Important Concepts of Six Sigma
Types of Variables In the equation – Y = f(X), Y is the dependent variable and it is dependent on the variable X. In other words, when there is a change in value of X then value of Y will automatically change. The following are the characteristics of both types of variables: Y X Dependent […]
Introduction to Intellectual Property Rights
Intellectual Property Rights (IPR) safeguard the creations of the mind, offering legal protection to inventors, artists, and businesses for their innovations, designs, and works. When individuals and businesses know their work is protected, they are more likely to invest time, resources, and energy into research, development, and innovation. This cycle of protection and creation benefits […]
SIPOC Methodology – A High-Level Process Map
The SIPOC methodology is one of the most useful concepts in the hand of a BPM expert. The idea behind the SIPOC methodology is to view each process as a different organization in itself. Each process therefore has its own suppliers, inputs and corresponding customers and outputs. The aggregation of all these processes is the […]
Investing in Sin Industries: Are They Worth the Hassle ?
Some professions in the world are not considered to be as acceptable as others. This notion of acceptability is widely influenced by the cultural norms in the society where one is conducting business. However, in the modern world, being associated with sin does not seem to be much of a deterrent to investors. Cities like […]
Finished Goods Supply Chain Operations
FG Supply Chain consists of all activities involved in movement, storage and distribution of Finished Goods from the Delivery point of Plant to the Point of Sale. In the case of global supply chains, supply chain management gets more complicated with the variations arising out of different countries regulations and logistical practices. Computer Hardware supply […]
Use of computer systems is a post second world war phenomenon. The first working computer was developed by two scientists at the University of Manchester, UK. However, commercial applications of computer commenced during the 1960s.
In the sixties, computers were bulky, noisy and without the facility of standard operating systems. The organizations used to develop computerized systems that were stand alone; tailor made and without an integrated approach.
The software development, in a sense, was a re-inventing wheel, as the basic business process is similar for all organization in the same business sector. Due to this restrictive environment, Development, maintenance, and modification cost became prohibitive. Developer ended up developing isolated and piecemeal systems, even within an organization. Thus, a payroll system, accounting system, and inventory system were developed in isolation as per specific need of business units and were incompatible with each other.
Stand alone systems, in vogue during the sixties, were incapable of processing planning requirement of an enterprise encompassing production planning, procurement, and inventory, which became an impediment to adopting Materials Requirement Planning (MRP).
MRP was first adopted by IBM and J I Case (a tractor maker from the USA) during the late seventies, when integrated systems started taking shape. The basic idea of MRP was to assimilate planning and scheduling elements to the manufacturing process. The process of MRP was to plan and procure purchase requirements based on finished products, inventory on hand, allocated inventory and expected arrivals. Subsequently, it was supplemented by Capacity Requirement Planning (CRP) to create capacity plans of shop floors and sub=contractors.
There was continued development of MRP system during the 1980s. The need moves beyond shop floor, and MRP II was introduced incorporating planning element of distribution as well as forecasting requirement.
ERP was introduced in late 1980 to integrate other business functionalities not covered by MRP or MRP II. It is not confined to manufacturing only but covers all facets of organization such as:
ERP development from software solution provider mainly emerged as a sequel of their MRP products. Some of the early solution providers are:
Few vendors did not follow this course. Starting point of Oracle ERP was their accounting package whereas People-soft ERP evolved from their HR suite.
During the 1990s, ERP products continued to evolve. Vendors added new functionalities, incorporated Graphic User/ Internet browser interface and brought out new versions of their products.
Some solutions were found to be more suitable for a particular vertical such as discrete manufacturing, utility, process industries, public sector and retail. Several vendors brought out reference models of their product, meaning that through pre-configuring basic and common data, a particular flavor of their product will be more compatible with the business need of a particular sector/ sub-sector.
Traditionally, the biggest purchaser of an ERP solution is fortune 500 companies. But, this market has since been saturated. Vendors are now looking to increase their presence in small and medium business sector. Due to fierce competition and financial crisis, there are also some takeover and mergers across ERP solution providers during early 2000 such as Oracle taking over People Soft, Infor taking over BaaN and Microsoft taking over Axapta.
ERP solutions, which were mostly, operating as a back-end system, is now broadening its horizon. ERP vendors are extending their products to become Internet-enabled. ERP extension products (mostly as an add-on to their existing products) now provide solutions for Advanced Planning and Scheduling, Manufacturing Execution System, Advanced Business Intelligence and Dashboards, Salesforce Automation, Product Lifecycle Management and Warehouse Management.
Business to Businesses and Business to Commerce functionalities, as add-on solution, is now getting seamlessly integrated with Back-end, thus making it possible to bring e-commerce under the gambit of ERP.
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Configuration Control and Setting Up of Base in ERP System
February 12, 2025
