Enterprice Resource Planing

Enterprise Resource Planning Introduction
Enterprise Resource Planning has become a powerful tool in the hands of management for effective use of resources and to improve efficiency of an enterprise. During 1970s Material Requirement Planning (MRP) was a fundamental concept of production management in manufacturing industries. In today’s rapidly changing business environment every organization has to face new market, new standard for quality assurance, new competition, increasing customer expectations. As a result the business enterprises are in a constant need of reviewing and re-engineering their processes in order to survive and grow under competitive environment. With the advent of innovations in information technology, a concept of integrated approach embracing all functional areas have been evolved. This has led to development of ERP packages which were originally targeted at manufacturing industries and consisted mainly of functions like Sales Management, Production Management, Accounting and Financial Affairs. In the recent years this has been extended to all industries covering whole management functions like: • Manufacturing • Material Management • Quality Management • Sales and Distribution • Logistic Management • Maintenance Management • Human Resources • Finance • Strategic and Operational Planning etc. ERP Overview Information in large organizations is often spread across numerous homegrown computer systems, housed in different functions or organizational units. While each of these “information islands” can ably support a specific business activity, enterprise-wide performance is hampered by the lack of integrated information. Further, the maintenance of these systems can result in substantial costs. For example, many of the older programs cannot properly handle dates beyond the year 2000, and they must be fixed at

a steep cost or replaced. While the Y2K bug has been fixed over time (at an estimated cost of $600 billion worldwide), the lack of...