What´s Enterprise Resource Planning (ERP)?

WHAT IS ENTERPRISE RESOURCE PLANING (ERP)?

‘’E’’

An enterprise is a group of people with a common goal, which has certain resources at its disposal to achieve that goal.

‘’R’’

Recourses include money and all other things require to run the affairs of an enterprise.

“P”

Planning is done to ensure that nothing goes wrong.

In general ERP can be defined as follows:

“ERP is a business management software that allows an organization to use a system of integrated applications to manage the business.” OR

“The practice of consolidating an enterprise’s planning, manufacturing, sales and marketing efforts into one management system.”

It combines all data bases across departments into

The real-time information flow in these systems simplifies data collection, analysis and reporting, which improves decision-making. ERP streamlines demand planning, inventory restocking and production scheduling functions, reducing the need for maintaining multiple databases and separate reporting systems. Streamlining of various manufacturing functions also reduces the possibility of production delays because management can make adjustments almost in real-time. For example, if there is a bottleneck in a supplier's production facility, management will know about it almost immediately and start making alternative plans, such as ordering from a backup supplier, rescheduling production and assembly operations, and informing customers of potential

Quality adds value to a brand, which drives market share growth. Integrated demand planning, inventory tracking and financial reporting allow management to anticipate changes in customer buying habits and make the necessary adjustments to sustain profit margins.

5) Decentralization: Enterprise resource planning systems can decentralize decision-making because managers at all levels have real-time access to the same data, such as production status summaries and financial reports. Mid-level managers and even shop supervisors can make operating decisions, such as ordering additional inventory or changing the production schedule.

Evolution of ERP:

The Evolution of Enterprise Resource Planning

The 1960s – Growth of Enterprise Information Systems (EIS)

Early systems were based on automation for individual functions, like financial accounting or inventory management.

The 1970s – Shift to Material Requirements Planning (MRP)

MRP systems tapped into the master production schedule, allowing businesses to plan the parts and product requirements.

The 1980s – Manufacturing Resource Planning (MRP II) Introduced

MRP II software emphasized an optimized manufacturing process that coordinated materials and production requirements, extending services