When we first talk about inventory management in the prelude, we mention about EDI, ECR and VMI. But we seem to forget one of the most quoted and most freuqently used by companies, that is, ERP system.
Enterprise Resource Planning or ERP means integrating data and running the enterprise's different departments' applications under one system. When a company decides to have their separate departments do this, they are actually eliminating the old applications and placing a new one that will run not just one department but all that's included in the ERP system.
ERP is all exclusive and it covers the whole enterprise. All the departments can be a part of the whole ERP system if the company chooses to. ERP can include the manufacturing, warehousing, logistics, information technology, accounting, human resources, marketing and strategic management. However, the company can choose to include only some of its functions in its ERP too.
Implementing ERP can be quite complicated and it can also be expensive, but it has its advantages. For one thing, it could spell a standardized data among the different departments. They would have easier communication of data so the operations of each department is made easier and made more effective. For instance, if manufacturing and warehousing are in an ERP system then manufacturing can warn warehousing when they will need more space for the seasonal increase in production. Orders can also be taken care of much easily from order acceptance to delivery this way.
When implemented correctly, the company will benefit from the smoother operations in the company. Communication is the key and ERP provides precisely this. They will also be able to operate cost effectively. In effect, the whole enterprise will be more efficient and they will be more productive because the ERP system.
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6 comments:
In china, several years ago only big company could afford to use ERP system. As ERP concept is getting hotter and hotter, now more and more small-medium size enterprises also start to purchase ERP systems too. I can say that Chinese companies are getting crazy about ERP.
At the same time, a lot of high-tech companies grow up by designing ERP systems for those small-medium size enterprises. Such as King-dee and Ufida etc and they share market profit with those international ERP companies such as SAP in the Chinese market.
With ERP, all what we leant are already programmed into the system, so what we need to do is to know how to use it. There is no complicated calculation or analysis, which gives a lot of people headache in the class. When you use it, you will feel much comfortable and so thankful to it.
I agree that most of the analysis techniques we learn in class will already be implemented in ERP systems that we will be much more comfortable with and will be easier used. I think its important that we know how the methods work from the ground up and why they come to the results that they do. For example, with EOQ, it balances holding costs and ordering costs equally to achieve an optimal cost. This is important to know, don't you think?
-Mark Brislin
It seems like the ERP "market" is dominated by several key players controlling a lion's share of the market (i.e. SAP).
Does anyone think that any new companies will emerge in this industry?
-Andrew Freeman
Like what i have mentioned, in china we have local developers such as King-dee and Ufida etc , which can compete with SAP in the Chinese local market. Even outperforms in the Chinese market. Maybe Chinese developers better tail to Chinese small-medium sized companies' tastes. On the other hand, SAP's international strategy may not work so well in some countries' local markets.
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