Definition of Enterprise Resource Planning (ERP)
Enterprise Resource Planning (ERP) refers to a suite of software that organizations use to manage day-to-day business activities, including accounting, procurement, project management, risk management and compliance, supply chain operations, and more. A complete ERP suite also includes enterprise performance management software to help businesses plan and budget for financial results, as well as forecast and report financial results.
These ERP systems link together a large number of business processes and realize the data flow among various business processes. By collecting an organization's shared transactional data from multiple sources, an ERP system can consolidate information sources to eliminate data duplication and ensure data integrity. Today, businesses of all sizes in every industry need to use an ERP management system to manage their business. ERP is an integral part of a business, just like electric lights are inseparable from electricity.
A story to understand "ERP".
One day at noon, the husband called home from outside: "Dear wife, I want to bring some colleagues home for dinner tonight, can I?" (order intention)
Wife: "Of course, how many people are coming, what time do you want to eat?"
Husband: "6 people, let's come back around 7 o'clock, prepare some wine, roast duck, scrambled eggs with tomato, cold dishes, egg drop soup... Do you think it's okay?" (Business Communication)
Wife: "No problem, I'll be ready." (Order Confirmation)
The wife recorded the menu to be prepared (MPS plan), the specific dishes to be prepared: duck, wine, tomato, egg, oil... (BOM list of materials), found that the needs: 1 duck, 5 bottles of wine , 4 tomatoes...(BOM expanded), 6 eggs are needed for scrambled eggs, and 4 eggs are needed for egg drop soup (common materials).
Open the refrigerator and look (warehouse), there are only 2 eggs left (short of ingredients).
come to free market
Wife: "Excuse me, how do you sell the eggs?" (Purchase Inquiry)
Hawker: "1 yuan for one, 5 yuan for a half dozen, 9.5 yuan for a dozen."
Wife: "I only need 8, but this time I'll buy a dozen." (Economy Bulk Buying)
Wife: "There is a broken one, change it." (Acceptance, return, replacement)
back home
Prepare to wash, cut, and fry vegetables... (process route), and there are gas stoves, microwave ovens, rice cookers... (work center) in the kitchen. My wife found that plucking duck feathers was the most time-consuming process (bottleneck process, key process route), and it might be too late to cook roast duck with a microwave oven (insufficient production capacity), so she decided to buy ready-made ducks in the restaurant downstairs (outsourced products).
At 4 o'clock in the afternoon, the phone rang again: "Mom, some classmates want to come to the house for dinner tonight, please help prepare." (urgent order)
"Okay, son, what do you want to eat, dad has guests tonight, would you like to eat with them?"
"You can figure out the dishes, but there must be scrambled eggs with tomatoes. We don't eat with adults, and we will come back around 6:30."
"Okay, I will definitely satisfy you." (Order Confirmation)
There were not enough eggs, so I called the hawker to bring them. (Urgent purchase)
6:30, everything is ready
But the roast duck hadn't arrived yet, so I hurriedly called and asked: "I'm Mrs. Li, why the roast duck I ordered hasn't arrived yet."
"I'm sorry, the delivery person has already left, it may be a traffic jam, and he will be there soon."
The doorbell rang, "Mrs. Li, this is the roast duck you want. Please sign the form." (Acceptance, storage, transfer to accounts payable)
At 6:45, my daughter's phone call: "Mom, I think it's okay to bring some friends home for dinner now?"
"No way, daughter, mother already needs to prepare two tables of meals today. There is really no time. I am really sorry. I will tell you sooner next time and I must prepare them for you." (Haha, this is the limitation of ERP. A stable external environment requires a minimum lead time)
After seeing off all the guests, the tired wife sat on the sofa and said to her husband: "Honey, our family treats guests very frequently now, we should buy some kitchen supplies (equipment purchase), and it is best to hire a babysitter. "(Even the human resource system has an interface)
Husband: "You are in charge of the house, and you can do whatever you need." (passed the review)
Wife: "Also, the family has spent too much recently, so use your private money to subsidize it, okay?"
summary:
After reading this story, is there anyone who doesn't understand ERP? In fact, you only need to remember the core of ERP, that is: every qualified housewife is a strong competitor for the production manager!
