UNIT-I

INTRODUCTION TO ERP

Enterprise resource planning (ERP) is an integrated computer-based system

used to manage internal and external resources including tangible assets, financial
resources, materials, and human resources. It is a software architecture whose purpose is
to facilitate the flow of information between all business functions inside the boundaries
of the organization and manage the connections to outside stakeholders. Built on a
centralized database and normally utilizing a common computing platform, ERP systems
consolidate all business operations into a uniform and enterprise wide system
environment.

An ERP system can either reside on a centralized server or be distributed across modular
hardware and software units that provide "services" and communicate on a local area
network. The distributed design allows a business to assemble modules from different
vendors without the need for the placement of multiple copies of complex, expensive
computer systems in areas which will not use their full capacity.

What is ERP

ERP is the acronym of Enterprise Resource Planning. ERP utilizes ERP software
applications to improve the performance of organizations' resource planning,
management control and operational control. ERP software is multi-module application
software that integrates activities across functional departments, from product planning,
parts purchasing, inventory control, product distribution, to order tracking. ERP software
may include application modules for the finance, accounting and human resources
aspects of a business.

ERP vs. CRM and SCM

CRM (Customer Relationship Management) and SCM (Supply Chain Management) are
two other categories of enterprise software that are widely implemented in corporations
and non-profit organizations. While the primary goal of ERP is to improve and streamline
internal business processes, CRM attempts to enhance the relationship with customers
and SCM aims to facilitate the collaboration between the organization, its suppliers, the
manufacturers, the distributors and the partners.

ERP Definition - A Systems Perspective

ERP, often like other IT and business concepts, are defined in many different ways. A
sound definition should several purposes:

1. It answers the question of "what is ... ?".

2. It provides a base for defining more detailed concepts in the field - ERP software,
ERP systems, ERP implementation etc.
 3. It provides a common ground for comparison with related concepts - CRM, SCM
etc.
4. It helps answer the basic questions in the field - benefits of ERP, the causes of
ERP failure etc.

A definition of ERP based on Systems Theory can server those purposes.

ERP is a system which has its goal, components, and boundary.

The Goal of an ERP System - The goal of ERP is to improve and streamline internal
business processes, which typically requires reengineering of current business processes.

The Components of an ERP System - The components of an ERP system are the
common components of a Management Information System (MIS).

• ERP Software - Module based ERP software is the core of an ERP system. Each
software module automates business activities of a functional area within an
organization. Common ERP software modules include product planning, parts
purchasing, inventory control, product distribution, order tracking, finance,
accounting and human resources aspects of an organization.
• Business Processes - Business processes within an organization falls into three
levels - strategic planning, management control and operational control. ERP has
been promoted as solutions for supporting or streamlining business processes at
all levels. Much of ERP success, however, has been limited to the integration of
various functional departments.
• ERP Users - The users of ERP systems are employees of the organization at all
levels, from workers, supervisors, mid-level managers to executives.
• Hardware and Operating Systems - Many large ERP systems are UNIX based.
Windows NT and Linux are other popular operating systems to run ERP software.
Legacy ERP systems may use other operating systems.

The Boundary of an ERP System - The boundary of an ERP system is usually small
than the boundary of the organization that implements the ERP system. In contrast, the
boundary of supply chain systems and ecommerce systems extends to the organization's
suppliers, distributors, partners and customers. In practice, however, many ERP
implementations involve the integration of ERP with external information systems.

Benefits of ERP Software:

* All processes and sub-processes are linked and unified into a single system.

* There are enhancements in the field of productivity, efficiency and achievement of

business objectives.

* ERP tends to considerably reduce the response time by effectively transferring crucial
information.
* ERP helps in streamlining the numerous functions performed by the organization as a
whole.

* It helps the management to make vital decisions with unparalleled accuracy and in-
depth study.

Thus, ERP software can effectively change the outlook of any business organization that
exists in today's cutthroat business world. Proper implementation of the ERP software is
the key factor, which can benefit the growth prospects of any organization.

History and Evolution of ERP

2005-03-08

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

1960s Inventory Inventory Management and control is the combination
Management & of information technology and business processes of
Control maintaining the appropriate level of stock in a
warehouse. The activities of inventory management
include identifying inventory requirements, setting
targets, providing replenishment techniques and
options, monitoring item usages, reconciling the
inventory balances, and reporting inventory status.
1970s Material Materials Requirement Planning (MRP) utilizes
Requirement software applications for scheduling production
Planning (MRP) processes. MRP generates schedules for the operations
and raw material purchases based on the production
requirements of finished goods, the structure of the
production system, the current inventories levels and the
lot sizing procedure for each operation.
1980s Manufacturing Manufacturing Requirements Planning or MRP utilizes
Requirements software applications for coordinating manufacturing
Planning (MRP II) processes, from product planning, parts purchasing,
 inventory control to product distribution.
1990s Enterprise Resource Enterprise Resource Planning or ERP uses multi-
Planning (ERP) module application software for improving the
performance of the internal business processes. ERP
systems often integrates business activities across
functional departments, from product planning, parts
purchasing, inventory control, product distribution,
fulfillment, to order tracking. ERP software systems
may include application modules for supporting
marketing, finance, accounting and human resources.

The Ideal ERP System

An ERP system would qualify as the best model for enterprise wide solution architecture,
if it chains all the below organizational processes together with a central database
repository and a fused computing platform.

Manufacturing

Engineering, resource & capacity planning, material planning, workflow management,

shop floor management, quality control, bills of material, manufacturing process, etc.

Financials

Accounts payable, accounts receivable, fixed assets, general ledger, cash management,
and billing (contract/service)

Human Resource

Recruitment, benefits, compensations, training, payroll, time and attendance, labour rules,
people management

Supply Chain Management

Inventory management, supply chain planning, supplier scheduling, claim processing,

sales order administration, procurement planning, transportation and distribution

Projects

Costing, billing, activity management, time and expense

Customer Relationship Management

Sales and marketing, service, commissions, customer contact and after sales support

Data Warehouse

Generally, this is an information storehouse that can be accessed by organizations,

customers, suppliers and employees for their learning and orientation

ERP Systems Improve Productivity, Speed and

Performance
Prior to evolution of the ERP model, each department in an enterprise had their own
isolated software application which did not interface with any other system. Such isolated
framework could not synchronize the inter-department processes and hence hampered the
productivity, speed and performance of the overall organization. These led to issues such
as incompatible exchange standards, lack of synchronization, incomplete understanding
of the enterprise functioning, unproductive decisions and many more.

For example: The financials could not coordinate with the procurement team to plan out
purchases as per the availability of money.
Hence, deploying a comprehensive ERP system across an organization leads to
performance increase, workflow synchronization, standardized information exchange
formats, complete overview of the enterprise functioning, global decision optimization,
speed enhancement and much more.

Integrated Management Systems:

Effective ERP requires that integrated management processes extend horizontally across
the company, including product development, sales, marketing, manufacturing, and
finance. It must extend vertically throughout the company's supply chain to include the
acquisition of raw materials, suppliers, customers, and consumers. The fundamental
purpose of ERP is to establish a process that links projected demand plans to supply
plans, so that the resources of manufacturers, their suppliers, and especially their
customers are utilized in the most efficient and cost effective way.

To do so requires a process for anticipating demand and planning and scheduling

resources in a manner that supports a company's strategic and financial goals. There are
five major elements in this:

1. An integrated business operating process that links strategic plans and business
plans to sales plans and operations plans.
2. A people-driven process that is supported by a computer system.
3. A formal resource planning process that involves all functions within a company.
4. Defined responsibilities and performance measurements for all functions in a
company.
5. Communications among all functions in a company as well as communications
among all divisions and sister companies.

Strategies must be tied to tactics, supply is resolved with demand, the financial system is
tied to the operating system, aggregate planning is translated into detailed planning, and
planning and execution are linked together via a two-way flow of information and a spirit
of cooperation among all functions.

ERP is a people process supported by the computer, rather than the other way around.
People -- and their behavior and discipline in utilizing the ERP process -- is vital. When
people understand how to utilize the ERP process, tools, and techniques, the data and
information will be highly accurate, and they will make sound decisions.

ERP philosophy has evolved from MRPII philosophy. MRPII philosophy evolved from
MRP philosophy. It is important to understand the difference between each term:

Supply Chain Management

Supply chain management (SCM) is the management of a network of interconnected
businesses involved in the ultimate provision of product and service packages required by
end customers (Harland, 1996).[1] Supply Chain Management spans all movement and
storage of raw materials, work-in-process inventory, and finished goods from point of
origin to point of consumption (supply chain).

Another definition is provided by the APICS Dictionary when it defines SCM as the
"design, planning, execution, control, and monitoring of supply chain activities with the
objective of creating net value, building a competitive infrastructure, leveraging
worldwide logistics, synchronizing supply with demand, and measuring performance
globally."

Supply chain management problems

Supply chain management must address the following problems:

• Distribution Network Configuration: number, location and network missions of

suppliers, production facilities, distribution centers, warehouses, cross-docks and
customers.
• Distribution Strategy: questions of operating control (centralized, decentralized
or shared); delivery scheme, e.g., direct shipment, pool point shipping, cross
docking, DSD (direct store delivery), closed loop shipping; mode of
transportation, e.g., motor carrier, including truckload, LTL, parcel; railroad;
intermodal transport, including TOFC (trailer on flatcar) and COFC (container on
flatcar); ocean freight; airfreight; replenishment strategy (e.g., pull, push or
hybrid); and transportation control (e.g., owner-operated, private carrier, common
carrier, contract carrier, or 3PL).
• Trade-Offs in Logistical Activities: The above activities must be well
coordinated in order to achieve the lowest total logistics cost. Trade-offs may
increase the total cost if only one of the activities is optimized. For example, full
 truckload (FTL) rates are more economical on a cost per pallet basis than less than
truckload (LTL) shipments. If, however, a full truckload of a product is ordered to
reduce transportation costs, there will be an increase in inventory holding costs
which may increase total logistics costs. It is therefore imperative to take a
systems approach when planning logistical activities. These trade-offs are key to
developing the most efficient and effective Logistics and SCM strategy.
• Information: Integration of processes through the supply chain to share valuable
information, including demand signals, forecasts, inventory, transportation,
potential collaboration, etc.
• Inventory Management: Quantity and location of inventory, including raw
materials, work-in-progress (WIP) and finished goods.
• Cash-Flow: Arranging the payment terms and methodologies for exchanging
funds across entities within the supply chain.

Supply chain execution means managing and coordinating the movement of materials,
information and funds across the supply chain. The flow is bi-directional.

