ERP – Enterprise Resource Planning

March 28, 2017 Facebook Twitter LinkedIn Google+ ERP

ERP (Enterprise Resource Planning), by the United States Gartner Group company in 1990. The Enterprise Resource Plan is the next generation of manufacturing systems and resource planning software for MRP II (Enterprise Manufacturing Resource Planning). In addition to MRP II’s existing production resource planning, manufacturing, finance, sales and purchasing functions, there are quality management, laboratory management, business process management, product data management, inventory, distribution and transportation management, human resources management and regular Reporting system.

ERP is a supply chain management idea proposed by Gartner Group Inc, a US computer technology consulting and evaluation group. Enterprise resource planning refers to the management platform based on the information technology, based on the systematic management of the decision-making for the enterprise decision-making and staff to provide decision-making means. The ERP system supports a hybrid manufacturing environment such as discrete, process and other industries. The scope of application extends from the manufacturing industry to the business sectors such as retail, service, banking, telecom, government agencies and schools. By integrating database technology, graphical user interface, Four generations of query language, client server architecture, computer-aided development tools, portable open systems, and so on.

Table of content

1. Production characteristics

2. Development stage

3. Function module

3.1 Supply chain management

3.2 sales and marketing

3.3 Financial Management Module

3.4 production control management

4. Main features

5. Advantages

6. Attention to the problem

7. System optimization

8.Other references

9.List of ERP developer

1. Production characteristics

It combines the characteristics of discrete production and process-based production, facing the global market, including all the leading and supportive capabilities in the supply chain, coordinating the management of the business around the market, more flexible or “flexible” to carry out business activities, real-time To respond to market demand. To this end, redefine the business relationship between suppliers, distributors and manufacturers, re-build the business and information flow and organizational structure, so that enterprises in the market competition in a greater initiative.

ERP is a kind of enterprise information management system which mainly deals with the integrated management of material resources, capital resources and information resources integration for the manufacturing industry. ERP is a management accounting as the core can provide cross-regional, cross-sectoral, and even cross-company integration of real-time information enterprise management software. For the material resources management (logistics), human resources management (flow), financial resources management (financial), information resource management (information flow) integration of enterprise management software integration.

ERP and the development of computer technology is inseparable from the high, the user has a greater initiative on the system, as a computer-aided management of the functions involved has far exceeded the scope of MRP II. ERP functions include the addition of MRP II (manufacturing, supply and marketing, finance), but also multi-plant management, quality management, laboratory management, equipment maintenance management, warehouse management, transportation management, process control interface, data acquisition interface, electronic communications, E-mail, regulations and standards, project management, financial investment management, market information management and so on. It will redefine the business and its interrelations, take a more flexible approach to management and organization, change the supply and demand relationships in the supply chain (including changes in regulations, standards and technological developments), synchronize, agile, and in real time Make a response; in the grasp of accurate, timely and complete information on the basis of making the right decision, the initiative to take measures. Compared with MRP II, ERP in addition to expanding management functions, but also the use of the latest achievements in computer technology, such as the expansion of user-defined range, object-oriented technology, client / server architecture, a variety of database platforms, SQL structured query Language, graphical user interface, 4GL / CASE, window technology, artificial intelligence, simulation technology and so on.

2. Development stage

The application of information technology in enterprise management can be divided into the following development stage:

A, MIS system stage (Management Information System)
Enterprise information management system is mainly to record a large number of raw data to support the query, summary and other aspects of the work.

B, MRP stage (Material Require Planning)
The information management system of the enterprise manages the product composition. With the help of the computer’s computing power and the system’s ability to manage the customer orders, the library material and the product composition, the enterprise plans to start and calculate the material demand plan according to the customer order. To achieve the management of reducing inventory and optimizing inventory.

C, MRP II stage (Manufacture Resource Planning)
In the MRP management system, based on the system to increase the production center, processing hours, production capacity and other aspects of management, in order to achieve the computer production scheduling function, but also the financial function included in the enterprise to form Computer as the core of the closed-loop management system, this management system has been able to dynamically monitor the production, supply, sales of all the production process.

