ERP
SIS

ERP
Table of Contents
• Introduction
•
Organizational & Technological Change
•
Business Engineering Vs. Business Process Re-engineering
• Definition & ERP’s role in the Supply Chain
• Business Aspects
•
ERP: Vendors, Comparison, Characteristics of ERP,
Applications and Advantages
• SAP R/3
•
Constraints: Business &Technical
•
Technical Aspects
•
Layer Architecture
•
Application Architecture
•
Customization
• Industry Example: Quantum
•
Look into the Future
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ERP
Introduction
Growing Competition
Market Globalization
Decreasing Innovation Cycles need for flexible, integrated, and open software
Relationship Based Transactions
Different Manufacturing Environments
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ERP
Introduction
• Changes in Structure
– Functional Vs. Process Based Structure
• Value Chain Thinking
Order
Processing
Product
Development
Customer
Service
Personnel
Product
Development
Marketing
& Sales
Production
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ERP
• 70’s Standard Software, Mainframe Systems
– Separate Applications for business functions
• 90’s Technological Trends
– Client/Server Computing
– Innovative process integrated business solutions
– Open Systems
– Increasing computing speed, GUI’s
– Faster Data processing
– Data Integration
Introduction
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ERP Introduction
• Use of Prototyping/Modeling
- Building Systems around Business
• Automating Business Processes through IT
•Use of Blueprinting
- Designing & Integrating Business Processes
• IT used as a Strategic Tool
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Definition
ERP is a software package integrating organizational business processes & data across the company
Modeling all the processes
Integrating all the information
Strategic use of IT
Quality,
Cost,
Delivery
Integrated views
Effective use of resources
DSS
EIS
MIS
TPS
OA

ERP
External
Suppliers
Role in Supply Chain
Extended Supply Chain Management
Supply
Planning
Demand
Planning
ERP
Scheduling Logistics
Internal Supply Chain Management
Internal
Suppliers
ERP
Internal
Customers
External
Customers
MRP
ERP
Plant
Management
Coordinated
Manufacturing
MRP
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ERP Business Aspects
5%
3%
3%
5%
11%
34%
5%
5%
7%
SAP
SSA
J.D. Edwards
Oracle
Peoplesoft
Others
9%
13%
Computer Assoicates
Baan
JBA
Marcam
QDA
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ERP Business Aspects
High Rebuild
J.D. Edwards *
Remain
* R/3
* CA
* Oracle
* Peoplesoft
* Baan
Low
Low
Review Reinforce
Technology
High
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ERP Characteristics
• Modeling Business Processes and
Integrating through Software
• NOT Multiple Packages Pieced together through Complex Interfaces
Configuration -
• 8,000 Tables set up by Programmers
• Series of Switches
• Requires Deep Understanding of
Existing Business Processes
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ERP
Aerospace & Defense
Automotive
Chemicals
Consumer Products
Financial Services
Healthcare
High-Tech & Electronics
Oil & Gas
Pharmaceuticals
Retail
Telecommunications
Utilities
Business Aspects
SIS

ERP Business Aspects
• Largest vendor of standard business application
• R/3: Real-Time Version 3.0
• Client/Server enterprise application software
• 6,000 companies, 50 countries
• Companies in diverse businesses
• 30 seats or installations with 3,000 end users
• 800 predefined business processes
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ERP
• Business Components
- Finance, HR, Logistics
• Business Objects
- Customer, Invoice
• Business Information
Warehouse
- Aggregate Internal
& External Data
• Business Engineer
- Customization Tool
• Integration Technologies (ALE)
Business Aspects
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ERP Business Aspects
• Data Model
• Business Object Model
• Organization Model
• Process Model
• Distribution Model
• Event
• Function/Task
• Organization
• Communication
- Repository Holds the Reference Model, Industry
Specific Models & Enterprise Models
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ERP
• Fast
• Flexibility
• Expandable
• Open
• Industry Specific
Business Aspects
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ERP Business Aspects
•Allows Companies to Adapt to New Business Opportunities
• Synchronous Transfer of Data
• Encourages Multi-Disciplined Teamwork
• Reduces Redundant Labor
• Provides Standard Based Development Environment
• Process Engineering Cost Benefits
• Flattens Organizations to Increase Agility
SIS

