ERP (Enterprise Resource Planning) - Unit 1 PDF

# B.Tech-CSE 5th/5E5th ## Subject: ERP (Enterprise Resource Planning) ### 1 UNIT: Introduction of ERP - It is a process used by companies to manage and integrate the important parts of their businesses. - Many ERP software applications are important to companies because they help them implement...

# B.Tech-CSE 5th/5E5th ## Subject: ERP (Enterprise Resource Planning) ### 1 UNIT: Introduction of ERP - It is a process used by companies to manage and integrate the important parts of their businesses. - Many ERP software applications are important to companies because they help them implement planning by integration all of the processes needed to run their companies with a single system. - An ERP Software system can also integrate planning, purchasing inventory, sales, marketing finance, human resources, and more. - Diagram: Example of ERP - Planning - Order Management - Accounting - Human Resources - ERP - Purchasing - Sales - Marketing - Finance ### Definition - Enterprise Resource Planning (ERP) is business program management software that allows an organization to use a system of integrated applications to manage the business and automate many back office functions related to technology, services and human resources. - Enterprise resource planning (ERP) is business management software that allows an organization to use a system of integrated application to manage the business. - A typical ERP system will use multiple components of computer hardware and software to achieve the integration. - Company use enterprise resource planning (ERP) system to assist management with decision making as well as to customize common business process to save the company time and money. - Diagram showing the difference between Integrated & Non-Integrated - Non Integrated System: - Marketing Sales app - Financial app - Manufacturing app - Human Resource abb - Sales - Marketing Application - Financial application - HR Planning Manufacturing Sales - Manufacturing application - Human Resource app - Marketing Sales data base - Accounting data base - Material database - Human Resource database - Data base ### Benefits of ERP - **Information Integration**: - The first and most important advantages lies in the promotion of integration. The reason ERP systems are called integrated is because they have the ability to automatically update data between related business functions and components. For example, you need only update the status of an order at one place say, in the order processing system, all the other components will automatically get updated. - It is an important part of process improvement. - It also reduces lead time. - Lead time reduction opportunities help to focus on improvement action. - **Reduction of Lead Times**: - Lead time is the elapsed time between placing an order and receiving it by reducing lead-time. - An organization should have an efficient inventory management system, which is integrated with the purchasing, production planning and production department. - **On Time Shipment**: - ERP Systems are designed to help your company to reduce errors and increase design productivity. By using steps of ECO (i.e. engineering change order), ERP system automatically implements change in production database. By using these, an ERP system ensures on time delivery of goods to customers. - **Reduction in Cycle Time**: - It is time between the placement of an order to the receipt of product. There are two types of situations: one is make-to-order and second one is make-to-stock. - **Better Customer Satisfaction**: - ERP systems are capable of considering goods in a flexible way with consideration of time and cost management. It means we will get individual attention and get services without spending more money or waiting for long period. - **Increased flexibility**: - Product flexibility is a type of ability of the operations to efficiently produce highly customized and unique product. ERP System not only improve flexibility of manufacturing operations but also improve flexibility of organization. - **Common database**: - A common database enables data to be defined once for all enterprises with every department using the same definition. - Some ERP system split in physical database to improve performance. ### ERP and Related Technologies - In IS (Information System) there were a lot of drawbacks like report generation requires technical expert, Historic details were not available, module integration was missing. - To overcome these limitation ERP uses a number of technologies: - OLAP (Online Analytical Processing) - SCM (Supply chain management) - Data mining - Data Warehousing - Business Process Reengineering (BPR) - Customer Relationship Management (CRM) #### OLAP (online Analytical Processing) - OLAP is a software technology that allows users to analyze information from multiple database systems at the same time. - It is based on multidimensional data model and allows the user to query on multidimensional data. - Eg. Delhi-2019 -> Sales data #### OLAP process - Data Source - Data Source - Data warehouse - OLAP Cube - Data Source - APP queries - APP queries - APP queries - User - User - User - OLAP can be defined in five words: **Fast Analysis of Shared Multi-dimensional Information.