MB 11 – 01 : ENTERPRISE RESOURCE PLANNING

1.a. Explain how ERP facilitates

a). Reduction of lead time

The elapsed time between placing an order and receiving it is known as the lead-time. It plays a significant role in purchasing and inventory control. Most purchasing departments urge the managers to anticipate material demands well ahead of actual need. All inventory system have safety mechanisms like safety stock, re-order level and so on built into them, to avoid the situation were the material is out of stock. The consequences non availability of an item that is required for production can result in a lot of problems like missing the delivery schedules, losing the customer good will due to delayed delivery or even losing the customer to the completion.

b). On time Shipment

Today, companies must be able to deliver customer-specific products (made-to-order) with the lead-time of standard, off-the shelf products. The companies must be able to change the mode of production from make-to-stock to make-to-order, yet retain the cost and time advantages off-the-shelf products. Today, the ERP systems provide the freedom to change manufacturing and planning methods as needs change, without modifying or reconfiguring the work place or plant layouts.

c). Improved Supplier performance

The quality of raw materials or components and the capability for the vendor to deliver them on time are of critical importance for the success of any organization. So, an organization needs to choose its suppliers or vendors very carefully and monitor their activities closely, so that the problems can be corrected before it can disrupt. To realize these benefits, corporations rely heavily on supplier management and control system to help plan, manage and control the complex processes associated with global supplier partnerships.

d). Improved Information accuracy

To survive, thrive and beat the competition in today’s brutally competitive world, one has to manage the future. Managing the future means managing the information. In order to manage the information, in order to deliver high quality information to the decision makers at the right time, in order to automate the process of data collection, collation and refinement, organizations have to make Information Technology (IT) an ally, harness its potential and use it in the best way possible.

b. What are the major problem areas in ERP implementation

The most important thing when installing an ERP system in a company is the attitude reform of the employees at all levels of that company. How managers use information systems and information technology as strategic management methods is likely to become the turning point of the change. Companies where the speed of change is fast, have a greater chance of surviving and growing in this age of intense competition.

Among the points that should be controlled for the purpose of the ERP’s success, the most important point is for company executives to have a definite timetable. Also, there are many misunderstandings caused by wrong estimates. For example, the company does not have previous experience in estimating the cost of such a massive project. If the implementation costs are estimated based on the figures from in-house development and implementing a solution within ones own company is normally less expensive. In the case of ERP implementation, there are substantial additional costs that are necessary, such as consultation, customization, training and education.

2. a. Write short note on ‘ Products of Oracle’.

Oracle Applications comprise of 45-plus software modules, which are divided into the following categories:

Oracle Financials:

Oracle Financial Applications can transform a finance organization int a strategic force. In today’s fast-moving corporate arena, organizations require access to critical financial management functions. With Oracle Financial Applications, companies will be able to work globally, lower their administrative costs, close their books faster and improve cash management – while providing the strategic information required for making timely and accurate decisions.

Oracle Projects:

Oracle Project Applications improve operational efficiency by providing an integrated project management environment that supports the full life cycle of every project in your enterprise, increasing top-line revenue growth and bottom-line profitability. As the bridge between operations systems and corporate finance, Oracle Projects Applications provide a central repository of validated cost, revenue, billing and performance data associated with your business activities or projects.

Human Resources:

Well managed human resources directly improve the bottom line and contribute to competitive advantage. The ability to hire, motivate and retain the most capable work force; engage employees and line managers directly in managing their skills and careers; and provide comprehensive and up-to-date workforce information for management – on a global basis – are a few of characteristics important fro success.

Manufacturing:

Oracle Manufacturing applications are the industry-leading mixed-mode manufacturing solution that enables companies to achieve market leadership by becoming more customer responsive and efficient. This product family support companies from small, single-facility environments to multi-plant, global manufacturers with complex requirements.

b. Explain the various subsystems of ‘ HR Modules of ERP’

The various sub systems under the HR module are:

Ø Personnel Management (HR master data, personnel administration, Information systems, recruitment, travel management, benefit administration, salary administration)

Ø Organizational Management (Organizational structure, Staffing schedules, Job descriptions, Planning scenarios, Personnel cost planning)

Ø Payroll Accounting (Gross / net accounting, History function, Dialog capability, Multi-currency capability, International solutions)

Ø Time Management (Shift planning, Work schedules, Time recording, Absence determination)

Ø Personnel Development (Career and succession planning, profile comparisons, Qualification assessments, Additional training determination, training and event management)

3. What are the limitations of an ERP system. How this can be tackled?

ERP systems serve an important integrating business function – materials management, product planning, sales distribution, financials and other – into a single application. However, ERP systems have three significant limitations. First, managers cannot generate custom reports or queries without help from a programmer. This inhibits managers from obtaining information quickly so that they can act on it for competitive advantage. In addition, this can also create a backlog for the IS department. Second, ERP systems provide current only, such as open orders. Managers often need to look past the current status to find trends and patterns that aid better decision-making. Third the data in ERP application is not integrated with other enterprise or division systems and does not include external intelligence.

One simple and cost effective way to solve these problems is to add data warehouse and business intelligence from end to the ERP system. Just as ERP fine-tunes resource planning and management business, business intelligence fine-tunes ERP. A data warehouse or data mart organizes ERP data so that it is easily accessible for –on-line analysis. Business intelligence systems, improve business competitiveness by providing reporting and analysis tools to the desktop, enabling communication with the entire supply chain via the web and automating and actions.