2.

3 ENTERPRISE RESOURCE PLANNING

Enterprise resource planning20 (ERP) is business process management software that allows an
organization to use a system of integrated applications to manage the business and automate
many back office functions related to technology, services and human resources. ERP software
integrates all facets of an operation, including product planning, development, manufacturing,
sales and marketing.
ERP software is considered an enterprise application as it is designed to be used by larger
businesses and often requires dedicated teams to customize and analyze the data and to handle
upgrades and deployment. In contrast, Small business ERP applications are lightweight business
management software solutions, customized for the business industry you work in.
It is a business management softwareusually a suite of integrated applicationsthat a
company can use to collect, store, manage and interpret data from many business activities,
including:

Product planning, cost

Manufacturing or service delivery

Marketing and sales

Inventory management

Shipping and payment

ERP provides an integrated view of core business processes, often in real-time, using common
databases maintained by a database management system. ERP systems track business resources
cash, raw materials, production capacityand the status of business commitments: orders,
purchase orders, and payroll. The applications that make up the system share data across the
various departments (manufacturing, purchasing, sales, accounting, etc.) that provide the
data. ERP facilitates information flow between all business functions, and manages connections
to outside stakeholders.

20

PTC.com,

http://www.gposolutions.nl/PTC/PLM/Understanding_PLM_ERP_Value-

WhitePaper.pdf

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.

ERP21 systems connect to realtime data and transaction data in a variety of ways. These systems
are typically configured by systems integrators, who bring unique knowledge on process,
equipment, and vendor solutions.
ERP was developed in response to the islands of automation problem: companies had deployed
a variety of stand-alone departmental software products that were not integrated.
This lack of integration caused major inefficiencies in business operations, particularly in the
area of supply chain management, which depends on a smooth and reliable flow of materials data
from one functional area to the next. Without this integration, organizations could not plan and
schedule resources properly, leading to the over- and under inventory of parts and finished
products, procurement difficulties, manufacturing scheduling issues, order fulfillment and
distribution problems, and so on throughout the supply chain.
ERP filled a serious need in the marketplace by providing companies with an enterprise-wide
solution that spanned and linked all the key operational functions and departments. This linkage
has enabled manufacturers to integrate their manufacturing and supply chain processes to reduce

delays and increase efficiency. This is ERPs primary source of value. ERP solutions, which grew
out of accounting software products, are primarily focused on physical assets and the flow of
materials, and this DNA is reflected in the attributes and requirements of ERP solutions. ERP
solutions perform particularly well when managing recurring transactions. And, since ERP
solutions are geared toward planning and accounting for production, they only require whatever
information is necessary for production.
21

http://en.wikipedia.org/wiki/Enterprise_resource_planning

The ERP solution can perform its planning and accounting functions perfectly well without
further detail. These attributes and requirements make ERP especially effective at executing and
optimizing manufacturing and distribution processes involving well-defined physical assets.
However, as its common characteristics suggest, ERP is less effective than PLM at managing
design changes and is unsuited to enterprise activities that involve less tangible, but more
strategically vital, assets, such as the intellectual capital typically found in product data and the
products bill-of-materials
(BOM).
Common attributes22 of ERP include:
Execution-focused
Repeated transactions
Inventory/order lifecycles
Controlled, well-defined business processes
Simple BOM hierarchy
BOM to procured part/assembly level
Released versions
Central theme of control
Order/supply/demand-focused
Rigid data model
Structured data
Hierarchical data relationships
Data mining
Text-based with some static 2D and 3D images

2.3 ENTERPRISE RESOURCE PLANNING

Enterprise resource planning20 (ERP) is business process management software that allows an
organization to use a system of integrated applications to manage the business and automate
many back office functions related to technology, services and human resources. ERP software
integrates all facets of an operation, including product planning, development, manufacturing,
sales and marketing.
ERP software is considered an enterprise application as it is designed to be used by larger
businesses and often requires dedicated teams to customize and analyze the data and to handle
upgrades and deployment. In contrast, Small business ERP applications are lightweight business
management software solutions, customized for the business industry you work in.
It is a business management softwareusually a suite of integrated applicationsthat a
company can use to collect, store, manage and interpret data from many business activities,
including:

Product planning, cost

Manufacturing or service delivery

Marketing and sales

Inventory management

Shipping and payment

ERP provides an integrated view of core business processes, often in real-time, using common
databases maintained by a database management system. ERP systems track business resources
cash, raw materials, production capacityand the status of business commitments: orders,
purchase orders, and payroll. The applications that make up the system share data across the
various departments (manufacturing, purchasing, sales, accounting, etc.) that provide the
data. ERP facilitates information flow between all business functions, and manages connections
to outside stakeholders.

20

PTC.com,

http://www.gposolutions.nl/PTC/PLM/Understanding_PLM_ERP_Value-

WhitePaper.pdf

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.

ERP21 systems connect to realtime data and transaction data in a variety of ways. These systems
are typically configured by systems integrators, who bring unique knowledge on process,
equipment, and vendor solutions.
ERP was developed in response to the islands of automation problem: companies had deployed
a variety of stand-alone departmental software products that were not integrated.
This lack of integration caused major inefficiencies in business operations, particularly in the
area of supply chain management, which depends on a smooth and reliable flow of materials data
from one functional area to the next. Without this integration, organizations could not plan and
schedule resources properly, leading to the over- and under inventory of parts and finished
products, procurement difficulties, manufacturing scheduling issues, order fulfillment and
distribution problems, and so on throughout the supply chain.
ERP filled a serious need in the marketplace by providing companies with an enterprise-wide
solution that spanned and linked all the key operational functions and departments. This linkage
has enabled manufacturers to integrate their manufacturing and supply chain processes to reduce

delays and increase efficiency. This is ERPs primary source of value. ERP solutions, which grew
out of accounting software products, are primarily focused on physical assets and the flow of
materials, and this DNA is reflected in the attributes and requirements of ERP solutions. ERP
solutions perform particularly well when managing recurring transactions. And, since ERP
solutions are geared toward planning and accounting for production, they only require whatever
information is necessary for production.
21

http://en.wikipedia.org/wiki/Enterprise_resource_planning

The ERP solution can perform its planning and accounting functions perfectly well without
further detail. These attributes and requirements make ERP especially effective at executing and
optimizing manufacturing and distribution processes involving well-defined physical assets.
However, as its common characteristics suggest, ERP is less effective than PLM at managing
design changes and is unsuited to enterprise activities that involve less tangible, but more
strategically vital, assets, such as the intellectual capital typically found in product data and the
products bill-of-materials
(BOM).
Common attributes22 of ERP include:
Execution-focused
Repeated transactions
Inventory/order lifecycles
Controlled, well-defined business processes
Simple BOM hierarchy
BOM to procured part/assembly level
Released versions
Central theme of control
Order/supply/demand-focused
Rigid data model
Structured data
Hierarchical data relationships
Data mining
Text-based with some static 2D and 3D images