D, ERP stage (Enterprise Resource Planning)
After entering the ERP stage, the computer-centric enterprise-class management system is more mature, the system includes the financial forecast, production capacity, adjust the resource scheduling and other aspects of the function. With the enterprise to achieve JIT management comprehensive, quality management and production resource scheduling management and auxiliary decision-making function. Become the enterprise production management and decision-making platform tools.

E, e-commerce era of ERP
The maturity of Internet technology for enterprise information management system to increase customer and supplier to achieve information sharing and direct data exchange capabilities, thereby strengthening the links between enterprises to form a common development of the survival chain, reflecting the survival of enterprises to achieve competition in the supply chain Management thinking. ERP system corresponding to the realization of this function, so that decision-makers and business units to achieve cross-enterprise joint operations.

3. Function module

ERP systems include the following main functions: supply chain management, sales and marketing, distribution, customer service, financial management, manufacturing management, inventory management, plant and equipment maintenance, human resources, reporting, manufacturing executive systems (MES), Workflow services and enterprise information systems. In addition, it includes financial investment management, quality management, transportation management, project management, regulations and standards and process control and other complementary functions.

ERP is the integration of all the resources of the enterprise integrated management, simply that the three major business flow: logistics, capital flow, information flow to conduct a comprehensive management of integrated management information system. Its function module is different from the previous MRP or MRPII module, it can not only be used for the management of production enterprises, but also in many other types of enterprises such as some non-production, public welfare enterprises can also import ERP system for resource planning and management The

In the enterprise, the general management mainly includes three aspects: production control (planning, manufacturing), logistics management (distribution, procurement, inventory management) and financial management (accounting, financial management). The three systems itself is an integrated body, they have a corresponding interface between each other, can be well integrated together to manage the enterprise. In addition, it is particularly important to mention that, with the emphasis on the strengthening of human resources management, there have been more and more ERP vendors will be integrated into the ERP system, an important part of the ERP system.

3.1 Supply chain management

Is the management of the enterprise supply chain, that is, the market, demand, orders, raw material procurement, production, inventory, supply, distribution and other management, including from production to delivery, from suppliers to customers in every aspect. Supply chain is the survival of the enterprise business cycle system, enterprise e-commerce management is the most important issue. Statistics show that the enterprise supply chain can cost businesses up to 25% of operating costs. SCM can bring the following benefits for the enterprise: (1) increase the accuracy of the forecast. (2) to reduce inventory, improve delivery capacity. (3) reduce the workflow cycle, improve productivity, reduce supply chain costs. (4) to reduce the overall procurement costs, shorten the production cycle, speed up market response.

With the rapid development of the Internet, more and more enterprises began to use the network to achieve SCM. That is, the use of the Internet will be the enterprise upstream and downstream enterprises to integrate to the center manufacturers as the core, the upstream industry raw materials and spare parts suppliers, industrial downstream distributors, logistics operators and product service providers and the combination of banks to form a A complete e – commerce supply chain for end – customers. The purpose is to reduce the procurement costs and logistics costs, improve the market for enterprises and the final customer demand for response speed, thereby enhancing the market competitiveness of enterprise products.

3.2 sales and marketing

Market is the product of commodity economy, with the development of commodity economy and developed. As long as there is commodity production and commodity exchange, there must be a market, so there is a commodity sales and the market there is an objective and inevitable contact. Individual, private enterprise commodity production and commodity exchange, not subject to national planning constraints, it is entirely in the market environment generated and developed. To this end, the individual, the private sector must establish the correct concept of the market, in particular, should pay attention to market research, which is a prerequisite for good product production and sales, enterprises in the fierce market competition in an invincible guarantee.

Market concept is the enterprise’s production and business activities based on the needs of users to meet the business guiding ideology. The specific contents of the modern market concept mainly include: (1) the user is the center of enterprise activities, enterprises according to user needs to determine their own production and operation direction; (2) corporate marketing activities to form a whole, consistent, to meet the needs of users to meet the activities ; (3) to meet the needs of users at the same time, to achieve the profits of the enterprise. In the profit strategy, not focus on the size of the profits of each transaction, but to consider the long-term development of enterprises, to fight for customers, establish a good corporate image, open up the market, improve market share as a business target, profit.