Activities/functions
Supply chain management is a cross-function approach including managing the
movement of raw materials into an organization, certain aspects of the internal processing
of materials into finished goods, and the movement of finished goods out of the
organization and toward the end-consumer. As organizations strive to focus on core
competencies and becoming more flexible, they reduce their ownership of raw materials
sources and distribution channels. These functions are increasingly being outsourced to
other entities that can perform the activities better or more cost effectively. The effect is
to increase the number of organizations involved in satisfying customer demand, while
reducing management control of daily logistics operations. Less control and more supply
chain partners led to the creation of supply chain management concepts. The purpose of
supply chain management is to improve trust and collaboration among supply chain
partners, thus improving inventory visibility and the velocity of inventory movement.

Several models have been proposed for understanding the activities required to manage
material movements across organizational and functional boundaries. SCOR is a supply
chain management model promoted by the Supply Chain Council. Another model is the
SCM Model proposed by the Global Supply Chain Forum (GSCF). Supply chain
activities can be grouped into strategic, tactical, and operational levels . The CSCMP has
adopted The American Productivity & Quality Center (APQC) Process Classification
FrameworkSM a high-level, industry-neutral enterprise process model that allows
organizations to see their business processes from a cross-industry viewpoint[5].

Strategic

• Strategic network optimization, including the number, location, and size of

warehousing, distribution centers, and facilities.
 • Strategic partnerships with suppliers, distributors, and customers, creating
communication channels for critical information and operational improvements
such as cross docking, direct shipping, and third-party logistics.
• Product life cycle management, so that new and existing products can be
optimally integrated into the supply chain and capacity management activities.
• Information technology chain operations.
• Where-to-make and what-to-make-or-buy decisions.
• Aligning overall organizational strategy with supply strategy.
• It is for long term and needs resource comittement.

Tactical

• Sourcing contracts and other purchasing decisions.

• Production decisions, including contracting, scheduling, and planning process
definition.
• Inventory decisions, including quantity, location, and quality of inventory.
• Transportation strategy, including frequency, routes, and contracting.
• Benchmarking of all operations against competitors and implementation of best
practices throughout the enterprise.
• Milestone payments.
• Focus on customer demand.

Operational

• Daily production and distribution planning, including all nodes in the supply
chain.
• Production scheduling for each manufacturing facility in the supply chain (minute
by minute).
• Demand planning and forecasting, coordinating the demand forecast of all
customers and sharing the forecast with all suppliers.
• Sourcing planning, including current inventory and forecast demand, in
collaboration with all suppliers.
• Inbound operations, including transportation from suppliers and receiving
inventory.
• Production operations, including the consumption of materials and flow of
finished goods.
• Outbound operations, including all fulfillment activities, warehousing and
transportation to customers.
• Order promising, accounting for all constraints in the supply chain, including all
suppliers, manufacturing facilities, distribution centers, and other customers.

Supply chain management

Organizations increasingly find that they must rely on effective supply chains, or
networks, to compete in the global market and networked economy.[6] In Peter Drucker's
(1998) new management paradigms, this concept of business relationships extends
beyond traditional enterprise boundaries and seeks to organize entire business processes
throughout a value chain of multiple companies.

During the past decades, globalization, outsourcing and information technology have
enabled many organizations, such as Dell and Hewlett Packard, to successfully operate
solid collaborative supply networks in which each specialized business partner focuses on
only a few key strategic activities (Scott, 1993). This inter-organizational supply network
can be acknowledged as a new form of organization. However, with the complicated
interactions among the players, the network structure fits neither "market" nor
"hierarchy" categories (Powell, 1990). It is not clear what kind of performance impacts
different supply network structures could have on firms, and little is known about the
coordination conditions and trade-offs that may exist among the players. From a systems
perspective, a complex network structure can be decomposed into individual component
firms (Zhang and Dilts, 2004). Traditionally, companies in a supply network concentrate
on the inputs and outputs of the processes, with little concern for the internal
management working of other individual players. Therefore, the choice of an internal
management control structure is known to impact local firm performance (Mintzberg,
1979).

In the 21st century, changes in the business environment have contributed to the
development of supply chain networks. First, as an outcome of globalization and the
proliferation of multinational companies, joint ventures, strategic alliances and business
partnerships, significant success factors were identified, complementing the earlier "Just-
In-Time", "Lean Manufacturing" and "Agile Manufacturing" practices.[7] Second,
technological changes, particularly the dramatic fall in information communication costs,
which are a significant component of transaction costs, have led to changes in
coordination among the members of the supply chain network (Coase, 1998).

Many researchers have recognized these kinds of supply network structures as a new
organization form, using terms such as "Keiretsu", "Extended Enterprise", "Virtual
Corporation", "Global Production Network", and "Next Generation Manufacturing
System".[8] In general, such a structure can be defined as "a group of semi-independent
organizations, each with their capabilities, which collaborate in ever-changing
constellations to serve one or more markets in order to achieve some business goal
specific to that collaboration" (Akkermans, 2001).

The security management system for supply chains is described in ISO/IEC 28000 and
ISO/IEC 28001 and related standards published jointly by ISO and IEC.

Developments in Supply Chain Management

Six major movements can be observed in the evolution of supply chain management
studies: Creation, Integration, and Globalization (Lavassani et al., 2008a), Specialization
Phases One and Two, and SCM 2.0.

1. Creation Era
The term supply chain management was first coined by a U.S. industry consultant in the
early 1980s. However, the concept of a supply chain in management was of great
importance long before, in the early 20th century, especially with the creation of the
assembly line. The characteristics of this era of supply chain management include the
need for large-scale changes, re-engineering, downsizing driven by cost reduction
programs, and widespread attention to the Japanese practice of management.

2. Integration Era

This era of supply chain management studies was highlighted with the development of
Electronic Data Interchange (EDI) systems in the 1960s and developed through the 1990s
by the introduction of Enterprise Resource Planning (ERP) systems. This era has
continued to develop into the 21st century with the expansion of internet-based
collaborative systems. This era of supply chain evolution is characterized by both
increasing value-adding and cost reductions through integration.

3. Globalization Era

The third movement of supply chain management development, the globalization era, can
be characterized by the attention given to global systems of supplier relationships and the
expansion of supply chains over national boundaries and into other continents. Although
the use of global sources in the supply chain of organizations can be traced back several
decades (e.g., in the oil industry), it was not until the late 1980s that a considerable
number of organizations started to integrate global sources into their core business. This
era is characterized by the globalization of supply chain management in organizations
with the goal of increasing their competitive advantage, value-adding, and reducing costs
through global sourcing.

4. Specialization Era—Phase One: Outsourced Manufacturing and Distribution

In the 1990s industries began to focus on “core competencies” and adopted a

specialization model. Companies abandoned vertical integration, sold off non-core
operations, and outsourced those functions to other companies. This changed
management requirements by extending the supply chain well beyond company walls and
distributing management across specialized supply chain partnerships.

This transition also re-focused the fundamental perspectives of each respective

organization. OEMs became brand owners that needed deep visibility into their supply
base. They had to control the entire supply chain from above instead of from within.
Contract manufacturers had to manage bills of material with different part numbering
schemes from multiple OEMs and support customer requests for work -in-process
visibility and vendor-managed inventory (VMI).

The specialization model creates manufacturing and distribution networks composed of

multiple, individual supply chains specific to products, suppliers, and customers who
work together to design, manufacture, distribute, market, sell, and service a product. The
set of partners may change according to a given market, region, or channel, resulting in a
proliferation of trading partner environments, each with its own unique characteristics
and demands.

5. Specialization Era—Phase Two: Supply Chain Management as a Service

Specialization within the supply chain began in the 1980s with the inception of
transportation brokerages, warehouse management, and non-asset-based carriers and has
matured beyond transportation and logistics into aspects of supply planning,
collaboration, execution and performance management.

At any given moment, market forces could demand changes from suppliers, logistics
providers, locations and customers, and from any number of these specialized
participants as components of supply chain networks. This variability has significant
effects on the supply chain infrastructure, from the foundation layers of establishing and
managing the electronic communication between the trading partners to more complex
requirements including the configuration of the processes and work flows that are
essential to the management of the network itself.

Supply chain specialization enables companies to improve their overall competencies in

the same way that outsourced manufacturing and distribution has done; it allows them to
focus on their core competencies and assemble networks of specific, best-in-class
partners to contribute to the overall value chain itself, thereby increasing overall
performance and efficiency. The ability to quickly obtain and deploy this domain-specific
supply chain expertise without developing and maintaining an entirely unique and
complex competency in house is the leading reason why supply chain specialization is
gaining popularity.

Outsourced technology hosting for supply chain solutions debuted in the late 1990s and
has taken root primarily in transportation and collaboration categories. This has
progressed from the Application Service Provider (ASP) model from approximately 1998
through 2003 to the On-Demand model from approximately 2003-2006 to the Software
as a Service (SaaS) model currently in focus today.

Supply chain business process integration

Successful SCM requires a change from managing individual functions to integrating
activities into key supply chain processes. An example scenario: the purchasing
department places orders as requirements become known. The marketing department,
responding to customer demand, communicates with several distributors and retailers as
it attempts to determine ways to satisfy this demand. Information shared between supply
chain partners can only be fully leveraged through process integration.

Supply chain business process integration involves collaborative work between buyers
and suppliers, joint product development, common systems and shared information.
According to Lambert and Cooper (2000), operating an integrated supply chain requires a
continuous information flow. However, in many companies, management has reached the
conclusion that optimizing the product flows cannot be accomplished without
implementing a process approach to the business. The key supply chain processes stated
by Lambert (2004) [9] are:

• Customer relationship management

• Customer service management
• Demand management
• Order fulfillment
• Manufacturing flow management
• Supplier relationship management
• Product development and commercialization
• Returns management

Much has been written about demand management. Best-in-Class companies have similar
characteristics, which include the following: a) Internal and external collaboration b)
Lead time reduction initiatives c) Tighter feedback from customer and market demand d)
Customer level forecasting

One could suggest other key critical supply business processes which combine these
processes stated by Lambert such as:

a. Customer service management

b. Procurement
c. Product development and commercialization
d. Manufacturing flow management/support
e. Physical distribution
f. Outsourcing/partnerships
g. Performance measurement

a) Customer service management process

Customer Relationship Management concerns the relationship between the organization

and its customers. Customer service is the source of customer information. It also
provides the customer with real-time information on scheduling and product availability
through interfaces with the company's production and distribution operations. Successful
organizations use the following steps to build customer relationships:

• determine mutually satisfying goals for organization and customers

• establish and maintain customer rapport
 • produce positive feelings in the organization and the customers

b) Procurement process

Strategic plans are drawn up with suppliers to support the manufacturing flow
management process and the development of new products. In firms where operations
extend globally, sourcing should be managed on a global basis. The desired outcome is a
win-win relationship where both parties benefit, and a reduction in time required for the
design cycle and product development. Also, the purchasing function develops rapid
communication systems, such as electronic data interchange (EDI) and Internet linkage to
convey possible requirements more rapidly. Activities related to obtaining products and
materials from outside suppliers involve resource planning, supply sourcing, negotiation,
order placement, inbound transportation, storage, handling and quality assurance, many
of which include the responsibility to coordinate with suppliers on matters of scheduling,
supply continuity, hedging, and research into new sources or programs.

