Fundermentals of ERP Flashcards
(6 cards)
What is an ERP?
ERP stands for Enterprise Resource Planning. It is a fully integrated business management system that covers functional areas of an enterpise like sales, productions, accounting, human resources, etc.
List and explain 5 advantages of an ERP.
Why do companies implement ERP systems? Here are 5 reasons:
1) Improved efficiency and information integration for better decision making.
2) Faster response time to customer queries.
3) Better analysis and planning capabilities.
4) Use of latest technology.
5) 5) Business Integration across departments and companies.
List and explain 5 disadvantages or limitations of an ERP.
1) ERP systems are basically meant for recording what has already happened, rather than planning for what will be.
2) ERP systems are far too rigid in their ability to continually reshape and restructure workflows as business challenges and opportunities arise.
3) ERP systems lack the ability to expand their scope to multiple enterprises.
4) ERP systems can be too expensive to install and maintain.
5) ERP is often seen as too rigid and difficult to adapt to the specific Workflow and Business process of some companies.
What are the characteristics of an ERP?
The main characteristics of an ERP are:
1) Flexibility to respond to changing needs. 2) Modular and Open architecture.
3) Comprehensive support for various organizational functions. 4) Beyond The Company boundaries, supporting online connectivity to other business entities. 5) Incorporates best business practices applicable worldwide.
List the modules of an ERP and give a brief explanation of each module.
Typical ERP modules include:
1) Production Planning: Optimizes manufacturing capacity, parts, components, and material resources.
2) Purchasing: Streamlines procurement processes.
3) Inventory Control: Maintains appropriate stock levels
4) Sales: Implements functions like order placement, scheduling, shipping, and invoicing.
5) Customer Relationship Management (CRM): Manages detailed customer information and interactions.
6) Financial Module: Manages financial data and generates reports.
7) HR Module: Streamlines human resource management.
8) Supply Chain Management (SCM): Manages product flow from manufacturer to consumer.
Briefly explain the evolution of ERP.
The evolution of ERP began with Materials Requirements Planning (MRP), which focused on production planning and inventory control. This evolved into Manufacturing Resource Planning (MRP II), which expanded to include more functions like business planning, sales and operations planning, and capacity requirements planning. Finally, modern ERP systems emerged in the 1990s, expanding the scope to include more of the supply chain and supplier resources based on dynamic customer demands and schedules.
