Finance Process
• Accounting & Finance functions produces
transactions such as paychecks , checks to
vendors ,customer invoices , purchase orders.
The accounting processes begin when a
sales order is entered -------This generates an
inventory update to the inventory system which
maintains information about each item in stock and
triggers the purchase of additional stock when the
stock level reaches a certain point------

25. ------The purchase order system creates the
purchase order and tracks which purchase orders
have been fulfilled , which items are on back order
and which orders are expected to be received ------
The sales order generates an invoice to the
customer from account receivable system-------
when the payment is made the account receivable
balance is updated(When the payments are
overdue the Account receivable system generates a
report that shows account balances which are
30,60,90 days overdue .

26. Side by side Accounting & Finance module does
the budgeting ,cash management, capital
budgeting also.

27. Production & Material Management ERP.

28. Without ERP –The Problems Faced
• Problem of shortages , Capacity Planning ,
Supplier Problem.
• Last minute change in the product
specifications can fail to make it to the shop
floor.
• When a totally new product is to be designed
the engineering department does not have
the information from marketing what actually
a customer wants.

29. • Purchasing requisitions get lost in the approval
process because paperwork is all manual . So it
creates multiple purchase requisitions.
• Production Planning Problem: Production
planning may not be linked to expected sales
levels , difficulty in adjusting production to actual
sales to meet the sales demand.
• Inaccurate production forecast may lead to
incorrect purchasing decision.

30. • So in all there is a problem of integration
between production planning , sales ,
purchasing and accounting.

31. Production Planning Process
• Production Planning Process includes the
following activities:
1. Producing the production plan-
**Operational & Management control.
2. Acquiring raw materials
3. Scheduling equipment , facilities and
workforce to process these materials.
4. Designing products and services

32. • Operational level activities include daily
activities like purchasing , receiving , Quality
Control , inventory control, materials
management (Bills of material),cost
accounting(cost of personnel ,
materials,equipment)

33. • Managerial Requirements Planning include:
-------Identifying stocks that planned productions
calls for.
------Determining the lead time to get the stock
from the suppliers.
------ Calculating safety stock levels.
------- Calculating the most cost effective order
quantity.

34. Implementation of ERP in Production
Planning
Subsystems How an ERP works
Sales Forecasting Production has access to sales forecast so
it can adjust production levels to actual
sales.
Sales & Operations Planning Determine if production facilities can
produce enough to meet the consumer
demand.
Purchasing Generates the purchase orders for raw
materials
Inventory Determine which material you need ,in
what quantity and at what time.
Accounting ERP captures data on the shop floor for
accounting purposes.

35. ERP-Human Resource
Subsystems Problems
Employee Information Need to query employee information to
identify the candidates with required skill
sets.
Applicant selection and placement Need to develop selection criteria to
provide a more stable workforce.
Government reporting Need to maintain and update data for
government reporting requirements.
Job Analysis and design Need to design positions which will
minimize turnover by providing breadth
and depth of responsibilities.
Compensation Need to develop competitive salary and
benefit packages for key positions.
Benefit administration Need to analyze alternative benefits
scenarios to minimize costs and maximize
employee loyalty and satisfaction.

36. • More of the problems exist due to lack of
access to information about employees , skill
sets ,job description , turnover data , retention
data . Failure to link HR data with financial
data.

37. Implementation of ERP in HR
Subsystem How ERP works
Employee information Maintains personnel information,
including job history, salary , retirement
and benefit choices.
Skills inventory Maintains information on special skills ,
work experience.
Position Control Defines each position with in the
organisation :Providing common job
categories ,descriptions , and
specifications which can be used across
the organisation.
Compensation Maintain the compensation data,
maintain the employee compensation
changes(salary history , job evaluation
results)

38. Performance Management Maintains performance appraisal data
and productivity data.
Training & development Tracks information about the courses , I
instructions,students and registrations
Government reporting Provides reports in response to
government statutes including the Age
discrimination act,the equal pay act ,,the
occupational act etc.
Payroll Generates payroll and various statements.

