Erp-Boon To Supply Chain Management - Sastra University
Erp-Boon To Supply Chain Management - Sastra University
Erp-Boon To Supply Chain Management - Sastra University
MANAGEMENT”
BY
apjk143@gmail.com vskharish@gmail.com
ABSTRACT:
Supply Chain Management (SCM) in today’s global environment, especially
the ERP is important to create significant competitive advantages to firms and business partners
worldwide. Since the objectives and goals are essential factors in the study of supply chain
management in the E Business.
.
INTRODUCTION:
Goals of SCM
Functions:
Advantages :
One of the most significant advantages of supply chain management is that it offers
sophisticated analytical capabilities.
The process of supply chain management enables the streamlining of the supply chain,
thus making it easy for the marketers to analyze the demand and supply of their products
or services.
Customers benefit from supply chain management as they always get the merchandise of
their choice and the merchandise is ready before customer entry.
Another important advantage of supply chain management is that it results in business
organizations gaining a competitive advantage by earning the loyalty of customers,
shareholders and employees
Originally ERP packages were targeted at the manufacturing industry and consisted
mainly of functions for general planning and management of core business such as sales
management, production management, accounting and financial affairs, etc. However, in recent
years adaption not only to the manufacturing industry, but also to diverse types of industry has
become possible and the expansion of implementation and use has been progressing on a global
level.
ERP software is a mirror image of the major business processes of an organization
such as customer order fulfillment and manufacturing. Its success depends upon reach – a
circumscribed ERP system is not better than the legacy system it replaces. In many cases, it is
worse because the old code was at least written specifically for the company and the task.
EVOLUTION OF ERP:
ERP (Enterprise Resource Planning) is the evolution of Manufacturing
Requirements Planning (MRP) II. From business perspective, ERP has expanded from
coordination of manufacturing processes to the integration of enterprise-wide backend processes.
From technological aspect, ERP has evolved from legacy implementation to more flexible tiered
client-server architecture
The following table summarizes the evolution of ERP from 1960s to 1990s.
Timeline System Description
ERP VENDORS:
ERP software is made up of many software modules. Each ERP software module mimics a major
functional area of an organization. Common ERP modules include modules for product planning,
parts and material purchasing, inventory control, product distribution, order tracking, finance,
accounting, marketing, and HR. Organizations often selectively implement the ERP modules that
are both economically and technically feasible.
In the process of evolution of manufacturing requirements planning (MRP) II into ERP, while
vendors have developed more robust software for production planning, consulting firms have
accumulated vast knowledge of implementing production planning module. Production planning
optimizes the utilization of manufacturing capacity, parts, components and material resources
using historical production data and sales forecasting.
Purchase module streamline procurement of required raw materials. It automates the processes of
identifying potential suppliers, negotiating price, awarding purchase order to the supplier, and
billing processes. Purchase module is tightly integrated with the inventory control and
production planning modules. Purchasing module is often integrated with supply chain
management software.
ERP Inventory Control Module
Revenues from sales are live blood for commercial organizations. Sales module implements
functions of order placement, order scheduling, shipping and invoicing. Sales module is closely
integrated with organizations' ecommerce websites. Many ERP vendors offer online storefront as
part of the sales module.
ERP marketing module supports lead generation, direct mailing campaign and more.
Both for-profit organizations and non-profit organizations benefit from the implementation of
ERP financial module. The financial module is the core of many ERP software systems. It can
gather financial data from various functional departments, and generates valuable financial
reports such balance sheet, general ledger, trail balance, and quarterly financial statements.
ERP HR Module
HR (Human Resources) is another widely implemented ERP module. HR module streamlines the
management of human resources and human capitals. HR modules routinely maintain a complete
employee database including contact information, salary details, attendance, performance
evaluation and promotion of all employees. Advanced HR module is integrated with knowledge
management systems to optimally utilize the expertise of all employees
ERP Market Outlook:
ERP Benefits:
As organizational processes fall into three levels - strategic planning,
management control and operational control. Even though much of ERP success has been in
facilitating operational coordination across functional departments, successful implementation of
ERP systems benefit strategic planning and management control one way or other.
ERP software attempts to integrate business processes across departments onto a single
enterprise-wide information system. The major benefits of ERP are improved coordination
across functinal departments and increased efficiencies of doing business. The immediate benefit
from implementing ERP systems we can expect is reduced operating costs, such as lower
inventory control cost, lower production costs, lower marketing costs and lower help desk
support costs.
Facilitate Day-to-Day Management
The other benefits from implementing ERP systems is facilitation of day-to-day management .
The implementations of ERP systems nurture the establishment of backbone data warehouses.
ERP systems offer better accessibility to data so that management can have up-to-the-minute
access to information for decision making and managerial control. ERP software helps track
actual costs of activities and perform activity based costing.
Strategic Planning is "a deliberate set of steps that assess needs and resources; define a target
audience and a set of goals and objectives; plan and design coordinated strategies with evidence
of success; logically connect these strategies to needs, assets, and desired outcomes; and measure
and evaluate the process and outcomes.In reality, resource planning has been the weakest link in
ERP practice due to the complexity of strategic planning and lack of adequate integration with
Decision Support Systems (DSS).
FUTURE TRENDS:
Market forecasting:
Formerly ERP was purely restricted to fortune 500 companies, in the sense only they could
afford to invest on them. This put the small and Medium Industries at a large disadvantage. They
were not able to make use of the application to gain the necessary benefits. ERP's future seemed
to be dooming on them.
However this drawback has been removed after the intervention of open source facilities. The
concept of outsourcing has helped in removing the difficulties faced by small and medium
enterprises. Hence a large potential for ERP still exists in the S.M.E. market.
The ERP vendors can target this market effectively. However both the vendor and the companies
in this segment have to remember that there are lot of competition in this sector and one is not
likely to succeed unless he serves the best product.
ERP has thrown open opportunities for many companies to trade with foreign counter parts in
the name of outsourcing, implementation and deployment of the existing ones. It has contributed
lot to the economy .Academics also boast its own share of ERP relations.
It has promoted lot of employment and educational opportunities. India happens to be a key
beneficiary in this aspect.
CONCLUSION:
ERP is a boon to supply chain management which ensures the simplication of
business process, enhance productivity, flexibility and operating efficiency is improved.It not
only reduces the cost but also eliminates inefficiencies thus leading to continuous improvement.
Here by title is justified “ERP- THE BOON TO SUPPLY CHAIN MANAGEMENT”.
SOURCES & REFERENCES:
1. http://www.erpwire.com/erp-articles/erp-future.htm
2. Kelly,S.,Holland, C., and Light B., 1999.”Enterprise Resource Planning:A
Business Approach To Systems Development, “In Proceedings of AMICS
3. http://en.wikipedia.org/wiki/Enterprise_resource_planning
4. www.erp.com
5. www.impacterp.com
6. en.wikipedia.org/wiki/Supply_chain_managemen
7. www.supplychainmanagement.in
8. logistics.about.com
9. www.informs.org/About-INFORMS/History.../Martin-K.-Starr
10. openlibrary.org/authors/OL3614399A/Martin_K._Star