c) Product development and commercialization

Here, customers and suppliers must be integrated into the product development process in
order to reduce time to market. As product life cycles shorten, the appropriate products
must be developed and successfully launched with ever shorter time-schedules to remain
competitive. According to Lambert and Cooper (2000), managers of the product
development and commercialization process must:

1. coordinate with customer relationship management to identify customer-

articulated needs;
2. select materials and suppliers in conjunction with procurement, and
3. develop production technology in manufacturing flow to manufacture and
integrate into the best supply chain flow for the product/market combination.

d) Manufacturing flow management process

The manufacturing process produces and supplies products to the distribution channels
based on past forecasts. Manufacturing processes must be flexible to respond to market
changes and must accommodate mass customization. Orders are processes operating on a
just-in-time (JIT) basis in minimum lot sizes. Also, changes in the manufacturing flow
process lead to shorter cycle times, meaning improved responsiveness and efficiency in
meeting customer demand. Activities related to planning, scheduling and supporting
manufacturing operations, such as work-in-process storage, handling, transportation, and
time phasing of components, inventory at manufacturing sites and maximum flexibility in
the coordination of geographic and final assemblies postponement of physical
distribution operations.

e) Physical distribution
This concerns movement of a finished product/service to customers. In physical
distribution, the customer is the final destination of a marketing channel, and the
availability of the product/service is a vital part of each channel participant's marketing
effort. It is also through the physical distribution process that the time and space of
customer service become an integral part of marketing, thus it links a marketing channel
with its customers (e.g., links manufacturers, wholesalers, retailers).

f) Outsourcing/partnerships

This is not just outsourcing the procurement of materials and components, but also
outsourcing of services that traditionally have been provided in-house. The logic of this
trend is that the company will increasingly focus on those activities in the value chain
where it has a distinctive advantage, and outsource everything else. This movement has
been particularly evident in logistics where the provision of transport, warehousing and
inventory control is increasingly subcontracted to specialists or logistics partners. Also,
managing and controlling this network of partners and suppliers requires a blend of both
central and local involvement. Hence, strategic decisions need to be taken centrally, with
the monitoring and control of supplier performance and day-to-day liaison with logistics
partners being best managed at a local level.

g) Performance measurement

Experts found a strong relationship from the largest arcs of supplier and customer
integration to market share and profitability. Taking advantage of supplier capabilities
and emphasizing a long-term supply chain perspective in customer relationships can both
be correlated with firm performance. As logistics competency becomes a more critical
factor in creating and maintaining competitive advantage, logistics measurement becomes
increasingly important because the difference between profitable and unprofitable
operations becomes more narrow. A.T. Kearney Consultants (1985) noted that firms
engaging in comprehensive performance measurement realized improvements in overall
productivity. According to experts, internal measures are generally collected and
analyzed by the firm including

1. Cost
2. Customer Service
3. Productivity measures
4. Asset measurement, and
5. Quality.

External performance measurement is examined through customer perception measures

and "best practice" benchmarking, and includes 1) customer perception measurement,
and 2) best practice benchmarking.

Components of Supply Chain Management are 1. Standardization 2. Postponement 3.

Customization
Supply Chain Management, or simply "SCM", is the management of the two-way flow
of materials, equipment, finances, information, and manpower resources within and
among organizations to ensure the efficient and fast delivery of goods and services to the
end customer. It involves the oversight of synchronized movement of these logistics
from the supplier to the manufacturer, wholesaler, and retailer, until the end-product
reaches the consumer.

Michael Dell didn't build his multi-billion empire simply by selling computers to
consumers. He solved the complex problems of just-in-time manufacturing, inventory
reduction, and efficient manufacture and delivery of goods to outdo his competitors. In
short, he came out on top because he was a master of supply chain management.

Supply chain management was never a strategic issue in the past, when sourcing and
delivery of logistics took a backseat to manufacturing. The emergence of new
information technologies, however, changed the business landscape. Now organizations
have the necessary tools to do business at a much faster rate. Companies that do not move
their goods and information around quickly enough do not survive because they simply
don't get their new products to the marketplace before their competitors do.

A basic supply chain management system has five (5) components: 1) the plan, which
refers to the over-all strategy of the SCM program including the development of SCM
metrics to monitor; 2) the source, which refers to the suppliers who'll provide you with
goods and services necessary for you to run your business; 3) the 'make' or manufacturing
component, which refers to the execution of processes needed to produce, test, and
package your products or services; 4) the delivery, which refers to the system for
receiving orders from customers, developing a network of warehouses; getting the
products to the customers; invoicing customers and receiving payment from them; and 5)
the return, which is the system for processing customer returns and/or supporting
customers with problems with the products they received.

The choice of the right software in setting up an effective SCM system is crucial. There
are two major classes of SCM software, i.e., supply chain planning (SCP) software and
supply chain execution (SCE) software. SCP software is used to determine the best or
most logical way to fill customer orders, while SCE software is used to track the physical
location or status of goods and materials, and manage their flows effectively. The SCM
software package selected must include both the aspects of planning and execution.

Benefits Of Erp
ERP systems are great to help your company streamline your processes. In order to have
a successful implementation of your ERP system, you need to make sure you have your
information in line to help make the process swift. It doesn’t matter whether or not your
company deals with paper or plastics, ERP provides your company with the right system
and performance that you need. ERP can help your company reduce operating cost and it
is a benefit when running company analytics. It improves the coordination of your
company’s process into one streamlined process where everything can be accessed
through one enterprise wide information network.

Additionally operating costs are reduced by being able to control inventory costs, lower
production and marketing costs, and help lower help desk support. ERP systems can also
benefit the company by facilitating day-to-day management activities. It encourages the
establishment of backbone data warehouses and allows employees to access the
information in real time. This helps with research, decision making, and managerial
control. It tracks actual cost of the daily activities and can perform activity based costing
functions.

Strategic planning is also benefited in that the ERP system is designed to support
resource planning in the strategic planning process. This is traditionally the weakest
portion of the process and it is a complex routine. But the reports and functions that
ERP provides can help employees work through the strategic planning sessions and
develop a comprehensive one that will aid in the company’s processes.

ERP programs are being developed and updated all the time. With so many different
types on the market, companies should make sure they do due diligence and try out
different packages before choosing one to use. Some of the programs even offer mobile
capabilities so that you can always have a finger on the pulse of your business activities
from your pda.

With real time capabilities and the ability to be able to see what is going on with your
company as it happens, ERP systems are handy when you deal with high volume. With
an ERP system, your company will never have inventory shortages or wasted time spent
transferring files. You can test out an ERP system before buying it and see how it will
work with your business.

ERP Benefits - Operational Control, Management Control and Strategic

Planning

According to Anthony, R. A, 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 manegment
control one way or other.

Help reduce operating costs

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.

Support Strategic Planning

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." (source) Part of ERP
software systems is designed to support resource planning portion of strategic planning.
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).
Business Engineering and ERP Handout
ERP Related Areas
Many areas from software engineering:
• Software project management
• Data Base Management Systems (DBMS)
• Legacy systems
• Change management
• Commercial Off-The-Self (COTS) Software vs tailor-made software
• Process modeling
• Business Process Re-engineering!
•
But... What is Business (Re-) Engineering?
• Business Engineering resolves around information technology and continuous
change. It is a constant refinement of an organisation’s changing needs
• Business Engineering is the rethinking of business processes to improve the
speed, quality and output of materials or services
ERP
• supports the business processes of a company
• allows sharing of common data and practices across the entire enterprise
• real-time environment for producing and accessing information

Business (Re)engineering, is it necessary?

• Survey of 62 Fortune companies (Deloitte Consulting 1998):
– 62% lists organizational and people issues among the obstacles to
successful ERP implementations
– Single most important obstacle: Change Management
• Survey of 220 European SAP projects (Buxmann et al. 1996):
– 83% responded that it was reasonable to restructure the business processes
as part of the project
– 55% admitted that restructuring would have taken place even if the SAP
system had not been implemented
What is Reengineering?
Incremental
Existing process
Radical
Clean slate
One-off/continuous
Short Long
One time
Bottom-up Top-down
Narrow-within functions Broad cross functional
Moderate High
Level of change
Starting point
Frequency of change
Time required
Participation
Typical scope
Risk
Improvement Reengineering
• Process involves the redesign of business processes to achieve dramatic
improvements in cost, quality, service or speed.
– Typically involves transaction processing
– Tries to find inefficient rules of thumb built into processes and break away
from them
– Design business processes to exploit IT rather than replicate old manual
processes
What are Primary Approaches?
• Two primary approaches: Start from scratch and “Best Practices”
• Start from scratch and redesign processes
– Most expensive ... But considers unique aspects of specific firm,
processes, resources & people
• Using existing best practices generated by others (e.g., consultants or competitors)
– Processes that have been proved in other firms
What is the role of reengineering in ERP?
• ERP have many best practices built into them to choose from
– E.g., SAP now has over 1000 best practices available to choose from
• Firms often use ERP as a way of reengineering processes
Why? Traditional IT Support
• Data processing needs defined at departmental level
• Inconsistent terminologies
• Field mismatches in data bases
• Unreliable interfaces between systems
• Data redundancy
• Inconsistent and delayed information
• Had to reconcile data at regular intervals
The answer? SAP R/3 Basis
• Developed from the perspective of the company as a whole rather than any one of
its departments
• Features:
– On-line system with no batch interfaces
– One database for all data (minimal redundancy)
– Clear definition of data items in data dictionary
– Modular application (independent, but integrated modules)
– Software functionality configurable to customer’s requirements
(parameterized modules)
– Client-oriented data structure
– Definition data reflects the relevance of the business
SAP R/3
• Coverage
• Client/Server Architecture
• Software Architecture
• Table Architecture
Coverage
• Financial Accounting
– FI: external accounting
– CO: internal accounting
– AM: asset management
• Human Resources
• Manufacturing and Logistics
– MM: materials management
– PL: plant management
– QM: quality management
– PP: production planning
– PS: project system
– SM: service management
• Sales and Distribution
Summary
• Business Engineering
– Aligning information technology, organization and procedures
– ERP systems vital in (re)engineering projects
• SAP
– Complex and powerful ERP system
– Integrated business processes and provides and on-line, consistent source
of business information
– Parameterized, modular software package
–
Principle of Business Engineering

• "... the fundamental rethinking and radical redesign of business processes to

achieve dramatic improvements in critical contemporary measures of
performance, such as cost, quality, service, and speed."[5]
• "encompasses the envisioning of new work strategies, the actual process design
activity, and the implementation of the change in all its complex technological,
human, and organizational dimensions."[6]

Additionally, Davenport (ibid.) points out the major difference between BPR and other
approaches to organization development (OD), especially the continuous improvement or
TQM movement, when he states: "Today firms must seek not fractional, but
multiplicative levels of improvement – 10x rather than 10%." Finally, Johansson[7]
provide a description of BPR relative to other process-oriented views, such as Total
Quality Management (TQM) and Just-in-time (JIT), and state:

• "Business Process Reengineering, although a close relative, seeks radical rather

than merely continuous improvement. It escalates the efforts of JIT and TQM to
make process orientation a strategic tool and a core competence of the
organization. BPR concentrates on core business processes, and uses the specific
techniques within the JIT and TQM ”toolboxes” as enablers, while broadening the
process vision."

