Sunday, July 25, 2010

What is ERP & How can it be best implemented?

ERP, which is an abbreviation for Enterprise Resource Planning, is principally an integration of business management practices and modern technology.

ERP systems at the latest stage of evolution considers following points (can be considered but not limited to the following):

Rough and finite capacity requirements
System of Engineering Changes
Product data management
Work Orders flow
Manufacturing Support Systems
Manufacturing Simulation Systems

Commercial Planning
Marketing Systems
Sales Forecasting

ABC Financial Planning
Accounts Receivable
Accounts Payable

Item Master
Inventory Management
Master Scheduling
Materials Resource planning

Distribution Systems
** It is important to mention that Human Resources involved subjects are covered in ERPs.
On the other hand, ERP models work based on the following levels of control for the enterprise administration:
Executive Planning
Business Planning,
Sales Planning,
Production Planning (Rough capacity).

Medium Management Planning
Master Scheduling and Inventory Control,
Materials Planning (based on products structures) and
Capacity Planning (Routing).

Operative Execution
Shop Floor Control (Costs) and
Performance Evaluation.

It is vital to note the point on administration before deciding which ERP software is the one we will be using, we need to have solid administration principles (no matter which administration tendencies you decide to choose) and strong knowledge of ERP methodology.

The Role of ADC(automated data collection)

Most warehouses or factory floors will more often than not reveal workers collecting data on clip boards, shop tickets or a variety of other paper-based methods before inputting the data to the ERP system on a terminal. It’s an archaic but persistent routine in applications like inventory management, time and attendance, shipping, receiving, picking, putaway, work-in-process: transactions throughout the supply chain. Why is it crucial for executives to keep these areas squarely in sight? Because data is typically collected there by hourly laborers, including assemblers, clerks and operators.

Research shows that manual data collection such as this tend to have one error with every 300 keystrokes. In a warehouse that processes 10,000 order lines each day with an average of 10 keystrokes per line, that’s 333 data errors every day, or 17,000 data errors each year. Where does that erroneous data go? Straight into the ERP system. And straight to the hands of strategic decision makers.

With the rise of ERP have come upgrades like a GUI (graphic user interface) for the end-user and Object- Oriented Technology (OOT) interfaces. For automated data collection systems, these technology advancements have an important effect. But, if not carefully planned for, they can present an interesting challenge to the smooth execution of an ERP implementation

To maximize ADC, the software should distill those screens to provide prompts on data collection equipment that simplify and minimize that process of data entry. This doesn’t happen just by purchasing the best data collection products. It’s a combination of data collection systems that seamlessly integrate with the ERP system, as well as good operational processes.

The right ADC system, then, is more than just a smart addition to ERP. It’s a mandatory component. Beacause, without reliable data, every ERP system, no matter how robust, will be deficient at best, a failure at worst.

Some Organisations do prefer to implment & develop their own ERP system coz other ERP systems may be too rigid for specific organizations that are either new or want to move in a new direction in the near future

Click here for More Information About ERP.

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