ERP
Lori Martel
Hahn Shin
Ramkin Shetty
Dinesh Sekar
SIS
Table of Contents
ERP
•Introduction
•Organizational & Technological Change
•Business Engineering Vs. Business Process Re-engineering
•Definition & ERP’s role in the Supply Chain
•Business Aspects
•ERP: Vendors, Comparison, Characteristics of ERP,
Applications and Advantages
•SAP R/3
•Constraints: Business &Technical
•Technical Aspects
•Layer Architecture
•Application Architecture
•Customization
•Industry Example: Quantum
•Look into the Future
SIS
Introduction
ERP
Growing Competition
Market Globalization
Decreasing Innovation Cycles
need
for flexible, integrated,
and open software
Relationship Based Transactions
Different Manufacturing Environments
SIS
Introduction
ERP
• Changes in Structure
– Functional Vs. Process Based Structure
• Value Chain Thinking
Order
Processing
Product
Development
Customer
Service
Personnel
Product Marketing
Development & Sales
Production
SIS
Introduction
ERP
• 70’s Standard Software, Mainframe Systems
– Separate Applications for business functions
• 90’s Technological Trends
–
–
–
–
–
–
Client/Server Computing
Innovative process integrated business solutions
Open Systems
Increasing computing speed, GUI’s
Faster Data processing
Data Integration
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ERP
Introduction
• Use of Prototyping/Modeling
- Building Systems around Business
• Automating Business Processes through IT
•Use of Blueprinting
- Designing & Integrating Business Processes
• IT used as a Strategic Tool
SIS
ERP
Definition
- ERP is a software package integrating organizational
business processes & data across the company
Integrated views
Modeling
all the processes
Integrating
all the
information
Strategic use
of IT
Quality,
Cost,
Delivery
Effective use
of
resources
EIS
DSS
MIS
OA
TPS
SIS
ERP
Role in Supply Chain
Extended Supply Chain Management
Supply
Planning
ERP
Scheduling
Demand
Planning
Logistics
Internal Supply Chain Management
External
Suppliers
Internal
Suppliers
MRP
External
Customers
ERP
Internal
Customers
ERP
Coordinated
Manufacturing
Plant
Management
MRP
SIS
ERP
Business Aspects
11%
3%
3%
5%
5%
34%
5%
5%
7%
SAP
SSA
J.D. Edwards
Oracle
Peoplesoft
Others
9%
13%
Computer Assoicates
Baan
JBA
Marcam
QDA
SIS
ERP
Business Aspects
High
Rebuild
Functionality
J.D. Edwards *
Remain
* R/3
* Oracle
Low
Low
* CA
* Peoplesoft
* Baan
Review
Reinforce
Technology
High
SIS
ERP
Characteristics
• Modeling Business Processes and
Integrating through Software
• NOT Multiple Packages Pieced together
through Complex Interfaces
Configuration • 8,000 Tables set up by Programmers
• Series of Switches
• Requires Deep Understanding of
Existing Business Processes
SIS
ERP
Business Aspects
Aerospace & Defense
Automotive
Chemicals
Consumer Products
Financial Services
Healthcare
High-Tech & Electronics
Oil & Gas
Pharmaceuticals
Retail
Telecommunications
Utilities
SIS
ERP
•
•
•
•
•
•
•
Business Aspects
Largest vendor of standard business application
R/3: Real-Time Version 3.0
Client/Server enterprise application software
6,000 companies, 50 countries
Companies in diverse businesses
30 seats or installations with 3,000 end users
800 predefined business processes
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ERP
Business Aspects
• Business Components
- Finance, HR, Logistics
• Business Objects
- Customer, Invoice
• Business Information
Warehouse
- Aggregate Internal
& External Data
• Business Engineer
- Customization Tool
• Integration Technologies (ALE)
SIS
ERP
Business Aspects
Reference Model
• Data Model
• Business Object Model
• Organization Model
• Process Model
• Distribution Model
Event Driven
Process Chain (EPC)
• Event
• Function/Task
• Organization
• Communication
- Repository Holds the Reference Model, Industry
Specific Models & Enterprise Models
SIS
ERP
Business Aspects
• Fast
• Flexibility
• Expandable
• Open
• Industry Specific
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ERP
Business Aspects
•Allows Companies to Adapt
to New Business Opportunities
• Synchronous Transfer of Data
• Encourages Multi-Disciplined Teamwork
• Reduces Redundant Labor
• Provides Standard Based Development Environment
• Process Engineering Cost Benefits
• Flattens Organizations to Increase Agility
SIS
ERP
Business Aspects
• Very Expensive
• Every $1 Spent in Software Licenses $8 - $10 Spent on Consulting Support
• Outside Consulting Fees can cost $1500/day
• Requires Equipping employees with new skill sets
• Hard to Keep Resources
• Changing Business Processes to suit ERP/ can
Effect the Organization’s Culture
• Can NOT Impose ERP Infrastructure on Company
SIS
ERP
Business Aspects
• Lack of Flexibility
• Complexity & Rigidity
• High Implementation Time
• Difficult in Decentralized Environments
• Difficult Interfaces
• Steep Learning Curve
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ERP
Technical Aspects
Layer Architecture
Development workbench
Applications
Application
Layer
Dictionary
Program Interface Modeling
editor
builder tools
Repository
Middleware
Basis
Layer
Middleware
System software: GUI, DBMS, OS, N/W
- Issues: Scalability, Portability, Interoperability & openness,
Customizability, GUI, etc.