Business Process Reengineering with Information Technology

BPR has been around for quite some time: a lot has been written about it in both the practitioner trade
press and the academic research journals. However, the controversy still remains if there is any accurate
description of BPR, or if BPR is just a fad: an appealing label to tag on to whatever your company is doing
to suggest that your latest and greatest work is 'in vogue.' To get some bearing about the question of what is
BPR and what is the role of information systems and human factors in that process, you may like to start
here.

What is BPR?

Start with Overview Article on BPR that covers key concepts regarding BPR, Processes, Myths about BPR,
Relation between BPR and information technology, Role of IS function in BPR, BPR Methodology, Failure
of BPR Projects, and Future of BPR. It also contains hyperlinks to selected references. On a related note,
you may also like to peruse the diverse notions of 'Enterprise Architecture' as they are relevant to planning
and implementing organizational change. These notions are presented in this Overview Article on
Enterprise Architecture within a framework of Strategic Capabilities Architecture.

A few other papers that add to the perspective explained in the overview paper are listed below for
additional reading on: "What is BPR?"
 • Business Process Innovation: What Is It? A text book definition and the six-step approach. The
'radical' and 'dramatic' improvement aspects should be noted for contrasting with the following
articles.
• Business Process Reengineering (Dean) A review of diverse perspectives on BPR and argument
for the 'humanistic' approach to business transformation.

Is BPR Out of Vogue?

Strategic Planning Is BPR out of vogue? After a decade of streamlining processes for efficiency, companies
are adopting a more proactive stance toward the future. The reborn Strategy must be "subversive": it must
challenge the internal company rules and industry rules; it must be customer-oriented; and it must be based
on "thinking in terms of whole systems." Makes one think if BPR and the "new" Strategy are really 'apples
and oranges'?

Does BPR Always Require External Consultants?

Some Companies Reengineer Without Consultants Companies like Texas Instruments and Harley Davidson
are setting the precedent for implementing reengineering initiatives with internal process improvement
teams. This article outlines the development of their home-grown BPR initiatives that were implemented
independent of external consultants.

BPR Initiatives... For the Benefit of Employees?

Balancing Work and Family Short-sighted nature of BPR initiatives has been often criticized because of
their key emphasis on restructuring and downsizing [read 'dumbsizing']. BPR efforts have been expected to
benefit the company and in several cases the customers of the company. How often have we heard of the
BPR efforts oriented to the benefit of the employees? Often we forget that the success of almost all BPR
initiatives depends upon the employees: in the final analysis they are the persons responsible for delivering
the benefits to the customers and to the company. Here are some companies that are turning the 'nuke them'
BPR philosophy on its head. Business processes... meet... work processes.

Systemic View of Organizational Change

If you are interested in a "wholistic" perspective about management of organizational change and
organizational interdependence by deploying information technology, you would like to read the paper
titled Role of Information Technology in Managing Organizational Change and Organizational
Interdependence. This synthesis of ideas from systems theory, organization research and information
technology practices, attempts to provide a "wholistic" perspective of the relevant organizational and
technological issues. The synthesis suggests that the survival and growth of organizations in an increasingly
turbulent environment would depend upon effective utilization of information technology for aligning the
organizational structure with environmental preferences and for creating symbiotic interorganizational
structures.

BPR: Incremental or Radical?

We are all familiar with the initial thrust of BPR on 'forcing' radical change on the employees propounded
by Hammer and Champy. We are also aware of the criticism of such 'radicalism' and the later aboutturn of
the above authors when they suggested that BPR needs to take into consideration the human factors
necessary for successful implementation. The question remains: BPR, should it be incremental or radical?

Our thinking is that the process changes need to be radical in the sense that they are of framebending or
framebreaking nature. In other words, the assumptions underlying the existing processes need to be
surfaced and analyzed by considering multiple and contradictory perspectives of the present and the future.
However, the implementation needs to be preceded by a well thought out action plan that involves the
employees at the various levels. For a relatively recent case study of an organization that used such an
approach, peruse the story Enterprise Systems: The Big Switch: Would You Shut Down Your Business to
Bring Up A New System? from CIO (Feb. 15, 1997). Going against the generally accepted notion of
reengineering business processes piece-by-piece, the computer manufacturer Quantum replaced its
worldwide legacy systems with an integrated client/server system using the 'big bang' approach. However,
the 'big bang' required: a four year planning and implementation process that involved managers and
employees from all business units; the ability to respond quickly to unforeseen situations and take decisive
actions; and the resolution to go through several testing cycles while often remaining on tenterhooks.

Remain tuned in for more on similar issues...

Meanwhile, to provide you with a more focused perspective on the various issues relevant to Business
Process Reengineering & Innovation, many other articles are provided below along with extensive
annotations.

UNIT-II

Business Modelling for ERP

A business model describes the rationale of how an organization creates, delivers, and
captures value[1] - economic, social, or other forms of value. The process of business
model design is part of business strategy.

In theory and practise the term business model is used for a broad range of informal and
formal descriptions to represent core aspects of a business, including purpose, offerings,
strategies, infrastructure, organizational structures, trading practices, and operational
processes and policies.

Business model design template

Business model design template: Nine building blocks and their relationships,
Osterwalder 2004[2]

Formal descriptions of the business become the building blocks for its activities. Many
different business conceptualizations exist; Osterwalder's work and thesis (2010[1],
2004[2]) propose a single reference model based on the similarities of a wide range of
business model conceptualizations. With his business model design template, an
enterprise can easily describe their business model

• Infrastructure
o Key Activities: The activities necessary to execute a company's business
model.
o Key Resources: The resources that are necessary to create value for the
customer.
o Partner Network: The business alliances which complement other aspects
of the business model.
• Offering
o Value Proposition: The products and services a business offers. Quoting
Osterwalder (2004), a value proposition "is an overall view of .. products
and services that together represent value for a specific customer segment.
It describes the way a firm differentiates itself from its competitors and is
the reason why customers buy from a certain firm and not from another."
• Customers

Business Model Canvas: Nine business model building blocks, Osterwalder,

Pigneur, & al. 2010[1]

o Customer Segments: The target audience for a business' products and

services.
o Channels: The means by which a company delivers products and services
to customers. This includes the company's marketing and distribution
strategy.
 o Customer Relationship: The links a company establishes between itself
and its different customer segments. The process of managing customer
relationships is referred to as customer relationship management.
• Finances
o Cost Structure: The monetary consequences of the means employed in the
business model. A company's DOC.
o Revenue Streams: The way a company makes money through a variety of
revenue flows. A company's income.

ERP System Implementation

Overview
INTRODUCTION
Enterprise Resource Planning (ERP) System implementation is both an
art and science that consists of planning, implementation, and ongoing
maintenance. This methodology is designed to automate the drudgery
of implementation and provide organized approaches to problem solving
by listing, diagramming, and documenting all steps. Structured
methodologies help to standardize and systemize ERP implementation
and maintenance by approaching them as an engineering discipline
rather than as whims of individual software developers. It is essential
to understand structured methodologies in the implementation of ERP
systems.
The basic steps of structured methodologies are:
• Project Definition and Requirement Analysis. Defining the terms
of reference, determining user needs and system constraints,
generating a functional specification and a logical model for
the best solutions.
• External Design. Detailing the design for a selected solution,
including diagrams relating all programs, subroutines, and
data flow.
• Internal Design. Building, testing, installing, and tuning
software.
• Pre-implementation. Evaluation and acceptance
• Implementation. Implementing systems.
• Post-implementation. Evaluation of controls and debugging.
This book covers ERP systems, their life cycles, and their major
components to aid in understanding of any major ERP, irrespective of
brand. It discusses each phase in the ERP life cycle, including the roles
of each principal participant, key activities, and deliverables. Particular
attention is paid to the audit role, which is the primary focus in succeeding
chapters and may have to be adjusted if the other participants
in the process do not perform their roles adequately.
When an organization purchases an ERP system, the intent is that
the purchased ERP system provides specific functions and benefits.
These functions and benefits need to be articulated to ensure that the
ERP system performs as desired. This process is called conducting a
feasibility analysis. The purpose of the feasibility study is to provide:
• An analysis of the objectives, requirements, and system
concepts.
• An evaluation of different approaches for reasonably
achieving the objectives.
• Identification of a proposed approach.
The feasibility analysis normally covers:
• Current working practices. These are examined in depth,
revealing areas in the business where there is duplication of
effort, or where procedures instituted in the distant past are
carried out even though there is no longer any need for them.
• Channels of information. These are examined because the
feasibility study is concerned primarily with the input and
output information of each internal system. Such a study
ignores departmental boundaries and prejudices. When the
true information patterns within a business are exposed, it is
often possible to reorganize resources so that all relevant data
is captured at the point where it can be used for decision.
• Alternative approaches. Alternative methods of handling or
presenting the data should be considered.
• Cost factors. These must be clearly identified and show
definite cost savings or related benefits. Existing costs must be
examined and used as a basis for comparison. Since this
presentation is likely to be related to the information structure
rather than to the departmental organization, the new
approach may suggest possible improvements that were
hidden under the existing system.
• Supporting services offered. The training and the systems and
programming assistance that will be available during the
installation period.
• Range compatibility. If the workload expands, can the
configuration be increased in power without extensive
reprogramming?
Differences and similarities between traditional auditing (i.e., financial,
operational and IT auditing) and how they may be integrated
in a computerized environment will be discussed. Appropriate ERP/IT
control objectives will be defined and correlated as criteria in the ERP
system audit.

