Introduction To ERP in Supply Chain Management

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Introduction to ERP in

Supply Chain
Management
Presented by: JYOTI SINGH
Introduction to ERP
What is Enterprise Resource Planning (ERP)?

 Enterprise: enterprise means group of people works together to achieve

common goal with the help of resources.

 Resource: Anything which is used to run an enterprise/company.

 Planning: means optimum utilization of organizational resources. It also

include what we want to achieve and how it will be achieved?


Defining ERP and its role in
Supply Chain
ERP, or Enterprise Resource Planning, is a comprehensive software system that
integrates core business processes, including supply chain management. ERP acts
as the backbone, centralizing data and streamlining operations across
procurement, inventory, logistics, and supplier relationships.
ERP INTEGRATION

Making sure Enterprise Resource Planning


(ERP) works together with Supply Chain
Management (SCM) is super important for
businesses today.

When ERP and SCM systems team up, they


help companies make their operations
smoother, see everything better, make
smarter choices, and overall, make their
supply chain work better.
Key Components of ERP in
Supply Chain
5. Logistics and Transportation: ERP coordinates logistics operations,
1. Planning Module: This module assists production planning, and
including order fulfillment, shipping, and fleet management for seamless
scheduling. It helps in aligning production with demand,
product delivery.
optimizing resources, and minimizing stockouts or excess
inventory.
2. Sourcing Module: The sourcing module focuses on supplier
management, procurement, and vendor relationship management.

3. Production Module: This module manages the manufacturing


process, including work orders, bill of materials (BOM), routing, and
shop floor control. It helps in optimizing production efficiency,
monitoring work-in-progress, tracking job costing, and ensuring
quality control.
4. Inventory Management: Inventory management is a critical
component of supply chain management. The ERP system helps in
managing inventory levels, tracking stock movements, and optimizing
inventory across multiple locations.
 ERP provide centralized database over which
 Enterprise resource planning is a software which every department share their data.
provides infrastructural support for integration of
day to day business activities with the aim of  No of departments works in an enterprise e.g.
optimum utilization of enterprise (organizational) production, procurement, inventory
resources management, HR, Finance, sales, marketing etc.

 Enterprise Resource Planning (ERP) systems are like super smart organizers for businesses.
They're made to work smoothly with all sorts of other tech tools in the supply chain. This
helps everyone see what's going on, work better, and make smarter choices using data all the
way from start to finish.
Evolution Of Erp In Supply Chain Manacement

o Evolution of ERP

o MRP (1970s) material requirement planing

o MRP-lI (1980s) manufacturing resource planning

o ERP (1990s)

o Extended ERP(2000)

Every department has own database, and to get access to other department data it
usually takes time due to which decisions are delayed, resources are not efficiently
used.
o 1970-MRP

o MRP Material Requirements Planning (MRP) :

• Inventory Optimization
• Production Efficiency
• Cost Reduction
• Enhanced Customer Satisfaction
 MRP-lI (1980s) manufacturing resource planning

 MRPIl : systems incorporated the financial accounting


system along with manufacturing and materials
management systems.

• Enhanced Production Planning

• Inventory Optimization

• Improved Customer Service

• Cost Reduction
 1990- ERP

 ERP: Enterprise resource planning

• Streamlined Processes
• Improved Decision Making
• Enhanced Customer Satisfaction
• Optimized Resource Utilization
 Extended ERP(2000)

 Extended Enterprise Resource Planning (ERP): in Supply Chain


Management (SCM) refers to the integration of ERP systems
beyond the boundaries of a single organization to encompass the
entire supply chain network.
Data Management and Analytics in ERP-
driven Supply Chain

Centralized Data Advanced Predictive Data-Driven


Analytics Capabilities Decisions
ERP systems bring ERP-integrated ERP's predictive ERP makes it easy to
together information from analytics tools use live analytics features help make smart decisions by
all parts of the supply data to give useful supply chain leaders giving you one reliable
chain into one place, insights, helping predict how much place to find all your
making it easier to see businesses make their they'll need, see information. This helps
everything at once and inventory, logistics, and problems coming, and businesses run
make smart choices. supplier connections get ready for what smoothly, save money,
work better. might happen next. and react quickly to
changes in the supply
chain.
Features/Characteristics of ERP

 Flexible (changes can be accommodated easily)

 Easy to use

 Modular

 Best business practice

 Minimize human efforts

 Comprehensive
 Advantages:

 Better resource utilization


 Fast decision making
 Cost reduction
 Better customer service
 Improved Efficiency
 Forecasting is easy

 Disadvantages:

 It is expensive
 Difficulty in implementation, it takes time.
 Difficulty in integration.

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