39. • In addition to these capabilities it supports
attendance reporting , determination of
overtime and bonus wages ,tracking of
absences which are due to vacation , illeness
or leave.

40. ERP Project Life Cycle
• ERP project is not only expensive but also
require high attention in its implementation
efforts.Once the need is established then its
feasibility report should be prepared so as to
ensure the smooth adoption and benefits
likely to derive out of this investment.

41. Business Case Anaylsis
Stage 1- Pre Implementation Stage
Business Case Anaylsis
1.Business Practices
1.Cost –benefit Analysis
2.Business Processes
2.Organisational Analysis
3.IT Infrastructure
4.Competitive environment
5. Strategic Feasibility
Analysis(Technical,Organisational,Schedule
))
Product /Partner Evaluation

42. Stage II : Implementation
Change Management: BPR
,Training, Organisational Project Management
readiness
Implementation Approach
Phased/Big -bang

43. Stage 3: Post Implementation
Extended according to
Optimization Utilization
requirements
Impact on Business Performance

44. Strategic Need Analysis
• Feasibility Analysis: Feasibility analysis guides
the company in determing whether to process
with the project or not.It identifies the
important risk associated with the project.

45. Feasibility Analysis Parameters:
• 1. Technical :
Familiarity with application/Technology
Project Size
Compatibility
Related to determining methodology to be used.

46. • 2.Organisational
1. Top management support
2. User involvement and support
3. Be a part of development team-incorporate
their support.
4. Stakeholders :
Customers,Vendors,Government

47. • 5. Strategic Alignment: Fits with company
goals , mission.
• 6. Political Scenario

48. • 3. Schedule:
1.Time & Cost
2.Use PERT/CPM techniques to access if the
project is on Track

49. • Other issues
Availability
Reliability
Security
Resources required.
Risk:
Cost Benefit Anaylsis:ROI,Present value anaylsis

50. Cost Element Associated with ERP
• There are some fixed cost elements that are
associated with implementation of ERP:
Hardware cost , software cost , system integration
cost , training cost , staff cost , consultant cost to
estimate the overall investment.
The company should also consider
operational and financial parameter like the
working capital , fixed assets , inventory turnover
ratio , manpower productivity ratio , business
process lead time.

51. • Approximate investment required for a
small/medium scale organization with
turnover< 20 Crore is 35 Lakh Approximately.
This amount includes: Network
infrastructure for 5 LAN points ,
Hardware(database and application
server),Operating system , database , Annual
maintaince ,IT skill manpower.

52. • Some of the global benchmarks for benefits of
ERP driven business :
30-35 % reduction in cost of sales
65-70 % reduction in cost of quality
75-80 % reduction in delivery time
35-40 % reduction in manpower
60-80 % reduction in inventory.
Also there is reduction in engineering &
design time , supply chain optimisation , machine
down time

53. Analysis of ERP software
• Some ERP solutions are tailor made but it can
be modified and customized to cover a range
of industry segment

54. ERP Market
• Its growing
• Lack of skill full people.

55. SAP
• It occupies the 30 % of the market share.
• It’s the world leader in ERP solutions
• It stands for Systems Application and Product
in Data processing.
• Current version of SAP that is being used is
SAP R3.
• It operates on operating system like UNIX,NT.

56. • It has more then 7500 clients . It uses
ABAP/4(Advance Business Application
Programming) and has 14 different modules.
• It is the first mover of ERP.
• It serves Aero space , defense ,automotives ,
chemicals , healthcare , engineering &
construction,phramaceutical.

57. SAP R3
• r/3 system
R/3 employees’ three-tier client/server architecture widely recognized by
SAP customers, industry analysts and technology partners to solving some of
today’s most demanding information management challenges.
There are three functional layers and each support the demands of its
functions.
• 1. The first layer is data layer resides on control servers.
• 2. Second layer i.e. the application layer holds the processing logic of
the system, prepares and formats the data for individual offices and
departments.
• 3. The presentation layers handles all the tasks related to presentation
of data including tasks interfaced by users of personal computers.

