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Slide 1: 

Enterprise Resource Planning Submitted By: Varun Dwivedi Varun Kumar 1

Contents : 

Contents Definition. ERP Legacy. ERP’s elements and subsystems. Use of ERP systems in Business. What does drive ERP approach. ERP implementation. ERP pros & cons. Summary. 2

Definition : 

ERP software integrates all departments and functions onto a single system that can serve the needs of the entire company. Some of ERP’s functions include: Bookkeeping & Accounting Human Resource Management Planning Production Supply-Chain Management Definition 3

ERP History : 

ERP History ERP has its roots in the MRP(Material Requirement Planning) and MRPII(Manufacturing Resource Planning) systems of the 70’s and 80’s. Came about as companies realized that the management and flow of information was just as important as materials and inventory management. ERP has also evolved considerably with computer and technology advances. 4

MRP-I (Material Requirement Planning) : 

MRP-I (Material Requirement Planning) It is a production planning and inventory control system used to manage manufacturing processes. MRP systems are software-based, while it is possible to conduct MRP by hand as well. Main functions of MRP-I Ensure materials are available for production and products are available for delivery to customers. Maintain the lowest possible level of inventory. 5

MRP-II(Manufacturing Resource Planning) : 

MRP-II(Manufacturing Resource Planning) It is a method for the effective planning of all resources of a manufacturing company. it addresses operational planning in units, financial planning in dollars. Benefits of MRP-II Systems. MRP II systems can provide: Better control of inventories Improved scheduling Productive relationships with suppliers 6

Slide 7: 

For Design / Engineering: Improved design control Better quality and quality control For Financial and Costing: Reduced working capital for inventory Improved cash flow through quicker deliveries Accurate inventory records 7

ERP’s Elements And Subsystems : 

ERP’s Elements And Subsystems 8

Use of ERP System : 

Use of ERP System A single software program that serves the needs of people in finance along with human resources and in the warehouse. Integrated software program that runs off a single database so that the various departments can more easily share information and communicate with each other. Interconnectivity (for example, to get into the warehouse's computer system). 9

Use of ERP System : 

Use of ERP System To support business goals Integrated, on-line, secure, self-service processes for business Eliminate costly mainframe/fragmented technologies Improved Integration of Systems and Processes Lower Costs Empower Employees Enable Partners, Customers and Suppliers 10

ERP Vendors : 

ERP Vendors 11

Major ERP Vendors : 

Major ERP Vendors 12

SAP ERP System : 

SAP ERP System SAP = Systems, Applications and Products German Based Company 4th Largest Independent Software company in the World SAP: ERP Market Leader 80% Fortune 500 Companies Use SAP Over 18,500 Customers in 120+ Countries Over 12 million users Client/Server Technology Highly Customizable Based on Industry Specific Best Practices Based on Open Standards 13

SAP Main Modules : 

SAP Main Modules SAP working initially based on modules only. The main modules in SAP are FICO( Finance & Control) HR( Human Resource ) S&D ( Sales & Distribution ) MM ( Material Management ) PP ( Production Planning ) PM ( Plant management ) 14

Slide 15: 


Slide 16: 

All the transactions in SAP is based on Transaction Code ( T-Codes ) only. T- Code is universally same. There are some customized T-Code, as per the demand of the company, Start with ‘Z’ Only. There are total 57038 T-codes in SAP. Some important T-codes are: MB5B : Stocks for Posting Date MFBF: Backflushing In Repetitive Mfg MB53: Display Plant Stock Availability MB54: Consignment Stocks etc. 16

Slide 17: 

SAP now are moving away from describing their system as a set of SAP Modules, and now are using the term ‘solutions’, which is much better, as follows: Financials Human Resources Customer Relationship Management Supplier Relationship Management Product Lifecycle Management Supply Chain Management Business Intelligence 17

What Does Drive ERP Approach : 

