Manufacturing and Production Systems
Planning, development, production of products and services
Planning, development, maintenance of production facilities
Acquisition, storage, availability of materials
Scheduling materials, facilities, labor
Controlling the flow of production
Examples of Manufacturing and Production IS
Finance and Accounting Systems
Manage firm’s financial assets: cash, stocks, bonds, etc.
Manage capitalization of firm and finding new financial assets
Maintain and manage financial records
Examples of Finance and Accounting Information Systems
Human Resources Systems
Identify potential employees
Maintain employee records
Track employee skills, job performance, and training
Support planning for employee compensation and career development
Examples of Human Resources Information Systems
Planning, development, production of products and services
Planning, development, maintenance of production facilities
Acquisition, storage, availability of materials
Scheduling materials, facilities, labor
Controlling the flow of production
Examples of Manufacturing and Production IS
Finance and Accounting Systems
Manage firm’s financial assets: cash, stocks, bonds, etc.
Manage capitalization of firm and finding new financial assets
Maintain and manage financial records
Examples of Finance and Accounting Information Systems
Human Resources Systems
Identify potential employees
Maintain employee records
Track employee skills, job performance, and training
Support planning for employee compensation and career development
Examples of Human Resources Information Systems
Traditional view of systems
Roots of ERP
The concept of ERP has been around since 1960’s
It has its beginning in Materials Requirements Planning (MRP), and this later evolved into
Manufacturing Resource Planning (MRP II)
MRP & MRP II
Primary business systems installed in tens of thousands of manufacturing companies
MRP
–Introduced in the 1970’s
–Computerized approach to planning and obtaining the required materials for manufacturing / production
–Uses mainframes as the main source for input and processing.
MRP & MRP II
In the 1980’s MRP expanded to
–plant and personnel planning and distribution planning which in turn became MRP-II
MRP II
–Used Mainframes, but in conjunction with LAN (Local Area Networks) to input and access information
MRP II split into two
–COMMS, or Customer Oriented Manufacturing Management System
–ERP, or Enterprise Resource Planning
What is Enterprise Resource Planning (ERP)?
What Goes into an ERP System?
ERP Market
Advanced Manufacturing Research
–43 ERP Vendors
–Sales exceeded $27 Billion (2003)
–27% financial modules
–Market trend in ERP software towards mid-size companies ($50-$500M in sales)
ERP Software Vendors
SAP
Oracle (Peoplesoft - J.D. Edwards)
Microsoft—Great Plains
Birth of SAP
Until 1972 ERP was just a concept that companies had to integrate all departments and functions to increase revenues and strengthen the business
In 1972, 5 IBM managers set out to start what is today known as SAP
SAP was the first to develop and implement ERP specific software and Applications
SAP AG
Founded in Germany (1972)
World’s fourth largest software provider
World’s largest provider of Integrated Business Solutions software
Company stock trades on the Frankfurt and New York exchanges
SAP
Systems, Applications, and Products in Data Processing (SAP)
Name of the company
–SAP AG
–SAP America
Name of the software
–SAP R/2 – Mainframe version
–SAP R/3 – Client/Server version
SAP Enterprise
SAP Product Offering
SAP R/3
World-wide usage
Designed to satisfy the information needs for all business sizes (international to local)
–Multi-lingual
–Multi-currency
Designed to satisfy the information needs for all industries (industry solutions)
SAP R/3
Enables a company to link it’s business processes
Ties together disparate business functions (integrated business solution)
Helps the organization run smoothly
Real-time environment
Scalable and flexible
SAP R/3 Modules
R/3 Modules
Financials
Human Resources
Logistics
Financial (FI)
Complete picture of accounting
Extensive reporting facilities
Suitable for international corporations
Supports multiple currencies, languages
Human Resources (HR)
Includes all processes for efficient management of the organization
Country-specific module
–Includes different transactions, procedures for different countries
Logistics
Most extensive module
Manage all applications in the supply chain
Contain comprehensive business processes for manufacturing
Seamless integration
Architecture
Central relational database (e.g., Oracle and many others)
Client/Server—three-tiered
ERP Component—Oriented towards common identifiable business modules (PP, MM, SD, FI, CO, HR)
Advantages of SAP R/3
Integration
Business Process Re-Engineering
Non-redundant data
Automatic international conversions
Complete audit trail
Compliance with Sarbanes-Oxley
Advantages (contd.)
