Tag: erp mrp

5 Minute Guide to ERP

Information technology has transformed the way we live and the way we do business. ERP, or Enterprise Resource Planning, is one of most widely implemented business software systems in a wide variety of industries and organizations. In this short article, well try to concisely explain the basic yet important concepts relevant to ERP.

What is ERP – ERP is the acronym of Enterprise Resource Planning. ERP definition refers to both ERP software and business strategies that implement ERP systems. ERP implementation utilizes various ERP software applications to improve the performance of organizations for 1) resource planning, 2) management control and 3) operational control. ERP software consists of multiple software modules that integrates activities across functional departments – from product planning, parts purchasing, inventory control, product distribution, to order tracking. Most ERP software systems include application modules to support common business activities – finance, accounting and human resources.

ERP Systems – ERP is much more than a piece of computer software. A ERP System includes ERP Software, Business Processes, Users and Hardware that run the ERP software. An ERP system is more than the sum of its parts or components. Those components interact together to achieve a common goal – streamline and improve organizations business processes.

History of ERP – The history of ERP has been more than 20 years. Enterprise Resource Planning (ERP) is the evolution of Manufacturing Requirements Planning (MRP) II in 1980s, while MRP is the evolution of Inventory Management & Control conceived in 1960s. ERP has expanded from coordination of manufacturing processes to the integration of enterprise-wide backend processes. In terms of technology, ERP has evolved from legacy implementation to more flexible tiered client-server architecture.

Benefits of ERP – ERP software attempts to integrate business processes across departments onto a single enterprise-wide information system. The major ERP benefits are improved coordination across functional departments and increased efficiencies of doing business. The implementation of ERP systems help facilitate day-to-day management as well. ERP software systems is originally and ambitiously designed to support resource planning portion of strategic planning. In reality, resource planning has been the weakest link in ERP practice due to the complexity of strategic planning and lack of adequate integration of ERP with Decision Support Systems (DSS).

ERP Failures – We couldnt conclude our brief guide to ERP without mentioning ERP failures. The failure of multi-million dollar ERP projects are reported once in a while even after 20 years of ERP implementation. We have identified the four components of an ERP System – 1) ERP software, 2) Business Processes that ERP software supports, 3) Users of ERP systems, and 4) Hardware and Operating Systems that run ERP applications. The failures in one or more of those four components could cause the failure of an ERP project.

Natalie Aranda writes about business and information technology.

ERP and OS Security Concerns

An interesting topic concerning ERP is which platform to run on. This is one of the first questions that needs to be asked in deciding on an ERP system. But the answer is not always as simple as you think. Below is an interesting article about Operating Systems and their security. More so, how it can affect and ERP system.


Security Concern

Which operating system is most secure open source or Windows? For manufacturers that all depends, says John Harney

According to most experts, vendors of the dominant enterprise manufacturing applications like ERP, supply chain and CRM have long-proven, proactive patch and other security programs. Instead, problems arise due to security vulnerabilities in the operating systems (OS) they run on or the applications (their own suite modules and related apps) they support.

Read more…

Hugger-Mugger fixes goofed open source ERP implementation

Although this article is a year old, it shows how an IT centric approach to ERP will lead to problems. ERP should be a process centric approach with the software being an enabler to good processes:

Hugger-Mugger fixes goofed open source ERP implementation
By Jan Stafford, Editor
05 Jul 2005 | SearchOpenSource.com

The low cost and easy accessibility associated with open source applications make them very attractive to some companies. But, as yoga and exercise products manufacturer Hugger-Mugger discovered, love at first sight led to a hastily implemented and ultimately botched implementation of Compiere’s open source ERP.

Read Article…

How ERP Systems Must Meet the Challenges of Automotive Suppliers

Browsing around the web we often come across gems of information. Here is an article that although a little dated shows how ERP must answer key functions in the automotive industry:

“Being competitive in the automotive industry requires adopting new management methodologies, such as just-in-time, electronic data communications, and work order-less scheduling and billing. Packaged ERP systems are now incorporating functionality to support these new methodologies. Read more here….”

Blackberry goes ERP

Now that everyone is breathing a sigh of relief after RIM’s legal settlement:
Blackberry goes ERP
by Cliff Saran
Tuesday 7 March 2006

Research in Motion has given its Blackberry Enterprise Server (BES) support for web services to enable wireless access to enterprise systems such as SAP.

