ERP Modules PDF: Enterprise Resource Planning (ERP) Introduction

1 BELGIUM CAMPUS © BELGIUM CAMPUS 2025 The manufacturing planning challenge A business needs to decide: how many products to make Do you think an ERP system when to make these products can do...

1 BELGIUM CAMPUS © BELGIUM CAMPUS 2025 The manufacturing planning challenge A business needs to decide: how many products to make Do you think an ERP system when to make these products can do all this? what materials are needed which suppliers to use (bear in mind multiple suppliers will be used and they may all have different lead times) all based on customer demand and current inventory levels Yes it can. while spending minimum cash © BELGIUM CAMPUS 2025  CORE SUPPORT MANAGE Processes that directly affect These do not directly link to These plan, monitor, and the customer and profit e.g. profit or the customer but control all other processes marketing and sales. are necessary for the e.g. controlling processes to business e.g. HR and admin increase profits by 5%. Business processes A business process is a series of related tasks that accomplish some goal. For example, hiring a new employee is a business process. There are 3 types of processes: © BELGIUM CAMPUS 2025  Marketing Salaries Coca-Cola is known for clever advertisements. They have thousands of employees. Purchasing Inventory They need to buy ingredients, They need to keep track of what stationery, uniforms, etc. they have and what they need. Manufacturing Engineering They need to actually make the They have a lot of machinery that drink on a huge scale. needs maintenance. How many processes can you identify in these Suppliers functions? How can they possibly keep track of it They have many suppliers they need all? What about a company like Apple or Nike? to maintain relationships with. © BELGIUM CAMPUS 2025 Functional Areas The concept of a department has changed over time and is now mostly dependent on the company. In Mallach, page 187, you’ll see how these various functions are grouped. When we group related processes together, this is a functional area. These differ depending on the industry. Compare the functional areas of a bank with BC. © BELGIUM CAMPUS 2025 The functional areas of a business How could you group all the different functions that occur within a business? Sales Accounting Marketing HR Management Distribution Service & Maintenance Manufacturing Planning © BELGIUM CAMPUS 2025 ERP Modules In ERP systems, these functional areas translate to modules. An ERP module performs all the functions required within that specific functional area. What are the benefits of using a modular approach? An ERP system can be extremely expensive. A business can only buy the modules they need. As the business grows or their needs change, they can simply purchase additional modules that easily fit into their current system. Third-party developers are also able to develop compatible software that can integrate with an existing ERP system. We will now look at a few popular modules. ERP Modules There are many modules available, and we will be looking at the following 6 modules: FINANCE MANUFACTURING HUMAN RESOURCES WAREHOUSE MANAGEMENT SUPPLY CHAIN MANAGEMENT CUSTOMER RELATIONSHIP MANAGEMENT  ERP Modules Cash is the lifeblood of a business. Being able to pay your suppliers and employees is critical. What kind of functionality would you like from a financial system if you were the CEO of a business? © BELGIUM CAMPUS 2025  ERP FINANCES Modules Probably the most important module since it gives the business an idea of its financial position. It includes important financial features such as the general ledger and accounts payable/receivable. It can automate billing and The Finance Module vendor payments as well. Through reporting, this module also allows the organisation to get an immediate view of their financial situation. It also facilitates financial analysis and planning. © BELGIUM CAMPUS 2025  ERP Modules Some businesses only source items from suppliers and resell. Other businesses provide services. If your business was a manufacturing business, what would you like a manufacturing module to do for you? © BELGIUM CAMPUS 2025  ERP MANUFACTURING Modules One of the first modules, it can check if your forecasted output will be met, it can calculate the average production time for an item, it can provide reporting on a status such as “in-progress” or “completed”, and can then link to inventory to keep it updated. The Manufacturing Module A significant advantage of this module is called Material Requirements Planning. This calculates the materials required to manufacture a product. It can check what is needed, whether there is stock, and can then either schedule manufacturing to be done or materials to be purchased. © BELGIUM CAMPUS 2025  ERP Modules What are human resources? What are the functions of the HR department at a company? © BELGIUM CAMPUS 2025  