Content expansion:
Many people say that ERP systems are indispensable in digital transformation, but do so many systems on the market, such as CRM/MRP/PLM/APS/MES/WMS/SRM , need to be launched together? The following article is clearly explained, so that you can understand it!
First understand what ERP does. ERP is an enterprise resource management system. From the analysis of the value chain of the enterprise, the business of the enterprise is divided into: finance, human resources, research and development, manufacturing, supply chain, procurement, sales, service, asset management9 large modules. With the development of the scale of the enterprise, from the traditional to the digital transformation of the enterprise, it is necessary to break through the data silos, make the data of various departments communicate with each other and cooperate with each other, and unify the data analysis to make decisions.
ERP: Enterprise resource management, which manages everything in the enterprise as resources on the ERP, and analyzes the enterprise from a global perspective.
CRM: customer management system, which is divided into project-oriented, terminal-oriented sales, and sales integrated with e-commerce from the framework. The most difficult thing is to prepare the system according to the sales model, which is highly personalized. With the intensification of the industry , Now CRM is doing more and more vertical segmentation.
SCRM: It has a certain blood relationship with CRM, and they all serve customer management, but SCRM adds social attributes and is more inclined to C-end customers, because for C-end customers with a relatively large group, refined community operations are required , is mainly a product derived from the demand for new retail.
The relationship between ERP and CRM: ERP is to improve the planning and management and control capabilities of the company's internal resources. How to meet customer needs, timely delivery, and account risk control, etc., use internal data to improve operational efficiency and improve customer service quality. What is more efficient. CRM is external management, focusing on support, sales and potential customers to establish customer relationships and maintain long-term development. The use of CRM is mainly in the departments that customers can understand, such as sales department, marketing department, after-sales department, etc. It can be understood that CRM is the front end of ERP. CRM and ERP are seamlessly connected (partial data sharing) to complete system integration, which enables employees to access important information in real time, such as inventory levels, shipments, customer finance, order history, returns, payments, Pricing and other information, open up data, improve internal work efficiency and customer service quality.
PLM: life cycle management, not only software will have life cycle management, mainly used in R & D department, from product (market analysis product planning-product design-process engineering-purchase/outsourcing-manufacturing-sales/distribution-support service - Delisting).
The relationship between ERP and PLM: PLM mainly manages product-related information in the production cycle, such as (project documents, process management, system architecture, authority management), so product-related technologies and information are used. The product is designed by PLM and then configured and managed, and the data is transmitted to MES and ERP at the same time, and then the post-allocation process is carried out by ERP.
MRP: material requirements plan, mainly including product production plan (master production plan) MPS, product structure, inventory status, and BOM list. Before production, it is necessary to count the number of materials, and plan and arrange through the APS advanced planning and scheduling system. The order is issued to the production and manufacturing, and the purchase order is issued to the procurement execution, so as to guide the development of production and procurement business. As the core of production, MRP runs through the entire supply chain, connects sales demand upwards, releases production procurement, and runs through the company's six major areas of human, financial, material, supply, production, and sales.
The relationship between ERP and MRP: ERP mainly focuses on the integration of customer needs and internal manufacturing activities, as well as the integration of suppliers' manufacturing resources, and effective management of all links in the supply chain. MRP mainly focuses on the management of resources such as people, money, and materials within the enterprise. ERP expands the scope of management on the basis of MRP, integrates customer needs with internal manufacturing activities and suppliers' manufacturing resources, and embodies the idea of manufacturing completely according to user needs.
APS: intelligent production scheduling, which can reasonably arrange the production schedule for the enterprise. At the same time, if multiple orders need to be produced, then the production deadline, production supply quantity, batch supply will be followed up, and the production time will be arranged reasonably to increase production. s efficiency
The relationship between ERP and APS: The demand planning module of APS obtains the actual demand of customers from the order input of ERP, and then the demand planning module combines the forecast demand in external data to calculate the forecast production plan through the APS algorithm; at the same time, through the APS in The constraint conditions in the supply chain planning module are guided by the constraint production plan of MRP and sent back to the master production planning module of ERP. The manufacturing planning module of APS and the MRP of ERP take into account the manufacturing order, combined with data such as BOM, inventory information, and purchasing information, and conduct repeated interactive demonstrations to obtain the production task list for production scheduling.