58. Strengths of SAP
• Long term Partnership with the customers.
• In-depth knowledge of business.
• Brand recognition
• Experience
• Sound financial situation
• Covering 27 different industries.
• Sustained investment in R&D
• Strong qualified consultant.

59. Weakness
• Its too big and complex.
• Costly
• It takes between 18 months to 5 years.

60. • Oracle:
Next challenger to SAP.
Its product name is Oracle E-business Suite .
• Peoplesoft: It has three products: People soft
enterprise , people soft entreprise one , people
soft world catering- HR , Finance , IT
,procurement ,marketing , services,sales.

61. • IFS : Industrial financial system : Only for Large
and medium size companies

62. Role of vendors
1.Vendors are the people who have developed
the ERP software’s. These people have invested
huge amount of time and efforts in research and
development to create the software solutions.
The ERP vendors spend billions of rupees in
research to come-up with innovations that make
the package more efficient, flexible and easy to
implement and use.

63. 2.Along with development and research, the
vendors are also responsible for up gradations in
the technology. The vendors constantly upgrade
their products to become best and latest in
advancements of technology.

64. 3.The vendor should supply the product and its
documentation as soon as the contract is
signed.For fixing any problem in
implementation, a vendor should have license
officer who should interact with the
implementation team.

65. 4.The another role or responsibility of a vendor is as
a trainer – to offer initial training for company’s key
users. This informs the users how the package
works and what are the major components, how
the data and information flows across the system,
what is flexible and what’s not, what can be
configured and what cannot, what are the
limitations, what are the strengths and weaknesses,
what can be customized and what should not and
so

66. • The vendors also support the project functions
and must exercise the quality control when
product is implemented
• Vendors should continue to participate in all
phases of implementation of a project.
• Rather than these responsibilities, vendors
should also involve in customizing the product
filling the gaps between package and actual
business and offer the guarantee of
customization.

67. ERP Market Share

68. criteria ifs marshal oracle sap Baan people soft J.D.edwards
Completeness of functionality
with in core package. Comparison of Software
Yes, except project and
advanced production
scheduling.
Yes, except project and
advanced production
scheduling.
Yes, but maintenance modue is
available through Maximo. Project
scheduling and advanced scheduling
are add ons.
Yes, except advanced Yes, except project and Complete solution
production scheduling. advanced production
scheduling.
is not internal.
Yes, except project and
advanced production
scheduling
Project scheduling Primavera link Primavera link Primavera link internal internal Primavera link No link
Advanced planning and Proposed i2 No link I1 Rhythm Limited internal and i2 No link Available No link
scheduling Rhythm Rhythm
Multi plant Available Available Maximo link Available Not complete Available available
maintenance
Localization Planned Available Available Available Available Available Not available
Architecture 3 tier web thin client 3 tier web 3 tier web 3 tier 3 tier 3 tier 3 tier
Choice in OS Unix,NT NT Unix,NT,OS 400 Unix,NT Unix,NT Unix,NT Unix,NT,OS
400
Data base Oracle MS SQL Oracle Multiple Multiple DB2/400 multiple
SQL server
oracle
Development tools Rational rose MS visual Oracle designer ABAP Baan 4GL ANSI C

69. Role of End users

70. In-house Implementation Pros & cons
• The system that their in-house team develops
are not having quality, scope, functionality or
technology as compared to software created
by software firms.. But to get maximum
benefit – out of packaged solution, the
company should participate fully during a
package implementation

71. • The people who are implementing ERP system
should have the good knowledge of product
along with following skills:
1. Knowledge of how to organize and run a
project of this magnitude, i.e., good
organizational skill, project management, team
management skill and knowledge of scientific
method of software project management