ERP HUMAN RESOURCES Modules This module (also known as Human Capital) manages all aspects surrounding employees. It keeps their information and documents such as performance reviews, attendance, warnings, job descriptions, and hours worked. The Human Resources Module © BELGIUM CAMPUS 2025  ERP WAREHOUSE MANAGEMENT Modules Consider companies such as Amazon or Takealot. They have large warehouses storing thousands of items and products. This module covers all components from The Warehouse Management checking which shipments arrived to locating, Module packing, and shipping an order. It can also guide employees on the most efficient route to take while picking up all items for an order as well as determining the ideal type of order picking. © BELGIUM CAMPUS 2025  ERP Modules Imagine the size of the Takealot warehouse or the Amazon warehouse. Do you think it’s better to collect all items from a certain department for various orders, or to collect all items for one order? What are the different ways of order picking? © BELGIUM CAMPUS 2025 ERP Modules The customer is always right. What do you think about this statement? © BELGIUM CAMPUS 2025  ERP CUSTOMER RELATIONSHIP MANAGEMENT(CRM) Modules Sales and marketing, commissions, service, customer contact and call centre support, linking to data warehouse and various self-service interfaces for customers, suppliers, and employees. The Customer Relationship This module contains customer information such as all Management Module communication, their purchase history, quotes, and can even suggest which customers to target for certain promotions. While most ERP systems provide their own CRM module, the most popular CRM software worldwide is Salesforce and it is often integrated with an existing ERP system. Study the 2 types of CRM on BC Connect. © BELGIUM CAMPUS 2025 ERP Modules What goes into making a BMW? Where do the various parts come from? What are the different types of materials needed? How many suppliers are there? © BELGIUM CAMPUS 2025  ERP SUPPLY CHAIN MANAGEMENT(SCM) The supply chain is a network of all parts needed to Modules get a product into the hands of the customer. This module can include other modules as well since it can track each step of the entire process from supplier to manufacturer to distributor to retailer/customer. It can The Supply Chain therefore also link to inventory, orders, procurement, or warehouse modules. Management Module Some manufacturers prefer using a standalone SCM that integrates with an existing ERP system since it can often provide much greater functionality. The SCM is often the most important module so we will explore it in greater detail. © BELGIUM CAMPUS 2025 Let’s say you bought a sweater. Where did the sweater start and how did it end up in your closet? © BELGIUM CAMPUS 2025  Raw materials Refinery Supplier A Supply Chain Manufacturer Retailer Distributor Consumer © BELGIUM CAMPUS 2025 Supply Chain Management A supply chain is a network of interconnected businesses involved in the ultimate provision of product and service packages required by end customers. Supply Chain Management (SCM) is the management of this network. © BELGIUM CAMPUS 2025  Supply Chains Choose one of the following products and do research on the supply chain involved in its manufacture: ROLLS ROYCE NIKE AIR NESPRESS0 COFFEE ROLEX WATCHES © BELGIUM CAMPUS 2025 Supply Chain Management (SCM) Supply chains have existed for thousands of years. In ancient Egypt you could buy bread. Where did the ingredients for that bread come from? How were the other ingredients transported? If you consider the immense complexity of life in 2025, a supply chain can become incredibly convoluted. An ERP system or a SCM package can greatly simplify and enhance this process. As we saw earlier, a SCM system can be a module included in the ERP package. It can also be a standalone package for companies who don’t really require additional functionality. Oracle, SAP, and Microsoft all offer SCM packages either as part of an ERP solution or as a standalone package. © BELGIUM CAMPUS 2025  Supply Chain Management (SCM) A supply chain is modelled after the business needs. There are several supply chain models depending on what a business needs and what a business is. Continuous flow model Agile model Fast chain Flexible model This model is for This model focuses This is ideal for business This model suits those more traditional on flexibility and that make products that sectors where seasonal companies that being able to adapt have a short life cycle. demand varies. It can manufacture the to unpredictable Think of anything that handle incredibly high same product over demand. follows a trend/fashion. demand but is also and over again. suitable for periods of low demand. © BELGIUM CAMPUS 2025 How did Covid affect supply chains? How is the Ukraine war affecting supply chains?  