Enterprise Resource Planning (ERP)

Click to edit Master subtitle style Presented By:

Avadhesh Singh

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What is ERP?
ERP is a solution, which Facilitates company-wide integrated information systems, covering all functional areas. Click to edit Master subtitle style Performs core Corporate activities and increases customer service augmenting corporate Image.

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Evolution of ERP
1960s - Systems Just for Inventory Control 1970s - MRP Material Requirement Planning (Inventory with material planning & procurement) 1980s - MRP II Manufacturing Resources Planning (Extended MRP to shop floor & distribution Mgnt.) Click to edit Master subtitle style Mid 1990s - ERP Enterprise Resource Planning (Covering all the activities of an Enterprise) 2000 onwards ERP II Collaborative Commerce (Extending ERP to external business entities)
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Overview:

Ideally, ERP delivers a single database that contains all data for the software modules, which would include: Manufacturing Supply Chain Management Data Warehouse is very common in the retail sector, where even a midsized retailer will have a discrete Point-of-Sale (POS) product and financials application, then a series of specialized applications to handle business requirements such as warehouse management, staff roistering, merchandising and logistics.
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This

Why ERP?
For management to know what is happening in the company For cycle time reduction To achieve cost control & low working capital To avoid the geographical gaps To satisfy the customers with high expectations To to edit Master subtitle style Click be Competitive & for survival

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ERP Expectations

Integrating all the functions

Integrating the systems running in all the locations

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Transparency of information using a single data source across the organization Software must be responsive

Modular Flexible

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ERP- Execution

ERP product selection Preparation Production Implementation

Post-Implementation Click to edit Master subtitle style

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ERP- Product Selection Parameters

No. of installations in the geographical area. % of the overall functional availability Customization possibilities After sales support Your investment plan & budget Implementation partners track record Click to edit Master subtitle style

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ERP- Preparation Phase

Framing ERP Implementation Strategies Formation of Apex & Steering committees Functional & IT team formation Training on ERP functions & features Scope finalization GAP analysis Click to edit Master subtitle style Action plan to resolve the gaps

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ERP- Production Phase

Installing the software & hardware Tuning the software to meet the customization needs Master & Control data arrival as per the Product data structures

Click to edit Master subtitle style Location & people specific roles & rights allocation for module access & security

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ERP- Points of concern

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Costly comparing to custom-built options Lot of hidden costs Chances of cost & time overrun are high The requirement of Change Management is a must Dependency on outsiders is high IT department Poor grip on the Implemented systems

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ERP- Success Factors

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The firm & optimistic approach of the Management on adapting the ERP product driven methodologies The dedicated Team Good Training Strict adherence to the Project schedules Right technical infra-structure Change Management

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Why Company Should Have ERP

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Very economical while comparing the cost of implementing tailor-made ERP solutions. Less prone for hidden-cost hits. The company can opt for its choice of Hardware, Software & communication platforms based on the skill availability. IT department has good control over the Project

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The existing practices & applications can be tuned and linked with the proposed package. Maintenance & improvements are easy & less costlier. Even IT team can maintain the setup after getting the source code.

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The Critical Success Factors

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Clear Vision & support of the Management. Capabilities of the software development vendor. Scope & Expectations finalization towards meeting the ERP concepts. Strict implementation schedules & periodical monitoring.

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American Lafrance(ALF)
Makers

of emergency vehicles like fire trucks and ambulances. Bought by Patriarch partners in late 2005. On 28 January,2008 filed for chapter 11 bankruptcy. Claimed the reason behind it was their software vendors work installing and transitioning to a new ERP system which led to inventory and production problems. The unanticipated obsolescence of inventory and the ERP problem ALF incurred $100 million in secured debt.

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Contd.
Resulted

in slowed production, a large unfulfilled backlog, and a lack of sufficient funds to continue operating. Freightliner had managed inventory, payroll and manufacturing processes until june 2007. But ALF fumbled the changeover. According to reports, the two systems were not compatible and a wide range of financial information was lost in the changeover. Inventory was in disarray, and workers were unable to find the parts they needed.

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Contd.
The

new system had serious deficiencies that had a crippling effect on companys operations. This forced ALF to seek protection from its more than 1000 creditors, who collectively are owed more than $200 million.

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Causes of Failures
Complexity

of the planning, development and training that were needed to prepare for a new ERP system was underestimated. Failure to involve the affected employees in planning and development phases. Trying too do too much too fast. Insufficient training in the new work tasks required by ERP system. Failures to do enough data conversion and testing. Overreliance on ERP software vendors.

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