ERP

SIS

Lori Martel

Ramkin Shetty

Hahn Shin

Dinesh Sekar

ERP

SIS

Table of Contents

•Introduction•Organizational & Technological Change•Business Engineering Vs. Business Process Re-engineering

•Definition & ERP’s role in the Supply Chain•Business Aspects

•ERP: Vendors, Comparison, Characteristics of ERP, Applications and Advantages•SAP R/3 •Constraints: Business &Technical

•Technical Aspects•Layer Architecture•Application Architecture•Customization

•Industry Example: Quantum•Look into the Future

ERP

SIS

Introduction

Growing Competition

Decreasing Innovation Cycles

Market Globalizationneed

for flexible, integrated,and open software

Relationship Based Transactions

Different Manufacturing Environments

ERP

SIS

Introduction

• Changes in Structure– Functional Vs. Process Based Structure

• Value Chain Thinking

Personnel ProductDevelopment

Marketing& Sales

Production

Order Processing

ProductDevelopment

Customer Service

ERP

SIS

Introduction

• 70’s Standard Software, Mainframe Systems– Separate Applications for business functions

• 90’s Technological Trends– Client/Server Computing

– Innovative process integrated business solutions

– Open Systems

– Increasing computing speed, GUI’s

– Faster Data processing

– Data Integration

ERP

SIS

Introduction

BPR

BE

• Use of Prototyping/Modeling - Building Systems around Business

• Automating Business Processes through IT

•Use of Blueprinting - Designing & Integrating Business Processes

• IT used as a Strategic Tool

ERP

SIS

- ERP is a software package integrating organizational business processes & data across the company

ERP

SIS

Definition

Modelingall the processes

Integratingall the

information

Strategic useof IT

Integrated views

Quality,Cost,

Delivery

Effective useof

resources

EIS

DSS

TPS

MIS OA

ERP

SIS

ERP

ERP

ERP

Extended Supply Chain Management

Internal Supply Chain Management

CoordinatedManufacturing

PlantManagementMRP MRP

Role in Supply Chain

SupplyPlanning

Scheduling

DemandPlanning

Logistics

InternalSuppliers

InternalCustomers

ExternalSuppliers

ExternalCustomers

ERP

SIS

Business Aspects

34%

13%9%7%5%

5%

5%5%

3%3%

11%

SAP Computer AssoicatesSSA BaanJ.D. Edwards JBAOracle MarcamPeoplesoft QDAOthers

ERP

SIS

Business Aspects

Fun

ctio

nali

ty

Technology

* Oracle

J.D. Edwards *

Low

Low

High

High

* R/3

* CA

ReinforceReview

RemainRebuild

* Baan

* Peoplesoft

ERP

SIS

Characteristics

• NOT Multiple Packages Pieced together through Complex Interfaces

• Modeling Business Processes and Integrating through Software

Configuration - • 8,000 Tables set up by Programmers• Series of Switches• Requires Deep Understanding of Existing Business Processes

ERP

SIS

Business Aspects

Aerospace & Defense Automotive

Chemicals Consumer Products Financial Services

Healthcare High-Tech & Electronics

Oil & Gas Pharmaceuticals

Retail Telecommunications

Utilities

ERP

SIS

Business Aspects

• Largest vendor of standard business application• R/3: Real-Time Version 3.0• Client/Server enterprise application software• 6,000 companies, 50 countries• Companies in diverse businesses• 30 seats or installations with 3,000 end users• 800 predefined business processes

ERP

SIS

Business Aspects

• Business Components

• Business Objects

• Business Information Warehouse

• Business Engineer

• Integration Technologies (ALE)

- Finance, HR, Logistics

- Customer, Invoice

- Aggregate Internal & External Data

- Customization Tool

ERP

SIS

Business Aspects

Reference Model

• Data Model • Business Object Model • Organization Model • Process Model• Distribution Model

Event Driven Process Chain (EPC)

• Event• Function/Task• Organization• Communication

- Repository Holds the Reference Model, Industry Specific Models & Enterprise Models

ERP

SIS

Business Aspects

• Fast

• Flexibility

• Open

• Industry Specific

• Expandable

ERP

SIS

• Synchronous Transfer of Data

• Encourages Multi-Disciplined Teamwork

• Reduces Redundant Labor

• Provides Standard Based Development Environment• Process Engineering Cost Benefits• Flattens Organizations to Increase Agility

