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ERP: Enterprise Resource Planning

ERP: Enterprise Resource Planning. CK Farn Tel: (03)426-7250 mailto: ckfarn@mgt.ncu.edu.tw http://www.mgt.ncu.edu.tw/~ckfarn 2004. Meaning of ERP. A term coined in the 1980’s Just like other terms, “ERP” was soon abused

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ERP: Enterprise Resource Planning

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  1. ERP:Enterprise Resource Planning CK Farn Tel: (03)426-7250 mailto: ckfarn@mgt.ncu.edu.tw http://www.mgt.ncu.edu.tw/~ckfarn 2004

  2. Meaning of ERP • A term coined in the 1980’s • Just like other terms, “ERP” was soon abused • Today, many basic business systems with internal financial management, inventory management and operations control systems are referred to as ERP • But, we have to accept the wrong usage

  3. Business Operations: Very Early Stage Delivery Production Procurement Sales Inventory One man show, everything is connected

  4. Barrier Barrier Barrier Barrier Barrier Barrier Business Operations: Early Stage, with independent functions Delivery Production Procurement Sales Inventory

  5. ERP: Pre-installation Input Delivery Sales Production Output No integration across functions

  6. ERP: Objective Input Delivery Sales Production Output Functional integration

  7. Barrier Barrier Barrier Barrier Internal Functional Integration Material Manage-ment Production Manage ment Logistics Management

  8. Barrier Barrier ERP Ideal: Internal Integration Logistics Management Material Management Production Management

  9. Electronic Commerce Supply Chain Management Sales Force Automation ERP II ERP MRP II MRP Internet Integration Enterprise Resource Planning mrp Manufacturing Resource Planning Manufacturing Resource Planning Material Requirement Planning (+BPR，HR Logistics Service..) Business Intelligent (+Cash flow) (+Capacity) Customer Relationship Management Knowledge Management Evolution of ERP

  10. Evolution of Business Systems EDI(電子資訊交換) E-Commerce (電子商務) SFA (銷售自動化) E-Business (電子企業環境) CRM (客戶關係管理) Planning(計劃) SCM (供應鏈管理) ESCM (延伸型供應鏈管理) Scheduling(排程) Distribution(配銷) MRP(物料需求規劃) MRPⅡ (製造需求規劃) ERP (企業資源規畫) EERP (延伸型企業資源規劃) Payroll(薪資系統) HR(人力資源) GL(總帳會計) FMIS(財務系統) AP(應收帳款系統) AR(應付帳款系統) 1980 1990 2000 1970 *資料來源：HP簡報

  11. ERP Packages • Large systems • SAP R/3, Oracle • Costs above NT$100 Mil, before year 2000 • Including license fee, business process consultant, systems modifications, installation etc. • Middle level systems • DSC(鼎新)Tiptop, DSC WorkFlow ERP, FAST Technologies (漢康), Proyang (普揚) • NT$ 2-100 Mil • Small Systems • DSC SmartERP，正航，高頻，鼎盛

  12. Customer Order ERP Integration: SAP Financial controlling Resource controlling Sales Presales Activity Sales order InventorySourcing Delivery CustomerBilling CustomerPayment Production Plannedorder MPS Produc-tionorder Shopfloorcontrol SOP MRP Purchasing Mat.mgt Requi-sition Purchase order Vendor Payment Invoice verifi- cation Vendorselection Goodsreceipt Logistics controlling Sales, Production, Purchasing, Warehouse

  13. ERP Integration: Oracle HR Payroll GL Corporate Journal Entries Journal Entries AR Journal Entries Invoices FA Internal Payments COST Journal Entries Customers Mass Addition Journal Entries Shipments AP Vendor Invoices OM INV Shipments Vendor Payments Orders Items Workflow COST Receipts WorkOrders TransportationInformation Bills Interplant PO PO WIP BOM Bills andRoutings Vendor PO COST Receipts Material Requirements ECOS Work Orders ENG Planning (MRP) EnterpriseDemand Production HR. Financial Sales

  14. Post ERP: Supply Chain Integration Internal Supply Chain Suppliers Customers 夥伴關係 Integration of Supply and Demand Chains

  15. Implementation of ERM • After much hardwork, the system is functioning smoothly • Question: • Are the business operations integrated? • Has the inter-functional barriers been removed? Are you Sure?

  16. Driving a Car • You bought a 400 horse-power Ferrari • How fast can you drive? Traffic? Light Congested Routes? Freeway Dirt road Weather? Clear sky Misty

  17. However, you can be sure… • In an era of ox- and mule-carts … • Your driving speed will be slow • There won’t be freeways, it is useless even if there is • The Same goes with ERP • No integration without ERP • Barriers cannot be removed • Even with ERP, integration is not automatic

  18. Successful ERP Implementation • Success • System installation • Daily operational usage • Benefits realized • BPR is essential • Business Process Reengineering

  19. Business Process Reengineering The fundamental rethinking and radical redesign of core business processes to achieve dramatic improvements in critical performance measures such as quality, cost, and cycle time. Source: Adapted from Hammer and Champy, Reengineering the Corporation, 1993

  20. BPR Example Which is shorter?

  21. New Process • Major Concepts: • Multiple servers, one queue • Multiple services per server

  22. Ford Accounts Payable Process* Purchasing Vendor Purchase order Receiving Goods Copy of purchase order Receiving document Accounts Payable Invoice Payment *Source: Adapted from Hammer and Champy, 1993

  23. Ford Procurement Process Purchasing Vendor Purchase order Receiving Goods Purchase order Goods received Accounts Payable Data base Payment

  24. Express Mail in the US • Traditional Express service • Point to point • Complicated network and routing • 3 days • Around $10

  25. The Rise of FedEx • Air Force base in Memphis • Computerized operations • Centralized dispatch • Guaranteed 24 hour delivery • Noon-to-noon • 3 times the price • Number 1 within 3 years

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