"Why ERP" Learnings (Can Kızılay)

The main character is Billy, a manufacturing manager at a furniture production plant in North Carolina. He faced the ERP implementation. Other main characters are Proffesor who provides advice, and Ruth, who owns the local cafe.

This is a book on ERP. These systems are large computer systems that integrate application programs in accounting, sales manufacturing and others. This integration is accomplished with a database shared by all the application programs. ERP systems integrate production, accounting, billing, and other tasks, usually separate, applications together. When a customer service representative takes a sales order it is entered in the common database and in the other applications where it is needed, for example, in the manufacturing backlog, the credit system and the shipping schedule. ERP systems real-time, meaning that the data is avaliable on time. Further, many of these systems are global. Since they can be deployed at aywhere around the world, they can work in different languages and currencies.

ERP has massive management and implementation issues associated with the systems. There are obviously deficiencies involved. Billy learns about ERP systems like SAP R/3 and installing them. Billy’s boss, Mr. McDougle, who owns the company, has an opportunity to expand the business by buying his brother’s furniture manufacturing plant in Ohio. The plant in Ohio is already using SAP R/3 and Mr. McDougle wants to get some efficiency by running the same software at both plants.

Billy goes to an SAP training seminar, he attends the seminar to learn more about the system and to determine whether it is appropriate for his company. He is shown the SAP R/3 software, some of the functionality like reservation or financial terms such as accounts payable terms, how the hardware is configured and a technique to help with the implementation. The program is also adaptable to ongoing changes. He learns that it is a massive process that requires a major business process analysis before the implementation. ERP increases the data integrity a lot but also, it requres a real time data input that my change the business. There are a lot of codes and logic implementations to run the ERP. A knowledge of programming is not sufficient also, management knowledge related to the company is key issues for success of an ERP system.

There is also a system called ASAP namely the Accelerated SAP which is a version that is start up customizable version of SAP and more implementable for smaller companies.

ERP reduces double effort, conflicting datas related to same subject, datas are real time accessible, data loss is minimized.

Billy has to imlement SAP installation in use at the Ohio plant. He travels to Ohio and learns about how that plant works and compares it. What is obvious is that SAP is crucial for Ohio plant since they have massive production with little variability. (less customized products) The vendors use the same system which increases integrity from vendors through customers. But this is not the case in North Carolina they have really have less production capability when compared. And, they customized products which an ERP system can not handle it easily. So, the ERP system in Ohio is not directly implementable to the North Carolina Plant. At least this issue needs detailed business process analysing with the help of consultants. Only a computer guy is not sufficient. So, he ends up with all kinds of questions about transferring the software from the Ohio plant to the North Carolina plant. In the end, Billy presents his boss with his recommendations that only the accounting module is implementable at least firstly and develops some guidelines. But the boss did not listen to him and the implementation turns to be a real failure. Such as they have lost the orders, they had to increase inventory, the efficiency drop.