Enterprise Resource Planning for managing todays

business
Purpose of ERP
Enterprise Resource Planning coming up with may be a methodology for
effective coming up with and management of all resources required to require,
make, ship and account for client orders in an exceedingly producing, distribution
or service company. The large organizations generally have totally different form
of data systems that support different functions, organization levels, and business
processes. But of these systems square
measure sometimes designed around completely different functions, and
managers find yourself having a tough time collection the information they
have for a comprehensive overall image of the organizational operations. for
example, sales personnel may not be able to tell at the time they place
order whether or not the things that were ordered were in stock,
customers couldn't track their orders
and producing couldn't communicate simply with finance to set up for brand
spanking new production.

Enterprise Resource Planning is a method for effective

planning and control of all resources needed to take,
make, ship and account for customer orders in a
manufacturing, distribution or service company (Sheikh,
2003). Large organisations typically have many different
kinds of information systems that support different
functions, organisation levels, and business processes
(Pressman, 2003). However all these systems are usually
built around different functions, and managers end up
having a hard time assembling the data they need for a
comprehensive overall picture of the organisational
operations. For instance, sales personnel might not be
able to tell at the time they place an order whether the
items that were ordered were in stock; customers could
not track their orders; and manufacturing could not
communicate easily with finance to plan for new
production.
Enterprise Resource Planning systems solve this problem
by collecting data from various key business processes
and storing the data in a single comprehensive data
repository where they can be used by other parts of the
business (Laudon and Laudon, 2003). Managers emerge
with more precise and timely information for coordinating
the daily operations of the business and a firm-wide view
of business processes and information flows.

ERP solutions use technology to address business issues,

at the same time striving to keep technology transparent
for the users. Users do not need to learn more about bits
and bytes but they need to know how operational and
long-term business issues could be effectively addressed
with technology, albeit using a user-friendly interface
(Ushasri, 1999). Such systems can provide general
managers with a firm-wide understanding of value
creation and cost structure. ERP systems can help create
a "customer driven" or "demand" organisation, which
better serves the customer's value chain (Foss and Stone,
2003).

Followings are the similar existing systems in international level:

Oracle
ERP 9
Peachtree
QuickBooks
SAP

Local level in the domain of Pakistan:

SARP
LATHM
Software packages:
Software packages has been decided related to modules offering,
depend on number of users. Other than modules the
implementation or installation charges also include in the cost of
the software package. On local level firm pay Rs.1.5 lakh per
module and 5000 per month for each of module and minimum 10
modules are running at a time in a single firm. On the first time to
install or get ERP software it pays Rs. 1.5million lump sum
amount.
Easy Accessibility:
A large number of competitors exist in local and international
market who develop the software according to the international
accounting standard, international standard of auditing, taxation
and according to the well of business users or owners.

Interconnected with departments:

ERP connect the departments to each other within organization
and they can access the information easily at a time. Due to use
of ERP system duplication of data cannot recorded all the
departments has same data or information at a same time a
single change in the records immediately change the all system
and update it. During use of ERP system the chances of fraud had
been reduce because the segregation of duties have implement
here. The performance of a single employee easily calculated and
identify their skills and efficiency of doing tasks in a given time.
Widely use of ERP:
The use of ERP is increase day by day and in the past most of the
organizations did their works manually like as general booking
system. But now in recent world 65% to 75% organization are
using ERP system for maintaining their accounts or information
purpose. Due to use of ERP system paperless environment have
been come forward. Due to some features ERP system use widely
and integrate all department of business such as it provides
accurate information, provide information on timely and provide
information completely which are useful for decision making
purpose. It is also good for customers supports and services.
After using the module of suppliers and customers we
interconnect with them and relevant data will provide them for
their purpose and it is useful for the organization to make a
coordination with their external stakeholders. With the help of this
features our all consignments and productions done on time
because customers give us order and we further create a
purchase order by default by supplier and supplier deliver raw
material to us. In this way deliver the order to customers on
timely basis.
Effective Industry:
The ERP system is effective for Trading, servicing and
manufacturing industries. But it play a major role in
manufacturing industry because ERP provide a solution for

problems which is face by manufacturers like as reduce the cost

of finished goods, and help to manage the growth of business
efficiency which create competitive advantage in their products.
ERP system integrates all areas of business related to production
material operations, inventories, sales, finance and accounting
etc. followings are the detail features of manufacturing industry:
Effective process: If the manufacturing industry grow then
their operations will become more and more complicate. So
ERP help the manufacturers by creating automate operations
of the business accurately and provide on time relevant
information. ERP enhance the productivity and efficiency of
the multiple processes and stop the errors and duplications.
It keeps the records of order completion and deliveries of the
goods within time.
Reduce the cost: The cost of the manufacturing will be
reduce by using accurate and real time information which
provided by ERP and it also reduce administrative and
operation cost and help the management to take quick
decisions.
Market Competition: In fast growing organization of the
world a large number of competitors exist, manufacturer
want to become a distinguished from others then they
implement ERP which will be able to compete their
competitors. No doubt in the initial stage manufacturers pay
a heavy amount for ERP but the return of investment
become twice by implementing ERP. The total investment on
ERP may be recover in few year but the advantage of it for a
long time.
Main module of the system:
Followings are the modules of the ERP system;

