Lesson
No. 6 – ERP
Important Statements are highlighted with yellow/blue background & terms are underlined that can come in Objective questions - Fillups, True or False, Multiple Choice Questions..
Short Question Answers
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Answer
the following
1. Give any four benefits of ERP system
- Page
105 - 106
2. List down different modules of ERP
system. – Page No. 101-102 (only names)
3. Define Enterprise and Resource. – Page No. 99 - 100
4. Explain any 2 ERP related technologies. - Page
No. 102-103-104 (two points per technology)
5. What is Planning? - Page No. 100
Lesson Summary for Objective Questions
Information Technology and its related technologies can be used for planning and
organizing resources and information of an enterprise.
Enterprise – An enterprise is a group of people and other resources
working together for a common goal.
An enterprise acts as a single entity.
An Enterprise consists of sections: manufacturing/production,
planning, sales, purchase, distribution.
Each department is working to achieve the objective which is
set for the enterprise.
Resource Types like men, material, money and machine
Planning – helps to improve future performance, by establishing objectives and
selecting a course of action in the organization.
Concept of Enterprise Resource Planning:
The ERP system often integrates accounts payables, stock control systems,
order monitoring systems and customer database into one system.
An enterprise can be considered as a system and all its departments as its
sub systems.
Information about the entire enterprise can be stored in a centralized
database.
ERP replaces the old stand-alone computer systems in each area of an
enterprise.
The ERP system helps the management in making the planning process more
productive and efficient.
ERP Functional Units/Modules :
a) Financial module – It collect financial data from
various functional departments and generates financial reports – balance
sheets, general ledger, trial balance.
Financial Module also
includes financial accounting, investment management, enterprise
controlling and treasury.
b)
Manufacturing module – It contains business rules to manage the entire production
process/planning methods.
c) Production Planning module – It is used for optimizing the
utilization of available resources and helps the organization to plan their
production.
d) HR module – It maintains updated and complete
employee database including personal information, salary details, attendance,
performance, promotion of all employees in an enterprise.
e) Inventory Control Module – It convers processes of maintaining
the level of stock in the warehouse.
f) Purchasing module – It helps for generating purchase
order evaluating the supplier, and billing. Purchasing module is closely
connected with the inventory, finance and production planning
module.
g) Marketing module - It is used for monitoring and tracking
customer orders, increasing customer satisfaction and for eliminating credit
risks.
h) Sales and distribution module – It helps for tracking
enquiries, order placement, order scheduling, dispatching and invoicing.
Sales and distribution
module is closely
integrated with the E-commerce website of the organization.
i) Quality management module – It is used for managing the quality
of the product.
The quality management module fulfills the following
functions : Quality planning, Quality inspection and Quality
Control.
ERP and
related technologies:
1. Product Life Cycle Management (PLM) –
It is the process of
managing the entire life cycle of a product. PLM is used for determining the life
span of a product.
PLM
consists of four stages : - Introduction, Growth, Maturity, Decline
2. Management Information System (MIS)
- MIS
has three components – Management, Information and System.
- MIS
collects relevant data from inside and outside an enterprise.
- MIS has the capability to generate
reports as and when the user demands it.
- Management is the end user
of the data.
3. Supply Chain Management (SCM)
It consists of all the
activities associated with moving goods from the supplier to the customer.
SCM begins with collecting
raw materials and ends with receiving the goods by the consumer.
4. Customer Relationship Management
(CRM)
It is a term applied to
processes implemented by a company to handle its contact with its customers.
CRM covers methods and
technologies used by companies to manage their relationships with clients.
It includes the capture,
storage and analysis of customer information.
5. Decision Support System (DSS)
DSS are interactive,
computer-based systems that aid users in judgement and choice activities.
It is a computer program
application that analyses business data and presents it so that users can make
business decisions more easily.
DSS needs a strong database management
system to provide the support in decision making.
ERP and Internet
The
communication between the server where an ERP system is installed and
many clients (End-user PC) is done through the Internet.
ERP suites run in the cloud as SaaS
(Software as a Service)
ERP runs on a company’s data center.
Benefits
of ERP
a) Improved resource utilization
b) Better customer satisfaction
c) Provides accurate information
d) Decision making capability
e) Increased flexibility
f) Information Integrity
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