Key supply chain Customer Relationship Management processes Customer Service Management Demand Management Supply chain management is more complex than it seems. Douglas Lambert, director of the Global Supply Order Fulfilment Chain Forum, states 8 processes that need to be followed to effectively manage a supply chain. These Manufacturing Flow Management processes involve the customer, the supplier, the products, and the manufacturer. Supplier Relationship Management Product Development & Commercialisation Returns Management © BELGIUM CAMPUS 2025  The Supply Chain “Marketing is too important to be left to the marketing department.” -David Packard, former CEO and co-founder, Hewlett-Packard Company. Who is responsible for customer needs and profit? © BELGIUM CAMPUS 2025  Key supply chain Customer Relationship Management processes: Activity Customer Service Management Demand Management On BC Connect under 02. ERP Modules you will find a section explaining each of the processes shown on the Order Fulfilment right. Select any 2 of these processes and provide an example of how DIKW and the IS interact with it. Manufacturing Flow Management Post your answers under the SCM Exercise section on BC Connect. Supplier Relationship Management Product Development & Commercialisation Returns Management © BELGIUM CAMPUS 2025  SCM OBJECTIVES Optimize the flow of goods and services Reduce costs Enhance customer satisfaction Increase responsiveness Improve collaboration What would the metrics be to determine whether these objectives are met? © BELGIUM CAMPUS 2024  32 A bad system will beat a good person every time. What do you think of this statement? Provide an example of where this is evident. © BELGIUM CAMPUS 2025 © BELGIUM CAMPUS 2024 WASTE: TRANSPORTATION Transportation waste arises from unnecessary movement of materials, people, or equipment, adding no value to the product. This excessive movement can be costly due to extra time, space, and machinery required, potentially leading to damage to materials. Examples include excessive handling, inefficient routing, or unnecessary long-distance transport when closer alternatives exist. © BELGIUM CAMPUS 2024 WASTE: INVENTORY Excessive inventory creates a burden for businesses. It ties up valuable resources like space and capital, leading to storage costs, potential obsolescence, and increased risk of damage or spoilage. This often stems from businesses with high safety stock to handle unexpected situations, production delays, or quality issues. However, these excessive stocks often hold products that don't meet customer needs and ultimately don't add value, only adding to storage and depreciation costs. ©© BELGIUM CAMPUS BELGIUM CAMPUS2024 2024 WASTE: MOTION Motion waste focuses on unnecessary or inefficient movements of people or equipment, leading to wasted time, potential injuries, and reduced productivity. This differs from transportation waste as it deals with ergonomics rather than simply relocating individuals. Examples include poor workplace layout, excessive bending or reaching, and repetitive tasks that don't add value. © BELGIUM CAMPUS 2024 WASTE: WAITING Waiting waste signifies any idle time caused by delays, equipment breakdowns, or missing resources like materials or information. This includes waiting for machines to finish tasks, approvals to be granted, or missing information to be delivered. It's the absence of movement in goods or tasks, leading to easily recognizable lost time. Examples include waiting for delivery, equipment repair, or document approval. ©© BELGIUM CAMPUS BELGIUM CAMPUS2024 2024 WASTE: OVER-PRODUCTION Overproduction waste occurs when more is produced than what's actually needed by customers. This leads to wasted resources in the form of materials, labour, and machine time, ultimately creating excess inventory with its associated costs (storage, handling, potential obsolescence). Since customers are unwilling to pay for waste, overproduction becomes a significant source of inefficiency. Additionally, overproduction can trigger other wastes in the system. © BELGIUM CAMPUS 2024 METRIC: OVER-PROCESSING It refers to unnecessary activities or steps that don't add value to the product or service, like excessive paperwork, duplicated information, or overly complex procedures. This waste also include doing more than what the customer wants or needs e.g., scope creep. The car with a TV in the trunk illustrates this point – adding a feature most customers won't use ultimately increases the product's price without providing additional value. Essentially, overprocessing involves any work or product development that exceeds the customer's needs or desired value, leading to wasted resources and unnecessary costs. ©© BELGIUM CAMPUS BELGIUM CAMPUS2024 2024 WASTE: DEFECTS Defects, imperfections in products or services, hurt businesses in multiple ways. They require time-consuming and resource-intensive rework, potentially leading to unusable scrap. Additionally, addressing defects often requires extra space, labour, and tools, further straining the system. Defects frustrate customers and harm brand reputation, and therefore minimising them is important for efficient supply chain management. © BELGIUM CAMPUS 2024  40 The 7 wastes Create an oral presentation in groups of 2 to 3 and answer the following questions: 1. Which waste is the easiest to identify? 