72. • 2. Enough experience in handling problem and
issues that arise during the implementation e.g.
problems like cost over runs, time overruns etc.
• 3. Good people skills: ERP implementation will
face resistance from the employee i.e. will be
ignorance about the product, fear of an un-
employment, fear of training, fobia of technology
etc. That’s why it is very important that people in
the implementation team are very good,
diplomats, adapt at diffusing crises situations

73. • Good leadership skills: An ERP implementation
involves many people, thus is necessary for
vendors to adapt good communication and
leadership skills. This is required for
implementation with existing employees.
• Excellent – training skills: As the team training
and end user training are the important phases of
implementation process, the excellent training
should provided by the vendor

74. ERP Product Life cycle
• It’s a modified BCM.
A new company would start as a Baby and
then continues it way to become star and then
after it becomes in to maturity stage it is among
the cash cows.When the technology gets old and
it loses its client it becomes it ends up in the
category on Dogiee.

75. Technology: Immature
Technology: Mature
Vendor:New Vendor
Vendor : Growing & established
Functinoality:Basic
Functionality: Many add on’s
Costs:Low
Liabilty:Less
Support:Extended
Cost:Moderate
Installed base: None/few
Installed base: Growing
Liabilty:high
Technology: Modern Technology: Old
Vendor: Established Vendor:Declining
Functinality: New Support :Passive
Support: Sturctured Functanlity:No development
Liabilty:Stable Liability: Unstable
Costs: High Costs: Unacceptable
Installed base : Large Installed base:Decliing

76. Evaluation of ERP Solutions
Is ERP a technical or is it a Strategic Solution:
Whether it is a technical or it is strategic, the
other is bound to be impacted.

77. ERP as an Technical Solution
• If the company views ERP as a technical solution
the main reason for changing over is that its
present information system are too old. Many
companies still use the systems that were
developed in house and are specially adopted for
the company . Most of the companies have
several systems developed by different
vendors.The capacity of these systems is often
not enough or they cannot be upgraded because
they are not supported any more.

78. ERP as a Strategic solution
• For larger enterprises it is very difficult to get a
general overview of its organisation.This can be
simplified with a uniform system where
everybody works according to the same routine.
An integrated ERP systems gives opportunities to
rationalize and develop the organizational ERP
system may be seen as a tool to obtain the
information that can be important when forming
the company future staretergies.Information
technology to an increasing degree concerns the
management and the decision to buy the ERP is
almost always taken by the top management

79. • To further breakdown the above two categories there
are three level that affected when implementing an
ERP system:
a) Business Development : Development of the business
strategies.
b) Operational Development: Development of the
company’s business process and their relationship
with the concerned functions with in the
organizations.
c) System Development: Development and
administration of necessary IT services where the
ERP system is an Important part

80. Methadology For ERP evaluation:
• Since ERP involves huge investment it is like
do it right the first time.Vendor selection is a
multilayered process.Intially a request for
information is delivered to some potential
vendors after doing research in market.The
various steps are as follows.

81. Step-1 RFI
• RFI summarizes the requirements of the company to
the potential vendor . The level of details needs to
enough to allow a good understanding of the effort
involved in the proposed contract. However vendors
are only going to express an interest and not a detailed
proposal with the pricing details. In addition to a
statement of the project requirements the RFI should
also state any preconditions of the contract. The
preconditons may be the quality standards ,size of the
vendor organization ,location of corporate and support
centers market position etc. Evaluation of the RFI
document helps narrow down the vendors to a
preferable limit.

82. Functional Requirements Specification
• Identifying the detailed functional requirements
is the most intricate task of the management and
the project committee.
------- The first step in defining specifications is to
break the job down in to manageable pieces by
business functions . Specifications for each function
can be defined with the help of experts in that
functional area.Perhaps the most difficult aspect of
defining in detail the functional requirements is
determing how much detail is enough and how
much is too much.

