Explain the Enterprise Resource Planning (ERP) System and its modules.

A Management Information System ICT Revision Questions and Answers


Enterprise resource planning (ERP) software is a group of programs and functions integrating corporate accounting and resource management with production schedules and customer orders. ERP may not be a direct focus of operations and design engineers; however, ERP is one of the most critical technological shifts an organization can make.
The resulting impact of the corporate information management system is profound, such that the entire organization, even plant-floor process control, for example, must adapt to it. ERP replaces manufacturing resource planning (MRP II), which was unable to meet the ever-changing challenges provided the international manufacturing world. ERP is proactive (i.e., ―if we get this order, which plant has the skills/capacity to handle it‖) while MRP II is typically reactive (i.e., ―the order rate has changed – what do we need to do to respond?‖).
The term ―enterprise resource planning‖ was coined to demonstrate the fact that these systems have evolved well beyond their origins as inventory-transaction and cost accounting systems. The software now acts as the means to support and expedite the entire order fulfillment process. ERP can also lead to business-process reengineering. By removing barriers between functional departments and reducing duplication of effort, the systems increase flexibility and responsiveness. The vision of ERP is evolving to include the extended enterprise. Extended ERP is an inter- enterprise vision that includes balancing and optimization of not just the enterprise, but the value network, or the entire set of supply and demand business processes that drive the enterprise‘s delivery of goods and services. Extended ERP is customer focused and dynamically balanced through asset optimization and real-time transaction processing.

ERP Production Planning Module
This module is used in production planning optimizes the utilization of manufacturing capacity, parts, components and material resources using historical production data and sales forecasting.

ERP Purchasing Module
Purchase module streamlines procurement of required raw materials. It automates the processes of identifying potential suppliers, negotiating price, awarding purchase order to the supplier, and billing processes. Purchase module is tightly integrated with the inventory control and production planning modules. Purchasing module is often integrated with supply chain management software.

ERP Inventory Control Module
Inventory module facilitates processes of maintaining the appropriate level of stock in a warehouse. The activities of inventory control involves in identifying inventory requirements, setting targets, providing replenishment techniques and options, monitoring item usages, reconciling the inventory balances, and reporting inventory status. Integration of inventory control

module with sales, purchase, finance modules allows ERP systems to generate vigilant executive level reports.

ERP Sales Module
Revenues from sales are live blood for commercial organizations. Sales module implements functions of order placement, order scheduling, shipping and invoicing. Sales module is closely integrated with organizations’ ecommerce websites. Many ERP vendors offer online storefront as part of the sales module.

ERP Market in Module
ERP marketing module supports lead generation, direct mailing campaign and more.

ERP Financial Module
Both for-profit organizations and non-profit organizations benefit from the implementation of ERP financial module. The financial module is the core of many ERP software systems. It can gather financial data from various functional departments, and generates valuable financial reports such balance sheet, general ledger, trail balance, and quarterly financial statements.

ERP HR Module
HR (Human Resources) is another widely implemented ERP module. HR module streamlines the management of human resources and human capitals. HR modules routinely maintain a complete employee database including contact information, salary details, attendance, performance evaluation and promotion of all employees. Advanced HR module is integrated with knowledge management systems to optimally utilize the expertise of all employees.

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