ERP

The Enterprise Resources Planning is a management system which integrates all relevant business processes of a company . ERP is a digital representation of how the company operates, particularly how his organization is built to make concrete the business strategies. Choosing an ERP implies the adoption by the company of a systematic approach and of an organization by process.

Procedure to selection of an ERP

1. Define the company profile and the macro processes
a. Define the Functions
2. Define the secondary processes
3. Exploration of the market and system integrators
4. First filter. The end result will be 3, maximum 5, coupled Software / System Integrator.
5. Software Demos
6. Creation of the Supply Specification
7. Define a control structure of the project
8. Selection of key users

Company profile Example

Our company , which we will call CONTOSO,  manufactures and assembles mechanical components.  The production not only involves internal business units, also makes use of external suppliers for the purchase of materials and for the execution of certain processing and/or treatment. The sales phase may be preceded by a bidding process. The purchase and production are regulated to ensure, through the traceability of objects, a proper after sales service. Contoso is active in a constant data collection in all departments / levels to ensure timely management control.

MERP

With this background , in Contoso should not be implemented an ERP system but a MERP system. Process manufacturing enterprise resource planning (process manufacturing ERP) refers to the use of enterprise resource planning (ERP) in conjunction with process manufacturing to maximize the potency of manufacturing processes. Process manufacturing is a production strategy that adds value by separating  the production process in two or more steps. When an output is generated using this process, it is impossible to distill the output back to the basic component form.

ERP for process-based manufacturing mainly operates on the basic concept of combining all the machines, tools and resources to maximize the efficiency of the manufacturing process. It saves valuable time and enhances production capacity with greater command over subcontracting, planning and inventory.

Using MERP the organization is capable of making every decision based on real information, not on predictions or assumptions. Because all reports about the process are available online, users can easily retrieve information about raw materials, what materials are used in certain processes, which material is needed for a particular process, what time the material is required, and so on.

In this specific ERP production is the most potent element of the software ; the connection between manufacturing and subcontracting, inventory, purchasing and other modules are superior and efficient.

Macro Processes

With this background we can identify five main processes:

1. Order fulfillment
2. Production
3. Purchasing
4. Quality Control
5. Logistic

The process begins with the management  of customer order. The finished product is an assembly of parts to be manufactured or purchased. Each part is constructed using at least one raw material. The material and finished parts are stored in a warehouse where they enter and exit in a controlled manner. The production process is monitored by sampling control,  both inside the company and at the external suppliers. The finished part / product is controlled.