Jeremy Ferrer
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An ERP, or Enterprise Resource Planning, is a system for managing production, manufacturing, financial, sales, and purchasing resources. It is also popularly referred to as “ERP” in technical jargon.
The difference? Just the name. An ERP or an ERP will have exactly the same functionalities. In fact, PGI is the French term for ERP, which means “Enterprise Resource Planning” in English. All this to say that the key to an ERP system is to be able to provide quality management, laboratory management, business process management, product data management, inventory management, distribution and transport management, human resources management, and regular reporting system.
That makes a lot of things!
It is a generation of information systems, as is CRM for customer management. ERP is primarily used to improve business processes for businesses in order to improve their core competitiveness. PGI (or ERP) represents a supply chain management idea proposed by the American IT consulting and assessment group Gartner Group Inc.
Enterprise resource planning refers to a management platform based on information technology and provides systematic decision-making methods for decision makers and company employees. The ERP system supports mixed environments and complex processes. The range of applications has expanded from manufacturing to retail, services, services, banking, telecommunications, government agencies, schools, and many other commercial services.
By integrating database technology, graphical user interfaces, query languages, a client-server structure, computer-aided development tools etc. ERP systems have effectively integrated most of the company's resources.
An ERP, or Enterprise Resource Planning, is a ERP software. Enterprise Resource Planning that makes it possible to effectively manage all of a company's processes and resources. It brings together various functional modules such as accounting, commercial management, production management, inventory management, human resources management, CRM. Customer Relationship Management, etc. The main objective of an ERP is to integrate all of the company's data and processes into a single database, which allows for better business management and better decision-making.
Faced with the global market, it combines the creation of internal and external processes, encompassing all management links and supply chain supports. It coordinates the various management departments of the company to conduct business activities more flexibly and in real time.
The PGI answered the demand! Redefine commercial relationships between suppliers, distributors and manufacturers, by reconstructing commercial and information processes, orchestrated with the organizational structure of the company, so that the company takes greater initiatives at the level of its competition.
PGI is a global and very complete corporate information management system mainly for so-called “integrated” management. By this we mean the integration of material resources, capital resources, and information resources for the manufacturing industry. ERP is software that has accounting at its heart, serving to provide real-time information integration across regions, departments, and even countries. The proposal for an ERP in the company is inseparable from the development of computer technology. Users have greater control over the system.
The functions of the ERP include in addition to the basic functions mentioned above (manufacturing, procurement, marketing and finance) the following modules:
It will redefine diverse business management and relationships, adopt a more flexible approach in organization, and synchronize, agile and in real time data between supply and demand (including changes caused by regulations, standards, and technological developments) in the supply chain.
In addition to extending management functions, the ERP also uses strong foundations in computer technology, such as extending user-defined scope, object-oriented technology, client/server architecture, multiple database platforms, and structured SQL queries: Language, graphical user interface, 4GL/CASE, window technology, artificial intelligence, simulation technology, etc.
The application of information technology in business management can be divided into the following stages of development:
1- Stage of the MIS (Management Information System) system
The company information management system is mainly about recording a large amount of raw data, support requests, summaries, etc.
2- MRP phase (production resource planning)
The company's information management system manages product composition and uses computer systems to manage customer orders, inventory, and product composition management capabilities.
It implements and calculates material demand plans based on customer orders and structural product lists.
3- MRP II phase (Manufacturing Resource Planning)
Based on the MRP management system, the system adds the management of the company's production center, processing hours, and production capacity to achieve the company's planning function, and also includes financial functions.
This management system is in a position to dynamically monitor the entire production, manufacturing, procurement and sales process.
4 — PGI phase
After entering the ERP phase, the enterprise-level IT management system is more mature, and the system adds functions such as financial forecasting, production capacity, and resource planning adjustment. Cooperate with enterprises to ensure quality management, production resource scheduling management, and ancillary decision-making functions.
Become a gateway for production management and decision making.
The maturity of Internet technology has increased the ability of information management systems to complete the sharing of information and the direct exchange of data with customers or suppliers, thus strengthening the relationship between businesses. A common development chain has therefore been established and helps the business supply chain to be more structured and therefore more competitive.
The ERP system, as a result, allows decision makers and business units to carry out joint operations between businesses.
The functional modules of an ERP
The ERP system also includes the following features:
In addition, it includes additional functions such as financial investment management, quality management, quality management, transportation management, project management, regulations, standards, and process control. PGI is a management system that integrates all of a company's resources. In short, it refers to the three main flows of a business: logistics, capital flow, and information flow.
It can not only be used for the management of production businesses, but also in many other types of businesses, such as non-productive ones, public welfare companies can also import ERP systems for planning and resource management. In businesses, general management mainly includes three aspects: production control (planning, manufacturing), logistics management (distribution, procurement, inventory management), and financial management (accounting, financial management).
These three major systems are themselves integrated and have corresponding interfaces with each other, which can be integrated for business management. In addition, it is important to mention that with the growing emphasis on human resources management, more and more ERP providers have integrated it.
The ERP integrates customer demand, manufacturing activities within the company, and supplier manufacturing resources to form a complete supply chain for the organization. Its core management ideas are mainly reflected in the following three aspects:
The ERP has important features such as integration, systematization, flexibility, and real-time control.
The management method of ERP system supply chain puts forward higher requirements for businesses, and it is the basic management mode for businesses to be able to thrive in the information society and the knowledge-based economic age.
1- For sales, able to respond quickly to the market. It includes supply chain management functions, highlights new partnerships between suppliers, manufacturers, and distributors, and supports corporate logistics management.
