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Enterprise Resource Planning. Enterprise Resource Planning - a software system that integrates core business areas such as manufacturing, distribution, financials and human resources. Example: A warehouse in Singapore enters a customer order

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enterprise resource planning
Enterprise Resource Planning
  • Enterprise Resource Planning - a software system that integrates core business areas such as manufacturing, distribution, financials and human resources.
  • Example: A warehouse in Singapore enters a customer order
    • data automatically flows to other areas of the company.
    • It would flow to the financial and accounting people in New York
    • Automatically update accounts receivable.
enterprise resource planning2
Enterprise Resource Planning
  • The order would also flow to the manufacturing operations in Europe instructing them to make another component.
  • Inventory levels would automatically be reduced in the warehouse and an order would be placed to replenish inventory.
benefits of erp
Benefits of ERP
  • One common system - less duplication, more efficient
  • Customer focus - better customer service
  • Open communications among business partners
  • Adherence to standard business practices
benefits of erp4
Benefits of ERP
  • Y2K compliant
  • Removes need for in-house development
  • Good reporting capabilities
  • Support for multiple currencies and languages.
disadvantages of erp
Disadvantages of ERP
  • High cost
  • Forced change of processes
  • Very complex software
  • Lack of trained people
  • Not Internet-ready
erp vendors
ERP Vendors
  • SAP - Systems Applications Products in Data Processing

29% market share - Honda, IBM, Bank of Canada, P & G

  • BAAN - Dutch - 5% - Russell Stover Candy, Mercedez Benz, Boeing, Nortel
  • Peoplesoft - California - 6% - NBA, Adidas, Anderson Consulting, Hilton Hotels, NYNEX
erp vendors7
ERP Vendors
  • Oracle - California - 10% - USPS, CBS, Nike, Kodak, Toronto Dominion Bank
  • J.D. Edwards - Colorado - 7% - Harley Davidson, Saab Automobile, BellSouth Cellular Corporation, Holiday Inns, Fox Television Stations
success stories
Success Stories
  • Autodesk (computer aided design software maker)
    • Reduced delivery time from two weeks to less than 24 hours
  • IBM Storage Systems Division
    • Reduced time to re-price – 5 days to 5 minutes
    • Time to ship a replacement part – 22 to 3 days
    • Time to complete a credit check – 20 minutes to 3 seconds
success stories9
Success Stories
  • Fujitsu Microelectronics
    • Reduced the cycle time for filling orders – from 18 days to 1.5 days
    • Time to close financial books – from 8 to 4 days
horror stories
Horror Stories
  • FoxMeyer Drug – software helped drive the company into bankruptcy
  • Dell computer – software will not fit its decentralized management model
  • Applied Materials – overwhelmed by the organizational changes involved
  • Dow Chemicals – spent seven years and 500 million dollars on R/2 – now starting again with R/3
  • Hershey’s – missed timely deliveries
reasons for failure
Reasons for failure
  • Software logic and the company strategy may not match!
  • Examples – p. 125 of Devenport article