evolution of Erp
- 1. 2017 DFT-6 | NIFT GANDHINAGAR
- 2. First and foremost, I would like to thank to our Faculty, Ms. Amisha Mehta for the valuable guidance and advice. She inspired us greatly to work in this project. Her willingness to motivate us contributed tremendously to our project. Finally, an honourable mention goes to our families and friends for their understandings and supports on us in completing this project. - Abhishek Gupta & Amrit Raj (DFT-6)
- 3. Enterprise resource planning (ERP) is an integral component of today’s complex global marketplace. ERP software helps companies streamline business processes, including: Product planning, cost and development Manufacturing or service delivery Marketing and sales Inventory management Shipping and payment ERP (Enterprise Resource Planning) is the evolution of Manufacturing Requirements Planning (MRP) II. From business perspective, ERP has expanded from coordination of manufacturing processes to the integration of enterprise-wide backend processes. From technological aspect, ERP has evolved from legacy implementation to more flexible tiered client-server architecture.
- 5. 1960s INVENTORY MANAGEMENT & CONTROL Inventory Management and control is the combination of information technology and business processes of maintaining the appropriate level of stock in a warehouse. The activities of inventory management include identifying inventory requirements, setting targets, providing replenishment techniques and options, monitoring item usages, reconciling the inventory balances, and reporting inventory status. The earlier generation EIS packages were based on individual business function automation such as inventory management and financial accounting systems. Also, the focus of manufacturing systems in the 1960s was on inventory control. Most of the software packages then (usually customized) were designed to handle inventory based on traditional inventory concepts. Evolution of Enterprise Information Systems (EIS) 1970s MATERIAL REQUIREMENT PLANNING (MRP) Materials Requirement Planning (MRP) utilizes software applications for scheduling production processes. MRP generates schedules for the operations and raw material purchases based on the production requirements of finished goods, the structure of the production system, the current inventories levels and the lot sizing procedure for each operation.
- 6. This system helped in translating the master production schedule into requirements for individual units like sub-assemblies, components and raw materials. MRP systems helped determine what to order, how much to order, when to order and when to schedule delivery. Drawbacks of MRP Systems These soft wares were helpful in manufacturing process. Their benefits did not extend to other Sectors. MRP solutions attained more fame. In fact it became a hallmark of the manufacturing setups. The MRP solutions did not render the expected results due to exorbitant costs and practical work problems MRP also requires for a huge pool of technical expertise in terms of manpower and machines. 1980s MANUFACTURING REQUIREMENTS PLANNING (MRP II) Manufacturing Requirements Planning or MRP utilizes software applications for coordinating manufacturing processes, from product planning, parts purchasing, inventory control to product distribution. MRP-II supported efforts to optimize the entire plant production system by supporting capacity planning, shop floor control, and distribution management activities. MRPII was further extended to support areas like Finance, Human Resources, Engineering, and Project Management etc.
- 7. MRP II software emphasized an optimized manufacturing process that coordinated materials and production requirements, extending services to: The shop floor Finance Human resources Engineering Project management Distribution management As MRP-II like systems were adopted by non-manufacturing enterprises like banks and airlines to support cross-functional coordination and integration of business processes, the “M” no longer fit, thus the name ERP was coined.
