erp: enterprise resource planning
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ERP:Enterprise Resource Planning
CK FarnTel: (03)426-7250
mailto: ckfarn@mgt.ncu.edu.tw
http://www.mgt.ncu.edu.tw/~ckfarn
2004
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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
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Business Operations: Very Early Stage
One man show, everything is connected
Procurement
Inventory
Production
Sales
Delivery
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Business Operations: Early Stage, with independent functions
Barrier Barrier Barrier Barrier BarrierBarrier
Procurement
Inventory
Production
Sales
Delivery
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ERP: Pre-installation
No integration across functions
SalesProduction
Delivery
Input
Output
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ERP: Objective
Functional integration
Input
Output
Sales
Production
Delivery
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Internal Functional Integration
Production Manage m
ent
Logistics Manage
ment
Material Manage-
ment
Barrier Barrier BarrierBarrier
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Logistics Management
ERP Ideal: Internal Integration
Production Management
Material Management
BarrierBarrier
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Supply ChainManagement
Sales ForceAutomation
Internet Integration
Business Intelligent
CustomerRelationship ManagementKnowledge
Management
ElectronicCommerce
ERP IIERP
EnterpriseResourcePlanning
(+BPR, HR Logistics Service..)
MRP II
ManufacturingResourcePlanning(+Cash flow)
MRPManufacturingResourcePlanning
(+Capacity)
mrpMaterial RequirementPlanning
Evolution of ERP
MRP( 物料需求規劃 )MRP( 物料需求規劃 )
Payroll( 薪資系統 )Payroll( 薪資系統 )
GL( 總帳會計 )GL( 總帳會計 )
AP( 應收帳款系統 )AP( 應收帳款系統 )
AR( 應付帳款系統 )AR( 應付帳款系統 )
EDI( 電子資訊交換 )EDI( 電子資訊交換 )
Planning( 計劃 )Planning( 計劃 )
Scheduling( 排程 )Scheduling( 排程 )
Distribution( 配銷 )Distribution( 配銷 )
MRPⅡ( 製造需求規劃 )
MRPⅡ( 製造需求規劃 )
HR( 人力資源 )HR( 人力資源 )
FMIS( 財務系統 )FMIS( 財務系統 )
E-Commerce( 電子商務 )
E-Commerce( 電子商務 )
SFA( 銷售自動化 )
SFA( 銷售自動化 )
CRM( 客戶關係管理 )
CRM( 客戶關係管理 )
SCM( 供應鏈管理 )
SCM( 供應鏈管理 )
ERP( 企業資源規畫 )
ERP( 企業資源規畫 )
E-Business( 電子企業環境 )
ESCM( 延伸型供應鏈管理 )
EERP(延伸型企業資源規劃 )
1970 1980 1990 2000* 資料來源: HP簡報
Evolution of Business Systems
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ERP Packages
Large systemsSAP R/3, Oracle
Costs above NT$100 Mil, before year 2000Including license fee, business process consultant, systems modifications, installation etc.
Middle level systemsDSC(鼎新 )Tiptop, DSC WorkFlow ERP, FAST Technologies (漢康 ), Proyang (普揚 )
NT$ 2-100 Mil
Small SystemsDSC SmartERP,正航,高頻,鼎盛
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ERP Integration: SAP
Sales
Production
Sales order
SOP MPS MRPPlannedorder
Produc-tionorder
Delivery CustomerBilling
Shopfloorcontrol
Requi-sition
Vendorselection
Purchase order
Goodsreceipt
Invoice verifi-cation
Financial controlling
Resource controlling
Logistics controlling Sales, Production, Purchasing, Warehouse
CustomerOrder Customer
Payment
Vendor Payment
InventorySourcing
Presales Activity
PurchasingMat.mgt
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Invoices AR
ENG
BOM WIPBills andRoutings
Shipments
ECOS
WorkOrders
GL
AP
Planning(MRP)
PO
MaterialRequirements
EnterpriseDemand
Vendor PO
Interplant PO
Receipts
WorkOrders
Customers
Journal Entries
Journal EntriesJournal Entries
Vendor Invoices
Vendor Payments
TransportationInformation
Bills
ItemsOM INV
InternalPayments
CorporateJournal Entries
Shipments
Orders
FA
Mass Addition
Journal Entries
COST
COST
COST
Receipts
Financial Sales
HRPayroll
Workflow
Production HR.
ERP Integration: Oracle
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Customers
Post ERP: Supply Chain Integration
Internal Supply Chain
Suppliers
夥伴關係Integration of Supply and Demand Chains
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Implementation of ERM
After much hardwork, the system is functioning smoothly
Question:Are the business operations integrated?
Has the inter-functional barriers been removed?
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Driving a Car
You bought a 400 horse-power Ferrari
How fast can you drive?
Routes?FreewayDirt road
Weather?Clear skyMisty
Traffic?LightCongested
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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 removedEven with ERP, integration is not automatic
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Successful ERP Implementation
SuccessSystem installation
Daily operational usage
Benefits realized
BPR is essentialBusiness Process Reengineering
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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
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BPR Example
Which is shorter?
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New Process
Major Concepts:• Multiple servers, one
queue• Multiple services per
server
Ford Accounts Payable Process*
Accounts Payable
Accounts Payable
VendorVendor
GoodsReceivingReceiving
Payment
Invoice
Receiving document
PurchasingPurchasingPurchase order
Copy ofpurchase order
*Source: Adapted from Hammer and Champy, 1993
Ford Procurement Process
AccountsPayable
AccountsPayable
VendorVendor
GoodsReceivingReceiving
Payment
Goods received
PurchasingPurchasingPurchase order
Purchase order
Data base
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Express Mail in the US
Traditional Express service
Point to pointComplicated network and routing
3 days
Around $10
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Air Force base in Memphis
Computerized operations
Centralized dispatch
Guaranteed 24 hour deliveryNoon-to-noon
3 times the price
Number 1 within 3 years
The Rise of FedEx
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