83. • After gathering all the functional requirements
their importance is to be weighed. The main
issues are to be focused . Some of the most
important areas are finance ,marketing , project
management , production planning & control. So
to address these areas companies create their
functional criteria and ask the vendors whether
they comply with the given criteria by filling up
some compliance materials provided in the next
step of RFP preparation.

84. Request for Proposal (RFP)
• Request for Proposal is the next step in vendor
selection.Once the vendor are narrowed down
to a particular number in the RFI stage RFP’s
are sent to them from organisation asking
them for detailed proposal both in terms of
technical & financial results.

85. • RFP must do the following:
1. Describe the company to the supplier
2. Provide an understanding of the needed
software capabilities as it relates to the
functional requirements.
3. Solicit bids(price estimate based on system
requirements)

86. • RFP should contain the following information:
1.Introduction of the company,the industry it
serves and the scope of the planned system.
2.Objectives for adopting ERP based information
system
3.Instructions to be followed by the bidders
4.Criteria that will be used to make the selection

87. • 5. Detailed functional requirements to which
the bidders capabilties response is expected
• 6. Conditions of the contract between the
company and the bidders for implementing
the ERP based information system.

88. • Some if the standard methods that are
followed are:
1) Open tendors:Tenders are invited openly
from ERP vendors .
2) Limited tender: In this in comparison to open
tender is restrictive process as a limited
number of RFP’s are sent to a few pre-ferable
vendors.

89. Evaluation Procedures:

90. ERP enabled BPR
• Business Process Re-engineering is the
fundamental rethinking and radical redesign
of business process of an organization to
achieve dramatic improvement in critical
contemporary measures of performance such
as cost , quality , service and speed.It involves
radical redesign of business process ,
information technology and the organisation
structure.

91. Why Process re-engineering?
• To gain Core competency.
• Customer demand :Significant gap exist
between the actual and the desired results.
**** almost 70 % of the projects fail due to lack
of senior management sponsorship or failure to
make commitement.

92. How is ERP different from other
Process Improvements.
• Quick Hits :These are typically low risk , easily
achievable efforts that provide immediate payback
opportunities.
• Incremental Improvements : Focusing on small
performance gaps , delivers small degree of change
that achieve small but meaningful business results.
Document the process problem-----Establish the measures-----
Follow the process----Measure the performance------Identify and
implement improvements.

93. • 3.Re-engineering -
But it says the current process is irrelevant it
does not work , it is broken , forget it , just start
over again.
Initiating(defining the scope & objectives
of the re-engineering project) ----Documenting
using Porters value chain-----Focus on AS-IS
Process-----Design TO- BE process------
Implementation.

94. Characteristics of BPR
• Cross-functional Orientation & Process
Innovation:
• Customer focus and outcome orientation.

95. Workflow management system in
BPR
• Workflow management integrates aspects of
technology ,organization &methodology and
support in communication and coordination
of business processes in the organization.

96. Workflow Process
• 1. Initiation------ 10 % of the total time
• 2. Documenting the processes using Michael
Porters value chain.-------- 10 % of the total
time
• 3.Focus on the AS-IS processes------ 20 % of
the total time.
• 4.Design the “ TO-BE” processes.--- of the 40
% of the total time.
• 5. Implementation of ERP enabled BPR- 20 %
of the total time.

97. Five stage Model of AS-IS/TO-BE
Analysis
• In this model the thorough analysis of the
ability to meet core business needs and
identifying of gaps between the core needs 7
existing applications features and functionality
is documented with all the alternatives ,
including estimates of all resource and
schedule impacts.

98. • It covers the following aspects:
a) Process Analysis
b) Product analysis
c) IT infrastructure
d) Competitive analysis
e) Strategic analysis

99. • Process Analysis : A clear understanding of the
current process is needed to be done to have
a migration from “AS-IS” environment to the “
TO-BE” environment..

