Presentation - 1 Introduction To ERP Systems

IST 600 ERP SYSTEMS:
Key Implementation Issues

Introduction to ERP Systems
SUMMER 2005
JUNE 6-10 2005

I. Course Intro
II. ERP Systems Intro
SUMMER 2005
JUNE 6-10 2005
Introduction Who am I?
Education:
BS in Business Administration
MS in Information Management
MBA (specialized in Supply Chain & Global Entrepreneurship)
Ph.D. in Information Science & Technology
Certification:
CPIM Certified Production & Inventory Control Management
PMP Project Management Professional Certification (in
process)
Experience:
Strategy Consulting & Small business ownership in Turkey
Technology Consulting (Booz Allen Hamilton)
Web Consulting (U.S. Department of Transportation)
SAP Implementation (Welch Allyn)
IST 600 ERP Systems: Key Implementation Issues U. Yeliz Eseryel
Who are you?

Your
first name
Experience
Expectations for this class.
2 Truths and a Lie
Expectations
Student
Expectations
My Expectations
Enthusiasm about the course

Come prepared for the class (read the material!)
Try to visualize real world and apply what you learned
in class to real world situations
Course
Goals (see syllabus)

Feedback Mechanisms For the Course
WebCT (anonymous feedback)

Email/call/online chat/face to face conversation with me.
Surveys, etc.
My Teaching Philosophy
Equip
students with tools, methodologies and

principles that they can use in work settings.
Provide students with knowledge and ways of
thinking and acting that will enable them to
make successful strategic and tactical decisions
in work setting.
Motivate students to self-teach skills through
research and experimentation via the use of
Assignments (structured, semi-structured, unstructured)

Research papers and other readings.
Course Outline
Day 1
ERP Intro, ERP Lifecycle, Org Change Mgmt
Day 2
Developing a Business Case for ERP Systems
ERP Selection
Day 3
ASAP Methodology Steps 1-2
Business Process Reengineering
Day 4
ASAP Methodology Steps 3-4
Day 5
ASAP Methodology Step 5
SAP Best Practices/ Lessons Learned
Course Delivery Method

Presentations
Case
Studies (2)
Readings
Grades (Syllabus)
Assignments (Syllabus)
WebCT Usage
Lessons
& Readings
Calendar
Syllabus
Bulletin Boards
Course Policy/Norms
Grading Policy
Read the syllabus and check WebCT frequently!
Late assignments
Assignments requested format/content, etc.
Feedback
Chat
Students vs. Professionals
How to Listen to Me and Guest Speakers
How to Read!
Teamwork rules/grade, etc.
Sleeping / eating / drinking in class
10
Team Break Out Session-I
Team Building Exercise
Strengths of each member.

When/where to meet for work.
Exchange phone numbers/email addresses.
Team rules
How will teams make sure there is fair contribution?
What will they do if somebody doesn't do his/her part?
Guidelines for grading team participation
Anything else?
Decide on the company you will work on for the course.
11

I. Course Intro
SUMMER 2005
JUNE 6-10 2005
12

I. Course Intro
What is ERP?
Where Did ERP Come From?
What is SAP?
Some SAP Terminology
SUMMER 2005
JUNE 6-10 2005
13
So.What is an ERP System?

Enterprise
Resource Planning System (ERP)

Complete (?) Suite of Integrated Applications
Finance / Controlling
Accounting
Customer Service
Sales / Marketing
Human Resources
Engineering
Real-time
Single Integrated Database

Modular Structure
Similar Interfaces
updates
14
Where Did ERP Come From?

MRP
MRP-II
ERP
Material Requirements Planning

Manufacturing Resource Planning
Enterprise Resource Planning
15
Manufacturing & Bills of Material

Bicycle
Frame
1
Seat
1
Rear Wheel Assy 1
Front Wheel Assy 1
Crank Assy
1
Crank
1
Peddle Assembly 2
Nut
1
16
Manufacturing Issues
Small
Shop -> Number of items to order

Larger Manufacturing company ->
Mass production of many products.
Lots of parts to order and manage.
Procurement of some parts and
manufacturing of other sub-assemblies
17
Material Requirements Planning

MPS - Bicycle
P/N 12345 - Gross Requirements

Summary of Forecasts and Actual Customer Orders
Period/ Work Days
QOH = 0
1
Gross Requirements
2
0
MRP - Front Wheel Assembly

QOH = 25
Order Lot Size 25
L/T = 1 Day
2
0
0
0
25
0
25
MRP - Tires
QOH = 25
Order Lot Size 200
L/T = 2 Days
250
6
50
7
0
200
100
10
0
300
300
0
25
0
0
0
0
25
225
250
0
225
0
50
6
50
0
50
0
0
0
0
0
0
200
7
200
0
200
0
100
100
0
100
0
0
10
0
0
0
0
0
0
0
0
0
0
P/N 23456 - Qty One Per on the Bill of Material

