ERP Introduction PDF

ENTERPRISE RESOURCE PLANNING (INTRODUCTION) #2 CONTENT Ø What is ERP? Ø ERP components Ø Advantages of ERP systems Ø History of ERP systems Ø Basic features of ERP systems  What is ERP? ØERP -Enterprise Resource Planning systems are computer application...

ENTERPRISE RESOURCE PLANNING (INTRODUCTION) #2 CONTENT Ø What is ERP? Ø ERP components Ø Advantages of ERP systems Ø History of ERP systems Ø Basic features of ERP systems  What is ERP? ØERP -Enterprise Resource Planning systems are computer application packages that meet the information needs of the business in many ways. ØIt is information systems that enable business activities to come together simultaneously by using advanced information technologies. ØERP can be defined as commercial software that covers all business units of all sectors and ensures the harmonization of the ongoing information flow in companies  What is ERP? ERP covers all business processes of institutions from procurement to sales; They are software packages with modular structure that enable them to manage with an integrated information management system. Why ERP? Companies with ERP systems will have the following capabilities. Ø Monitoring al kinds of materials and information flow in the overall enterprise Ø Perform effective time management in the operations Ø Follow technological developments and innovations Ø Produce solutions to the problems that occurs in supply chain. Ø Gain competitive advantage Ø Identify labor and material need in place on time Ø Create efficient and effective quality production environments and monitoring the performance ERP works with data ERP components- Basic set ERP components- Additional components  Finance management It provides the execution of the financial transactions of the enterprises in line with the tax and related regulations, in the IT environment. Tracking receivables, making payments, following customer payments, preparing accounting documents (receipts etc.), bank transactions, cash transactions, preparing general ledger and other documents, determining cost centers and distributing costs, Taxation, VAT transactions Many financial transactions such as tracking product costs, performing profitability analysis, monitoring financing rations and balance sheet movements can be managed within this scope. In addition, processes such as balance sheets, income statements, e-invoices and e-books that are required to be submitted to the government are prepared automatically. Supply chain and supplier management Supply Chain and Logistics Applications are also among the most important components of enterprise resource planning systems. Supply Chain and Logistics processes are basically the management of purchasing and sales processes. Supply chain is a process that ends with financial and accounting processes that start with proposals and contracts. Enterprises do their purchases and sales of products and raw materials according to the workflows given in this way. ERP processes naturally support these flows. It is operated in an integrated structure with work flow processes and related information flows.  Supply chain and supplier management With supply chain management; By supplying the materials and parts (whether it is a by-product or parts to be reproduced) that are needed by the production, suppliers (manufacturers, wholesalers, dealers, etc.) are ensured to be monitored and kept under control till to the customers who will purchase the product. Supply chain within ERP business processes includes purchasing and material supply, production, inventory management, sales forecasting, production, distribution and after-sales customer service. According to the due dates determined by the ERP system, it provides a mechanism for the customer to deliver the right product at the right time, in the right place, at the right price, at the lowest possible cost. Supply chain and supplier management- Components  Supply chain and supplier management- Invocing- A screen shot from ERP System There is a large amount of data and information movement behind every process managed within the enterprise. Invoice transactions are one of the basic operations of Supply Chain and Logistics Management.  Supply chain and supplier management- Waybill- A screen shot from ERP System One of the important subcomponents of ERP system is the waybill system. Waybill is a system that supports traceability processes in the implementation of the material and logistics system. It is used in directing processes such as sales, purchasing, shipment, transfer of goods and products between warehouses.  Supply chain and supplier management- Procurement - A screen shot from ERP System One of the operations where ERP systems are used most intensively is purchasing. All purchases can be managed through the system, and it is possible to execute the transactions in the most accurate and shortest way by showing the information in the system to those who carry out the purchasing task automatically from the screens.  Supply chain and supplier management- Sales management- A screen shot from ERP System ERP systems also manage the production based sales systems. The sale starts with the offer process, and covers all of the operations ranging from detailed order processes, offer tracking, closing the offer and the order processes to shipment and invoicing.  