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Components of ERP
1 Hardware
2 Operating System
3 Data Base System
4 Connectivity
5 Business Processing understanding & mapping
6 Consultants
7 Choice of ERP product to suite your Business
1 Hardware
This consists of Data Base server, Application servers
Clients.
Data Base servers store all the tranaction data that takes place due
to different business transactions in Finance, Costing, Material,
Sales, Production planning, Plant Maintenance, Quality etc.
The Data base servers have memory that are installed into the server
to store data. These are available in discs with designated sizes e.g:
9 gb, 81 gb etc. The size od data base is decided by the number of
discs installed in it. Ex: 9 discs of 81 gb would mean that it has a
capacity of 9x81 = 729 gb memory size.
These are products that are sold by vendors whose names have
been mentioned in earlier line. These products allows us to conduct
our business through the business system that are written in
software. These softwares addresses all business functions and
related business processes. At one time when ERP started, the Data
Base and Applications were loaded on one system with either
physical separation or logical separation in the Hard Disc as well as
the RAM. This meant that there was only one box that housed both
these systems. Under such circumstances we then had one box with
these 2 systems and another box that was used by the users of the
system. This architecture was then call a 2-Tier system.
Till 1993, most of the ERPs were run on the Main Frame computer
systems. These were essentially 2-Tier systems. The Main Frame
systems were not the 4th Generation (4 GL) Language systems.
Hence it was not internet enabled. Further they were also not
platform independent.
2 Operating System
This is a software tool that helps to pull out the correct business
processes/ applications for conducting the transaction. Further it
helps to draw out the correct data from the data base system and
after completion of the transaction helps to return the application
processes and data to the designated places in each of the servers.
One must also remember that Operating System also acts like a
police man to regulate the data traffic in the systems. It prioritises
data travel, application programs call, locates and relocates data at
correct places, has the address of all these data that u have saved so
that the same data can be recalled correctly without wasteage of
time.
Examples of Operation systems are: Unix, Linux, Windows NT etc
4 Connectivity:
Here we connect the different office, factories and godowns with the
central servers. This means that we have a centralized Data Base
system and not a distributed Data base system. This means that the
data is captured and recorded in a Real Time & On-Line manner. In
this data & business transactions are captured on-line and in nano
seconds. This will happen only when all locations are centrally
connected.
When we use the Fibre optic cables, the data travels through
these cables and hence the transmission is without any HOOP.
When we use the VSAT, the data is shot in the air as packets.
These data packets reach the assigned satellite of the service
provider and returns to the service providers HUB. Thereafter the
data is once again thrown in the air to the satellite and then
reaches the destination that has been assigned to the data. This is
called a double HOOP system. One can clearly if that the data
travelling through the Fibre optic makes no HOOPs like the ones
made in VSAT. Hence data transmission through Fibre optics is
musch faster than that through the VSAT. Further we will need
much smaller bandwidth to transfer data through the fibre optics.
6 Consultants
These are prfessionals who understand the ERP Package that you
have selected to be implemented at your site. Since ERP is a
Business man’s package and not a IT engineer’s package, it will be
best understood by business persons.
Important criteria that you need to watch with each ERP vendors are:
a) no of accounts that each of these ERP vendors have in your
business areas
b) annual ERP product sales year on year
c) investment in Research & Development
d) trained and certidfied consultants available with them
e) number of existing implementation partners in your country
f) types of hardware and infrastructures available for help
g) cost per user for each licemse purchased
h) annual maintenance cost as % of license fees
i) support during and post implementation stage
j) ERP vendors partnership witjh the Hardware, Operating
Systems, Networking and communications, Systems
integrators etc.
k) Global connections and connectivities.
Chapter 2
HR – Human Resources
MM – Materials Mgt
SD – Sales & Distribution
PM – Plant Maintenance
PS – Project Systems
QM – Quality Mgt
FA – Financial Accounting
CO – Controlling
IS – Industry Solutions
OC – Office Communication
HR – Human Resources
Here we handle all the business processes that atke place in HR. We
have Salaries and other related aspects taken care off. We also
address the recruitment processes, selction, appraisals, career
developments, training & development requirements, retrials &
separations, succession plans, job descriptions, job attributes , skills
required and matching with available skills of the concerned
employuee.
We can also track travel on business & training, guest house or hotel
booking, ticketing and reservations as well.
MM – Materials Mgt
c) Procurement
Here we handle all activities that are connected with maintaining the
material supply to the company: either the consumable raw material
or the capital goods.
d) Inventory Mgt
Here we have the responsibility to receive materials against the
Purchase orders (GRN), Issue materials to various production orders,
projects etc (GI- Goods issue), Inventory valuation, manage store
spaces, manage shelf lives of the various mteruials, inventory stock
taking at regular intervals as reqd by company.
Inventory mgt will also mean that we issue correct material in correct
reqd quantities so that there is no problem faced during production.
Each material type has a separate Number range for each type of
amterial.
All above statements made in Materials mgt are equallt valid for
Sales by as a mirror image.
PM – Plant Maintenance
PS – Project Systems
We can then get staistics on how costly each plant is to us and can
the plan the replacements etc
QM – Quality Mgt
Here we need to define the Quality Strategy, Quality Plan and finally
the methods used to administer thr quality at all levels. The different
levels will be for Procurement, Work in Progress and the Finish
Products.
There will be different tools and instruments used to evaluate quality.
There will also be defined the various attributes that need to be
measure regulatrly. We will also define the top and bottom limits to
get quality in place in terms of accepting or rejecting the material at
various stages.
This means that we will have to define the number of lots that we will
inspect and also at what intervals. The size of each sample for quality
/ inspection/ control will have to be defined alongwith the appropriate
number of samples to be taken and also the intervals. The choice will
have to be done keeping in mind what is the reliability level that u are
seeking. This means we will inteprete quality of the population from
the observed results of all the combined samples that we have
chosen and also the number of samples and also the interval
between the samples. We can work out these details depending upon
the reluiability levels like 65%, 95%, 99% or 6-sigma.
This will mean that the population will be 65% reliably represented, or
95% or 99% or 6-sigma.
FA – Financial Accounting
All costs, budgets, budgets used, cash flows (inwards and outwards),
financial funding in terms of long term and short term.
Asset Management
We also manage Assets in this way. We track every asset for it’s
performance and the value it delivers.
CO – Controlling
OC – Office Communication
Here we will talk about integrating Office Communications softweare
with basic SAP System.
Examples could be email system, Document management system,
GIS (Geographic Information System,), CAD/ CAM ststem, Animation
systems, FAX, Mobiles, Mobile Commerce system etc.
Chapter 3
You can clearly see the brick wall in the diagram disappearing
significantly as we moved from 1999 onwards. This was announcing
a new era of Enterprise Application Integration (EAI). One could
see products like Seebeyong, TIBCO etc emerging on the scenario.
One could now integrate different ERPs as well