Period/ Work Days
1
Gross Requirements
Open Orders
Planned Due
Projected Balance
Planned Orders
300
P/N 23456 - Qty One Per on the Bill of Material

Period/ Work Days
1
Gross Requirements
Open Orders
Planned Due
Projected Balance
Planned Orders
0
0
0
25
400
3
0
0
0
25
0
225
0
400
200
0
4
50
0
0
150
200
5
0
0
0
150
0
6
200
0
200
150
0
7
100
0
0
50
0
25
IST 600 ERP Systems: Key
Implementation Issues U. Yeliz Eseryel
9
0
0
0
50
0
10
0
0
0
50
0
0
0
0
50
0
18
Big Picture: Planning At the Company Level

1
Strategic Business
Plan.
A 2-5 Year Horizon.
Annual Business Plan.

Annual Budget
process.
Sales Forecasts.
Actual Demands Customer Orders.)
Sales, Production &

Inventory Planning.
5
Master Production
Schedule.
(Anticipated build
schedule.)
Inventory Transactions
mrp Explosion.
(Demands thru BOMs
& inventory.)
Detailed Capacity
Planning.
Purchase Orders New PO Releases.

PO Reschedules.
Supplier Control
5
Shop Floor Control.
Work Orders or JIT
Releases.
Reschedules.
19
Manufacturing Resource Planning.

MRP
II 1980s
Method for planning resources of a Mfg

company. It addresses operational planning in
units, financial planning in dollars, and has
simulation capability to answer what if
questions.
Links a variety of functions together integrated
with financial reports.
Result one linked resource planning system.
20
Product Lifecycle
1. Customer Orders Customer
Service Rep. takes the order
Do we have the inventory?
If not- order parts or

manufacture them.
2. Order Manufactured
The reduction in inventory
needs to be recorded.
3. Orders Packed
Track packed orders,

packaging material, etc
4. Products Shipped
Track shipped products.
5. Customer billed
6. Company financials and
customer payments
tracked
7. Repair
Customer Service Rep

takes customer repair order
Checks info in the system.
8. Sales Rep- checks the

customer history from the
system.
9. Engineers- Store the
product designs, access
and change them.
21
Enterprise Resource Planning

ERP
Enterprise Resource Planning.

Late 90s and 2000s
A new increased connection to suppliers.
An increased connection to customers.
Supply Chain Management.

Demand Management.
Customer Portals.
e-Business processes.
All linked to the ERP engine.
Better Integration of data and functionality
22
Some ERP Systems

Major
Players
BAAN
JD Edwards
PeopleSoft
Oracle
SAP
Smaller
Ones
Open Source ones
Compiere
23
What is SAP?
Systems
Applications Products
German Company with the Same Name (SAP)
SAP R/3
Release 3 of the software

3 Tier Client-Server Architecture
Upgrades
to the System -> Versions
Version 4.6C
Version 4.7, etc.
Modular
Structure
24
SAP Industry-Specific Solns
25
SAP Modules
FI Financials
CO Controlling
MM Materials
Management
PP Production Planning
HR Human Resources
SD Sales & Distribution
CS Customer Service
PLM Production Lifecycle
Management
PS Project Systems, etc
Terminology for
integration:
Eg: PP-PI
Production Planning in
Process Industry
Eg: SD-MM
Elements of Materials
Management that are
related to Sales and
Distribution
26
SAP Features
Complete
Core business functions
Suite of Integrated Applications
(Finance, Sales&Dist, Materials Management, etc.)

Industry specific solutions
Special solutions
Frequent new applications, upgrades and industry
specific bolt-ons
Open Systems Architecture
Works with many hardware vendors (HP, IBM, DEC, etc)

Different Databases (Oracle, etc)
Various Operating Systems and GUIs.
27
SAP Features-continued
Global
Screens and Language
Business Architecture
>30 languages supported

Language is user driven
Multi-Currency
Currency exchange rates

Tax issues based on country
28
Three-Tier
Architecture
Efficient use of processing power

Transparency between SAP apps. and PC apps.
Application
Data
Presentation
Client-Server Network
BASIS
Operating System
29
Audit
Trail
Very important for regulated industries

Can help you learn more about user behavior
Every person is accountable.
Data integrity
Connectivity
30
Team Break Out Session-II

Planning
for ERP Knowledge Portal
Work Breakdown Structure

Tasks
Resource Plan
Timeline
Risk Mitigation Plan
Identify Risks
Categorize them by frequency and by criticality
Write mitigation steps.
31

I. Course Intro
ERP Implementations:
Some Key Strategic Decisions
Implementation Methodology
SUMMER 2005
JUNE 6-10 2005
32
ERP Options
Implementation
Timeline
Pros and Cons?