5 Steps To Successful ERP Implementation

Introduction
Tougher competition in the marketplace is generating the need to better optimize
resources, improve profitability and keep customers satisfied. Companies are
increasingly implementing Enterprise Resource Planning (ERP) software solutions to
improve operations and provide faster customer response.
Choosing an ERP solution that meets your specific business requirements will enable you
to have a smoother implementation. If the software package is written for your industry,
you won’t have to custom design a solution. Customized solutions are time consuming to
implement and add unnecessary cost. One of the top reasons ERP implementations fail is
because the software doesn’t meet basic industry specific business requirements.
However; purchasing an ERP application is only half the battle. A well designed
implementation plan is the key to success.
5 Steps To Successful ERP Implementation
1. STRATEGIC PLANNING
• Assign a project team.
• Examine current business processes and information flow.
• Set objectives.
• Develop a project plan.
Project team: Assign a project team with employees from sales, customer service,
accounting, purchasing, operations and senior management. Each team member should be
committed to the success of the project and accountable for specific tasks, i.e. developing a
timeline, finalizing objectives, formulating a training plan. Make sure you include first line
workers as well as management on your team. Base the selection on the knowledge of the
team not status of the employee.
Examine current business processes: Have the team perform an analysis on which business
processes should be improved. Gather copies of key documents such as invoices, batch
tickets and bill of lading for the analysis. To start the team discussion, consider questions
such as: Are your procedures up to date? Are there processes that could be automated? Are
personnel spending overtime processing orders? Does your sales force and customer service
personnel have real-time access to customer information? The team members should also
conduct interviews with key personnel to uncover additional areas of improvement needed.
Set objectives: The objectives should be clearly defined prior to implementing the ERP
solution. ERP systems are massive and you won’t be able to implement every function. You
need to define the scope of implementation. Ideally, the scope should be all inclusive. But
practically, it is very difficult to implement. Examples of objectives would include: Does the
solution reduce backlogs? Can the solution improve on-time deliveries? Will you be able to
increase production yields?
Develop a project plan: The team should develop a project plan which includes previously
defined goals and objectives, timelines, training procedures, as well as individual team
responsibilities. The end result of the project plan should be a “to do” list for each project
team member.
ollection and Clean-Up
4. Training and Testing
5. Go Live and Evaluation
5 Steps To Successful ERP Implementation
2. PROCEDURE REVIEW
• Review software capabilities.
• Identify manual processes.
• Develop standard operating procedures.
Review software capabilities: Dedicate 3-5 days of intensive review of the software
capabilities for the project team. Train on every aspect of the ERP software to fully educate
the team on capabilities and identify gaps. Determine whether modifications are needed prior
to employee training.
Identify manual processes: Evaluate which processes that are manual and should be
automated with the ERP system.
Develop standard operating procedures (SOPs): for every aspect of your business. These
procedures should be documented. Make sure that you modify the document as your SOPs
change. This is a huge task, but it is critical to the success of your implementation.
Examples of SOPs:
• How do you handle global price changes?
• What are the processes for inputting new customer records?
• How do you currently handle the paperwork on drop shipments?
• How do we add a new product or formula?
1. Strategic Planning

3. Data Collection and Clean-Up

4. Training and Testing
5. Go Live and Evaluation
5 Steps To Successful ERP Implementation
3. DATA COLLECTION & CLEAN-UP
• Convert data.
• Collect new data.
• Review all data input.
• Clean-up data.
Convert data: You can’t assume 100% of the data can be converted as there may be outdated
information in the system. Determine which information should be converted through an
analysis of current data.
Collect new data: Define the new data that needs to be collected. Identify the source
documents of the data. Create spreadsheets to collect and segment the data into logical tables
(Most ERP systems will have a utility to upload data from a spreadsheet to their database).
Review all data input: After the converted and manually collected data is entered into the
ERP database, then it must be reviewed for accuracy and completeness. Data drives the
business, so it is very important that the data is accurate.
Data clean-up: Review and weed out unneeded information such as customers who haven’t
purchased in a while or are no longer in business. Now is the time for improving data
accuracy and re-establishing contact with inactive customers.
1. Strategic Planning
2. Procedure Review

4. Training and Testing

5. Go Live and Evaluation
5 Steps To Successful ERP Implementation
4. TRAINING AND TESTING
• Pre-test the database.
• Verify testing.
• Train the Trainer.
• Perform final testing.
Pre-test the database: The project team should practice in the test database to confirm that all
information is accurate and working correctly. Use a full week of real transaction data to
push through the system to validate output. Run real life scenarios to test for data accuracy.
Occurring simultaneously with testing, make sure all necessary interfaces are designed and
integration issues are resolved to ensure the software works in concert with other systems.
Verify testing; Make sure the actual test mirrors the Standard Operating Procedures outlined
in step 2, and determine whether modifications need to made.
Train the Trainer: It is less costly and very effective if you train the trainer. Assign project
team members to run the in-house training. Set up user workstations for at least 2 days of
training by functional area. Provide additional tools, such as cheat sheets and training
documentation. Refresher training should also be provided as needed on an ongoing basis.
Final Testing: The project team needs to perform a final test on the data and processes once
training is complete and make any needed adjustments. You won’t need to run parallel
systems, if you have completed a thorough testing.
1. Strategic Planning
2. Procedure Review
3. Data Collection and Clean-Up
5. Go Live and Evaluation
5 Steps To Successful ERP Implementation
5. GO LIVE AND EVALUATION
• Develop a final Go-Live Checklist.
• Evaluate the solution.
Sample Final Go Live Countdown Checklist Sample
• Physical inventory process is complete.
• Beginning balance entry procedures are developed for all modules.
• Any transition issues are addressed.
• Documents & modifications are tested thoroughly.
• Executives and departments heads are fully trained.
• Vendor is available for go-live day.
• Users will have assistance during their first live transactions.
Evaluation: Develop a structured evaluation plan which ties back to the goals and objectives
that were set in the planning stage. In addition, a post-implementation audit should be
performed after the system has been up and running for the first week for reconciliation
purposes and three to six months following to test whether or not the anticipated ROI and
business benefits are being realized. Comparing actual numbers with previously established
benchmarks will reveal if the software tool does what it is intended to do - add value to the
business. It is important to periodically review the system's performance to maximize ROI.
In Summary
• Set reasonable goals and objectives.
• Make project team members accountable for implementation.
• Test software across departments.
• Constantly evaluate to maximize the return on your investment.
You will hit bumps in the road and you need to be patient. Upper management and project team
members should be committed for the company to realize the benefits of successful ERP.
1. Strategic Planning
2. Procedure Review
3. Data Collection and Clean-Up

4. Training and TestingConsultants: Role

What is the role of the consultant?

1. Uses experience and skills to provide you with recommendations and advise. The
implementation of the recommendations may be performed by a consultant but is
more often better performed by the company staff.
2. Gathers information for analysis.
 3. Consultants bust use their detachment from the organization as a source for
objectivity in their analysis.
4. Works with managers to develop solutions.

Should the consultant remain on-site?

Advantages Disadvantages

• easier access to their expertise • cost associated with working full-

time
• observe all the hours being worked
• if a consultant is only working when
they are at your worksite, then you
need to get a new consultant.
Consultants should be able to work
independently of the client.

Role Of Customer Service In Success Of Business

Business success is dependent on a variety of factors -

a realistic business idea, a well thought-out business plan, an appropriate marketing

strategy and great customer service are amongst the top ones. While customer service is a
part of marketing, it can be segregated as a separate field on its own. It's important to
define the term customer service before we proceed. Customer service includes all
aspects of interaction with a customer and speaks to the organization's image in the mind
of a customer.

A customer provides an organization with that most organic of all advertising tools -

word of mouth advertising. A happy and satisfied customer is much more likely to send
more customers your way. Further, there is the potential for repeat business, which is the
backbone of many businesses. It is obvious that a customer who has been provided with a
product or service that he or she desired in the ideal way, would build a relationship with
the seller.

Further customer relationship management teaches the business where there are flaws in
the system and provides valuable customer feedback. When a business receives feedback,
it is able to see the customer's image of the organization and the impression of its
services. This tool is invaluable in correcting systems as well as image management for
the business. It is also an outsider's perspective, which provides the business owner or
management a unique insight.
Additionally, a satisfied customer would be more likely to participate in activities that
help to generate customer preference data. This data goes back to the marketing function
in assisting the organization to better target and attract it potential customers.

In fact, it would not be a stretch to say that without good customer service, a business
would not survive. The old adage 'The customer is always right' has been the foundation
of many an organization and what it really means is that keeping customers happy is the
foremost principle of any business. The reason for the survival of many small businesses
in a tough and competitive market is their ability to provide personalized customer
service. It is the human touch that warms and enlivens an organization in the customer's
mind and goes towards building a relationship. This relationship is the basis of future
growth for a business.

Regular and sustained interaction with a customer ensures that the customer feels
connected with the business. For instance, a small pub owner who chats with his
customers and knows them by name builds a relationship with them. Further, when he
makes sure that their regular bartender makes their drinks and the food is fresh and hot,
he is providing customer service. The customers have a good experience and feel that the
establishment treated them well. Once an organization grows or goes online, there is less
potential for this face-to-face interaction and then the business must find creative ways to
ensure customer satisfaction.

The role of customer service to a business, online or offline, is essential to its growth and
survival.

role of vendors
I think vendors and partners are really important, but the success of a partnership depends
greatly on how much the parties invest in the partnership. That's extremely important.
You just can't put each other's logos on your Web sites and expect leads to just come in. I
think it's a process, and it's a working process. You have to effectively market the
relationship and really get to know each other, know what each other's business is, and
know what your strengths and weaknesses are, but play on the strengths.

Prospects don't want to be constantly barraged with people pushing products on them.
They want value for their business, whether it's to save money or to make their job easier.
In order to provide your customers with that value, you have to understand how things
work within their business, and your business and your partner's business.

For example, we had a very successful partner-related business development initiative,

and that was when Mark Hurd came to San Antonio. It was something as simple as the
CEO of HP coming to San Antonio, but we created a marketing campaign to call our
close customers [with whom] we've already done business, and also new customers, to
get them out to this event so they can come out. How many times do you have the chance
to hear the CEO of your IT vendor at an event? So we did a campaign around his coming
to San Antonio, and we were very successful in getting several customers there and
several new clients that became customers.

Another initiative we kicked off in 2007 was our MP SupportLink, and that's an online
portal for contract and asset management. Managing the service and support contract is a
really tedious job and extremely paper-intensive. HP is moving some of its service
contracts out to the channel, and we have a product, called MP SupportLink, that is ideal
for helping customers manage their service and support contracts. And we're in the
middle of a marketing campaign to reach out to the affected customers in our area, and
we've already picked up business as a result of it. Our partnership with HP provided us
with this opportunity. We saw a need with HP, and we're filling it with our MP
SupportLink.

Customization
Numerous studies of the critical success factors for ERP implementation success conclude that the
preferable way to implement ERP software is sans software modification (Nah & Zuckweiler, 2003).
However, for reasons of misalignment and strategic alignment, customizations of enterprise systems are
necessary. One estimate is that 20% of the processes in an organization cannot be modeled in an ERP
system without customization (Scott and Kaindl, 2000). Software modification and customizations are
needed for the ERP system to meet the needs of the organization; however, the issues associated with
customization are far reaching.

Because customizations are built as part of a development effort, many times during an implementation
time frame, customizations may have minor bugs (Markus, Axline, Petrie, & Tanis, 2000; Soh, et al., 2000)
that the vendor supplied ERP software would not. These bugs can cause delays in development during the
implementation of an ERP, and affect the successful implementation. Customizations have been found to
have negative affects on the outcome of ERP implementation projects (Gattiker and Goodhue, 2004; Levin,
1998; Parr and Shanks, 2000). The example case in Gattiker and Goodhue (2004) where the entire
implementation budget was spent on just four of 20 plants illustrates the problems that customization can
bring to bear on an ERP implementation project. In general, less customization will mean shorter
implementation times (Levin, 1998), thus the inclusion of “vanilla” implementation in so many ERP
implementation critical success factor studies (Nah & Zuckweiler, 2003).