2. Choose a specific industry and discuss how each TIMWOOD waste can manifest. 3. How can the use of an ERP system and its various modules impact TIMWOODS (both positive and negative). 4. Which of the earlier metrics can be linked to identifying wastes and what other metrics can you think of? 5. For each of the TIMWOOD wastes, how can software or IS be used? © BELGIUM CAMPUS 2025 © BELGIUM CAMPUS 2024 Autonomous ERP systems What are the different levels for a self-driving car? Is it possible for a website to handle the entire purchasing process without any human intervention? Consider someone placing an order on Takealot. Which processes can be automated by a computer, and which require human intervention? Is it possible for the human intervention component to be replaced by a computer? Consider how powerful AI has become. © BELGIUM CAMPUS 2025 ERP and e-Procurement E-procurement (purchases that occur electronically) is a function usually included in the manufacturing modules. Standard replenishing of inventory is completely automated with human involvement only required at certain steps of the cycle. E-procurement is a system designed to handle all aspects of purchasing/procurement and is focused on business-to- business (B2B). It handles suppliers, sourcing, contracts, and purchasing. Some of this functionality can also be found in order fulfilment and e-commerce modules. © BELGIUM CAMPUS 2025 ERP and e-Procurement Suppliers provide a special website called a punchout website which links to the e-procurement software. They use a standardized data format known as EDI (electronic document interchange) that allows them to exchange data without requiring human intervention. This means an e-procurement system can automatically check suppliers for the best price, and order materials that might be needed. © BELGIUM CAMPUS 2025  E-Procurement Cycle E-SOURCING E-TENDERING INFORMATION EXCHANGE The suppliers are filtered to find The business requests quotes from Suppliers able to supply the required those that are a good match in terms various suppliers and tries to find the material/product are identified, and of reputation, technical compatibility, cheapest one that still adheres to the contact is made using EDI. and logistics. desired quality. E-AUCTIONING E-ORDERING Prices are negotiated and finalized with contracts being set. One supplier tries Orders are approved, paid, and to get the best price from various purchasers. An alternative here is e-reverse delivery dates are set. auctioning where multiple suppliers compete to provide the best price and secure a contract with a purchaser. E-Logistics When it comes to logistics; the challenge has always been how to deliver products to customers as quickly as possible. Logistics is concerned with the flow of materials in the supply chain; from source through the industrial process to the customer; and then on to re-use/re-cycle or disposal. E-Logistics simply refers to using web technology to facilitate this process. © BELGIUM CAMPUS 2025 E-procurement vs SCM A SCM includes the entire infrastructure from the raw materials to the consumer receiving a product. It can also handle returns/recycling. E-procurement can be seen as half of SCM since it manages all aspects related to purchasing and suppliers. © BELGIUM CAMPUS 2025  E-Logistics customer item is replaced returns order and re-delivered handed to customer places order courier company warehouse receives order courier delivers order © BELGIUM CAMPUS 2025  48 Barker, T. and Frolick, M.N. (2003) ‘Erp Implementation Failure: a Case Study’, Information Systems Management, 20(4), pp. 43–49. doi:10.1201/1078/43647.20.4.20030901/77292.7. Chuck C.H. Law, A. (2019) Managing Enterprise Resource Planning Adoption and Business Processes: A Holistic Approach. Newcastle upon Tyne, UK: Cambridge Scholars Publishing. Available at: https://search.ebscohost.com/login.aspx?direct=true&db=nlebk&AN=2098074&site=ehost-live Lambert, D.M. (2014) “Supply chain management – processes, partnerships, performance,” Dimensionen der Logistik, pp. 553–572. Available at: https://doi.org/10.1007/978-3-8349-6515- 8_29. Sanjay Kumar, Jose Esteves and Elliot Bendoly (2011) Handbook of Research in Enterprise Systems. New Delhi, India: Sage Publications Pvt. Ltd (Response Books). Available at: https://search.ebscohost.com/login.aspx?direct=true&db=nlebk&AN=385314&site=ehost-live Unless otherwise stated all images are obtained under the Creative Commons License from www.unsplash.com and www.pexels.com © BELGIUM CAMPUS 2025