Sale module
Purchase module
Store module
Inventory module

Payroll module
Gate module
Finance module
Marketing module
Accounting module
Production module
Receivable module
Payable module
Fixed Assets module
Customers Relationship module (CRM)

Detail explanation of module:

1: Inventory Module:
This module is showing that how much goods are available for use
or selling process or send to the production department. Sub
functions of inventory modules are as follows:
Coding of Items: Those products which are stored in
inventory everyone have special code on it. This code is
created by magnetic ink for scaning purpose. When the
products or goods entered or exit from the store it keeps a
proper record of in and out.
Connection with stores: inventory module create a
coordination with all the stores where we store our raw
material or finish goods for future benefits.
System updating: While using ERP system the updating of
accounts and inventory are very easy according to
traditional system of updating. When we enter a single
transaction in the software within a second all the system
will be change and update the software.
Average Rate define: ERP provides average rate of the
goods or raw material where we do not need to remember
the rates of the raw material or goods.
Generate Auto Reports: few years ago we create reports
manually which is a time consuming process and too much
individuals were required for creation of the reports but now

we can get reports through the ERP by a single click. This

report can be used for the inspection purpose or any
decision making purpose.
Audit Trail: It is easy to get how know about the invoices
are entered or not in the software and it easily reconcile the
sale invoices and orders with the references.
Detailed summary of quantity: ERP system provide the
detail records of the inventory which is exist in business.
Goods Received Notes: On the time of receiving the
consignment ERP automatically creates the goods received
notes to the suppliers and store in it for audit trail.
Provisional rate of purchases: When are going to
purchase new one commodity which we never purchase
before but ERP provide the rates of the products relevance to
the previous goods. When someone give us a higher rate of
this products system will inform us the previous rate of
similar products.
Distributions of purchase: In this features ERP records the
purchases in two ways: first one is items wise purchases and
second one is partially purchases. In item wise purchase ERP
system keep record all the items and in partially purchase it
records the all the spare parts of related products.
Department wise purchase: ERP system maintain the
record of each of department which ordered the goods and
make the summary of issuing the goods to department wise.
Record of Import cost: ERP records the cost which is
incurred during import the goods from foreign countries just
like plant and machinery and technology related products
import from several countries.
Inspection report as container wise: ERP maintain
inspection report with the name of inspector to inspect the
goods of the container which we import from foreign.
Issuance summary of goods: It is a major thing in which
in production department we issue the products or raw
materials for further proceeding and then ERP automatically

create the report which contain of date, time, quantity,

quality of products and etc.
Store Return Notes: when we issue goods to production
department and after completion of the production or may
be some damages or defected or some extra remaining or
unconsumed products send back to store department and in
this process ERP automatically create sale return note.
Summary of return items: When goods return from
production department due to damages or unconsumed
material after production of finish goods then it create
summary report for decision making or audit trail purpose.
Return to store from two source: first one is return from
production department and second one is return from batch
processing.
Closing summary of Stock: ERP system keep records of
inward and outward of stock and create in every monthly or
weekly closing summary of stock according to the
requirement of organization policies.
Damage stock report: This report contains the damage
goods record in ERP system. The damages may be occurred
due to disaster or expiring the date of goods.

2: Purchase Module:
Purchases are occurred to fulfill the requirement of the production
department to achieve their goals. Followings are the major steps
creating the purchase order:
Inquiry: In this process we get the assurance about the
material is really needed or not. Further we search that what
is availability of raw material in existing market. Can we
easily purchase from local market or import it from foreign
countries. After inquiry about the raw material we get the
links of suppliers and perform second step which is
collection of quotation.
Collection of Quotations: When the process of inquiry is
completed then collect the quotation from different suppliers
and then keep record the quotation in the ERP.

 Comparison of Quotations: After getting the quotation

from the different suppliers ERP system suggest us from
where we should purchase the raw material to maintain the
stock level.
Approval of Purchase orders: After doing above
mentioned processes the purchase officer give command or
generate purchase order to the relevant supplier who is
giving or offering comparative advantages from other
suppliers.
Generation of Purchase order: Purchase officer create a
purchase order after keeping all above points in his mind
and determined the quantity, quality and shipment way of
purchase order.
Goods received: When we receive the goods on the behalf
of issuance of purchase order we create good receive note
and check the goods whether those are according to the
purchase order or not. If it is relevant to the purchase order
and fulfill our expectation we will receive it.
Inspection of stock purchased: