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  • The very basic [question] is why Enterprise resource planning?

  • Also called erp is required

  • to answer let's examine this typical business scenario

  • A client approaches the sales Team to buy a particular product

  • The sales team approaches the inventory Department to Check the availability of the product

  • in this case the product is out of stock the sales team approaches the production planning Department to

  • manufacture the product

  • the production planning team checks with the inventory department for availability of raw material

  • If raw material is not available within the inventory the production planning team buys the raw material from the vendors

  • Then production planning forwards the raw materials to the shop floor execution for actual production

  • Once ready the [shop] floor team forwards the goods to the sales team who in turn deliver it to the client

  • the sales Team updates the finance Department with revenue generated [by] the sale of the product

  • The production planning team updates the finance department with payments to be made to different vendors for raw materials

  • All departments approach Hr. For any human resource related issue

  • That is the typical business process of any manufacturing company

  • some key inferences one could derive from the scenario would be a

  • Typical Enterprise has many departments or business units

  • These departments or business units continuously communicate and exchange data with each other

  • the success of any organization

  • lies in its effective communication and Data exchange

  • Within these departments as well as associated third parties such as vendors outsources and customers

  • Based on the Manners in Which communication and Data exchange is managed

  • Enterprise software systems can be broadly classified as

  • decentralized systems

  • Or centralized systems which are also called

  • [erp], let's look at decentralized systems first in a company with a decentralized system of Data Management data

  • Is maintained locally at the individual departments?

  • Departments do not have access to information or data of other departments

  • to identify the problems arising from

  • Decentralized Enterprise management systems let's look at the same business process again

  • the customer approaches the sales team for a product

  • But this time he needs the product on an urgent basis

  • The sales team do not have real-time information access to the products inventory

  • So they approach the inventory Department to check the availability [of] the product

  • This process takes time and the customer chooses another vendor

  • leading to loss of Revenue and customer dissatisfaction

  • Now suppose the product is out of stock and the sales team approaches the production planning team to manufacture the product for future use

  • The production planning team checks the availability of the raw materials required

  • Raw Material information is separately stored by production planning as well as the inventory department

  • Thus data maintenance cost goes up a particular raw material

  • Required to manufacture the product is available in the inventory

  • but according to the database of [the] production planning team the raw material is out of stock, so

  • They go ahead and buy the raw material

  • Thus material as well as inventory costs go up

  • Once the raw material is available the shop floor department suddenly realizes. They are short of workers

  • They approach the hr. Who in turn hire temporary employees and higher than market rates

  • thus labor cost increases

  • The production planning department fails to update the Finance Department on the materials they have purchased

  • the Finance Department

  • Defaults the payment deadline set by the vendor causing the company loss of its reputation and even inventing a possible legal action

  • These are just a few of the many problems with decentralized systems

  • Some major problems with the decentralized system are

  • Numerous disparate information systems that are developed individually over time and are difficult to maintain

  • Integrating the Data is time and money consuming

  • inconsistencies and duplication of data

  • lack of timely information leads to customer dissatisfaction loss of revenue and reputation

  • High inventory Material and human resource costs

  • These are just some of the major drawbacks [for] which we need a solution

  • Well the solution lies in

  • Centralized systems that is e rp in a company with a centralized system of information and Data Management data

  • Is maintained at a central location and is shared with various departments?

  • Departments have access to information or data of other departments

  • Let's look at the same business process again to understand

  • how a centralized enterprise system helps overcome problems posed by a

  • decentralized Enterprise system

  • In this case all departments update a central information system

  • When a customer approaches the sales team to buy a product on an urgent basis the sales team has real-time information

  • access to the products in inventory

  • Which is updated by the inventory department in the centralized system?

  • The sales team responds on time leading to increased revenue and customer delight

  • In case manufacturing is required the sales team updates the centralized database

  • Production planning Department is auto updated by the centralized database for requirements

  • The production planning team checks the availability of the raw materials required Via central database

  • Which is updated by the inventory department?

  • Thus data duplication is avoided and accurate Data is made available

  • The shop floor team updates their manpower status regularly in the central database which can be accessed by the Hr. Department

  • In case of a shortage of Workforce the Hr

  • Team starts recruitment process with considerable lead time to hire a suitable candidate at market price thus labor costs go down

  • Vendors can directly submit their invoices to the centralized Enterprise system

  • Which can be accessed by the finance department?

  • Thus payments are made on time and possible legal actions are avoided

  • The key benefits of the centralized system are it eliminates the duplication?

  • Discontinuity and Redundancy in Data it provides information across departments in real time it

  • Provides control over various business processes it increases productivity provides better inventory Management promotes quality

  • reduces material cost allows for effective human resources management and reduces overhead while boosting profits

  • better customer interaction increased throughput and

  • Improved customer service

  • Hence a centralized Enterprise management system is required

  • Si p is a centralized enterprise management system also known as Enterprise resource planning

The very basic [question] is why Enterprise resource planning?

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SAPとは何か?なぜERPが必要なのか?初心者向けチュートリアル (What is SAP? Why do we need ERP? Beginner Tutorial)

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    黃文君 に公開 2021 年 01 月 14 日
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