The complexity added by customization is an issue for organizations implementing ERP systems. An ERP
system is already a complex system, requiring massive amounts of organizational change as part of the
implementation process (Barnes, 1999). The added complexity of customizing the ERP system is
problematic.

The problems associated with ERP customization do not end with implementation. Customization of an
ERP will have maintenance and upgrade impacts (Zrimsek and Geishecker, 2002). Each time a change is
required to the system, the effect of the change on the customization will have to be assessed by the
organization, as the software vendor will not support these customizations. Many times, this requires
bringing in an expert to help with this assessment. These additional requirements reduce flexibility or
agility of the system. As well, ERP software vendors do not usually support customizations in future
versions of the software. For example, an upgrade of accounting software is required each year to be
compliant with tax law. If a company is using an ERP system with customization, the effect of the tax law
upgrade will have to be tested with the customization of the system to ensure processing continues as
expected. The added complexity required by customization of ERP systems reduces system agility as well.

Definition of Customization
Customization in this paper will refer to either interfaces or modification. The reason for only using these
types of customization is that historically, these types of customization require the most upkeep, and will
have the biggest impact on strategic alignment and system agility. Also, interfaces and modifications are
both “code” change type customization, meaning that a certain amount of custom programming is required
to achieve this type of customization. Modifications (Haines and Goodhue, 2004) are code changes that the
vendor does not support. This notion of “code changes” as a particular and influential form of
customization is supported by other academic studies (Gattiker and Goodhue, 2004) as well as by
practitioner journals. So, the conceptual definition of customization for the purposes of this paper is:
Customization is a code change put into place because the ERP business process does not mirror the
“desired” business process.

Two types of customization will be studied: strategic customizations and consistency customizations.
Strategic customizations are important, as these types of customizations aid in strategic alignment.
Consistency customizations are customizations made not for strategic reasons, but for the purpose of
replicating a “status quo” business process. Proceedings of the 2005 Southern Association of Information
Systems Conference 251
Strategic customizations are any customizations that are made with the purpose of achieving a strategic
goal or furthering a strategic initiative. The reason these are so important, is that a strategic customization
should be in support of the strategy of the company, thus is aligned with the strategy of the company. When
a modification or customization is made in support of the strategy of the company, this will further the
alignment of IS strategy and business strategy, and the impacts should be positive.

The other type of customization that will be considered is a customization that is made for consistency
purposes. Attention has been paid to customizations that are necessary because of a lack of fit between the
ERP and the business processes; however, customizations are being made to mimic the status quo, or to
mimic a poor business process. These types of customizations are not strategic, and should be differentiated
from strategic customizations. These customizations are “consistency” type customization. An example of
a consistency customization is when an organization has reporting requirements that include certain
headers, footers, and general formatting of data that is not readily available from any of the thousands of
generic reports available from the ERP system. The organization may have to code this sort of change,
rather than even use the reporting tool available from the ERP software. This type of change is not
strategic. This type of customization only re-enforces a pre-ERP way of reporting with no added strategic
value. This is a “consistency” type customization.

Though different types of consistency customization may exist as well as different types of strategic
customization, for the purpose of this research and for parsimony, we group these into two categories:
strategic customizations and consistency customizations. Consistency and strategic changes are not two
ends of a continuum, but are separate concepts. This paper treats strategic customizations as separate and
distinct from consistency customizations.

Decision to Customize
The decision to customize is complex (Haines and Goodhue, 2004). Several studies have discussed the
issues and concerns inherent in the customization decision (Haines and Goodhue, 2004; Parr and Shanks,
2000). This paper does not attempt to include all the different reasons that firms customize enterprise
system. This paper only uses these as a basis for understanding that the decisions are complex, and are
therefore made with a trade-off in mind.

The decision (to customize or not to customize) and the reason for customization (strategic versus
consistency) are addressed in this paper. The major problem faced with the decision to customize is the
conflicting objectives of “vanilla” software for a successful implementation and customization to include
legacy business processes. Organizations may make a decision not to customize, only to be forced to
customize after implementation when a serious strategic threat to the organization manifests (Gattiker and
Goodhue, 2002). Therefore, more attention to the nature of customization as part of the decision making
process is required. Haines and Goodhue (2004) identify the many different factors that affect ERP system
customization. Exploring the factors that affect ERP system customization is beyond the scope of this
paper. The focus is the outcome of the decision, and the impacts of strategic and consistency
customizations.

Post ERP Implementation

Background
Well that's it then, you've gone live, temporary staff and vendor representatives have left
the building and the old system has been switched off. The stakeholders have seen all
their objectives delivered, the users love the new system and don't sigh wistfully for how
things used to be, the new system seamlessly supports working practices and there are no
errors or issues outstanding.
Unfortunately, this is not the reality. Most investments in an ERP system fail to deliver
all that was desired at the start of the project. But businesses do not have to accept this;
there is a lot that can be done to optimize an ERP solution.

This article will focus on the implementation of ERP software packages developed and
sold by a large range of IT companies. ERP serves as an all-important information
pipeline that links finance, manufacturing, logistics, sales, and other departments. This
allows the various departments to share information and to smoothly process transactions.
The "resource planning" that gives them their name is now just a very small part of the
capabilities they bring to an enterprise.

[edit]
The Process
The post implementation or review stage of any project methodology is often overlooked
by businesses keen to return to business as normal. Although typically carried out around
three months after go live, even if you have been live with a system for a few years it's
still worth carrying out an efficiency exercise. It can be all too easy to jump straight to
solutions, without taking the time to understand the nature of the problem.

Most ERP implementations do not reveal their value until after they have been running
for some time and the business can concentrate on making improvements to the processes
affected by the system. Going live with an ERP system is only the first milestone on a
long journey to improvement.

Below is a 3-stage process that can be used to help live with ERP:

1. The undertaking of a Post Implementation Audit

2. Lean process alignment
3. Maximizing business benefit

[edit]

Post Implementation Audits

The best way to ascertain how well your business system is performing is to ask the
people dependent upon either its processes or its outcomes. This will cover a cross-
section of users, managers and the IT department; but customers and suppliers can also
be included. There are a number of methods for gathering this information including
questionnaires, focus groups, informal meetings and interviews. Questions can be open-
ended, which will allow you to gather specific comments, or can be tick-boxes against a
range of possible options, which will allow you to statistically analyze the data.

Whichever approach is selected there are a number of key questions to ask:

 • Does the system meet the needs of your daily activities?
• Is the system efficient to use?
• Was the functionality promised at the start of the process delivered?
• Have business processes changed?
• Are there any old systems still in use?
• Are there any spreadsheets or databases in use?
• Is there data to show that the new system has delivered business benefit?
• Could further training improve your utilization of the system?
• Do you believe that you are utilizing all of the available functionality?
• Does the system provide all of the information you need to do your job?

More focused questions can be directed at specific personnel where there are issues with
particular functionality or where more detailed information is required (i.e.) performance
issues.

The outputs from this process will generally include a list of functional gaps, processing
gaps, and system issues, together with a range of statistics that can be used to determine
the status of the project and provide a benchmark for assessing progress when the process
is repeated following issue resolution.

[edit]

Lean Process Alignment

Lean delivers what companies really need in today’s competitive world – shortened lead
times, improved quality, reduced cost, increased profit, improved productivity and better
customer service. A well-functioning and aligned ERP system will also deliver against
these goals. ERP systems work best in a cross-functional environment with departments
talking to each other and agreeing working practices.

One of the areas often having an imbalance is where the processes have not been aligned
with the system. People are working hard to hold onto their previous ways of working
which may be in direct conflict with the ERP system being used. This can cause immense
inefficiencies, frustrations and cost to the business. Sometimes this can become apparent
within days of the new system going live or it may be hidden from view for months or
even years, quietly eroding any faith people may have in the ERP system.

Having spent a great deal of money buying a new system, it always amazes me how often
people incur further expense by ensuring that the new system replicates the old one it is
replacing – "same tune different piano". An ERP implementation is an ideal opportunity
to re-engineer business processes, but the aggressive timescale can often prevent this
from happening. The best implementations are those where effort has been expended
early on to document existing processes and to identify non value-adding ones. The new
ERP system can then be used to drive through new ways of working.
The starting point is to map out all of the business processes to establish those that are
value-adding and those that are non value-adding; with the aim of enhancing the former
and eliminating the latter. AN ERP system provides a window on what is happening and
it is often useful to compare the system’s way of doing things with what is happening in
practice. Once process flows have been determined then the business needs to look
towards determining the best activity flow.

[edit]

Maximizing Business Benefit

The two processes highlighted above should have produced a range of opportunities to
maximize business benefits. But there is a further area that needs to be monitored. I refer
to this as “system noise.” These are the quiet grumbles, water fountain conversations,
inter-departmental stresses and strained relationships with customers and suppliers that
may be occurring so frequently that they have become invisible and so not mentioned in
analysis. It is imperative that whoever is project managing this process picks up on these
things.

Once all of the issues / challenges have been documented attention needs to focus on
developing and implementing solutions. The system vendor needs to be involved with the
process, as they will have the knowledge to ensure that you are getting the best from the
system. Even if there are major problems with the system it does not necessarily mean
that it has to be replaced.

One of the first areas to consider is whether the previous system has been truly replaced
or is it still in use. This will have a double impact – the new system will be missing a key
element of the process flow which will cause issues further down the line, but it will also
ensure that the users do not migrate onto the new system. This reluctance to let go may
also be reflected in the number of spreadsheets, databases and manual recording systems
still in use, which your Post Implementation Survey will have identified. It is important to
remember that the users have been asked to fundamentally change the way that they work
and may be fearful of relinquishing knowledge that they believe provides them with job
security. ERP systems formalize and make transparent business processes and this can be
challenging for those people who feel secure with their personal knowledge.

This links to the second point. Changing hardware and software is not the hardest part, it
is the cultural change required to make the ERP system perform efficiently that is
difficult. Without changing the culture, business behavior will remain the same and an
improvement opportunity missed. People don’t like change and ERP asks them to
fundamentally change how they do their jobs. If you use ERP to change how people
process orders, manufacture goods, ship and invoice them, you will see value from your
software. But if you install the software and leave working practices the same, then at the
very least you will see no benefit and in all likelihood the new software could actually
slow you down.
At this point attention should also be given to Phase 2 module implementations. These
are the tools that looked really exciting at the demonstration, but when the budget or
implementation started to get challenged were deemed to be of less initial importance
than the primary modules. Typically these include Business Intelligence (BI), Customer
Relationship Management (CRM), Advanced Planning (APM) and process automation
tools. These can often be what the stakeholder is expecting and without their
implementation, the stakeholder will never consider the ERP project a success. In
addition, some can also be used to support the implementation of lean practices.