Human resource management (HRM) Another important component of ERP systems is the management of Human resources. Human resources are based on two basic elements. These; The “payroll system” and the second are the “human resources” systems in which processes such as social rights, administrative affairs, performance, education, and career maps that will affect wages are followed.  Material requirements planning (MRP) MRP is a system that determines the types, quantities and delivery times of the required parts by determining the dates and quantities of the final assemblies and main assemblies to be produced in a business, and by scheduling backwards from the due dates.  MRP parameters ERP software offers environments where businesses can plan their material needs. They can define the parameters that are appropriate for their situation to the system and enable the system to act accordingly.  Bill of Material By introducing the basic components of each piece required (within the scope of Material Requirements Planning) to the system, minimum requirements of all units can be determined. Production work orders ERP studies provide opportunities for a better management of production and capacity. When businesses enter their production plans into the system, it is possible to reach production work orders and purchase orders with a single click by automatically making Capacity Planning, Material Requirements Planning over the system. Production work orders The relevant work order can be tracked on the system. For example, 7 orders were entered on this screen. The amount produced seems to be 5 pieces. The system closes the automatic work order when production entry is made to 2 more related work orders. Customer relations management (CRM) It aims to manage the coordination of the relations and related services at the highest level in order to ensure the satisfaction of the customers who purchase, use or be affected by the produced products and services, to understand their expectations, to meet their needs, especially to ensure the sustainable use of the products and services. ERP systems offer a mechanism that will enable the customer-oriented structuring of business processes and technological possibilities for this purpose with CRM modules. CRM also supports companies in determining their customer relations strategies, getting to know customers closely, what their focus should be in relations, monitoring the performance by making measurements in this context. Customer relations management (CRM) Collecting customers' requests, managing their orders, monitoring customer satisfaction, previous works of each customer, customer evaluation activities, etc. It is possible to carry out such studies on CRM software. Advanced ERP systems The size and operational activities of the enterprises lead to a variety of information systems to be used. Some businesses are content with only 3-4 components, while others need more comprehensive systems as they have to run more complex operations. From this point of view, ERP systems can serve their customers in different layers in terms of their; Ø Scalability Ø Functional and operational capabilities Ø Support and service offered Basic features of ERP systems-1 This technology makes it possible to gather all basic operations of the business under the ERP system infrastructure, regardless of the size of any business, whether it is private, public, service or producing goods. In general, it is possible to summarize the main objectives of an ERP systems as follows. Ø Effective use of business resources Ø Increasing efficiency and performance Ø Reducing costs, ensuring traceability Ø Guaranteeing sustainability Ø Supporting the definition of competition strategy, Ø Collecting, analyzing, reporting and making use of the data that will enable quick decisions. Basic features of ERP systems-2 The main features of ERP systems can be listed as follows. Ø Integration Ø Functionality Ø Flexibility Ø Modularity Ø Multiple Business Opportunities Ø Quick Access to Information Ø Reconstruction Ø Universality Basic features of ERP systems-3 Integration: ERP systems; it crosses the boundaries of traditional, hierarchical and function-based structures. Purchasing, production planning, sales, warehouse management, financial accounting and human resources functions all unite in a workflow of departmental and inter-functional business processes. Basic features of ERP systems-4 Functionality: ERP systems have understandable functionality for all standard business needs in businesses. With the addition of industry-specific business processes, ERP systems can meet the specific needs of many industries. ERP systems are implemented as a combination of standard business functionality and typical business processes specific to the industry. Basic features of ERP systems-5 Flexibility: ERP provides a flexible organizational structure. Companies can implement the required modules from a wide range of functions and alternative business processes. The flexibility of ERP systems allows companies to turn the change in their favor. Basic features of ERP systems-6 Modularity: ERP systems have a modular structure. The modules are capable of being used alone. Companies can expand the system to meet their needs. The modularity