ERP Business Aspects
• Very Expensive
• Every $1 Spent in Software Licenses -
$8 - $10 Spent on Consulting Support
• Outside Consulting Fees can cost $1500/day
• Requires Equipping employees with new skill sets
• Hard to Keep Resources
• Changing Business Processes to suit ERP/ can
Effect the Organization’s Culture
• Can NOT Impose ERP Infrastructure on Company
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ERP Business Aspects
• Lack of Flexibility
• Complexity & Rigidity
• High Implementation Time
• Difficult in Decentralized Environments
• Difficult Interfaces
• Steep Learning Curve
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ERP
Layer Architecture
Development workbench
Application
Layer
Dictionary
Program editor
Interface builder
Modeling tools
Repository
Middleware
Technical Aspects
Applications
Middleware
Basis
Layer
System software: GUI, DBMS, OS, N/W
Issues: Scalability, Portability, Interoperability & openness,
Customizability, GUI, etc.
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ERP
Application Architecture
Technical Aspects
System model
Repository
SD CO AM
MM
PP
FI
HRM
WF
PS
Business model
Scope, Rules & Pattern
DM
Business Kernel
FM WFM
Full Business
QM PM DW
Specific Situation
Issues:
1. Independent from all types of computers(UNIX, Window NT,
AS/400, etc.), DBMS(Informix Online, Oracle 7, ADABAS, DB2, MS SQL
Server 6.0, etc.), GUI flatform(OS/2 Presentation Mgr.., OSF/Motif,
Macintosh, Windows, etc)
2. Independent from the country specific rules, languages, etc.
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ERP Technical Aspects
Customization: Support of initial implementation projects, follow-up projects, and release-change projects
Implementation environment
Implementation guides
Procedure model
Customized model
Reference model:
FM, PM, DM, IFM, OM,
Comm. Model,
Distr. Model
Documentation Release management
Issues: Integrated customizing functions, quality assurance, etc.
SIS

ERP Industry Examples
– Available-to-Promise (ATP), the real-time capability to take an order, schedule it to be delivered anywhere in the world and confirm delivery instantly
– Ability to determine what was actually in inventory or in production and how much of it had been promised to other customers
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ERP Industry Examples
– Based on the full suite of Oracle Corp.'s manufacturing and operations applications
– 750 users in 25 locations worldwide
– To adopt Big-bang approach
• One of the largest distributed business systems to go live worldwide at one time
– HP9000 hardware, HP UX operating system
(10.1) and Oracle Release 10.4
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ERP Industry Examples
– Legacy system-based MRP system in use
– Each division's business transactions in separate databases by business unit, and by function within a unit
– Databases couldn't share information
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ERP Industry Examples
– Project team members pulled from regular jobs
& relocated to
“Building 12”
– “Building 12” essentially set up a scaled-down business model of Quantum
– Team members play-acted their real-life roles
– Improved business processes and wrote requirements for the new system
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ERP Industry Examples
– Packaged available applications & selected
Oracle applications
– Consultants from Price Waterhouse and Oracle, installed the software & began pilot projects
– Complexity and magnitude of the project quadrupled (Digital Disk drive division acquisition)
– Conference room pilots tests
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ERP Industry Examples
– Locally trained about 100 users from all over the world and flew them into Milpitas to run a full-scale system simulation
– Sponsored massive user training - users had to pass a test before returning to their jobs
– Ran Internal PR campaign- Entailed group meetings, presentations,an intranet site and events emphasizing system's importance
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ERP Industry Examples
– October 1992 - May 1996
– 16 full time managers
– 100 person multidisciplinary team
– 1,632 meetings
– 79 shouting matches
– 800GB of disk space
– 18,064 miles of cable
– 300,000 cups of coffee
– 58,000 e-mails
– 7,503 cases of beer
– 1.62 million miles of air travel
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ERP Future Aspects
•
Targeting Small & Medium Enterprises
•
Addition of Simple GUI based development Tools
• Strategic Alliances
Andersen Consulting & SAP
IBM & J.D. Edwards
- GE & Oracle
•
Supply Chain Management
•
Internet Enabled
• Workflow Management
• Resource Planning
• Data Warehousing
SIS