ERP is an integrated, real-time, cross-functional enterprise application, an enterprise-wide transaction framework that supports all the internal business processes of a company.
It supports all core business processes such as sales order processing, inventory management and control, production and distribution planning, and finance.
ERP is very helpful in the following areas
- Business integration and automated data update
- Linkage between all core business processes and easy flow of integration
- Flexibility in business operations and more agility to the company
- Better analysis and planning capabilities
- Critical decision-making
- Competitive advantage
- Use of latest technologies
Features of ERP
The following diagram illustrates the features of ERP
Scope of ERP
- Finance: Financial accounting, Managerial accounting, treasury management, asset management, budget control, costing, and enterprise control.
- Logistics− Production planning, material management, plant maintenance, project management, events management, etc.
- Human resource− Personnel management, training and development, etc.
- Supply Chain− Inventory control, purchase and order control, supplier scheduling, planning, etc.
- Work flow− Integrate the entire organization with the flexible assignment of tasks and responsibility to locations, position, jobs, etc.
Advantages of ERP
- Reduction of lead time
- Reduction of cycle time
- Better customer satisfaction
- Increased flexibility, quality, and efficiency
- Improved information accuracy and decision making capability
- Onetime shipment
- Improved resource utilization
- Improve supplier performance
- Reduced quality costs
- Quick decision-making
- Forecasting and optimization
- Better transparency
Disadvantage of ERP
- Expense and time in implementation
- Difficulty in integration with other system
- Risk of implementation failure
- Difficulty in implementation change
- Risk in using one vendor