Chapter 6 RESOURCE PLANNING SYSTEMS
Supplier relationship management
Allows the firm to manage its supplies more effectively, monitoring supply performance
Accounting and finance
Financial control and acountability
Incompatible system environment
In certain cases the firms environment does not give ERP a distinct advantage over other systems.... I.E. there is no advantage for a small, family owned,,, used cars dealer in a small town to implement an expensive ERP system
Lack of top management commitment
Management sets aside sufficient funds to implement a new ERP system it may not take an active role in the implementation process.... This leads to users reverting back to the old processes and systems because of their lack of knowledge or interest in learning the capabilities of the new ERP system
Lack of proper training
Many employees may have already been familiar wit their legacy MRP systems Top management may underestimate the amount of training needed to get the system up and running
Supply chain management:
Planning, execution and control the activities involve supply chain
Manufactoring
Schedules materials and track production
Enterprise Resource Planning Systems (ERP)
Utilizes the idea of centralized and shared database management to tie the entire organization together. Information is entered once at the source and made available to all users. It eliminates the inconsistency and incompatibility created when different functional areas use different systems with overlapping data Provides a mechanism for supply chain members to share information so that scarce resources can be fully utilized to meet demand Bullwhip effect is minimized along with supply chain inventories Production changes and other modifications can also be executed quickly and efficiently to minimize delivery lead times
Customer relationship management
capability to manage customer
Human resource management
organization plan, develop menage and control
Single integrator solution
pick all the desired applications from a single vendor
Major ERP applications include
Accounting and finance Customer relationship management Human resource management Manufacturing Supplier relationship management Supply chain management:
Two types of ERP implementation
Best-of-breed and Single integrator solution
Rapid Growth of ERP systems-
ERP systems have gradually spread from the manufacturing to the service sector and has become commonly used in many university classrooms....U.S. For instance ERP training is integrated into their business curricula Rapid development of computer information technology over the last 2 decades has contributed to the positive growth of ERP (going from mainframe computers to laptops)
Lack of communication
Lack of communication within an organization or between a firm and its ERP software provider can also be a major headache Lack of communication often results in the wrong specifications and requirements being implemented
Implementation Problems
Lack of top management commitment- Lack of adequate resources Lack of proper training Lack of communication Incompatible system environment
Lack of adequate resources
Long term commitment requiring substantial capital investment Many firms may not have the necessary workforce and exepertise to implement the complex system
Best-of-breed
pick the best application for each individual function. The resulting system includes several different applications that must be integrated to work as a single coordinated system to achieve the global scope required by the ERP Major criticism - multiple software infrastructures and databases may have to be used to link the multiple applications obtained from different vendors May severely affect the ability of the system to update the databases rapidly and efficiently