MNO 3701 Production & Operations
Management
Chapter 7
Enterprise Resource Planning
Enterprise resource planning
what is ERP
o an enterprise wide info system that integrates all the info from many functions that
is needed for planning and controlling operations activities. This integration around
a common database allows for transparency
how did ERP develop
o latest development from the original planning and control approach called materials
requirements planning (MRP)
what is MRP
o a dependent demand system which calculates materials requirements and
production plans to satisfy known and forecast sales orders
o it is a master production schedule which summarizes volume and timing of end
products or services
What is MRP II
o Systems that integrate many processes that are related to MRP but which are
located outside the operations function
How is ERP developing
o It is becoming increasingly competent at the integration of internal systems but
there is significant potential for integrations with other organization’s ERPs
o The internet has opened up the possibility of a web-based integration
The concept of enterprise resource and planning
1
, o ERP stands for Enterprise Resource Planning and is the most recent development
that evolved from the original material requirements planning (MRP), which as a
system helped calculate the quantity and types of materials required (or volume
calculations) and the times when they are required (or the timing calculations).
o To ``make sure that the right materials in the right quantities arrive at the right
place at the right time'' requires ``planning and control, not only of materials but
also finance, purchasing, people, equipment and many other activities''. ERP helps
organizations to plan ahead for these types of decisions and to understand the
implications of any changes to the plan. It integrates information from all parts of
the organization
o In ERP systems, the same principle of MRP applies on a much wider scale, because
all the parts of the organisation are integrated on the same databases. As the result,
the consequences of any
o Decisions affecting the planning and control in one part of the organization will be
reflected throughout the rest or other parts of the organization.
o The internet has opened up the possibility of a web-based integration (cross-
organizational)
Information inputs and outputs of MRP
o The inputs to MRP I are the
(a) master production schedule (MPS),which provides information on
demand, has as its inputs customer/client orders, which provide information
on firm orders scheduled and the demand forecast, which provides
information on realistic estimates of the quantity
2
Management
Chapter 7
Enterprise Resource Planning
Enterprise resource planning
what is ERP
o an enterprise wide info system that integrates all the info from many functions that
is needed for planning and controlling operations activities. This integration around
a common database allows for transparency
how did ERP develop
o latest development from the original planning and control approach called materials
requirements planning (MRP)
what is MRP
o a dependent demand system which calculates materials requirements and
production plans to satisfy known and forecast sales orders
o it is a master production schedule which summarizes volume and timing of end
products or services
What is MRP II
o Systems that integrate many processes that are related to MRP but which are
located outside the operations function
How is ERP developing
o It is becoming increasingly competent at the integration of internal systems but
there is significant potential for integrations with other organization’s ERPs
o The internet has opened up the possibility of a web-based integration
The concept of enterprise resource and planning
1
, o ERP stands for Enterprise Resource Planning and is the most recent development
that evolved from the original material requirements planning (MRP), which as a
system helped calculate the quantity and types of materials required (or volume
calculations) and the times when they are required (or the timing calculations).
o To ``make sure that the right materials in the right quantities arrive at the right
place at the right time'' requires ``planning and control, not only of materials but
also finance, purchasing, people, equipment and many other activities''. ERP helps
organizations to plan ahead for these types of decisions and to understand the
implications of any changes to the plan. It integrates information from all parts of
the organization
o In ERP systems, the same principle of MRP applies on a much wider scale, because
all the parts of the organisation are integrated on the same databases. As the result,
the consequences of any
o Decisions affecting the planning and control in one part of the organization will be
reflected throughout the rest or other parts of the organization.
o The internet has opened up the possibility of a web-based integration (cross-
organizational)
Information inputs and outputs of MRP
o The inputs to MRP I are the
(a) master production schedule (MPS),which provides information on
demand, has as its inputs customer/client orders, which provide information
on firm orders scheduled and the demand forecast, which provides
information on realistic estimates of the quantity
2