of ERP systems allows firms to choose between progressive application or “big bang” which is the application of the whole system at the same time. Basic features of ERP systems-7 Multiple Business Opportunities: ERP systems and companies can combine business processes in factories and branches in different regions. For example, companies install their ERP systems at the headquarters, factories or branches and perform their transactions independently of the others. When a business message is sent between these remote systems, ERP systems provide a smooth communication. Basic features of ERP systems-8 Quick Access to Information: Process oriented processes increase efficiency. Because ERP connects interrelated processes, each employee can quickly access the necessary information. The information is current and consistent. Employees can get the right information on time. Basic features of ERP systems-9 Team Orientation: ERP systems provide integrated workflow management. It provides initiative and motivation by replacing team orientation, opinion and opinion on the basis of department, opinion and global approach on the basis of organization. ERP helps employees work in a team. Basic features of ERP systems-10 Restructuring: With its integrated processes to meet business needs, ERP has the potential to restructure traditional structure and organization methods. In this regard, ERP packages have modules related to project management and have the ability to guide the project on what to do with processes, organizations and functions during software deployment. Some of the new generation software goes one step further and has the infrastructure to transition to process management, and the overall project is aimed at this transition. Basic features of ERP systems-11 Universality: ERP packages have universality and it is easier to provide expert and support in this field. ERP companies have a mission to include universal changes and technological changes in their requirements in ERP software. ERP system helps businesses to transform all business processes into automation as a whole, instead of just some functional units. A seamless integration for all activities from workshop activities to performance monitoring of managers has been achieved thanks to ERP applications that make various computer hardware and software platforms compatible with each other. General advantages of ERP software systems There are many advantages to using ready and commercially available ERP systems. Some of these are listed below. Ø It provides significant savings in commissioning the system. Ø Since there are systems that have been used many times before, there are systems free from errors. Ø Ready-made solutions can be used for the problems to be encountered in a shorter time. Ø Ready-made systems offer ease of use. It offers effective solutions with trainings and consultancy services. Ø It provides integration of all processes within the enterprise. Ø It makes it possible to share all the information produced within the enterprise. Ø It offers solutions to enable customer and supplier relations. Ø It ensures keeping up with the developments (technological and legal) in a short time. Ø... General advantages of ERP software systems Ø Access to information becomes easier Ø Forecasting ability increases with the use of statistical methods. Ø It is ensured that the operations are managed according to the targets. Ø It is easier to identify powers and responsibilities. Ø Business activities become more disciplined and more organized. Ø Reduces dependency on employees and suppliers. Ø Satisfaction increases in customer service. Ø Chaos (turmoil) decreases between jobs and employees Ø Organization between time, people, money, business, customer and supplier becomes easier. Ø Competitive infrastructure is created. Ø The corporate memory covers very long years. Ø …. Ø …. Advantages of ERP systems- Finance Ø Costs are reduced, cash management are made easy. Ø Turnover / Profit ratio improvement is sustained. Ø It simplifies the tracking of operational costs. Ø It ensures the follow-up of the legal regulations. Ø It monitors the follow up of cash flow. Ø It provides acceleration of relations with banks. Ø It facilitates the follow-up of the compatibility of budget works with corporate goals.... Advantages of ERP systems- Supplier systems Ø It increases customer satisfaction. Ø Potential customers are given confidence. Ø Order management becomes easier and makes purchasing expenses checked. Ø It provides import transactions and tracking of costs. Ø It makes it possible to monitor supplier performance. Ø It provides the opportunity of product quality control. Ø Purchasing costs are reduced by analyzing input costs. Ø... Advantages of ERP systems- Logistics and warehousing Ø The data collection system becomes easier and reliable data increases. Ø It provides a decrease in stock level and increases productivity. Ø It enables tracking of stock turnover rates. Ø It makes it easy to follow up the shipment of goods, products between customers, branches, warehouses. Ø Enables the life and traceability of products Ø.... Advantages of ERP systems- Production Ø The structure of traceability of the products produced is established Ø Production capacities are taken under control Ø Production costs