Linked with the phase 2 modules are the third-party integrations that may well have
formed part of the initially determined solution. These are challenging in two ways – they
involve multiple parties which can present an ownership challenge and they involve
writing specialized coding to support the linkages. Often the time involved in developing
the links is under-estimated so may continue to present a challenge post go-live. It is vital
that all interested parties get together to resolve any operational issues.

The survey may also illustrate that the system has been set up incorrectly – assumptions
may have been wrong, analysis fields may be missing key elements, redundant records
may have been transferred or the data may contain errors. All of these factors will make
the ERP solution ineffective and inefficient and need to be resolved. A reimplementation
exercise will need to be conducted, with the support of the vendor, to address these
issues.

Another area that is often neglected is the task of keeping the system up to date. Most
vendors issue a range of patches, bug fixes, and minor version updates; as well as the
more major system upgrades. You will experience the most efficient support for the
system only if you have kept your ERP system on the latest release. This will also ensure
that you are prevented from experiencing issues that have already been addressed.
However, one factor more than any other, will have an impact here – any customizations
that were an “essential” requirement at the start of the project will make applying
upgrades much more challenging and expensive. Effort should be made to resist these
where possible, or look to eliminate them as the system becomes embedded and the
processes subject to lean alignment.

One of the major challenges of any implementation is the training of end users. Typically
a few people, often termed senior users, are trained on the system by the vendor at the
start of the project. They then spend subsequent months developing the solution and
testing it, before the business is ready to go live. Usually at this point the senior users are
presented with the responsibility to train the end users – a role for which they are unlikely
to have received any training themselves. The success of this process is reliant upon the
skills of the trainer and the responsiveness of the trainee. In addition, people change jobs
much more frequently than in the past and so it is quite easy for the system knowledge to
leave the business.

Conclusion
It is possible for businesses to mine value from an ERP system post implementation. To
achieve this they need to understand what their ERP system can do and then invest in
people, training, the system and internal processes to achieve alignment. Once this work
has been carried out the business should be leaner and more efficient, and better able to
achieve competitive advantage.

Finally, remember that the cost to re-implement an existing ERP system is likely to be
substantially lower than the costs – in money and resource, required to select and
implement a new system.

Analyzing the technology beyond ERP

ERP helps in the business of an enterprise .There are some technical details about ERO
and the tools used which needs to be covered. ERP technicalities are given here briefly
and analyzed in depth in the later articles.

Some of the technical information on ERP is as follows:

The technical information on ERP can be covered under the following four heads:

• ERP platforms
• Open Source ERP
• ERP with reference to supply chain warehousing and logistics
• ERP II

ERP Platforms
There are no specific platforms exclusively dedicated to the functioning of ERP.
However two platforms are popularly used in this context. They are dotnet and j2ee.Dot
net is a comparatively cheap platform and mostly preferred by ERP vendors and users.
However J2ee has also carved a niche in the ERP market with its customers remaining
ever loyal. Dot net comes with lots of facilities for the user. However J2ee caters to some
special needs which make it compatible to some players like erp home builder and erp
financials.

Open Source ERP

Open source ERP provides the users with free software programs devoid of licensing and
other formalities. The user is also able to access the source code. This has been citied as
one of the main reasons for S.M.E.'s to select ERP apart from outsourcing and
development of applications suited exclusively to S.M.E.'s. Open source ERP platforms
out beats commercial ERP in almost every aspects but still the awareness among
companies is not sufficient to encourage its use. In addition ERP technicalities require
greater clarification especially for packages like erp home builder.

ERP with reference to logistics supply chain and ware housing

The manufacturing sector has been citied as the core beneficiary of ERP. The three
departments that enjoy the maximum benefits within the manufacturing sector are
supplychain, logistics and warehousing. A proper coordination of these three departments
is essential not only for the uplift of the manufacturing sector but any other sector that
deals with commodity and products.

Supply chain is the flow of action that controls the movement of goods and services in
the organization. Any activity whether falling under the scope of this condition or directly
or indirectly related to it can be clubbed under the head supply chain. Supply chain is the
map that outlines the functions duties and responsibilities of the individuals in the
organization in terms of delivering the enterprise objectives. Any process in the supply
chain must have proper coordination and transparency. Organizational problems will
erupt if there is a lack or absence in any of these or both. Enterprise resource planning
helps the organizations to maintain and control this process by a click of the mouse. It
ensures and facilitates the flow of the work and make corrections and periodical checks
besides constant monitoring.

Logistics refers to the department in charge of maintaining details about transportation

and its network. A proper detail of the goods in transit is mandatory for organizations to
face the mantle. ERP provides a common database that helps in getting these details
immediately.

Warehousing refers to the place where inventory is stored in an organization. The

authorities in Warehouses should coordinate and reciprocate with others regarding the
stock of raw materials and relevant details. These are provided by the common database
of ERP.

ERP II
The latest advancement in ERP has revolutionized the enterprise operations. It has helped
in expanding the scope and usage. Some of the novel features of ERP include extending
ERP to all departments, industries and functions. It has increased the penetration of
internet and exploited modern technology to the maximum.the financial operations have
been made easier by erp financials.

Conclusion
The technical information of ERP reveals its latest advancements. However none of them
will benefit unless the organizations changes its way of business. ERP technicalities will
not serve the purpose.

ERP:The Process And Guidelines For Implementation

ERP Implementation Guideline

Research on enterprise resource planning have shown that the flaws in ERP
implementation have resulted in the vast majority of companies failing to unleash the
benefits of ERP softwares.This has led to lot of problems right from litigations to
misinterpretations in business media. The vendor is always taken aback because the
entire community blames him and the products. Enterprise resource planning phases are
very important in this regard.
Probable reasons behind Failure
The actual problems lie in choosing the right software for your company. If this is either
taken for granted or done hastily then the chances of ERP Success are rare. Some of the
reason for failure could be exorbitant costs, inadequate training, longer time, and failure
of strategy and the lack of attitudinal change on the part of employees to accept and
manage change. They have to analyse What companies use enterprise resource planning?

Guidelines
Very few companies succeed in the first instance after implementing ERP.ERP is not a
fortune but a technology that delivers results only after effective execution of the laid
down procedures. Therefore to merely bank on it will not suffice to obtain any results.
What is more important is the implementation of the necessary changes in the
organization so as to combat ERP.

ERP is not an answer to the errors in business plans and tactics. In fact ERP consultants
are reluctant to attend to it because they don't want it to disturb the purpose of ERP. It
should therefore be understood that ERP is an I.T. tool that assists and facilitates the
business process by being a part of it. On the contrary it is misunderstood that ERP can
rejuvenate the business. The answer to the popular question What companies use
enterprise resource planning? will help in clearing this trouble.

ERP gap analysis and business process reengineering should be performed properly. This
will ensure that other steps are followed systematically and in accordance to the
company's need. They are otherwise referred as enterprise resource planning phases.

IT facilities in the organization should be at par with market standards and international
reputation. This will enable the operation people to constantly modify and update as and
when it is necessary in order to stay in tune with the competition. Research on enterprise
resource planning will reveal this.

The process of ERP implementation should be carried on by a team of competent

personnel so as to ensure perfection, accountability and transparency.

ERP should become a part of the daily routine. If that does not happen then the company
cannot expect any fruitful results inspite of having followed the above mentioned steps
meticulously inorder to ensure the successful implementation of ERP and no amount of
successful planning of enterprise resource planning phases will help in this regard.

There is another important issue that needs to be addressed in this regard. Even after
successfully implementing and setting ERP right for action the trick lies in combining it
with the business process. The restructuring should also address issues like finding
solutions for the current business problems. It should not be done with an illusion that
ERP will take care of everything. Unless these fundamental problems are solved the
functioning of ERP will do very little to help connectivity and facilitation in business. A
choice is to be made from ERP implementation models after knowing What companies
use enterprise resource planning?

An organization needs to answer the following questions while thinking of taking up

ERP.

1. Perception of the business problems

2. The visualization of solving them.
3. How is ERP going to solve the same and how worth is it and how effective are the
measures taken to implement it.
4. How and who will coordinate the operation of ERP and is it justified in terms of costs,
time taken and efforts?
5. What is the accountability and transparency of ERP operations and how far it will
affect issues like piracy, IPR and their impact on the organizations performance and
image and the possible measures to curb any unnecessary elements?

Conclusion
If an organization follows all the abovementioned steps it will definitely result in
successful ERP implementation as it has been witnessed in the research on enterprise
resource planning phases.

UNIT-III

QAD MFG/Pro
(now QAD Enterprise Applications 2009)

QAD MFG/Pro (now QAD Enterprise Applications 2009 ) is a complete suite of

products with functionality that addresses the needs of single-site and multinational
organizations. QAD MFG/Pro Applications support shared services, cross-border trade,
multi-site manufacturing and multi-entity accounting.

QAD MFG/Pro Applications are built on a deep, foundational understanding of

manufacturing. Designed to streamline the management of manufacturing operations,
supply chains, financials, customers, technology, and business performance, QAD
solutions provide manufacturers easy access to the time-sensitive information they need
to plan for the future as they continue to meet daily manufacturing targets.
Consolidation
The Shared Services capability of QAD Enterprise Applications allows multi-entity
consolidations and eliminations to be performed across multiple general ledgers. The
sophisticated chart of account mapping capabilities allow for different charts of account
to be consolidated, and full traceability to originating transactions can be maintained,
which are critical for audit ability.

Consolidation of the financial results of entities in different domains, with different base
currencies and charts of account, can be achieved without the need to export and import
the data. QAD's solutions support multiple or proportional consolidation and enable
hierarchical reporting.

Multi Currency
QAD Enterprise Applications support multiple currencies. Accounting transactions can
be recorded in any currency and reported either in the transaction currency or converted
to the operation's base currency at the prevailing exchange rate. Currency reporting
options allow general ledger reporting to reflect the latest exchange rate. QAD Enterprise
Applications enables companies to update and maintain exchange rates at any time. All
capabilities for profit and loss on foreign exchange are accommodated within QAD
General Ledger reporting. Support is provided for multiple bank accounts in separate
currencies.

Users can maintain and support a virtually unlimited number of currencies, and the
application supports full currency dependent rounding to allow simultaneous support of
different currencies. Multiple base currencies within a single database are supported by
the Domain concept, and QAD General Ledger consolidation can accommodate
operations running in different base currencies.

System Controls and Security

QAD has developed security and control functionality to meet strict security procedures
— those required by internal corporate policies as well as mandated by governing bodies
— such as the requirements of the SEC, IFRS, as well as the U.S. Food and Drug
Administration 21 CFR Part 11.

