ERP (Enterprise Resource
Planning)
Manage processes with ‘ERP software’
Business processes =
- Different activities
- To make product / to provide service
- With added value for the customer
In all of these organizations we use business processes to organize and
streamline activities. Obviously we need to take the necessary decisions. And
apart from this you need to communicate with customers and suppliers, and even
more intensely within the company internally. Now, all of these activities,
decisions and communications only make sense when they add value.
Vb. Frietcultuur
=>
process flow including in -& outgoing materials
3 sub-processes:
- Physical
- Document flow
- Financial flow
The combination of these three make up the complete process. We do use this
representation in three parts to make a correct analysis or verify an existing
analysis on completeness. A solid analysis is the best guarantee for accurate and
valid proposals of process improvements or innovations.
Vb. Frietcultuur
,Optimization: Value Stream Mapping
- You need to make your production as fast as possible
- This can be done by combining or adapting things
ERP started as a calculation technique used in production. It is what we call MRP.
Slowly and with many intermediate steps, ERP evolved to supporting software for
any well managed company.
In 1960 (for manufacturing):
In the 1960s MRP only existed in companies that produce goods.
- MRP technology (manufacturing resource pl)
- Thinking in advance about how you are going to organize something
- Vb. Frietcultuur – How many potatoes needed for 1 packet of fries?
Later:
- MRP I (= Material requirement planning)
- Production: inventory, purchase and production planning
- Thinking about how long you can keep something for
, - MRP II (= Manufacturing resource planning)
- Finance and labor: cost price, financial integration, hours
- Provide up to date information to finance
- Forecasting = in advance thinking about your organization
- Create purchase orders + production orders
- How much do I have to sell to break even?
Finally: ERP
- ERP (= Enterprise Resources Planning)
- Expansion of MRP to all internal sources of the main process
- Also calculate needed people
- Also calculate needed budgets
On the one hand it is a step in the evolution of a comprehensive software
package that regulates all business activities and processes. And on the other
hand it is the generic term used for … exactly the same package.
It is no coincidence that ERP appears in a course on business processes. It is ERP
which enables the business world to create and maintain a precise interaction
between different departments and processes. And at the same time it allows
each of those linked processes to run well.
- Manage processes in optimal way
- Financial integration in accounting
Real time!
- Step outside the company
Customer relationship: send electronically
Supplier relationship
- Reduce manual work: scan documents
Before ERP existed the process ran on paper and was executed manually by
planners. Now it is executed completely electronically.
Understand your process!
- You need to know your organization before you can implement ERP
, - If you tell the system mistakes about your company then ERP will make
mistakes
- Get your ducks in a row!
Example: Bicycle shop in New York
Department structure:
1. Sales & Distribution = sales department
Front office process (= direct contact with customer)
2. Materials management = purchase department
3. Production planning = production department
Back office process
1) Sales department: SHOP
STEP 1: Sales person talks to customer: “What do you want?” (= pre-sales)
- Black touring bicycle
- Black helmet
- Knee pads
- Water bottle
- Cargo bike
- …
Section phase: You can step out of the store without buying something
and go to another if you like. There is nu harm done or any contract
made.
STEP 2: Parties agree: make sales order
- I order a cargo bike with flexible roof in red + helmets
Transaction process: You made the contract, so you are stuck. “You are
married to each other.”
STEP 3: Check if the bike is available in the stock = check availability
2 options:
- Available in WHS (=warehouse)
- Not available in WHS – See later
STEP 4: Pick & pack
- The cargo bike is being shipped to Belgium
STEP 5: Post goods issue (they buyer is now the owner, not the company
anymore)
Planning)
Manage processes with ‘ERP software’
Business processes =
- Different activities
- To make product / to provide service
- With added value for the customer
In all of these organizations we use business processes to organize and
streamline activities. Obviously we need to take the necessary decisions. And
apart from this you need to communicate with customers and suppliers, and even
more intensely within the company internally. Now, all of these activities,
decisions and communications only make sense when they add value.
Vb. Frietcultuur
=>
process flow including in -& outgoing materials
3 sub-processes:
- Physical
- Document flow
- Financial flow
The combination of these three make up the complete process. We do use this
representation in three parts to make a correct analysis or verify an existing
analysis on completeness. A solid analysis is the best guarantee for accurate and
valid proposals of process improvements or innovations.
Vb. Frietcultuur
,Optimization: Value Stream Mapping
- You need to make your production as fast as possible
- This can be done by combining or adapting things
ERP started as a calculation technique used in production. It is what we call MRP.
Slowly and with many intermediate steps, ERP evolved to supporting software for
any well managed company.
In 1960 (for manufacturing):
In the 1960s MRP only existed in companies that produce goods.
- MRP technology (manufacturing resource pl)
- Thinking in advance about how you are going to organize something
- Vb. Frietcultuur – How many potatoes needed for 1 packet of fries?
Later:
- MRP I (= Material requirement planning)
- Production: inventory, purchase and production planning
- Thinking about how long you can keep something for
, - MRP II (= Manufacturing resource planning)
- Finance and labor: cost price, financial integration, hours
- Provide up to date information to finance
- Forecasting = in advance thinking about your organization
- Create purchase orders + production orders
- How much do I have to sell to break even?
Finally: ERP
- ERP (= Enterprise Resources Planning)
- Expansion of MRP to all internal sources of the main process
- Also calculate needed people
- Also calculate needed budgets
On the one hand it is a step in the evolution of a comprehensive software
package that regulates all business activities and processes. And on the other
hand it is the generic term used for … exactly the same package.
It is no coincidence that ERP appears in a course on business processes. It is ERP
which enables the business world to create and maintain a precise interaction
between different departments and processes. And at the same time it allows
each of those linked processes to run well.
- Manage processes in optimal way
- Financial integration in accounting
Real time!
- Step outside the company
Customer relationship: send electronically
Supplier relationship
- Reduce manual work: scan documents
Before ERP existed the process ran on paper and was executed manually by
planners. Now it is executed completely electronically.
Understand your process!
- You need to know your organization before you can implement ERP
, - If you tell the system mistakes about your company then ERP will make
mistakes
- Get your ducks in a row!
Example: Bicycle shop in New York
Department structure:
1. Sales & Distribution = sales department
Front office process (= direct contact with customer)
2. Materials management = purchase department
3. Production planning = production department
Back office process
1) Sales department: SHOP
STEP 1: Sales person talks to customer: “What do you want?” (= pre-sales)
- Black touring bicycle
- Black helmet
- Knee pads
- Water bottle
- Cargo bike
- …
Section phase: You can step out of the store without buying something
and go to another if you like. There is nu harm done or any contract
made.
STEP 2: Parties agree: make sales order
- I order a cargo bike with flexible roof in red + helmets
Transaction process: You made the contract, so you are stuck. “You are
married to each other.”
STEP 3: Check if the bike is available in the stock = check availability
2 options:
- Available in WHS (=warehouse)
- Not available in WHS – See later
STEP 4: Pick & pack
- The cargo bike is being shipped to Belgium
STEP 5: Post goods issue (they buyer is now the owner, not the company
anymore)
