12 Oct What is Enterprise Resource Planning (ERP)?
Enterprise resource planning (ERP) is an information system that integrates all aspects of business such as accounting, production, planning, purchase, sales, distribution, human resources, customer relationship management, supply chain management.
Today many companies implement ERP systems in order to improve communications between departments, optimise all business processes, provide their employees with easy visibility of all operations.
An ERP system typically comprises of multiple modules that can be customized up to a certain limit, specific needs and technical capabilities of any business. It means you can purchase the modules you need today, and in the future if your company evolves and grows you can incorporate new ones.
What are ERP system modules?
Accounting: This module ensures company full control and integration of financial information. It provides the ability to centrally track financial accounting data within a framework of multiple companies, languages, and currencies, account-related transactions, account ledgers, budgeting, bank statements, payment receipts, tax manage.
Production: This module is designed for specific needs of manufacture industries including such core capabilities as production planning, machine scheduling, raw material usage, preparation, track daily production progress, production forecasting, and actual production reporting.
Planning: This module is mainly used to monitor current production progress. After the end of any work order, the information will be transmitted to the dispatch of the delivery. Delivery schedule reports will be available in this module.
Purchase: This module can trace all the purchasing processes, it consists of such functionalities as a supplier/vendor listing, supplier and item linking, sending quotation request to vendors, receiving and recording quotations, analysis of quotations, preparing purchase orders, tracking items, preparing good recipient notes, updating stocks and various reports.
Sales: This module due to multiple configuration options allow a company to organize and track the sales process in an efficient way, it includes such processes as sales queries and inquiry analysis, quotation drafting, accepting sales orders, drafting sales invoices with proper taxation, shipment of material or service, tracking pending sales order.
Distribution: This module provides a complete sales management solution for a wide range of industries designed to increase the efficiency of the supply chain from production through delivery to end customers.
Human resources: This module gives an opportunity to administer traditional human resources activities and new initiatives with greater speed and accuracy.
Customer relationship management: This module helps to ensure that customer needs are met in a timely and efficient manner. By having customer relationship management integrated with an ERP system, it is possible to gain and maintain a complete view of your company’s customers and support analysis which helps to identify your most and less profitable customers.
Supply chain management. This module manages the flow of product items from manufacturer to consumer and consumer to manufacturer. Common roles involved are manufacturers, super stockiest, distributors, retailers. Supply Chain Management involves demand and supply management, sales returns and replacing process, shipping and transportation tracking.
List of benefits of ERP systems for your business
Efficiency: ERP systems remove the barriers to information between the different departments by integrating them and improving internal communication. ERP systems allow businesses to make effective plans, arrange expenses, manage orders, make sales more efficient, and satisfy customers.
Boost productivity: One of the enormous benefits that can be experienced from the implementation of ERP system for your business is an increase in productivity. With increased transparency by smooth business processes, employees will be able to shift their focus on managing enlarged volumes of business.
Exceeding collaboration: Implementing an ERP system for your business will bring a huge change to the matter of struggling with collaboration. Once employees will have access to data across all the departments the collaboration will be facilitated.
Streamlined data flow: The use of ERP systems and streamlined resource management processes will help to simplify procedures and reduce re-work and manual handling costs.
Quick decision making: Decision makers can monitor performance in individual departments and across the company, and consider the inter-dependence of different areas. ERP systems allow creating a shared database with more information and higher quality that those responsible will be able to see on their screen in real time, speeding up and improving the decision-making process.
Reduce operating costs: One of the most important fact for many business owners is that an ERP system evidently reduces overall operating costs. By streamlining data into one software application, you will be able to save money on the individual software and management systems that you were previously paying for in each department.
Greater control and traceability: ERP systems facilitate the tracking of the product throughout the company, from the entry of the raw material to the delivery of the finished product to customers.
With the implementation of a quality ERP system your business will experience a lot of benefits. As of today, an ERP system is the most reliable system for data management ensuring its reliability, transparency, uniformity, and visibility across the company. An ERP system easy provides access to valuable business data to some or all members of the company. It works in an efficient way to help your company save costs and increase productivity. An ERP system will help your business to operate in compliance with global regulatory laws and guidelines. It will automate and streamline tedious tasks and superfluous processes, will provide your business leaders with instant access to the global supply chains, will help them to identify challenges and make faster decisions that will impact different areas of the business. Nowadays implementation of an ERP system is vital to achieving a real business success.