Market research, also known as marketing research, is the use of certain methods and procedures to collect, collate and analyze marketing information on goods and services related to consumer demand, conduct market analysis and planning to determine marketing strategies. To do a good job of corporate financial management, we must also focus on the market, strengthen marketing research. This is because: First, the market is linked to the production and consumption of intermediaries, it can be sensitive to reflect the changes in social needs and its situation, enterprises should be in a favorable position in the competition, we should grasp the market dynamics; Want to produce the largest financial benefits with the least cost, it is necessary through market research, production and management for the needs of the market, marketable products; Third, the company’s purchase and sale activities must rely entirely on marketing mechanisms, Individual private enterprise production and management characteristics of the decision. The main contents of the market research include market research, market forecasting and the formulation of sales strategy.

3.3 Financial Management Module

In the enterprise, clear financial management is extremely important. So, in the ERP program is an integral part of it. ERP in the financial module is different from the general financial software, as part of the ERP system, it and other modules of the system have the appropriate interface, to integrate with each other, for example: it can be produced by the activities of the procurement activities of information automatically included The financial module generates the general ledger, the accounting report, and eliminates the cumbersome process of entering the voucher, almost completely replacing the traditional manual operation. The financial part of the general ERP software is divided into two blocks of accounting and financial management.

First, accounting

Accounting is mainly to record, accounting, reflect and analyze the changes in funds in the economic activities of enterprises in the process and its results. It consists of general ledger, accounts receivable, accounts payable, cash, fixed assets, multi-currency and other components.

1, the general ledger module: its function is to deal with accounting voucher input, registration, output journal, general ledger and general ledger, the preparation of major accounting statements. It is the core of the entire accounting, accounts receivable, accounts payable, fixed assets accounting, cash management, payroll, multi-currency and other modules are the center to communicate with each other.

2, accounts receivable module: refers to the enterprise receivable due to the credit of the normal customer arrears account. It includes invoice management, customer management, payment management, aging analysis and other functions. It and customer orders, invoice processing business linked to the event at the same time automatically generate accounting vouchers, import general ledger.

3, accounts payable account: accounting accounts payable is the enterprise to pay the purchase and other accounts, which includes the invoice management, supplier management, check management, aging analysis. It can and procurement module, inventory module is fully integrated to replace the past cumbersome manual operation.

4, cash management module: it is mainly on the cash inflow and outflow control and petty cash and bank deposits. It includes the management of coins, banknotes, checks, bills of exchange and bank deposits. In the ERP provides the ticket maintenance, bill printing, payment maintenance, bank inventory printing, payment inquiries, bank inquiries and check inquiries and cash-related functions. In addition, it also accounts receivable, accounts payable, general ledger and other modules integrated, automatically generate vouchers, into the general ledger.

5, fixed asset accounting module: that is, to complete the increase and decrease of fixed assets and depreciation of the provision and allocation of funds related to the accounting work. It can help managers understand the status of fixed assets, and through the module to provide a variety of ways to manage assets, and the corresponding accounting treatment. Its specific functions are: log in fixed assets cards and ledger, calculate depreciation, the preparation of statements, and automatic preparation of transfer vouchers, and transferred to the general ledger. It integrates with accounts payable, cost, and general ledger modules.

6, multi-currency module: This is to adapt to the international business of today’s business, foreign currency settlement business requirements arising from the increase. Multi-currency system will be the entire financial system functions in a variety of currencies to represent and settlement, and customer orders, inventory management and procurement management can also use multi-currency system for transaction management. Multi-currency and accounts receivable, accounts payable, general ledger, customer orders, procurement and other modules have an interface, can automatically generate the required data.

7, the salary accounting module: the enterprise employees of the wages of the settlement, distribution, accounting and the provision of the relevant funds. It can register wages, print the wage list and all kinds of summary statements, calculate the various costs related to wages, automatically make the certificate, import general ledger. This module is integrated with the general ledger, cost module.

8, the cost module: it will be based on product structure, work center, process, procurement and other information to calculate the cost of the product in order to carry out cost analysis and planning. But also by standard cost or average cost method by location maintenance costs.

Second, financial management

The functions of financial management are mainly based on accounting data, and then analyzed, so as to carry out the corresponding forecasting, management and control activities. It focuses on financial planning, control, analysis and forecasting:

Financial plan: according to the previous financial analysis to make the next financial plan, budget and so on.