100. • AS ----IS TO-BE
1. Customer dissatisfaction because of delays 1.Matrix structure is
2. Inefficient manufacturing process required to reduce
3. Increased labour cost ,raw material cost. bureaucracy
4. Lack of innovation in business 2. Need for efficient
cellular system
3. Needed to reduce
product cycle time.
ERP helps in 4. Need for proper
Reducing inventory implementation of supply
Decentralization of decision making. chain Management
Creating sense of ownership among
workers
Reduce cycle time

101. • Product Anaylsis : Same as in Process analysis
The AS-IS and TO-BE analysis of the product is
done.
AS-IS TO-BE
1.Lack of innovation in 1. New product development
product development
2. Decline in sales because of 2. Integration of all departments to
non-competitive products produce innovative product.
3. Low productivity 3. Increasing productivity.

102. • IT infrastructure: It is important to
understand the current systems that are
supporting the current processes.
Most of the time the new
technology will replace some or all of the
existing technology.By understanding the
current systems data migration , integration and
plan for a smooth transition to the new
technology can be defined.

103. • Competitive Analysis :
AS-IS TO-BE
1. Decline in sales because Implementing latest technology
of rise in competition
2. Lack of innovation in Increasing network within and
Products comparing to outside of the organization
Competitors.
3. Lack of technological advantage Leading organization towards SBU.

104. Strategic Analysis
• 1. Programs in Isolation 1. Rebuild process from scratch
• 2. No synergy gain 2. Redesign the methods
• 3. Bureaucratic hierarchical 3. Design & develop customer
organization structures centric ,decentralized
decision making flexible
systems

105. ERP –ES enabled best business
practises.
• Lean manufacturing
• Vendor managed inventory
• Condition based scheduled maintaince (CBM)
to launch a journey towards excellence for
achieving dual goals viz zero defect & zero
breakdown.
• Competency based appraisal

106. • All the above management practices demand
availability of accurate information and
coordination between various departments ,
parties and business processes.So for this ERP
based integrated information system become
inevitable.

107. Lean Manufacturing
• Lean manufacturing is a means by which the
overall business processes are organized so as
to deliver products with greater variety and
superior quality using less resource and in a
shorter time.It can be implemented by having:
1. Faster throughput times for inbound , work
in progress.
2. Smaller manufacturing batch sizes.
3. Shorter set up and changeover time.

108. 4. Greater schedule stability
5. Lower rework and rectification costs.

109. Adapting LM principles for
automobile producers
• Three inter-related components necessary
are:
1. Design for logistics and manufacture.
Agile process
2. Organizing manufacturing along LM and
consistent
principles. performance
measures.
3. Integrative supplier relationships.

110. Design for logistics
• Part count is very necessary if not managed
carefully will tend to proliferate very fast . In
the interest of speedy new product
development new product designs do not
always take sufficient account of existing parts
. As a result the part count for raw materials
part , finished parts and subsystems can go
up. The lean manufacturing principle for
design for logistics is therefore very critical.

111. • Commonising raw materials part :
• Common finished parts & use of modular
designs.
• Staged engineering change control.: All
manufacturing process data , tooling and
quality plans.
• Multifunctional teamwork.

112. • Organizing manufacturing along LM principles:
The first element here entails the effective
integration of marketing and planning. The
manufacturing system for lean manufacturing
do not always integrate the customer enquiry
stage and the order release stage.

113. • The first is to take orders as they come on a
first come first serve basis and build them in
to master production schedule . These are
then sequenced to balance the work content
of the assembly line. Now here the work
content may fluctuate and this may lead to
volume and mix turbulence. The tight coupling
between the different levels of the product
structure could also schedule turbulence after

114. • Unforeseen circumstances such as component
non-supply, quality or production problems .
The weakness of this process in to the
customer enquiry process thereby effectively
decoupling them.
The best option is to
integrate the customer enquiry stage and order
release stage with the help of ERP.This can be
done in two steps . Firstly MPS is prepared

115. • Second the customer order is taken before a
due date can be promised the order is
matched to the closest unoccupied order slot
in MPS.If the customer order and the
proposed oder slot are deemed to be
compatible then the order is accepted in to
that slot and the delivery due date is
calculated and promised.