What Does Drive ERP Approach Business Customer Satisfaction. Business Development - new areas, products, services. Ability to face competition. Efficient processes required to push the company to top gear. 18

Slide 19: 

IT Present Software does not meet business needs. Legacy systems difficult to maintain, Y2K Problem , Euro currency. Obsolete hardware/software difficult to maintain. 19

ERP Implementation : 

ERP Implementation Steps for implementation: Cost analysis Blueprinting of Business Processes Staff Training Integration Data Conversion Going live with ERP 20

Cost Analysis : 

Cost Analysis Costs to implement an ERP system is not just a ‘one-time thing.’ Real costs are in constant training, upgrading, and maintenance. Average Total Cost of Ownership (TCO) is $15 million. Benefits are not seen right away. 21

Staff Training : 

Staff Training Most overlooked of ERP implementation costs. Needed to get the most out of new software. Training is needed to make sure employees do not abandon the system. 22

ERP Implementation; : 

ERP Implementation; Producing ERP software systems are typically complex and usually impose significant changes on staff work practices. It is desirable and highly advised to hire outside consultants who are professionally trained to implement these systems. Three types of services that are provided by of an ERP vendor or of third-party consulting companies are: consulting, customization and support. ERP systems are modular, so they don't all need be implemented at once. It can be divided into various stages, or phase-ins. The length of time to implement an ERP system depends on the size of the business, the number of modules, the extent of customization, the scope of the change and the willingness of the customer to take ownership for the project. 23

ERP Implementation (Cont..); : 

ERP Implementation (Cont..); It is therefore crucial that organizations perform a thorough business process analysis before selecting an ERP vendor and setting off on the implementation track. Neglecting to map current business processes prior to starting ERP implementation is a main reason for failure of ERP projects. Configuring an ERP system is largely a matter of balancing the way you want the system to work with the way the system lets you work. Configuration Tables – A configuration table enables a company to tailor a particular aspect of the system to the way it chooses to do business. 24

ERP Pros & Cons; : 

ERP Pros & Cons; ERP advantages: INTEGRATION among different functional areas to ensure proper communication, productivity and efficiency. Design engineering (how to best make the product). Order tracking, from acceptance through fulfillment. Tracking the three-way match between purchase orders (what was ordered), inventory receipts (what arrived), and costing (what the vendor invoiced). Eliminates the problem of synchronizing changes between multiple systems. 25

Slide 26: 

Permits control of business processes that cross functional boundaries. Provides top-down view of the enterprise (no "islands of information"). Reduces the risk of loss of sensitive data by consolidating multiple permissions and security models into a single structure. 26

ERP Pros & Cons (cont..); : 

ERP Pros & Cons (cont..); ERP disadvantages: Customization of the ERP software is limited. Re-engineering of business processes to fit the "industry standard" prescribed by the ERP system may lead to a loss of competitive advantage. ERP systems can be very expensive (This has led to a new category of "ERP light" solutions) Many of the integrated links need high accuracy in other applications to work effectively. A company can achieve minimum standards, then over time "dirty data" will reduce the reliability of some applications. 27

Slide 28: 

The blurring of company boundaries can cause problems in accountability, lines of responsibility, and employee morale. Resistance in sharing sensitive internal information between departments can reduce the effectiveness of the software. The system may be too complex measured against the actual needs of the customers. ERP Systems centralize the data in one place. This can increase the risk of loss of sensitive information in the event of a security breach. 28

Summary; : 

ERP, the business management modular system, mainly represents the INTEGRATION & the powerful dynamic internal COMMUNICATION. ERP come to existence as a more mature IT management system gradually after other old mates. ERP approach has been adopted to achieve customer dealing flexibility, internal management consistency & competitive ability. Fortunately, being MODULAR is a main aspect of ERP implementation, however, the process still complex & requires unhurried decision. Consultants & third-party staff are usually outsourced. Summary; 29



Slide 31: 

Thank You. 31

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