Financial analysis: Provides a query function and performs financial performance evaluation, account analysis, etc. through graphical display of user-defined differences data.

Financial decision-making: the core of financial management, the central content is to make the relevant financial decision-making, including fund raising, delivery and fund management. Production control management module.

This part is the core of the ERP system, it will be the enterprise’s entire production process organically together, enabling enterprises to effectively reduce inventory and improve efficiency. At the same time each of the original scattered production process of automatic connection, but also makes the production process can be coherent before and after, and will not produce disjoint, delay production lead time.

3.4 production control management

Is a planning-oriented advanced production and management methods. First of all, the enterprise to determine its a total production plan, and then after the system layers of subdivision, down to the various departments to implement. That is, the production sector to the production and procurement departments according to this procurement and so on.

1, the main production plan: it is based on the production plan, forecast and customer order input to arrange the future of the cycle to provide the type and quantity of products, it will be the production plan into a product plan, in balance with the needs of materials and capacity , Accurate to the time, the number of detailed schedule. Is the arrangement of the total activity of the enterprise over a period of time. It is a stable plan which is produced by the forecast of the production plan, the actual order and the historical sales analysis.

2, the material needs of the plan: the main production plan to decide how much production after the final product, and then according to the bill of materials, the entire enterprise to produce the number of products into the required number of parts and components, and control the existing inventory, Can get the number of processing, the number of purchases of the final number. This is the plan that the whole department really follows.

3, Capacity Requirement Plan: It is a detailed work plan generated after balancing the overall workload of all work centers with the capacity of the work center after determining the initial material requirements plan to determine whether the material requirements plan is generated Is the production capacity of the viable demand plan. Capacity requirements planning is a short-term, current practical application of the plan.

4, workshop control: This is a dynamic change with the time of the business plan is to assign the work to the specific workshop, and then sorting operations, job management, job monitoring.

5, manufacturing standards: in the preparation plan requires a lot of basic production information, these basic information is the manufacturing standards, including parts, product structure, processes and work centers, with a unique code in the computer to identify.

A part code, the management of the material resources, for each material to give a unique code to identify.

B BOM, technical document defining product structure for the preparation of various plans.

C process, describing the processing sequence and the order in which the product is manufactured and assembled. It contains the order of the processing steps, indicating the processing equipment of each process and the required rated working hours and wage levels.

D work center, the use of the same or similar processes of equipment and labor force, engaged in production schedule, accounting capacity, the basic cost of calculating the unit.

4. Main features

ERP to customer needs and manufacturing activities within the enterprise and the supplier’s manufacturing resources together to form a complete supply chain, the core management ideas are mainly reflected in the following three aspects: First, the implementation of the entire supply chain resources management Thinking; Second, reflect the lean production, agile manufacturing and synchronous engineering ideas; Third, reflect the pre-planned and prior control of the idea.

ERP application success of the logo is: First, the system running integrated, the operation of the software across multiple departments; Second, the rationalization of business processes, business departments at all levels based on fully optimized after the re-construction process; Third, performance monitoring dynamic, performance system Can be timely feedback in order to correct the problems in management; Fourth, the management to improve the sustainability of enterprises to establish a continuous self-evaluation and continuous improvement of management mechanisms.

ERP has the characteristics of integration, system, flexibility, real-time control and so on. ERP system supply chain management ideas to the enterprise put forward higher requirements, is the enterprise in the information society, in the era of knowledge economy prosperity and development of the core management model.

(1) for sales, to the market quickly respond. It includes supply chain management capabilities, emphasizing new partnerships between suppliers, manufacturers and distributors, and supporting enterprise logistics.

(2) more emphasis on business processes and workflow, through the workflow to achieve the enterprise personnel, finance, manufacturing and distribution of integration, to support enterprise process reorganization.

(3) into the product data management PDM function, increased the design data and process management, and further strengthen the production management system and CAD, CAM system integration.

(4) more emphasis on financial management, with a better corporate financial management system, which enables the implementation of the concept of value management, capital flow and logistics, information flow more organically.