116. • Integrative Supplier relationships:
Agile Processes and consistent performance
measures:

117. Vendor Managed Inventory (VMI)
• Vendor managed inventory is a process where
the manufacturer generates orders for the
distributor based on demand information sent
by the distributor.
Under VMI instead of distributor
monitoring sales and inventory for the purpose
of triggering replenishment orders the vendor
assumes responsibility for these activities
through enterprise resource planning.

118. • There are basically two models :
1. The conventional business model : Here the
distributor is in full control of the timing and
size of the order being placed.
2. Vendor Managed Inventory Model: The
manufacturer receives electronic data that
informs it about the distributor’s sales and
stock levels.The manufacturer can view every
item that the distributor stocks as well as the

119. • True point of sale data. The manufacturer is
responsible for creating and maintaining the
inventory plan.

120. How does VMI work
• There are basically two transactions in the ERP
system at the heart of the process . The first is
the product activity record . The data
contained in this document are sales and
inventory information . The inventory data is
typically segmented in to various groups such
as on hand on order , committed ,back
ordered and so forth . This transaction is the
backbone of VMI and is sent by the distributor

121. on a prearranged schedule daily . The decision
to order is based on this data.
The manufacturer reviews
the information that has been sent in by the
distributors to determine if an order is needed.
1. The first step is automatic verification of the
data as accurate and meaningful
2. ERP calculates a re-order point for each item

122. 3. ERP system compares the quantity available
at the distributor with the reorder point for
each item at each location . This determines if
an order is needed.
4. The order quantities are then calculated.

123. • The second VMI transaction informs the
distributors what product to expect from the
manufacturer. There are two transactions
being used for this function . The most
frequently used is the purchase order
acknowledgement .This document contains
the product numbers and quantities ordered
by the manufacturer on the distributors
behalf.

124. Benefits to Manufacturer &
Distributor
• Lower distributors Inventories
• Lower administrative costs.
• Increased sales
• A true partnership is formed.
• Stabilize the timing of purchase orders.

125. Condition Based Maintaince (CBM)
• There are three types of machine maintaince:
Unplanned breakdown maintaince , planned
scheduled maintaince , condition based
maintaince.
Unplanned maintaince increase the
cost of downtime and costs . The planned
scheduled maintaince is normally based on the
statistical analysis of the machine failure history
and maintaince recommendation of machine

126. • Spare parts manufacturer . The third type is
the condition monitoring based strategy .It is
planned maintaince based on the measuring
the conditions of the critical elements of the
machine during operation.The anaylsis can be
done to predict the time to failure and thus
allow maintaince to be planned.The object of
condition monitoring is not only to identify
defects but also to identify the root cause of

127. • Failure.
Predictive maintaince is one main type of
condition based maintaince . While performing
predictive maintaince tasks a user must access
warning signs that a failure is about to take
place and react to those warning signs.This
approach pulls together operating data,design
data ,maintaince logs and condition based
assessements in order to schedule future

128. • Maintaince.
How does it work ?
The information of the machine is extracted by
instruments like infra-red thermal image and
analyzed to extract information to detect
machine ‘health state’ based on decision making
algorithms (like BI software).Then the present
condition of the machine is determined and the
future condition can be predicted.

129. The ERP package uses real time data from the
equipment monitoring devices to access
equipment conditions against predefined
normal operating parameters.
Provides real time alerts ( via pager ,
email or other messaging systems when the
equipment is operating outside of normal
bounds so that appropriate maintaince action
can be taken place.

130. • Benefits of condition based apporach is :
1. Increased plant uptime generates profit
2. Enables reduction in spares stockholding
3. Reduces maintaince costs
4. Reduces the number of catastrophic failures
5. Extends the interval between maintaince
period
6. Reduce the number of costly emergency
repairs.

131. • Improved man power utilization