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