2- Put more emphasis on business processes and workflows, to achieve integration between company personnel, finances, manufacturing, and distribution, and support the reorganization of business processes.
3- The PDM product data management function is incorporated, the management of design data and processes is increased, and the integration of the production management system with CAD and CAM systems is further strengthened.
4- More emphasis on financial management, with a more comprehensive corporate financial management system, which allows the implementation of the concept of value management, and the organic integration of capital flows with logistics and information flows.
5- Further consider the role of human factors as resources in planning production and operations, as well as the costs of human training.
6- In the manufacturing plan, the PGI supports the mixed management mode of MRP and JIT, and also supports the management mode of multiple production methods (discrete manufacturing, continuous manufacturing, etc.).
7- The latest computer technologies are adopted, such as distributed client/server structure, object-oriented technology, electronic data exchange (EDI) based on WEB technology, multi-database integration, data warehouse, data warehouse, data warehouse, graphical user interface, graphical user interface, graphical user interface, fourth-generation language and auxiliary tools, etc.
The advantages of ERP are mainly reflected in the following aspects:
There are still some problems in implementing ERP systems in French companies.
The main manifestations are as follows:
Therefore, choosing an appropriate vendor is the key to a successful ERP implementation.
lookout
According to known statistics, the success rate of ERP implementation is only 10% to 20%! An ERP based on the idea of supply chain management should be carried out in accordance with the following aspects during the deployment process:
- Decision makers establish the implementation of the ERP system.
- A decision maker is a person who has a comprehensive understanding of all aspects of the business, who has a clearer overall development objective, and who has some influence and appeal.
As a leader in the implementation of the ERP project, if he conducts comprehensive planning, he will validate all the steps and go through to the end.
Establishing a comprehensive organization at three levels within the company:
Determine deployment plan steps, implementation details, and personnel division for ERP.
Do a good job of preliminary consultation and research
Consulting consists of diagnosing and analyzing the weak links and fundamental problems existing in the current development and management of businesses through management consulting experts.
Rethink business processes and adjust organizational distribution with these seasoned consultants.
Research is about knowing, understanding the production and composition of the company and the demand for services, as well as the development capabilities of ERP providers.
Also added are:
Ensure the accuracy, timeliness, reliability of core data, and consistency between data before and after, and provide a reference for decision making.
There are a lot of ERP products out there and there are also big differences in scale, product structure, market strategy, and business model between different businesses.
Therefore, when choosing ERP software, businesses should focus on:
Fully consider the nature, strength, and reputation of the supplier as well as the determined price that should be appropriate.
In addition, an analysis of the benefits of the investment should also be carried out, including the profit rate, the investment payback period, the implementation cycle, and the difficulties.
In order to avoid that the implementation time, secondary or customization developments are too long and thus sacrifice the benefits perceived beforehand.
Train shop and department managers, financial and accounting staff, production planners, production planners, purchasing and sales personnel, production statisticians, and warehouse administrators throughout the implementation of the ERP system.
Because the use of the ERP system will significantly change existing operating methods or employee routine procedures.
In terms of sophisticated production, “just-in-time” production, comprehensive quality management, etc., the personnel involved in the ERP project should be trained to use software functions at various levels and to varying degrees.
Establish and improve the engineering project management system and its operating mechanism.
The ERP system is a business management system project with characteristics of a large investment, a long cycle, a complex system and a high risk.
Therefore, businesses must ensure the successful and exemplary implementation of ERP projects from the point of view of systems engineering and scientific management in the process of applying the ERP itself.
What we regularly see in businesses are extremely expensive installations of ERP systems, where no one is properly trained, resulting in an almost total abandonment of the tool.
The company therefore loses enormous added value due to this lack of rigor and pays huge amounts for installation and maintenance for finally not much relevant.
Thanks to the centralization of data, the various departments of the company can access information in real time, which facilitates the planning, management and monitoring of company activities. An ERP also offers the possibility of customizing functionalities according to the specific needs of each business. Independent modules can be added or removed according to business needs and activities. This modularity allows businesses to choose the functionalities they need and to integrate them into their existing management system.
The implementation of an ERP can be done in various ways. Some publishers offer solutions in SaaS mode. Software as a Service, i.e. the software is hosted on external servers and accessible via the Internet. This allows businesses to benefit from a management solution without having to invest in IT infrastructure. Other companies prefer to opt for open source ERP solutions, such as Dolibarr, ERPNext or OpenERP, which offer more flexibility and agility in configuring and adapting the software to the specificities of the business. Whatever the choice of the company, it is important to clearly define the needs and objectives before selecting an ERP solution.
Precise ERP specifications must be established to describe the expected functionalities, the desired functional scope and the specific constraints of the company. Integrating an ERP into a company often requires the intervention of an integrator, who is a specialist in the implementation of ERP solutions. the integrator is responsible for setting up the software according to the needs of the company, ensuring user training and ensuring compatibility between the ERP and other information systems already in place.
The ERP market is very broad, with numerous publishers and numerous solutions available. Each solution has its own specificities and covers certain sectors of activity more than others. The benefits of an ERP are numerous. It allows better traceability of information flows and company activities, optimization of business processes, more efficient management of human resources, automation of operational tasks, better management of customer relationships, etc. In addition, dashboards and decision-making functionalities of ERP systems offer a global and synthetic vision of business activity, which facilitates strategic decision-making.
An ERP is an integrated management tool that allows businesses, regardless of their size, SMEs, SMIs, large companies, to manage all of their processes and resources in an efficient and optimized manner. Whether in the trading, production, distribution or e-commerce sector, an ERP offers a complete solution adapted to the specific needs of each company.
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