• Define and enforce security policies on password management

• Define the threshold of failed log-in attempts that will indicate a security violation
• Provide log-in access control and access restrictions to menu functions
• Control password complexity and aging with configurable parameters
• Allow administrators to force some or all users to change their password at next
log-in
• Provide enhanced intrusion detection including the ability to record all or failed
log-in attempts
 • Control password composition, frequency of change and rules for reuse
• Log all log-in events and lock accounts after a prescribed number of failed
attempts
• Provide a flexible report for investigating log-in attempts
• Meet the requirements of 21 CFR Part 11

Multi-National Capabilities
QAD Enterprise Applications provide single-site companies and multinational
organizations with a fully integrated enterprise solution that sets new standards for
connectivity, functionality and ease-of-use. QAD Enterprise Applications operate
factories and supply chains, manage and secure data, and provide corporate governance
compliance at more than 5,500 sites in 90 countries.

QAD Enterprise Applications are available in 27 languages and can handle an unlimited
number of currencies. For both single-site manufacturers with customers and suppliers in
many locations around the world, and global enterprises with factories and plants in
dozens of countries, QAD can provide the solutions and support to operate multi-national
businesses in the most efficient and profitable manner.

MFG/PRO is an industry-leading manufacturing, financial, distribution and customer

service management application from QAD. MFG/PRO is one of the world's top
manufacturing and distribution packages.

Industrial and Financial Systems

IFS AB was founded in 1983 to develop software that would manage business systems
for the nuclear power industry. They produce components for product lifecycle
management and enterprise resource planning for the mid-sized market, focusing on the
manufacturing, technology and utility sectors. Their solutions are based on open
standards to allow integration with other products.

History
• 1983 - Foundation of IFS, Linköping, Sweden
• 1985 - First Software-Release: IFS Maintenance
• 1988 - IFS delivers an early version of IFS Applications for automotive
• 1990 - First release of ERP-suite IFS Applications
• 1991 - IFS expands to Norway and Finland
• 1992 - IFS opens its 1st office outside Scandinavia in Poland
• 1993 - Introduction of the 1st GUI for Windows. Expansion to Denmark and
Malaysia
• 1994 - Object-oriented technology enters IFS Applications
 • 1995 - Expansion to North America, Japan and Indonesia - IFS Applications is
now component-based with a graphical user interface
• 1996 - Listing on Stockholm Stock Exchange
• 1997 - IFS establishes a software development center in Sri Lanka and expands to
Great Britain, Germany, France, Brazil and Turkey. Launch of IFS Web client
• 1998 - First offices in Hungary and Argentina
• 1999 - IFS buys the US company EMS and expands to Greece - IFS is
represented on all continents.
• 2000 - Introduction of Java-based internet portals and mobile solutions.
Expansion to Czech and Slovak.
• 2001 - Expansion to China, Hong Kong und Russia
• 2002 - IFS and IBM begin to develop the "next generation of mobile Business
Applications". All components are available as web services
• 2004 - NEC invests into IFS by buying 7.7% of IFS' share capital
• 2005 - over 500,000 users of IFS Applications
• 2007 - IFS announces its interface platform called IFS Enterprise Explorer
(formerly Aurora). It will be released in 2009.

Numbers and facts

• Customers: worldwide over 2,000 with more than 600,000 IFS Applications users
• Branches: IFS has more than 70 branches in some 50 countries
• Employees: about 2,700 employess
• Research and Development center is situated in Sri Lanka and Sweden. Most of
the support for existing versions and the development work for future projects are
done here.

[edit] Specific solutions for different industry sectors

Extensions and adaptions for different industry sectors normally are driven by
requirements of customers.

• Aerospace & Defense

• Automotive
• Construction, Service & Facility Management
• High Tech
• Industrial Manufacturing
• Process Industries
• Utilities & Telecom

[edit] IFS Applications

IFS Applications is a fully integrated solution for enterprises and has over 60 different
components. IFS Applications offers international support by default.
Some benefits of IFS Applications 7.5

• Over 60 individual purchasable business components

• One global release
• Online-Documentation
• Web-based Portal
• Scalable — from one to thousands of users
• Collaboration-Portal for users, customers and subcontractors
• 20 languages supported
• Used in over 60 countries

The 7th generation of the component-based software IFS Applications 7.5 — is

completely based on the open Service Oriented Component Architecture (SOCA). It
supports the complete management of product and service life cycle management from
product development to different kinds of manufacturing processes and support of
maintenance / service processes

[edit] Technology and architecture

Many extensions of the actual version have been developed customer-driven. IFS plans
its software-architecture as evolutionary insomuch the investments in running
installations of customers should remain secure. Through the use of open APIs
(Application Program(ming) Interface) the modules comprising IFS Applications can
integrate with other solutions and Open Source Products. Business logic is separated
from the system core module, and standard solutions (e.g. reports and barcode
applications) are preferred instead of proprietary solutions. IFS Foundation1 is strategic
for a component based system, so IFS Applications 7.5 supports J2EE- and .Net as IBM
WebSphere 6, Oracle AS 10g and JBoss 4.0 (the IFS middle tier or IFS Extended Server
runs the latter for a default installation). Due to the support of Java Portal Standard (JSR-
168), companies can access data and functions of IFS Applications directly from the IBM
WebSphere Portal. The platform is based on open standards including UML, SQL, XML,
J2EE and .NET and ships with tools for development, use, configuration, integration and
administration of the system.

[edit] Restrictions and comparision to other products

A big difference to an ERP-system like SAP is that IFS Applications is delivered with
preinstalled Web Services but no ESB (Enterprise Service Bus) - on the one side this can
mean more effort for integration but on the other side the freedom of choice for any SOA
or ESB solution. The basic business processes in IFS Applications are set up with the
installation. It is possible to control/vary the manual steps from beginning to the end of a
process but there is no possibility to configure a template from scratch for every
company's individual processes. This means that the processes are not as flexible to
configure in comparison to J. D. Edwards. Because of the evolutionary development of
IFS Applications there is no single integrated IDE for developers but a set of tools for e.g.
the customization of vouchers, GUI and Server programming. The majority of the
business logic is implemented in PL/SQL, thus, IFS Applications can only be installed on
an Oracle database. The IFS Client (Centura Client, 2008) runs only on Windows - the
Web Client on the other hand is OS independent.

Customers
IFS has a large customer Base, starting from GE (General Electrics) to Three Gorges. -
Benz - Volvo - Toyota - Singer - Lockheed Martin - BAE Systems - General Dynamics -
Doosan Babcock Energy - Oriflame - Katun - GECOL - Libya - Crary Industries, Inc. -
etc.

Baan IV SAP
Baan was a vendor of enterprise resource planning (ERP) software that is now owned by
Infor Global Solutions.
Baan or Baan ERP was also the name of the ERP product created by this company.

History
The Baan Corporation was created by Jan Baan in 1978 in Barneveld, Netherlands, to
provide financial and administrative consulting services. With the development of his
first software package, Jan Baan and his brother Paul Baan entered what was to become
the ERP industry. The Baan company focused on the creation of enterprise resource
planning (ERP) software.

Jan Baan developed his first computer program on Durango F-85 computers in BASIC
language. In the early '80s, Baan Company began to develop application on Unix
computers with C and self-developed Baan-C language, which syntax was very similar to
BASIC language[1].
Baan gained its popularity in the early nineties. Baan software is famous for its Dynamic
Enterprise Modeler (DEM), technical architecture and its 4GL language. Baan 4GL and
Tools nowadays is still considered to be one of the most efficient and productive database
application development platforms. Baan became a real threat to market leader SAP after
winning a large Boeing deal in 1994. It went IPO in 1995 and became a public listed
company in Amsterdam and US Nasdaq. Several large consulting firms throughout the
world partnered to implement Baan IV for multi-national companies. It acquired several
other software companies to enrich its product porfolio, including Aurum, Berclain, Coda
and Caps Logistics. Sales growth rate was once claimed to reach 91% per year.

However the fall of the Baan Company began in 1998. The management exaggerated
company revenue by booking "sales" of software licenses that were actually transferred
to a related distributor. The discovery of this "creative" revenue manipulation led to a
sharp decline of Baan's stock price at the end of 1998.[2]
In June 2000, facing worsening financial difficulties, law suits and reporting seven
consecutive quarterly losses and bleak prospects, Baan was sold at a price of US$700
million to Invensys,[3] a UK automation, controls, and process solutions group to become
a unit of its Software and Services Division. Laurens van der Tang was the president of
this unit. With the acquisition of Baan, Invensys's CEO Allen Yurko began to offer
"Sensor to Boardroom" solutions to customers.

In June 2003, after Allen Yurko stepped down, Invensys sold its Baan unit to SSA Global
Technologies for US$ 135 million.

Upon acquiring the Baan software, SSA renamed Baan as SSA ERP Ln. In August 2005,
SSA Global released a new version of Baan, named SSA ERP LN 6.1. In May 2006, SSA
was acquired by Infor Global Solutions of Atlanta, which was a major ERP consolidator
in the market.

Today Baan ERP software is still used by thousands of mid-range companies in the
world, the majority on version BaanIVc4 and ERP LN.

[edit] Product version

Triton 1.0 to 2.2d, 3.0 to last version of Triton is 3.1bx, then the product is renamed to
Baan

Baan 4.0 (last version of BaanIV is BaanIVc4 SP26) & Industry extensions (A&D,...)

Baan 5.0 (last version of BaanV is Baan5.0 c SP25)

Baan 5.1, 5.2 (for specific customers only)

SSA ERP 6.1 /Infor ERP LN 6.1 (latest version is ERP Ln 6.1 FP6, released in
December, 2009)

Infor ERP Ln 6.1 supports Unicode and comes with following language translation. The
base language is English.
1. Dutch
2. French
3. German
4. Italian
5. Brizilian Portuguese
6. Spainish
7. Japanese
8. Korean
9. Simplified Chinese
10. Traditional Chinese
[edit] Supported Platform and Database (Server)
Server Platform:

Windows Server, Linux, IBM AIX, Sun Solaris,HP Unix, AS400(Obsolete),OS390

(Obsolete)

Database:

Oracle, DB2, Informix, MS SQL Server, MySQL (version 6.1 only), Bisam (Obsolete)

[edit] Standard Modules

Baan IV modules:
Common (tc), Finance (tf), Project (tp),Manufacturing (ti),Distribution (td),Process
(ps),Transportation (tr),Service (ts),Enterprise Modeler (tg),Constraint Planning
(cp),Tools (tt),Utilities (tu)

ERP Ln 6.1 modules:

Enterprise Modeler (tg), Common,Taxation (tc),People(bp), Financials (tf),Project
(tp),Enterprise Planning (cp),Order Management (td), Electronic Commerce (ec),Central
Invoicing (ci),Manufacturing (ti),Warehouse Management (wh),Freight Management
(fm), Service (ts), Quality Management (qm), Object Data Management (dm), Tools (tt)

[edit] Baan Virtual Machine - bshell

Bshell is the core component of Baan application server. It is a process virtual machine to
run Baan 4GL language. Bshell were ported to different server platforms and make Baan
program scripts platform indepedent. For example, a Baan session developed on
Windows platform can be copied to Linux platform without re-compilimg the application
code. Bshell is similar to nowaday's Java VM or .Net CLR.