today's competitive world many major companies have decided to use a
popular tool that has evolved over the past few decades. ERP, the
descendant of MRPII offers the "answer" to the economic and
productivity troubles of manufacturing and service enterprises.
Thus, the ERP system has become very popular as an enterprise
management software tool.
In order for a software system to be considered ERP, it must
provide an organization with functionality for two or more systems.
While some ERP packages exist that only cover two functions for an
organization (QuickBooks: Payroll & Accounting), most ERP
systems cover several functions.
The term ERP originally referred to how a large organization
planned to use organizational wide resources. In the past, ERP
systems were used in larger more industrial types of companies.
However, the use of ERP has changed and is extremely comprehensive,
today the term can refer to any type of company, no matter what
industry it falls in. In fact, ERP systems are used in almost any
type of organization - large or small.
ERP systems today can cover a wide range of functions and
integrate them into one unified database. For instance, functions
such as Human Resources, Supply Chain Management, Customer Relations
Management, Financials, Manufacturing functions and Warehouse
Management functions were all once stand alone software
applications, usually housed with their own database and network,
can now fit under one umbrella
As in any integrated System or Unit, the performance of each one
of the parts of an Enterprise has an impact in his cumulative
performance results. Specifically, we can say that a 95% performance
in independent vital enterprise elements (Item master, Bills of
Materials, Production Master Schedule Adherence, Inventories
Accuracy, Production Orders Accuracy and Purchase Orders Accuracy),
will reflect a cumulative 75% in a ERP environment. This means a
percentage of failure possible in productivity terms. Here is where
we should support and combine this useful tool with a business
strategy based on the desired administration tendency or theory.
On this sense, it is vital to note the point on administration
before deciding which ERP software is the one you will be using, you
need to have solid administration principles (no matter which
administration tendencies you decide to choose) and strong knowledge
of ERP methodology.
This will translate into synergy between areas that will allow
organizations to have highly effective processes with a continuous
success. Only by creating a deep understanding of this philosophy
you will have the certainty of obtaining the best results, as well
as being in position to face and take proactive actions for any
obstacle you could find in the road. If you have not this reference
point, your efforts will deliver the wrong results.
We invite our readers to contribute their views and
opinion on ERP. Articles which is suitable for publication will be
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