(5) more consider the human factors as a resource in the production and operation of the role of planning, but also consider the cost of training and so on.

(6) In the manufacturing plan, ERP supports MRP and JIT mixed management mode, also supports a variety of production methods (discrete manufacturing, continuous process manufacturing, etc.) management model.

(7) Adopting the latest computer technology, such as client / server distributed structure, object-oriented technology, electronic data exchange (EDI) based on WEB technology Tools and so on. (EDI), multi-database integration, data warehousing, graphical user interface, fourth-generation language and auxiliary (e), and so on.

5. Advantages

The advantages of ERP are mainly reflected in the following aspects: shorten the turnaround time; integration of logistics and capital flow; strengthen materials and production planning; simulate the impact of different market conditions on production planning, capacity demand planning, material procurement planning and storage and transportation; To enhance the enterprise’s ability to respond quickly to changes in the business environment; to achieve real-time and online inquiry of the management; to provide more accurate and timely financial reports for enterprise decision-making; to provide timely management reports and analysis of data; the system itself has a strict internal control function.

6. Attention to the problem

According to statistics, ERP implementation of the success rate of only 10% to 20%.

Based on the idea of ​​supply chain management ERP, in the implementation process need to proceed from the following aspects:

Establish decision makers for ERP system implementation

Decision-makers are all aspects of the enterprise to grasp a more comprehensive, the overall development goals of the enterprise more clearly, have a certain influence and appeal of the people. By its commitment to the implementation of the ERP project leader, for overall planning, will take every step, the next good whole game. In the enterprise to establish a sound three-tier organizations: leading group, project implementation group and functional groups. Through the decision-makers and organizations of scientific decision-making to determine the ERP implementation plan steps, the implementation of rules and division of labor.

Do pre-consultation and research work

Consulting is through the management of experts on the current development and management of the weak links and the existence of the core issues of diagnosis and analysis, re-design of business processes, adjust the organization of distribution; research is to know ourselves, to find out the production and business composition, service Demand, ERP vendor development capabilities and software product characteristics and the success of the case to understand the composition of the supply chain, market supply and demand and future changes in the characteristics of the situation. To ensure the accuracy of the basic data, timeliness, reliability and before and after the consistency between the data for the scientific decision-making and management to provide a basis for reference.

Select the ERP management software for enterprise characteristics

ERP products are more, the size of different enterprises, product structure, market strategy, management model there are also large differences. Therefore, enterprises in the choice of ERP software, should focus on business needs, software functions and open the open, secondary development tools and ease of use, improve the software documentation, good after-sales service and technical support, system stability Sex, supplier strength and credibility, the right price and other aspects of comprehensive consideration. In addition, investment benefit analysis, including capital profitability, investment recovery period, implementation cycle and difficulty, should be avoided in order to avoid the implementation time, secondary development or customization time is too long to affect the effectiveness of cash.

Do a good job of staff training

Respectively, the workshop and department heads, accounting staff, production planners, purchase and sale personnel, production statisticians, warehouse managers, etc. throughout the implementation of the ERP system throughout the implementation of the training. Because the use of ERP systems will be a greater extent to change the staff of the existing mode of operation or operational processes. From the fine production, punctual production, total quality management, etc., the ERP project involved in the staff at different levels, varying degrees of software function training.
Establish and improve the project management system and operational mechanism

ERP system is a large investment, long cycle, complex system and high risk and other characteristics of the enterprise management system engineering. Therefore, enterprises in the ERP application process must be from the system engineering and scientific management point of view, to ensure the successful implementation of ERP projects.

To achieve ERP and e-commerce integration

E-commerce is the mainstream business model for enterprises to participate in the future international competition and optimize their business. E-commerce era of ERP system will make full use of Internet technology and information integration technology, supply chain management, customer relationship management, enterprise office automation and other functions fully integrated optimization to support product collaboration business and other business management model. If ERP blindly stick to the original management ideas, only to stay in the management of internal processes, will not be able to adapt to e-commerce era of resource optimization and collaborative development needs between enterprises. Plans to implement ERP enterprises, we must strive to achieve ERP and e-commerce seamless docking for enterprises in the era of e-commerce development to provide new opportunities for development.