Big Bang Implementation
Phased (Roll Out) Implementation
Mini Big Bang (Combination of big bang and roll-out)
Staff/Resources
Strategy
Outsourcing
In-house
Pros and Cons?
Customization Level
Pros and Cons?
33
ERP Timeline
Can
be used for any ERP implementation

Based on Project Management Methodology
Project Initiation
Planning
Controlling
Execution
Closeout
34
ASAP Timeline
Based on Accelerated SAP (ASAP) Implementation

Methodology
35
What is ASAP Methodology?
36
Project Success With ASAP Meth.
37
Phase-1 Project Preparation
38
Phase- 2 Business Blueprint
39
Phase-3 Realization
40
Project Plan Outline for Realization
41
Phase-4 Final Preparation
42
Phase-5 Go Live & Support
43
Sources
Chris Keller- MRP Slides

Kenny Leung- SAP Summit 2005 Hong Kong
Doane, SAP Blue Book
SAP.com
44
Questions?
45
Some Terminology
Basis Software. The R/3 Basis is similar to an operating

system that specifically has the capability of processing
any of the SAP R/3 transactions. Its a middleware
between the operating system and the servers that
allow for smooth operations across different servers,
operating systems, and databases.
ABAP: Advanced Business Application Programming
(ABAP/4), is a specialpurpose, fourth generation
language developed by SAP, is used to write programs
for the specialized requirements of creating custom
reports, screens, userdefined functions, and special
industry solutions for use with the SAP R/3 System.
46
What is SAP Netweaver?
A comprehensive integration and application platform,

SAP NetWeaver works with your existing IT
infrastructure to enable and manage change.
SAP NetWeaver embraces Internet standards such as
HTTP,
XML, and
Web services.
Ensuring openness and interoperability with Microsoft .NET
and Java 2 Platform Enterprise Edition (J2EE) environments
such as IBM WebSphere.
47

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IST 600 ERP SYSTEMS:

Key Implementation Issues

Introduction to ERP Systems

IST 600 ERP Systems: Key Implementation Issues U. Yeliz Eseryel

Who are you?

IST 600 ERP Systems: Key Implementation Issues U. Yeliz Eseryel

Enthusiasm about the course

Goals (see syllabus)

WebCT (anonymous feedback)

IST 600 ERP Systems: Key Implementation Issues U. Yeliz Eseryel

students with tools, methodologies and

Assignments (structured, semi-structured, unstructured)

IST 600 ERP Systems: Key Implementation Issues U. Yeliz Eseryel

IST 600 ERP Systems: Key Implementation Issues U. Yeliz Eseryel

Course Delivery Method

IST 600 ERP Systems: Key Implementation Issues U. Yeliz Eseryel

IST 600 ERP Systems: Key Implementation Issues U. Yeliz Eseryel

IST 600 ERP Systems: Key Implementation Issues U. Yeliz Eseryel

Team Break Out Session-I

Team Building Exercise

Strengths of each member.

IST 600 ERP Systems: Key Implementation Issues U. Yeliz Eseryel

Introduction to ERP Systems

Introduction to ERP Systems

So.What is an ERP System?

Resource Planning System (ERP)

Single Integrated Database

IST 600 ERP Systems: Key Implementation Issues U. Yeliz Eseryel

Where Did ERP Come From?

Material Requirements Planning

IST 600 ERP Systems: Key Implementation Issues U. Yeliz Eseryel

Manufacturing & Bills of Material

IST 600 ERP Systems: Key Implementation Issues U. Yeliz Eseryel

Shop -> Number of items to order

IST 600 ERP Systems: Key Implementation Issues U. Yeliz Eseryel

Material Requirements Planning

P/N 12345 - Gross Requirements

MRP - Front Wheel Assembly

P/N 23456 - Qty One Per on the Bill of Material

P/N 23456 - Qty One Per on the Bill of Material

Big Picture: Planning At the Company Level

Annual Business Plan.

Sales, Production &

Purchase Orders New PO Releases.

IST 600 ERP Systems: Key Implementation Issues U. Yeliz Eseryel

Manufacturing Resource Planning.

Method for planning resources of a Mfg

IST 600 ERP Systems: Key Implementation Issues U. Yeliz Eseryel

If not- order parts or

Track packed orders,

Track shipped products.

Customer Service Rep

8. Sales Rep- checks the

IST 600 ERP Systems: Key Implementation Issues U. Yeliz Eseryel

Enterprise Resource Planning

Enterprise Resource Planning.

A new increased connection to suppliers.

An increased connection to customers.