** - **Fast**: Fast means that the system is targeted to deliver most responses to users within about five seconds with the simplest analysis taking no more than one second and very few taking more than 20 seconds. - **Analysis**: Analysis means that the system can cope with any business logic and statistical analysis that is relevant for the application and the user and keep it easy enough for the target user. - **Shared**: Shared means that the system implements all the security requirements (confidentiality and, if multiple write access is needed, provides concurrent update locking at an appropriate level. - **Multidimensional**: Multidimensional means that the system must provide a multidimensional Conceptual View of data, including full support for hierarchies and multiple hierarchies. - **Information**: It is all of the data and derived information needed, wherever it is, and however much is relevant for the application. #### Types of OLAP Servers - ROLAP (Relational OLAP) - MOLAP (Multidimensional OLAP) - HOLAP (Hybrid OLAP) - Specialized SQL Servers #### Relational OLAP - ROLAP servers are placed between relational back-end servers and client front-end tools. To store and manage warehouse data. - It uses relational or extended relational DBMS. #### Multidimensional OLAP - MOLAP uses array-based multidimensional storage engines for multidimensional views of data. With multidimensional data stores, the storage utilization may be low if data set is sparse (small). - Many MOLAP servers use two levels of data storage representation to handle dense and sparse data sets. #### Hybrid OLAP - Hybrid OLAP is a combination of both ROLAP and MOLAP. - It offers higher scalability of ROLAP and faster computation of MOLAP. - HOLAP servers allow to store the large data volumes of detailed information. #### Specialized SQL Servers - It provides advanced query language and query processing support for SQL queries over star and snowflake schemas in a read-only environment. #### OLAP Operations - OLAP servers are based on multidimensional view of data. - List of OLAP operations: - Roll-up - Drill - down - Slice and dice - Pivot (rotate) ##### Roll-up - Roll-up performs aggregation on a data cube in any of the following ways: - By climbing up a concept hierarchy for a dimension. - By dimension reduction. ##### Drill-down - Drill-down is the reverse operation of roll-up. It performed the following way: - By stepping down a concept hierarchy for a dimension. - By introducing a new dimension. ##### Slice and dice - Slice operation selects one particular dimension from a given cube and provides a new sub-cube. - Dice selects two or more dimensions from a given cube and provides a new sub-cube. ##### Pivot - The pivot operation is also known as rotation. It rotates the data areas view in order to provide an alternative presentation of cube. ### SCM: (Supply Chain Management) - Supply chain management (SCM) is the centralized management of the flow of goods and services and includes all processes that transform raw materials into final products. - By managing the supply chain, companies can cut excess costs and deliver products to the consumer faster and more efficiently. - The five most critical elements of SCM are developing a strategy, sourcing raw materials, production, distribution and returns. - Diagram of SCM - Supplier - Manufacturing - Distribution - Retail location - Customer - Raw Material ### Data Mining ### Data Warehouse - A data warehouse is a consolidation of data extracted from different sources designed to support strategic and tactical decision making. - The key objective of setting up a data warehouse is to provide a coherent picture of the business at a point in time. - End users or managers are able to run online queries and perform data mining using the consolidated data available at a data warehouse. Data warehouse is capable of providing up to date, accurate and integrated information about business processes. - In general, a data warehouse is a subject-oriented, integrated, time-variant and non-volatile collection of data. **Subject-oriented**: - Data basis is used to represent a process. Like payroll, accounting etc. On the other hand, a data warehouse is used to analyze a particular sub-field area, for eg: "Sales **Integrated**: - Original data available in different source system is not integrated. A data warehouse integrates data from these multiple data sources. For example, customer may be identified using two different keys at different data sources. Data warehouse must be able to integrate the two source systems and identify customers on the basis of a single key. **Time-variant**: - Operational data represents only the current data whereas data warehouse keeps all the historical data as well. You can retrieve data for the last 3 months, 6 months, 12 months, or even older data from a data warehouse. **Non-Volatile**: - The only way to add to a data warehouse is to extract data from source systems. The data is used only for the analysis task and no changes are made to it. Historical data in a data warehouse is never altered or deleted. - Diagram: - Data Source 1 - Data Source 2 - Data Source 3 - ETL - Data Warehouse - Extraction of data from operational systems to data warehouse ### Business Process Reengineering (BPR) - In 1990, drawbacks helped to business (1990 found). - Identify Process - Design to-be - Test and Implement to be - Review, update changes and analyzes. - In 1990, business strategy can be changed at any point of time. - Business process reengineering involves the examination and redesign of business processes and workflows in your organization. Moves from serial operations to concurrent operations.