7. System optimization

ERP Globalization

In the SME information construction, the most obvious development trend is: corporate globalization, globalization and globalization of competition. With the continuous development of e-commerce, policy barriers have been in the past few years have disappeared, corporate e-commerce has been in the small and medium enterprises for a long period of time, the scope of business has gradually expanded to the world. Therefore, with the small and medium-sized enterprise information technology has not been strengthened. Is bound to require optimization of ERP system functions for the global enterprise to provide services.

ERP has supported the enterprise information is obvious, relatively easy to do the function, such as allowing transactions and telegraph using a variety of monetary units, according to the country to declare operating results. but. Other features, such as local policy structure or local cultural expectations, will be designed in the ERP system is very complex, and the use of programming to achieve the more difficult. therefore. So that ERP globalization should first proceed from the ERP process standardization, the relevant areas of productivity, production and transportation costs, tariffs and demand and other global data together.

With the globalization of the market, small and medium-sized enterprises are also inclined to merge to better cope with the excess capacity in the market. In addition, the similarity between the information environment and the process environment can also lead to business integration. The continued growth of mergers and acquisitions has brought about another demand – integrating the original ERPs separated from each other. Therefore, in the optimization of ERP systems, we must take into account the enterprise in the original ERP system devoted to the energy, so that enterprises in the original ERP system environment, a slight upgrade to meet the current economic situation, the needs of small and medium enterprises information construction.

ERP rapid

In a competitive business environment, small and medium enterprises in order to maintain survival, development, must quickly understand the individual customers at a particular time want to get what, and through the ERP software to respond. Therefore, the requirements of ERP software with rapid perception and rapid response capability. Optimized ERP must be in the technical aspects to meet the needs of small and medium enterprises information construction. Improve the speed and flexibility of enterprises to respond to customers.

ERP reorganization

Economic globalization has facilitated mergers between enterprises, but because companies and regulatory agencies have required to reduce the cost of management, they will encourage companies to reorganize in the industry. After the reorganization of the company should also be able to optimize the ERP software with the help of ERP reorganization, making ERP software can adapt to the current requirements of corporate restructuring.

ERP Virtualization

As the virtual organization is the enterprise in order to achieve win-win cooperation and joint collaboration. The scope of the relationship is very extensive. Optimized ERP software In order to cover this range, it is technically necessary to support the combination of different levels of data and processes, from simple market transactions between organizations to fully united and shared, and various levels of union must be suitable for The relationship between the two (or more) organizations of the organization. To make ERP software virtual. One way to do this is to expand the value chain and integrate the information from multiple data systems together.

8.Other references

CAM – Computer Aided Manufacturing
CAD(Computer Aided Design)
cnc router

9.List of ERP developer

ManufacturerHQProducts Built
Seradex IncCanadadeveloper of ERP software.
IndustriOS Software IncCanadadeveloper of ERP software for manufacturing and distributing operations.
Genius SolutionsCanadadeveloper of ERP software, productivity software, CAD software for manufacturing industry.
R + B Entwicklungs- und Vertriebs GmbHGermanydeveloper of ERP software, CAM software.
OrbisGermanyreseller of CAD software, ERP software for manufacturing sector.
GeovisionGermanydeveloper of CAM software, PPS software.
EVO InformationssystemeGermanydeveloper of ERP software, data management software, DNC software, tool management software, EDI, CAQ software.
DPS Software GmbHGermanydeveloper of CAD/CAM software, CAE software, ERP software. One of the three largest SolidWorks resellers in Europe and among the top six partners of Sage in Germany.
Bock & HeitbrederGermanymanufacturer of ERP software for small and medium-sized enterprise in metal working industry.
WinToolSwitzerlanddeveloper of CAM software, DNC software, CNC software, ERP software.
Synergy ResourcesUSdeveloper of visual ERP software.
JobBOSSUSdeveloper of ERP software, production planning software for small to medium sized contract manufacturers.
Epicor Software CorpUSdeveloper of ERP software, distribution software, HCM software, retail software.
OmegaCube Technologies Inc.USdeveloper of ERP software.
Henning Industrial Software Inc.USdeveloper of ERP software, accounting software.
Global Shop Solutions, Inc.USdeveloper of ERP software for small and medium sized machine shops.