The document discusses Enterprise Resource Planning (ERP) systems. It defines ERP, describes its key characteristics and functions. It provides examples of 4 companies that implemented ERP systems and the challenges they faced and benefits achieved. The conclusion states that while large organizations use integrated ERP systems, smaller suppliers may use different systems that integrate with their larger customers' systems due to differing internal needs. ERP systems will continue to support a range of products due to diverse user needs.
3. The primary functions of Enterprise Resource Planning
(ERP) are to integrate the inter-departmental operation
procedures and Management Information System (MIS)
modules, and to reallocate the resources of a company.
The Gartner Group first used the acronym ERP in the
1990s.
ERP systems experienced rapid growth in the 1990s.
Because of the year 2000 problem and the introduction of
the euro that disrupted legacy systems, many companies
took the opportunity to replace their old systems with ERP
4. Enterprise resource planning (ERP) is a category of business-
management software—typically a suite of
integrated applications—that an organization can use to collect,
store, manage and interpret data from many business activities,
including:
product planning, purchase
manufacturing or service delivery
marketing and sales
inventory management
shipping and payment
5. ERP (Enterprise Resource Planning) systems typically
include the following characteristics:
An integrated system that operates in (or near) real time
without relying on periodic updates.
A common database that supports all applications
A consistent look and feel across modules
Installation of the system with elaborate application/data
integration by the Information Technology (IT) department,
provided the implementation is not done in small steps.
6. Financial accounting General ledger, fixed asset, payables including
vouchering, matching and payment, receivables cash application and
collections, cash management ,financiaL consolidation
Management accounting: Budgeting, costing, cost
management, activity based costing
Human
resources: Recruiting, training, rosterin, payroll, benefits, 401K, diversi
ty management, retirement, separation
Manufacturing: Engineering, bill of materials, work
orders, scheduling, capacity, workflow management, quality control,
manufacturing process, manufacturing projects, manufacturing
flow, product life cycle management
7. ERP's scope usually implies significant changes to staff
work processes and practices. Generally, three types of
services are available to help implement such
changes—consulting, customization, and support.
. Implementation time depends on business size,
number of modules, customization, the scope of
process changes, and the readiness of the customer to
take ownership for the project
8. Problem-A family owned chemical manufacturer needed to replace its old
information, inadequate system and solve some important business
problems. The company was growing and management needed to
understand customer profitability.
Solution-Management believed that they did not have the knowledge to
select a new system by themselves and they wanted to be sure not to make
a mistake. They began to interview consulting firms who had the
knowledge they lacked.
. Management selected Ultra to assist the company with a selection of a
new information system. Ultra was selected for two reasons: first, the
ability of the Ultra Partners to work with the management team, and
second, Ultra’s depth of knowledge about ERP software vendors
9. This client has received the following benefits through an
Ultra engagement:
Development of new processes for sales and service
Management understanding of how to solve a critical business problem
Clear justification for the new system
Accurate selection of a new information system that fits their unique business
requirements
Purchase of a tier I ERP vendor at tier II prices
Availability of outside ERP knowledge and experience to supplement the management
team during the implementation of the selected system.
10. CHALLENGE-Miljoco gauges and thermometers are
installed by original equipment manufacturers and
mechanical contractors on products such as refrigerated
cases, boilers, compressors, burners, chillers and food
holding cabinets. With 35 people in its headquarters and
manufacturing facility in Detroit, and 55 more at a plant
in Shanghai, China and with more than 1,500 customers
around the world Miljoco’s management knew it needed
an Enterprise Resource Management (ERP) system to
manage the increasing complexity and still remain
competitive in a market.
11. After the decision, that same team of four future users
built the datasets that would drive the new ERP system.
The datasets were complex and extensive: 25,000
stock-keeping units (SKUs) the company sells, 15,000
SKUs they make, 5,000 components from more than
300 vendors, and, of course, detailed records from
1,500 customers.
12. Market-Manufacturer of Structural Steel Tubing Annual
Revenues $200 million.
Problem-LTV - Copperweld was constantly forced into a
position of borrowing convertible raw materials from
various production runs to meet spikes in demand in
another production line. Copperweld’s Materials Resource
Planning (MRP) system did not support visualization of the
stock outs or inventory fluctuations that resulted from these
practices. Consequently, Copperweld suffered from
inaccurate raw material inventory levels and periodic
shortages of vital materials in several productionruns.
13. Working directly with Copperweld IT Executives and Production staff, Ultra
Consultants designed a Raw Materials Pipeline Model. Utilizing a custom
application and Microsoft SQL Server, this model extracted raw materials
inventory data, pipeline data, finished goods orders and forecasts from the
operational systems. Detailed conversion/precedence rules, and exceptions to
rules, were acquired from the operational system and interviews with the
master scheduler. These rules allowed the Raw Materials Pipeline Model to
simulate raw-material consumption into the future. Furthermore, Ultra
Corporation technicians designed a Decision Support System (DSS) and
reporting writer,
Benefits
Stock-out reduced significantly by giving suppliers longer lead times
Scrap was reduced by nearly 2%
Raw materials inventory reduced by 40%
14. Market-Full Compass Systems, Inc. distributes professional audio, visual,
and lighting equipment. Located inMadison, Wisconsin, the company
markets over 100,000 SKU’s to over 300,000 customers.
Problem-Twenty-five years ago the company implemented its current
information system. They called the system TeleManager because is
primarily supported the telemarketing efforts or their in house sales
organization. The system used the Informix database and was eventually
ported to a Linux operation system. Over the years the information system
has grown to include purchasing, warehouse operations, and accounting.
In 2010, management began to see that TeleManager was beginning to
impact the company’s double-digit growth. It became difficult for IT to
keep up with changing business environment and business process change.
The company was becoming a true multi channel marketing company and
the business users needed an information system that addressed the needs
of this rapid changing industry.
15. In early 2011, Full Compass Systems retained Ultra
Consultants to help them with the transition from a 25- year-
old legacy system to a modern multi-channel marketing ERP
system. The top management of the company was involved in
every step of the process. The team involved the top officers
of the company including the founder, COO, CFO,
procurement, operations, and sales and marketing.With Ultra’s
guidance, the team documented all of the current business
processes. Over 300 business processes were identified and
documented. Ultra facilitated an ERP education curriculum we
called ERP University. Ultra provided ERP professionals from
the industry to teach the team about ERP best practices for
their industry so they could envision “what is possible” with
modern ERP.
16. There is a limiting factor, and this brings us full circle.
Small suppliers do need to integrate with their larger
suppliers’ ERP systems, but their internal processes and
requirements will often be very different. Many will buy the
ERP application that most suits their internal use and seek
to integrate it with whatever applications are used by
organisations they trade with. In other words, tier-two
fragmentation of ERP is not just something that exists in
large organisations, it is also a fact of life across broader
business communities. The interests of ERP users are so
diverse that the market will continue to support a wide
range of products, including those for enterprise-wide needs
and those for specialist niches, and the various products will
always need to talk to each other at some level