The company’s aim with the 4.1 release of BES is to move Blackberry beyond push e-mail. It has introduced a development tool called MDS 4.1 to help businesses create links…Blackberry goes ERP

New ERP Bookstore

In association with Amazon.com, ERPandmore.com now has a complete bookstore to assist you in finding ERP, CRM, PLM, or other software/process books. To access this new store, please click on “books” at the top right of the page. We hope you find this to be a valuable part of the site.

ERP is in the picture for midsize manufacturers

Small and midsize manufacturers are increasing IT investment because they don’t have the IT architecture needed to compete in a demand-driven world. For many, this means going back to the basics: an ERP system that standardizes business processes, extends the company’s reach, and reduces overhead.

In a 2005 study of more than 550 companies’ ERP investment plans, only 27 percent of small companies “those with fewer than 500 employees” currently …more… (requires registration)

ERP Tiers: What Tier are you in?

ERP vendors and consultants are always trying to classify you as a company into distinct ERP tiers. What is your vertical industry? What is your revenue? How many employees? These are all questions of where you fit within their offering. Others talk about ERP Tiers. What are tiers? ERP Tiers are classifications of software by the size of the company the fit. Let’s break it down:

ERP Tiers: Tier 1 ERP

Tier 1 ERP software is software for the large enterprise. This includes multi-site, multi-national corporations. Typically the Tier 1 customer is a company with revenues in excess of $200 million dollars and has several sites, probably geographically dispersed and in multiple companies. There used to be what was known as JBOPS. JD Edwards, Baan, Oracle, People Soft, and SAP. Now that Oracle purchased People Soft, who had just prior purchased JD Edwards, the map has left the three primary ERP vendors: SAP, Oracle and Baan. These are your Tier 1 ERP players. Although not yet quite a Tier 1 ERP player, Microsoft with their Axapta (now called Dynamics AX) is pushing to be a Tier 1 software system.

ERP Tiers: Tier 2 ERP

The Tier 2 market is the largest of all the tiers in terms of the number of potential customers. This is the mid-sized tier. The customers of Tier 2 software usually are in the $20 million to $200 million dollars. They are usually just a few localized sites. For example a company that has a main office in California, with a manufacturing facility in Ohio and a distribution outlet in Texas would be a typical Tier 2 client. Often though, Tier 2 customers are single site. The main indication is the size of the company by revenue. This is important in that you probably will not find more than a couple hundred users all said and done. More likely though it is less than 100 users. Some references to the Tier classifcation refer to the number of employees. This is really not a good indicator as sometimes smaller companies with labor intensive processes may only have a few computer users.

Software in this class includes QAD, Infor’s Syteline, Microsoft Navision (Dynamics NV), ABAS, Glovia, Best’s MAS500, Epicor Vantage, and a host of others.

The problem that the Tier 2 vendors are facing is that the Tier 1 players are pushing down into this space. The market in the Tier 1 arena is small and to continue to expand their businesses, the Tier 1 players are reducing cost, simplifying transaction sets, and offering outsourced hosting and other incentives to allow a medium sized company to have the broad features of the Tier 1 package.

ERP Tiers: Tier 3 ERP

Tier 3 software is designed for single site customers of under $40 million dollars. These are companies with 5 to 30 users and have less demanding needs. Often these companies have just grown out of the Tier 4 packages and are looking to expand their capabilities. These companies tend to be the family run or small corporations.

Software in this market space includes Lily’s Visual Manufacturing, Intuitive Manufacturing, Microsoft Great Plains (Dynamics GP), DBA Software and Best’s MAS200.

ERP Tiers: Tier 4

Tier 4 software is your basic accounting systems. These include Peach Tree, Accpac and Quickbooks. This is the startup to $2 Million dollar software.

The next time you hear a vendor referring to a Tier 2 client, you will understand now that they are referring to a midsized company with just a couple plants. It is amazing how in the IT industry acronyms and categories spring up and every assumes they know what the other is referring to.

An interesting article is the segmentation of ERP into two tiers. You can read more in this publication: The rise of two-tier ERP: what it is and what it means.(TECHNOLOGY)(enterprise resource planning ): An article from: Strategic FinanceERP Tiers

ERP Tiers