SIS
ERP
Technical Aspects
Application Architecture
SD
CO
AM
System model
Repository
Business model
MM
FI
WF
Scope, Rules & Pattern
DM
PP
HRM
PS
Business Kernel
FM
WFM
Full Business
QM
PM
DW
Specific Situation
- Issues:
1. Independent from all types of computers(UNIX, Window NT,
AS/400, etc.), DBMS(Informix Online, Oracle 7, ADABAS, DB2, MS SQL
Server 6.0, etc.), GUI flatform(OS/2 Presentation Mgr.., OSF/Motif,
Macintosh, Windows, etc)
2. Independent from the country specific rules, languages, etc.
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ERP
Technical Aspects
Customization: Support of initial implementation
projects, follow-up projects, and release-change projects
Implementation environment
Procedure model
Implementation
guides
Customized model
Reference model:
FM, PM, DM, IFM, OM,
Comm. Model,
Distr. Model
Documentation
Release management
- Issues: Integrated customizing functions, quality assurance, etc.
SIS
ERP
Industry Examples
Objectives
– Available-to-Promise (ATP), the real-time
capability to take an order, schedule it to be
delivered anywhere in the world and confirm
delivery instantly
– Ability to determine what was actually in
inventory or in production and how much of it
had been promised to other customers
SIS
ERP
Industry Examples
Scope
– Based on the full suite of Oracle Corp.'s
manufacturing and operations applications
– 750 users in 25 locations worldwide
– To adopt Big-bang approach
• One of the largest distributed business systems to go
live worldwide at one time
– HP9000 hardware, HP UX operating system
(10.1) and Oracle Release 10.4
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ERP
Industry Examples
Pre-Implementation Assessment
– Legacy system-based MRP system in use
– Each division's business transactions in separate
databases by business unit, and by function
within a unit
– Databases couldn't share information
SIS
ERP
Industry Examples
Project Planning & Control
– Project team members pulled from regular jobs
& relocated to “Building 12”
– “Building 12” essentially set up a scaled-down
business model of Quantum
– Team members play-acted their real-life roles
– Improved business processes and wrote
requirements for the new system
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ERP
Industry Examples
Implementation Process
– Packaged available applications & selected
Oracle applications
– Consultants from Price Waterhouse and Oracle,
installed the software & began pilot projects
– Complexity and magnitude of the project
quadrupled (Digital Disk drive division
acquisition)
– Conference room pilots tests
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ERP
Industry Examples
Human (HR) Side
– Locally trained about 100 users from all over
the world and flew them into Milpitas to run a
full-scale system simulation
– Sponsored massive user training - users had to
pass a test before returning to their jobs
– Ran Internal PR campaign- Entailed group
meetings, presentations,an intranet site and
events emphasizing system's importance
SIS
ERP
Project Statistics
– October 1992 - May 1996
– 16 full time managers
– 100 person
multidisciplinary team
– 1,632 meetings
– 79 shouting matches
Industry Examples
–
–
–
–
–
–
800GB of disk space
18,064 miles of cable
300,000 cups of coffee
58,000 e-mails
7,503 cases of beer
1.62 million miles
of air travel
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ERP
Future Aspects
• Targeting Small & Medium Enterprises
Business
• Addition of Simple GUI based
development Tools
• Strategic Alliances
- Andersen Consulting & SAP
- IBM & J.D. Edwards
- GE & Oracle
• Supply Chain Management
Technology
• Internet Enabled
• Workflow Management
• Resource Planning
• Data Warehousing
SIS
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