are taken under control Ø Production quality standards compliance can be monitored Ø Productivity is increased by integrating with production machines Ø... Advantages of ERP systems- Quality Ø Good Quality of raw material is assured Ø Compliance of the produced goods with quality standards is checked Ø Discard rates are continuously improved, waste and errors are reduced Ø Regular and continuous auto control develops Ø Corrective and preventive actions are monitored Ø Compliance of institutions and works with internal and external quality standards is ensured. Ø Quality differences are monitored according to the competitors of the produced products Ø More regular records are started to be kept Ø Allows applications to be easily documented Ø... Advantages of ERP systems- Human resource management Ø The motivation of the staff is traced. Ø Uncertainties disappear in internal relations. Ø It provides the opportunity to follow the inputs and outputs of all processes. Ø Institutional efficiency is increased by providing trainings to in-house, suppliers and dealers. Ø Employee personal rights and payroll affairs are followed. Ø The career path of the employees is provided. Ø With the performance appraisal, the infrastructure of being more fair and motivating its employees is provided. Ø The contribution of the staff to the system is increased. Ø Self-awareness of all employees is raised. Ø It accustoms all employees and managers to be Systematic. Ø... Impact of ERP systems on company performance Ø Making the right decisions becomes easier. Ø Everyone starts talking with numbers. Ø Build trust among employees, customers, dealers and suppliers. Ø It allows the follow-up of the differences between the company's developments and competitors. Ø It is understood that it is necessary to constantly review the current situation. Ø The firm image is developed / strengthened, reputation and reference are gained. Ø Retrospective information is also provided by providing records and traceability. Ø Management is achieved with the targets. Ø Business repetitions are reduced.... Issues and success criteria setting up an ERP system Ø Improving the Awareness Ø Obtaining Top Management Support Ø Process analysis Ø Creating the project manager and project team Ø Completion of the internal organization Ø In-house reconciliation Ø Realization of project planning Ø Choosing the right ERP Ø Selecting a Successful Salesperson and Adaptive Firm Ø Implementation of the test process before purchasing Ø Realization of end user trainings  Issues and success criteria setting up an ERP system For a successful ERP system in a business, it is necessary to pay attention to the following issues. Ø Convincing the key personnel within the organization about the ERP system and its necessity Ø To ensure that all users are trained to use the new system Ø Assessing and ensuring the suitability of the Enterprise's Information Technology Infrastructure Ø Keeping senior management support alive and monitoring the work until the end of the installation process Ø To ensure that everyone involved takes part in the installation work Ø To establish a Project Team responsible for the participation of both the customer and the software developer company and to request that the Ø Project management be carried out without interruption Ø Redesigning all business processes within the boundaries of ERP software and related legislation and making arrangements at points that need improvement especially in this way Ø Ensuring the system to sit with pilot applications Ø To increase system modeling speed and efficiency with consultancy services Ø Conducting mutual communication smoothly History of ERP systems-1  History of ERP systems-2 With the spread of computers in businesses in the 1960s, the first MRP (Material Requirements Planning) software began to be used. This system was quite simple at first and only covered product trees and stocks. In the 1980s, the MRP system started to cover all production-related activities (purchasing, production planning, quality control, accounting, inventory management...) of production companies. As this system progressed, it became known as MRP II (Manufacturing Resources Planning).  History of ERP systems-3 When we came to the 1990s, these systems started to cover not only the manufacturing sector but also the sectors serving. In line with the increase in the sectors covered by the management system, the operating units also increased (service, maintenance, human resources...). These large-scale and more comprehensive systems were called ERPs. In the early 2000s, more comprehensive concepts were added to existing ERP systems to meet the needs of businesses and customers. These concepts are; Ø CRM (Customer Relationship Management) Ø SCM (Supply Chain Management) Ø BI (Business Intelligence)  Content of the course Within the scope of this course, all components of the KKP system will be explained with examples and case studies. Information on the following topics will be provided in the coming weeks. Ø Inventory Management Ø Sales Management Ø Purchasing and Supply Management Ø Production management Ø Quality management Ø Financial Affairs Management Ø Human Resources Management Ø Business Intelligence and Reporting Systems Ø ERP selection and ERP Project Management QUESTIONS?