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ERP - A review of System Benefits and Proposed Features Agenda Limitations of a manual system ERP business advantage... thumbnail 1 summary

ERP - A review of System Benefits and Proposed Features


Limitations of a manual system
ERP business advantages
Modules covered

Limitations of a manual system

Huge compilation of valuable data exist in files resulting in:
High cost of maintenance in terms of time & money
Inability to provide instant results to the simplest queries
Hence the non-productivity of these activities

Limitations of a manual system

Inability to efficiently manage scattered resources
High possibility of Theft & leakages
Errors in accounting entries
Reliability of baseline data
Financial planning becomes questionable

 Inventory management

- Improper material planning leads to shortages and problems for Production Planning.
- There is low control on process wastages, material issuances in small quantities and
   percentage of ‘extra’ purchases.
- Transparency in procurement can be questioned in absence of standard rules


Planning for production

- Data from production floors, inventory is not available in real-time for quick decision making
- Optimized utilization of available resources becomes a tough challenge
- A large amount of time is consumed is focusing on ‘how’ rather than on ‘what’ and ‘when’. 


Production Floor

Feedback loop most important for:

- Quick decision making
- Enhance occurrences of preventive measures
- Prepare realistic plans
- Enable the organization to be more agile


Human Resources

HR evaluations are hard to estimate
Optimized employee management is seldom achieved resulting in delayed decisions and wastage of valuable resources



- Less than desired visibility into processes
- Accurate and critical information not available in real-time
- A non-efficient information communication mechanism leads to a nonflexible organization


ERP Business Advantages

- Most important benefit is the transparency
- Activities are tracked and logged
- Build-up of organization’s knowledge repository

- Availability of critical information without any hassle and delay
- Jobs/approvals/requisitions etc do not get stuck anymore- they are automatically routed to the
   next levels for processing

- Integrated system leads to increased control over wastages and leakages
- Accounting activities are automated, reducing errors and increasing reporting reliability
- Instant increase in responsiveness to customer

- Reduction in order-processing lead-times resulting in on-time supplies to distributors
- Real-time view of the Finished Goods Stock Status
- Visibility across manufacturing operations

- Increase operational flexibility by enabling quick decision making, possible through real time  
   flow of information 
- Reduce duplication of work and associated overheads 
- Ensure consistency of specs and thereby reducing reworks/claims/returns/rejections etc

- Optimize production resources by providing a dynamic, best-in-class planning mechanism 
- Provide objective basis for taking resource acquisition decisions 
- Select optimized department routing for selected batches 
- Easily prioritize and re-plan production batches

- Avoid material stock out situations thus preventing production shocks 
- Provide valuable analysis of purchasing trends, supplier ratings  
- Automatic generation of PO’s keeping in view pre-set purchase agreements with vendors


 ERP - Integrated System Modules 


Order Handling

This module would aid in generating sales forecasts, create and manage orders and issue order dispatches and all core documents from the system.

Production Planning

Production planning would generate production plans for new-batches, provide planning adjustments for planned batches, release job dispatches for production floor, QC. This module would also serve as a basis for enterprise capacity planning and procurement of raw materials.


Materials Management

Procurement would generate Purchase Orders, maintain vendors database, contracts and agreement management, provide purchase histories and reports.
Integrated system modules

(Inventory Management)

In inventory management, some of the functionalities would include tracking of material receipt, issuances, returns, material transfers and provide material availability intimations for sales, QC, production planning and shop-floor.

Quality Assurance

Quality Assurance module would ensure enforcement of set quality standards by allowing for incoming material inspections, in-process and finished goods inspections, raising NCP intimations to management, recording and maintenance of RM and product-based inspection results 



Core features offered would be General Ledger (GL with 7 level COA), Integrated Accounts Receivable and Payable (AR, AP), Fixed Assets Management and Order Costing


 Shop-Floor Control

Functionalities for production floor would include receipt of material, release of work orders, entering production confirmations, viewing batch plan, entering re-work information, raising requisitions and generating core documents from system.

Human Resources Management

The HRM module, a tool for effective management of HR and associated costs, would allows for time & attendance management, generating employee payroll, leave & asset management, performance appraisals, TNA and core system-based documents.

Import/Exports Management

The scope of this module would cover purchasing against requirement determination/EOQ, payments and purchase settlements as well as shipment management against Export sale orders/samples and generation of reports. 

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