•Allows Companies to Adapt to New Business Opportunities

Business Aspects

ERP

SIS

Business Aspects

• Every $1 Spent in Software Licenses - $8 - $10 Spent on Consulting Support• Outside Consulting Fees can cost $1500/day• Requires Equipping employees with new skill sets• Hard to Keep Resources• Changing Business Processes to suit ERP/ can Effect the Organization’s Culture

• Very Expensive

• Can NOT Impose ERP Infrastructure on Company

ERP

SIS

• Lack of Flexibility

• Complexity & Rigidity

• High Implementation Time

• Difficult in Decentralized Environments

• Difficult Interfaces

• Steep Learning Curve

Business Aspects

ERP

SIS

Technical Aspects Layer Architecture

- Issues: Scalability, Portability, Interoperability & openness, Customizability, GUI, etc.

Middleware

Middleware

Development workbenchApplications

DictionaryProgrameditor

Interfacebuilder

Modelingtools

Repository

System software: GUI, DBMS, OS, N/W

ApplicationLayer

BasisLayer

ERP

SIS

Technical Aspects

Application Architecture

- Issues: 1. Independent from all types of computers(UNIX, Window NT, AS/400, etc.), DBMS(Informix Online, Oracle 7, ADABAS, DB2, MS SQL Server 6.0, etc.), GUI flatform(OS/2 Presentation Mgr.., OSF/Motif, Macintosh, Windows, etc) 2. Independent from the country specific rules, languages, etc.

IS

SD CO AM

MM

PP HRM PS

WFFI

QM PM DW

System model

Business model

Scope, Rules & Pattern

Business Kernel

Full Business

Specific Situation

DM

FM WFM

Repository

ERP

SIS

Technical Aspects

Customization: Support of initial implementation projects, follow-up projects, and release-change projects

- Issues: Integrated customizing functions, quality assurance, etc.

Implementation environment

Procedure model

Reference model:FM, PM, DM, IFM, OM,Comm. Model, Distr. Model

Implementation guides

Customized model

Documentation Release management

ERP

SIS

Industry Examples

Objectives– Available-to-Promise (ATP), the real-time

capability to take an order, schedule it to be

delivered anywhere in the world and confirm

delivery instantly

– Ability to determine what was actually in

inventory or in production and how much of it had

been promised to other customers

ERP

SIS

Industry Examples

Scope– Based on the full suite of Oracle Corp.'s

manufacturing and operations applications

– 750 users in 25 locations worldwide

– To adopt Big-bang approach• One of the largest distributed business systems to go live

worldwide at one time

– HP9000 hardware, HP UX operating system (10.1) and Oracle Release 10.4

ERP

SIS

Industry Examples

Pre-Implementation Assessment

– Legacy system-based MRP system in use

– Each division's business transactions in separate

databases by business unit, and by function

within a unit

– Databases couldn't share information

ERP

SIS

Industry Examples

Project Planning & Control– Project team members pulled from regular jobs &

relocated to “Building 12”

– “Building 12” essentially set up a scaled-down business model of Quantum

– Team members play-acted their real-life roles

– Improved business processes and wrote requirements for the new system

ERP

SIS

Industry Examples

Implementation Process– Packaged available applications & selected

Oracle applications– Consultants from Price Waterhouse and Oracle,

installed the software & began pilot projects– Complexity and magnitude of the project

quadrupled (Digital Disk drive division acquisition)

– Conference room pilots tests

ERP

SIS

Industry Examples

Human (HR) Side– Locally trained about 100 users from all over the

world and flew them into Milpitas to run a full-scale system simulation

– Sponsored massive user training - users had to pass a test before returning to their jobs

– Ran Internal PR campaign- Entailed group meetings, presentations,an intranet site and events emphasizing system's importance

ERP

SIS

Industry Examples

Project Statistics– October 1992 - May 1996

– 16 full time managers

– 100 person

multidisciplinary team

– 1,632 meetings

– 79 shouting matches

– 800GB of disk space – 18,064 miles of cable – 300,000 cups of coffee– 58,000 e-mails – 7,503 cases of beer – 1.62 million miles

of air travel

ERP

SIS

Future Aspects

• Supply Chain Management• Internet Enabled• Workflow Management• Resource Planning• Data Warehousing

• Targeting Small & Medium Enterprises• Addition of Simple GUI based development Tools• Strategic Alliances

- Andersen Consulting & SAP- IBM & J.D. Edwards- GE & Oracle

Business

Technology