Describe about the Enterprise Resource Planning for Inventory Details.
Definition and meaning of ERP system
ERP, an essential tool for any company, is mainly referred to the system that helps a company to record its important data like inventory details, planning for new projects, sales activity, marketing aspects, financial concepts, and as well as human resources. ERP, software, has now become an integrated part of any company to manage several data (Lin et al, 2014). This ERP system is very much popular with manufacturing companies as because they tend to have huge inventories to manage, and with such unique system whole work of managing stocks become very easy and effective.
Goal of ERP
It is the efficiency of resources that every company wants to achieve and that is the reason to use ERP in a systematic organization (Chou et al, 2015). Cost reduction can be achieved by maintaining things that may not be necessary or recycle waste from manufacturing hub, these all stances need specific speculations on time to time basis, so the need for an ERP systems arises. ERP gives managers an edge to speculate quality of the product compared with other company's product through statically. With the efficiency of cost reduction, best quality of products ensures a definite profit in the company’s account.
Reason for Selection of ERP
ERP made several organizations work under one software as ERP can operate with distant computers of various organization. To make a decision effective in a planning, one must have accurate data to calculate the risk factor, so to provide that data ERP is considered to be the most reliable software right these days. ERP developers can actually develop the software, in a way which can work accordingly and incorporate essential things learned by the proposed company, if desirable. It is also very helpful from the customer's point of view when tracking any purchase order placed with the respective company or any other detail provided by the company for the betterment of customer services (Kilic et al,2015).
Steps to implement an ERP system
The steps to implement an ERP system are as follows:
Planning helps in analyzing the different measures required to complete the entire project. This begins with the sales process and it requires the creation of a project team which will handle all the meetings and operations required for the project.
The project team works on various configurations merely for the implementation of the new systems and defines the role of each of the individual concerned.
These includes activities such as the customizations, development of the user training, importing of the relevant data with the help of ERP systems in order to complete the concerned project.
This helps in testing of the requirements for the concerned project, moreover at the end of this particular phase the team members feel comfortable with the use of the ERP systems.
The project team takes the entire responsibility to assess the situation and makes effective decisions in order to bring out the positive results for the firm.
Over the time concerning the work pressures, there might be some requirements related to the training of the employees on the live project which needs to be done effectively.
Difficulty of implementation
Integration of ERP: Implementation of ERP system raises some questions like which process is to be integrated, as the processes are e-commerce /POS software or accounting process and CRM.
Setting goals in ERP software: the goals should be clear at the planning level as to get maximized profit. During the implementation process, once the goal identified the further changes can be done.
Customization: regarding ERP a general misconception is that it requires huge customization, but that is not the fact in reality. ERP is just a framework at the initial where desired solutions can be optimized (Nwankpa, 2015).
Flexibility: the system is not flexible perhaps in huge demand.
Offices before and after ERP
Before ERP era, a company operating across various places finds absolute constraint in assimilating all data at a single time. Various decisions were taken merely just on the consensus of the decision-making body. Inventory could not reflect accurate data. But now these days, ERP software has changed the way a company used to work now, especially for manufacturing companies (Kilic et al, 2014). Now a day's customer services are something that helps a company to identify its market potential and act on the points effectively needed for the betterment of company's prospectus. Now tracking a product delivery is very easy at the customer's end.
The ERP Modules
The ERP modules are as follows:
Human resource module: it helps entirely the human resource team to keep details of employee’s code, attendance record, job category and description etc.
Inventory module: it is the key software to track stocks inflow and outflow.
Sales module: it inherits all the sales activity starting from packing to shipping, taxation to the drafting of sales vouchers (Kwak et al, 2012).
Purchase module: it incorporates listing of vendors, quotation analyzing, prepare purchase vouchers, and etc.
Financing& accounting module: the whole cash flow is monitored here whether it is inward or outward.
Customer relationship management module: it is to establish a better relationship with customers by tracking all the relative information about them.
Engineering module or production module: it is used to heighten the quality of services in product delivery, daily production track, bill preparation for used raw materials.
Supply chain module: it records the data of product items which flows from manufacturers to the customers and vice verse
Advantages & disadvantages of ERP
Advantages: the complete track of business process is now available at one click. Various outlets set up across the country can now operate as one system. Customers can track their purchase delivery online. It incorporates various modules to help the company with various aspects of the company's parameters.
Disadvantages: while ERP implementation in an organization, the cost incurred at the beginning is very high (Al-Ghofaili & Al-Mashari, 2014). Some customizations may not work for the business as ERP is not so flexible. Importing of external data may not be an easy job while implementing it. The indirect cost incurred while implementing ERP is critical.
Costs of ERP
The ERP system is not a cheap one as it can do a lot of profitable tasks for the company. ERP vendors and the proposed company negotiate on the pricing and the contract they have imbibed. The pricing factor actually depends on some daily phenomenon, like how much users will use this at a time, what application part is actually required, then comes the customization part of the proposed ERP, and the hosting issues. For the cloud computing ERP, an annual subscription fee has to be incurred which is 20 to 25 percent of the license fee for the system.
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