ASSIGNMENT # 1 ERP SUMMARY OF CHAPTER 1
SUBMITED TO SIR MUINUDDIN
BUSHRA SABA AWAN 17440
SCM301-B INTRO TO SAP-ERP SYSTEM
Q=What is ENTERPRISE?
A group of people with a common goal which has certain recourses at its disposal to achieve this goal
Q=What is ERP?
ERP software is designed for modern business, it basically help in running the internal business
processes by creating a communication among different departments and functions of enterprises
ERP system create common data base and reporting tools assimilate areas such as planning, purchasing,
inventory, sales, marketing, finance and human resources. ERP programs to improve how work is done
within a company and between companies.
Q=What are the advantages of ERP system?
Major importance of ERP is
reduction of inventory
flexibility
It decreases cost
Use of latest technology
It save time as it provide timely information
Reduces the manual work
ERP systems are especially helpful for managing globally dispersed enterprise
Helps in making forecasts
It has centralized database which anyone can access at any work place
One of its importance is that it help in making customer relation better and reliable by placing
order and billing system at one place and tacking customer attitude all time
Q=What is inventory?
Inventory is basically stock at warehouse or at storage which is for sale
Basically it is categorized in
Raw material
Semi-finished goods
Finished goods
Q= What is SILOS?
It occurs when departments or management groups do not share information with other departments.
The silo mentality reduce employee morale and it contribute to the failure of an enterprise So with the
help of ERP system at work place help to reduce the silo mentality which is also one of its importance
Q=How does ERP works?
It basically works at its core, ERP helps employees do their jobs more efficiently by breaking down
barriers between business functions .Before going to erp explanation we must understand what are the
main functions or areas of business are in which we will come to know that how erp works .Main
functions are as follows
1 production planning
2 Finance
3 Marketing
4 R and D
5 Production
6 Sales and distribution
7 Human resources
And before using ERP system here managers first do the observations of the activities of these
departments or functions so that managers can introduce the ERP system according to the business
processes
Q=What is business process?
It is basically the combination of activities
For example
1 the procurement or purchasing processes
Here in this process Production planning control is first responsible to make master production
schedule and create bill of materials
And warehouse check material availability of materials and create purchase requisition for
material
And purchasing dept. make order and send it to authorized appropriate supplier
Again warehouse receive and inspect material on delivery from supplier and update database of
inventory
And in the end accounting dept. receive invoice from supplier and make payments
2 the production processes
Here in this process Production planning control is first responsible to make master production
schedule and create bill of materials
Warehouse according to BOM send materials
Production dept. receives MPS and BOM
Quality control inspect goods
Again warehouse store finished goods and update system
3 the production planning processes
Marketing dept. check the trends
Production planning identify level of production and create MPS and BOM
Warehouse receive BOM
And MPS is send to production dept.
Q=What is master production schedule MPS?
The master production schedule (MPS) the plan that the company make for production, inventory, etc.
PRODUCTION PLANNING CONTROL AREA is responsible for making MPS after the analysis of market
trends is done by marketing unit,
MPS a variety of data for each of a number of time periods
After MPS production planning control unit make BOM BILL OF MATERIALS
Q=what is bill of materials?
A bill of materials BOM is list of parts, items, and other materials required to create a product, The bill
of materials can be taken as the recipe and shopping list for creating a final product. The bill of materials
explains what, how, and where to buy required materials.
Example
BILL OF MATERIAL OF COMPUTER MANUFACTURING ENTERPRISE
NAME OF ITEMS ITEM CODES QUANTITY
micro chips micro123-gold 56
motherboards m.board11-gold 23
soundcards s.cards123-gold 45
battries battries34-black 56
screens screens564-led 56
mouse mouse32-black 23
keyboard k.board4-black 45
cpu cpu456-silver 56
