Why ERP? Learnings

Why ERP? Notes:

- Billy was working as a manufacturing manager for a local furniture company.
- There is Professor Kellsdorf whom Billy often asks for advice.
- “ERP cannot manage a company”
- The company, McDougle Furniture, is known for its quality and well-designs with awards for innovation and style.
- Company has experienced and highly skilled work force.
- Company was using MRP system to help production and manufacturing seems ok even though they do not have clear forecasting system and clear forecasts.
- There is often tension between manufacturing and sales.
- Billy faces with problems in some deliveries and with raw materials.
- CEO is considering implementing ERP.
- “ERP systems are integrated information systems for the company” says Professor Kellsdorf.
- There is no integration and low communication
- Billy checked the forecasts as Professor Kellsdorf advised.
- Billy thinks that Mr. McDougle believes SAP is a miracle for management of company and integration of accounting of two family companies.
- Professor Kellsdorf tells Billy that people even implemented ERP systems in order to overcome y2k problems, but more logically they implemented ERP for better integration and also integration and communication of multiple plants. Some firms implement ERP for future aims, e-business and other applications.
- The companies using ERP are diverse with various origins and various businesses.
- Billy sees this at the SAP school he started to go.
- At SAP school representative, Amanda, shows SAP R/3.
- SAP stands for systems, applications and products and is the name of a German company.
- SAP is organized around business processes which cut across business functions.
- The idea behind ERP is that if information is common and the processes are integrated, then the organizational integration is possible.
- After implementation, it will probably be necessary to change the way people do things – change their jobs.
- R/3 is like turbo-changed version of MRP with addition of solutions in areas like hiring, training and firing, running a sales campaign, tracking the portfolio of assets and so on.
- The resources managed with ERP are employees, buildings, equipment and so on.
- ERP systems can integrate with softwares as it is done in the switching to Euro was realized.
- There are some best practices coming with SAP.
- Companies usually have customer service problems and SAP also address to them.
- There is a project preparation phase
- Business blue printing is the means by which the parts of the software appropriate to a company are configured.
- Phase three of the ASAP process is realization.
- Phase four is final preparation and phase five is Go Live and support.
- R/3 uses some organization element like client, business areas, sales areas and control areas in order to organize information.
- Financial applications are among the most needed and SAP has modules for it.
- The manufacturing module and example shown makes Billy to think that SAP may change things.
- Three-tier architecture: Presentation (user computers) > Application Servers > Database Servers.
- When Billy is back at plant he still has questions in mind and he wants to discuss them with professor.
- Professor Kellsdorf explains the single database principle which is used in areas like Marketing, Manufacturing, IT, Finance and Accounting meaning that all use the same information.
- There are two important factors called flexibility and centralization both can be high or low.The implementation of ERP is failed like most of the ERP implementation projects.