MES: Manufacturing Execution System is the most important IT system of intelligent manufacturing IT system. MES integration includes the integration of hardware and software. Data visualization, unmanned operation, and intelligent production need to be used in conjunction with hardware equipment (AGV cars, standardized containers, automated tracks, intelligent logistics, etc.). Here, digital twins can also be used to jointly manage the digital and physical worlds.
The relationship between ERP and MES: The mes system is more detailed than the erp system, and can be more detailed to each manufacturing process, and carry out task assignment, execution control, data collection, and on-site scheduling for each process; the management scope of the erp system is larger than that of the mes system Large, mainly based on the work center. The mes system is the execution layer, especially for the factory manufacturing industry. Data collection plays the role of quality, process control and traceability through its core functions, and is the basis of intelligent manufacturing; the erp system is the command layer, which is more for enterprise management Services can involve various fields such as human resources and finance, and mainly have functions such as document entry, confirmation, information notification, and approval, so that information can flow across departments.
WMS: warehousing management, the expansion of enterprise scale, and the super complex product structure, it is necessary to use professional WMS to carry out reasonable inventory configuration (minimum inventory, safety inventory) for products to meet market demand, how to find them faster, how to Store more products with the smallest area, how to arrange loading and unloading operations, etc.
The relationship between ERP and WMS: The focus of WMS is the warehouse, warehouse operation process, inventory management, business reports, punctual and accurate storage, first-in-first-out, process control, etc. as management objectives. The scope of ERP system management is larger than that of WMS. WMS belongs to the category of ERP management, and has functional modules such as procurement management, inventory management, and warehouse management. The ERP system is oriented to result management, and its functions are not deep enough, so it is difficult to meet the current warehouse management needs of enterprises. The warehouse management system is oriented to process control, which can realize on-site control, automatic data collection, link traceability, etc., and improve the level of warehouse informatization. WMS can run independently. If it is integrated with ERP, data interoperability will be more conducive to enterprise management and improve efficiency.
SRM: Supplier management, a procurement structure that integrates business and goods, can cut costs to obtain profits for enterprises. Good procurement can reduce costs, improve efficiency, ensure quality, and control risks for enterprises. It is generally divided into supplier management and supply. Supplier performance evaluation, multi-channel management, sourcing management, procurement contract management, procurement to payment management, online reconciliation, quality collaboration, supply chain finance, etc.
The relationship between ERP and SRM: SRM is used to manage upstream supply chain relationships, similar to CRM is used to manage customer relationships. The integration of ERP and SRM systems can realize procurement sourcing, order coordination, logistics coordination, and financial coordination. SRM is equivalent to the expansion of the ERP management resources section.
The relationship between ERP and other systems is interrelated in the entire business chain. ERP is like the brain, which controls the overall situation without overly intervening.
Enterprises need those systems for digital transformation, so they need to look at the core business of the enterprise, and expand around the core business, and the system does not need to be fully integrated. If the company focuses on sales, then it is how to manage the collaboration between customers and the enterprise, and digital marketing is the key point. If you are a production-oriented company, you need to distinguish whether you are a process-based manufacturing company or a discrete manufacturing company, or whether you are a service-oriented company. Is digital transformation all about using these software? These softwares are the beginning of your informatization. Digitalization needs to be carried out on the basis of informatization. Only by turning all the information of the enterprise into data and utilizing the data in various businesses can digitalization be realized.
Conclusion:
Building an advanced information system is a crucial step for a manufacturing enterprise. Only the reasonable and effective use of the ERP system can ensure the smooth achievement of the team's goals. In this regard, weaving letter low-code is the ideal choice right now. The team has more than 10 years of experience in the successful implementation of digital systems, and has been favored by many Fortune 500 companies. Based on the design concept of data model first, the platform provides a standardized BPMN2.0 process engine and a large number of standardized components to help enterprises build highly complex core digital supply chain systems and systems. In addition, by adopting Zhixin's low-code platform, enterprises can also develop multiple application systems in one stop, including SCM, ERP, PLM, MES, WMS, OMS, EMS, projects, enterprise services and other application scenarios, and comprehensively assist enterprises in landing Digital transformation strategic goals.