- 8. In the early 1990s, MRP-II was further extended to cover areas such as engineering, finance, human resources, sales and distribution, and projects management, that is, the complete gamut of activities within any business enterprise. Hence, the term ERP was coined. ERP is focussed within an enterprise. MRP-II was based on mainframe technology and hence was highly centralized and server-centric. ERP is based on client-server computing architecture and hence distributed in nature. Benefits of ERP Systems: Improving integration, flexibility Fewer errors Improved speed and efficiency More complete access to information Lower total costs in the complete supply chain Shorten throughput times Sustained involvement and commitment of the top management Causes of ERP Failures: Expensive (can costs 100 thousands to millions of dollars) Business managers and IT professionals underestimate the complexity of the planning, development, and training needed. Failure to involve affected employees in the planning and development phases. Trying to do too much too fast in the conversion process. Failure to do enough data conversion and testing BEFORE ERP
- 9. PROBLEMS FACED: Delays Lost Orders Keying into different computer systems invite errors AFTER ERP
- 10. 2000s and Beyond Extended ERP systems include: • Customer relationship management • Supply chain management • Advanced planning and scheduling Continuing ERP trends include capabilities for: • Cloud • Mobile • Analytics 21st century – ERPII ERPII is the name some now use to describe ERP like systems that are evolving to support inter-organizational business processes across the supply chain. ERPII is a business strategy and a set of collaborative operational and financial processes internally and beyond the enterprise New multi-enterprise business models like Value Collaboration Networks, customer- centric networks that coordinate all players in the supply chain, are becoming popular as we enter the 21st century These new business models reflect an increased business focus on external integration There is movement away from Client-Server System to Internet Based Architecture New Technologies in ERPII E-Commerce (Electronic Commerce) M-Commerce (Mobile & Wireless Technologies) C-Commerce (Collaborative Commerce) Middleware Enterprise Portal Technologies Web Services
- 11. RFID Analytical Capabilities (Data Warehousing & Data Mining) CRM, SCM, SRM Knowledge Management Business Intelligence ERP II is a solution that includes the traditional materials planning, distribution, and order- entry functionality strengthened by capabilities like customer relationship management (CRM), human resources management (HRM). Such a system can quickly, accurately and consistently operate an entire organization. It delivers information in an instant to the people who need it. It manages the access to that information by establishing security roles and ratings that define which employees can use certain pieces of information. It also addresses the issue of multiple office locations by making the solution web- based, so employees can access the system worldwide. Difference between ERP & ERPII Keys ERP ERPII Role Traditional ERP was concerned with optimizing an enterprise, Internal optimization. ERP II systems are about optimizing the supply chain through collaboration with trading partners. Domain ERP systems focused on manufacturing and distribution. ERP II systems will cross all sectors and segments of business. Function As ERP systems cross sectors and segments, they will no longer be able to present all things to all people. ERP II vendors to pick the industries in which they’re going to play, and focus on providing deep functionality for those users. Process In ERP systems, the processes were focused on the four walls of the enterprise. ERP II systems connects with trading partners, to take those processes beyond the boundaries of the enterprise.
- 12. Architecture Old ERP systems were monolithic and closed. ERP II systems will be Web-based, open to integrate and interoperate with other systems that allow users to choose just the functionality they need. Data Information in ERP systems is generated and consumed within the enterprise. Same information will be available across the supply chain to authorized participants. THE EVOLUTION OF ERP System Primary Business Need (S) Scope Enabling Technology MRP Efficiency Inventory Management and Production planning and control. Mainframe computers, batch processing, traditional file systems. MRPII Efficiency, Effectiveness and integration of manufacturing systems Extending to the entire manufacturing firm (becoming cross functional). Mainframes and Mini computers, real-time (time sharing) processing ,database management systems (relational) ERP Efficiency (primarily back office), Effectiveness and integration of all organizational systems. Entire organization (increasingly cross functional), both manufacturing and non-manufacturing operations Mainframes, Mini and micro Computers, Client server networks with distributed processing and distributed databases, Data warehousing, and mining, knowledge management. ERPII Efficiency, Effectiveness and integration within and among enterprises. Entire organization extending to other organizations (cross functional and cross enterprise--partners, suppliers, customers, etc.) Mainframes, Client Server systems, distributed computing, knowledge management, internet technology (includes intranets and extranets). Internet, Web Service Architecture, wireless networking, Middleware, M- commerce, E-commerce
- 13. NEXT GENERATION ERP As ERP has evolved, its business case has also changed. Consequently, it has become even more important that companies get the right solution to suit their needs. Offerings vary and different models suit specific organisational structures. The next generation ERP is based on 2 fundamental shifts:- The first is a shift to cloud based ERP. You no longer need to invest in having a system of your own – instead, you can buy it as a service straight from the service provider, safely and securely, while ensuring that the data is always kept in the home country, if so desired. Another, even more remarkable shift when it comes to next generation ERP systems is the access to real-time data. This has not been possible earlier
- 14. 1. http://www.erpwire.com/erp-articles/erp-evolution.htm 2. http://www.sysoptima.com/erp/history_of_erp.php 3. https://faculty.biu.ac.il/~shnaidh/zooloo/nihul/evolution.pd 4. http://www.ctnd.com/a-brief-historical-look-at-the-evolution-of-enterprise-resource-planning/ 5. The Evolution of ERP Systems: A Historical Perspective - by Mohammad A. Rashid, Massey University–Albany, New Zealand, Liaquat Hossain, Syracuse University, USA Jon David Patrick, University of Sydney, Australia 6. Introduction To Erp-An Overview Author: Deepak Dembla ; Vetter: Prof. M.S. Turan