Open system
Integrated development
Sophisticated management and monitoring capabilities
Workflow capabilities
Disadvantages of R/3
Expensive
Complex
Demands highly trained staff
Very lengthy implementation times
Inter-module functions least understood by business
Internal conflict in organizations
The concept of ERP has been around since 1960’s
It has its beginning in Materials Requirements Planning (MRP), and this later evolved into
Manufacturing Resource Planning (MRP II)
MRP & MRP II
Primary business systems installed in tens of thousands of manufacturing companies
MRP
–Introduced in the 1970’s
–Computerized approach to planning and obtaining the required materials for manufacturing / production
–Uses mainframes as the main source for input and processing.
MRP & MRP II
In the 1980’s MRP expanded to
–plant and personnel planning and distribution planning which in turn became MRP-II
MRP II
–Used Mainframes, but in conjunction with LAN (Local Area Networks) to input and access information
MRP II split into two
–COMMS, or Customer Oriented Manufacturing Management System
–ERP, or Enterprise Resource Planning
What is Enterprise Resource Planning (ERP)?
What Goes into an ERP System?
ERP Market
Advanced Manufacturing Research
–43 ERP Vendors
–Sales exceeded $27 Billion (2003)
–27% financial modules
–Market trend in ERP software towards mid-size companies ($50-$500M in sales)
ERP Software Vendors
SAP
Oracle (Peoplesoft - J.D. Edwards)
Microsoft—Great Plains
Birth of SAP
Until 1972 ERP was just a concept that companies had to integrate all departments and functions to increase revenues and strengthen the business
In 1972, 5 IBM managers set out to start what is today known as SAP
SAP was the first to develop and implement ERP specific software and Applications
SAP AG
Founded in Germany (1972)
World’s fourth largest software provider
World’s largest provider of Integrated Business Solutions software
Company stock trades on the Frankfurt and New York exchanges
SAP
Systems, Applications, and Products in Data Processing (SAP)
Name of the company
–SAP AG
–SAP America
Name of the software
–SAP R/2 – Mainframe version
–SAP R/3 – Client/Server version
SAP Enterprise
SAP Product Offering
SAP R/3
World-wide usage
Designed to satisfy the information needs for all business sizes (international to local)
–Multi-lingual
–Multi-currency
Designed to satisfy the information needs for all industries (industry solutions)
SAP R/3
Enables a company to link it’s business processes
Ties together disparate business functions (integrated business solution)
Helps the organization run smoothly
Real-time environment
Scalable and flexible
SAP R/3 Modules
R/3 Modules
Financials
Human Resources
Logistics
Financial (FI)
Complete picture of accounting
Extensive reporting facilities
Suitable for international corporations
Supports multiple currencies, languages
Human Resources (HR)
Includes all processes for efficient management of the organization
Country-specific module
–Includes different transactions, procedures for different countries
Logistics
Most extensive module
Manage all applications in the supply chain
Contain comprehensive business processes for manufacturing
Seamless integration
Architecture
Central relational database (e.g., Oracle and many others)
Client/Server—three-tiered
ERP Component—Oriented towards common identifiable business modules (PP, MM, SD, FI, CO, HR)
Advantages of SAP R/3
Integration
Business Process Re-Engineering
Non-redundant data
Automatic international conversions
Complete audit trail
Compliance with Sarbanes-Oxley
Advantages (contd.)
Open system
Integrated development
Sophisticated management and monitoring capabilities
Workflow capabilities
Disadvantages of R/3
Expensive
Complex
Demands highly trained staff
Very lengthy implementation times
Inter-module functions least understood by business
Internal conflict in organizations
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