6_guest lecture_ibs blr_erp – a competitive advantage_session i_2009

ERP ERP –– A competitive advantageA competitive advantageConcepts – Session I9 am – 10.15 amICFAI Business School – Executive MBA

Subhajit MazumderEmail: [email protected]

Views expressed are personal and do not include any point of view of the speaker’s organization

mailto:[email protected]

AgendaAgenda

� Introduction and background� Evolution� Business modeling for ERP� ERP functional blocks� Impact on Competitive Advantage

Introduction & backgroundIntroduction & background

� Increasing need for information flow and data exchange◦ Within the organization◦ Cross-organization

� Growing complexity of business processes◦ Non-standardization◦ People specific


Typical scenario prior to ERP

Manufacturing, Plant

Maintenance Logistics

Distribution, Supply Chain

HR, Payroll

Financial Accounting

Warehouse,Inventory

management


Typical scenario after ERP

Shipping

Order Entry

Raw Material

FinishedProductReceiving

Make/Buy

Shop Floor Control On Time

Forecast & Planning

Quality

Customer

Quality

Inventory Management

Production Process

CollectionsPayments

Purchasing

Financial Reporting

Introduction & backgroundIntroduction & background� Enterprise Resource Planning

◦ Integrate all functions◦ Single database◦ Business process oriented◦ Adopts Industry best practices◦ Ensures process controls◦ Strict audit trails◦ Orchestrates an entire organization◦ Brings agility in business response◦ ERP+ : CRM and SCM

EvolutionEvolution

� An evolution over 5 decades◦ Economic Order Quantity (EOQ)◦ Materials Requirement Planning (MRP)◦ Closed Loop MRP◦ Manufacturing Resource Planning (MRP II)◦ ERP◦ E-commerce◦ ERP+ / ERP II

Business ModelingBusiness Modeling

� A diagrammatic representation of◦ Business systems◦ Business Processes ◦ People / Actors of the processes◦ Business rules◦ Inter-connections / Inter-dependencies

Business ModelingBusiness Modeling

ERP functional blocksERP functional blocks� Any ERP has more or less standard

functional coverage◦ Finance & Accounts◦ Materials mgmt. / Purchase / Inv. Mgmt.◦ Sales / Distribution◦ Production planning / Manufacturing◦ Maintenance / Service management◦ Quality mgmt.◦ HR / Payroll◦ Projects management◦ SRM / CRM◦ APS

ERP functional blocksERP functional blocks

Finance

Purchase / Inventory / Materials mgmt.Sales / Distribution

Production planning / operations

Maintenance / Service

CRM

SRM

HR / PayrollAPS

ERP functional blocksERP functional blocks� Finance & Accounts

◦ General ledger◦ Cash / Bank management◦ Asset management◦ AP / AR◦ Project finance◦ Vouchers◦ Financial statements◦ Cash flows◦ Budgeting◦ Costing◦ Compliance / Statutes

ERP functional blocksERP functional blocks� Materials mgmt. / Purchase / Inv. Mgmt.

◦ Materials mgmt. / Vendor mgmt.◦ PR / Indents◦ RFQ / Enquiries◦ PO◦ GR / Challan◦ Invoicing◦ Debit notes◦ Cash flows◦ Budgeting◦ Costing

ERP functional blocksERP functional blocks� Sales / Distribution

◦ Customer mgmt.◦ Sales forecasting / planning ◦ Quotations / Analysis◦ SO◦ Shipment / Delivery◦ Transportation modes◦ Incoterms ◦ Invoicing◦ Credit memos◦ Trans-shipments

ERP functional blocksERP functional blocks� Production planning / manufacturing

◦ Plant organization◦ Bill of Materials◦ Routing◦ Work Centers◦ Operations: processing time, lead times etc.◦ Planning (MRP / MRPII)◦ Different planning horizons◦ Scheduling◦ Interfaces with materials, orders, maintenance◦ Job sheets / Route cards


� Maintenance / Service management◦ Plant organization / Storage locations◦ Scheduled maintenance◦ Break-down maintenance◦ Condition based maintenance◦ Maintenance orders◦ Service orders◦ Service items / Scope of Work◦ RA billing


� Quality mgmt.◦ Definition of quality standards / parameters◦ Definition of quality lots / inspection lots◦ Visual / Chemical testing / Mechanical tests / Physical

tests◦ Defect tracking (root cause analysis) ◦ Usage decision ◦ Interfaces from purchase, production, sales / dispatch◦ TCs◦ 3rd party quality inspections


� HR / Payroll◦ Employee details mgmt.◦ Attendance recording◦ Leave mgmt.◦ Training / HRD ◦ Performance appraisal ◦ Travel mgmt. / Advance / Loan mgmt.◦ Pay structures and payroll processing◦ Pay slip generation◦ Income tax / other statutes


� Projects◦ Projects definition◦ Evaluation (techno-commercial)◦ WBS◦ Project activity schedules◦ Link to orders / R&D / Service management◦ Project tracking (link with project tracking tools)◦ Project finance – costs and billing◦ Project completion


� SRM / CRM◦ Link with the external supply chain partners◦ Relationship mgmt. (beyond business SLAs)◦ xRM

� APS◦ Advanced planning & scheduling◦ Demand mgmt. / Demand planning◦ Forecasting techniques◦ Transportation planning

Impact on Competitive AdvantageImpact on Competitive Advantage

� Competitive advantage over others to◦ Attract new business◦ Retain existing new business

� Competitive priorities (focus)◦ To create advantages in the marketplace◦ Driven by business plan objectives and

customer preferences◦ High quality, Low cost, Speed, Flexibility,

Convenience

Impact on Competitive AdvantageImpact on Competitive Advantage

� Some tangible results from ERP implementation◦ Supply Chain visibility◦ Synchronization of all planning aspects to

deliver optimally◦ Reduced process cycle times◦ Higher inventory turns◦ Faster accounts closure◦ Cost reduction◦ Ensuring quality throughout the processes

ExperiencesExperiences� A leading non-profit healthcare research

organization goes for ERP◦ Transformational impact◦ Cross-functional integration◦ Online validations, checks and controls◦ MIS – enhanced reporting and dashboards◦ Online workflows with business rules

embedded◦ Better funds management and utilization◦ Better accountability

Thank YouThank You

[email protected]

mailto:[email protected]

6_guest lecture_ibs blr_erp – a competitive advantage_session i_2009

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