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   (c) is an integrated computer-
based system used to manage internal and external resources, including
tangible assets, financial resources, materials, and human resources. Its
purpose is to facilitate the flow of information between all business
functions inside the boundaries of the organization and manage the
connections to outside stakeholders. Built on a centralized database and
normally utilizing a common computing platform, ERP systems consolidate
all business operations into a uniform and enterprise-wide system
environment.
An ERP system can either reside on a centralized server or be distributed
across modular hardware and software units that provide "services" and
communicate on a local area network. The distributed design allows a
business to assemble modules from different vendors without the need for
the placement of multiple copies of complex and expensive computer
systems in areas which will not use their full capacity.
The term "Enterprise resource planning" originally derived from
manufacturing resource planning (MRP II) that followed material
requirements planning (MRP).MRP evolved into ERP when "routings"
became a major part of the software architecture and a company's capacity
planning activity also became a part of the standard software activity ERP
systems typically handle
the manufacturing,logistics, distribution, inventory, shipping, invoicing,
and accounting for a company. ERP software can aid in the control of
many businessactivities, including sales, marketing, delivery, billing,
production, inventory management, quality management, and human
resource management.
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4 Transactional Backbone
4 Financials
4 Distribution
4 Human Resources
4 Product lifecycle management

 
 

4 Customer Relationship Management (CRM)

4 Supply chain management software
4 Purchasing
4 Manufacturing
4 Distribution (business)Distribution
4 Warehouse Management System
4 Management Portal/Dashboard
4 Decision Support System

These modules can exist in a system or utilized in an ad-hoc fashion.

   
 


 

 
Engineering, bills of material, work orders, scheduling, capacity,
workflow management, quality control, cost management,
manufacturing process, manufacturing projects, manufacturing flow


   

Order to cash, inventory, order entry, purchasing, product
configurator, supply chain planning, supplier scheduling, inspection of
goods, claim processing, commission calculation

  
General ledger, cash management, accounts payable, accounts
receivable, fixed assets

 
 


Costing, billing, time and expense, performance units, activity
management


 

Human resources, payroll, training, time and attendance, rostering,
benefits

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Sales and marketing, commissions, service, customer contact, call-
center support



Various "self-service" interfaces for customers, suppliers and/or
employees


 
Management of user privileges for various processes
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ERP case study on three companies Colgate- Palmolive ,owens - corning
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4 An ERP implementation has rapidly become the spinal cord of
colgate-pamolive the world leader in an oral care products- mouth
wash,toothpaste,and toothbrushes and a major suppliers of
personnel care products-baby care, deodorant, shampoos and soaps.
Pamolive is a leading dishwashing soap brand worldwide, and
colgate is a top producer of bleach and liquid surface cleaners
outside the united states.
4 The company¶s Hill¶s Health science diet is a leading premium per
food brand worldwide. Foreign sales account for about 70 percent of
colgates total revenues.


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4 To stay competitive, colgate continuously seeks to stream line its
business. At the same time, colgate faces the challenges of new
product acceleration, which has been a factor in driving faster sales
growth and improved market share.
 4 Also colgate is divising ways to offer consumer a greater choice of
better products at a lower cost to the company, which creates
complexity in the manufacturing and logstic processes.
4 To better co-ordinate its business, colgate embarked on an ERP
implementation to allow the company to access more timely and
accurate data, get the most out of working capital , reduce cost.



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4 An important factor for colgate was whether it could use the software
across the entire spectrum of the business. colgate needed the ability
to co-ordinate globally and act locally. 
4 Colgate¶s U.S division installed SAP R/3 at end of 1996, a year or
ahead of most of its competitors .


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4 According to colgate¶s annual report, ³The implementation of SAP
across the colgate supply chain continue to increased profitability
now installed in operations that produce over 35% of colgate¶s
worldwide sales, SAP will be expanded to all colgate division by
2001. Global efficiencies in purchasing combined with product and
packaging standardization ± also produced large savings´


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The benefits from colgate¶s ERP implementation are as follows.

4 Prior to installing SAP R/3 ,colgate had 75 data centers for its global
business; now , the company has 2 data centers , employing only 40
people.
 4 Colgate used to take anywhere from 1 to 5 days to acquire an order
and another 1 to 2 days to process it. Now, with SAP R/3, order
acquisition and processing combined take four hours not 7 days.
Distribution used to take 4 days;it take 14 hours. In total, the order ±
to ± delivery time has been cut in half.
4 Before SAP R/3 , on time deliveries used to occur only 91.5
percentage of the time, and cases ordered where delivered correctly
97.5% of the time. Now the figures are 97.5% and 99.0%
respectively.
4 Using SAP R/3 has resulted in a 1/3rd drop in domestic inventory and
receivables outstanding have dropped to 22.4 days from 31.4,
working capital as percentage of sales has plummeted to 6.3% from
11.3%. Total delivery cost per case has been reduced by nearly 10%.
4 After SAP R/3 , accounts payable was consolidated into one location
from 8. And 3 HR administrative office where consolidated in to 1.














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á Building supplies manufactures Owens-Corning is one of the world¶s
top makers of glass fiber and composite materials, manufacturing
fiberglass insulation, piping and roofing materials , asphalt, specialty
foams, windows, patio doors, vinyl siding and yarns. The company
operates manufacturing facilities in the United States and about a
dozen other countries.

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á In 1992, CEO Glen Hiner said that his goal was to grow the company
from $2.9 billion a year to $5 billion a year through a combination of
acquisitions, overseas expansion and more aggressive marketing of
the company¶s traditional building products. The business goal:
Owens Corning should offer one-call shopping for all the exterior
siding, insulation pipes and roofing material that builders need. As a
work in progress, the process is fragmented. Customers call an
Owens Corning shingle plant to get a load of shingles but then must
place a separate call to order siding and yet another call to order the
company¶s well known pink insulation!
á One-stop shopping will give Owens-Corning the ability to integrate
sales by allowing salespeople to see the inventories at any plant or
warehouse and to quickly assemble orders for customers.

Typical goals of sales order management includes:

á Accepting customer orders from any location worldwide into one

system.

á Assigning ship dates to available products.

 á Scheduling futures ship dates for products not in stock.

á Checking order status 24 hours a day , 7 days a week.

Sounds simple, but like other large companies Owens-Corning had

operated as a collection of autonomous fiefdoms with an estimated 211
legacy systems. Each plant had its own product lines and pricing
schedules, built up over years of cutting deals with various customers.
Trucking had been parceled out to about 325 carriers, selected by
individual factories. Clearly, Owen-Corning¶s business needs had outgrown
its practices and the company required a platform that could handle present
demands while serving as a long-term foundation for future growth.

The case of Owens-Corning illustrates how many companies operate

across a series of information islands. The tendency is of various
departments to function as if they were independent empires. ERP can be
used as a battering ram to break down such unhealthy rivalries and to pave
the way to effectively integrating islands of information, ensuring total
transparency.

For Owens-Corning to grow, it was critical to integrate order

management, financial reporting and distribution.

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The company chose to implement SAP R/3, requiring that Owens-Corning
staff come up with a single product list and a single price list .The use of
R/3 also allowed the finished ± goods inventory to be tracked easily both in
company warehouses and in distribution channel. The estimated savings
were more than $65 million by the end of 1998.