Enterprise Resource Planning (ERP) is a term for a broad set of activities to help a manufacturing managing the business 1). It is defined as a computer-based system to manage external and internal resources. An ERP system provides visibility for Key performance Indicators (KPI). It manages product planning, purchasing, inventories, as well the interaction with suppliers, provision of customer service and order tracking. Also an ERP system might include modules for finance and human resources aspects of the business. 2). The scope of an ERP system is to enhance the firm’s capabilities by fully utilizing capacities, schedule production, reduce inventory meet delivery due dates and to enhance the efficiency and effectiveness of the supply chain 3).
ERP system evolution started more than 30 years ago. The aim to integrate business processes by utilizing computer programs was first introduced in the late 1960s by developing material requirement planning (MRP). In the 1980s MRPII was developed. MRP II integrated inventory with financial transactions, sales orders with material planning and finance transactions. The establishment of modern ERP systems started in the 1990s 4).
Major differences of new ERP systems are:
Today also web-based ERP systems are available. These advantage of these systems is that no installation on the customer side is needed. The ERP web-based systems can be access via web browser.
General characteristics of an ERP-System 5):
In general ERP systems consist of many modules. These modules are linked together and share the same database. These modules perform different functions within the organization and each module can be installed independently 6) Typical Software Modules are:
An ERP System provides several advantages for managing the supply chain. Typical advantages of an ERP System are 7):
Typical disadvantages of ERP-Systems are 8):
Some of the well-known ERP vendors are: