What is ERP?

Enterprise Resource Planning (ERP) software is used in order to integrate corporate accounting and resource management as per the production department requirements and the order dispatch date. The ERP software is a kind of group of programs and functions which are developed as per the organization processes needs. It is a technological step taken by any organization in order to improvise processes of its various departments; it does not focus on operations and design team but indirectly helps to improve these departments of an organization. It is so developed that each and every person of the organization; from shop floor to higher management is able to work in synchronize manner with each other. In earlier days of industrialization, MRP I and then MRP II were used by many companies which were actually not able to meet the expectations of the company as well as to compete with the international manufacturing world. So, ERP was introduced which was considered as proactive i.e. if we get any order, which skill will be capable to handle it. The term Enterprise Resource Planning was formed in order to demonstrate the fact that this systems can work beyond their limits as inventory planner and cost accounting systems. Now ERP is so developed that it supports and expedite the entire order fulfillment process; also it can lead to business process reengineering. The system helps in increasing flexibility and responsiveness between various departments of an organization. The other kind of ERP is Extended ERP which helps in balancing and optimizing the enterprise in its customer focused and dynamically balanced value network. Why to implement ERP? Electronic Data Interchange (EDI) is supported by ERP system. In the automobile industry, ERP enables transactions that alert the entire supply chain to changes in any one area. OEM can make changes in product scheduling and could trickle down in a real-time fashion to tier-four suppliers. ERP is being used by many companies for customization of data. In automobile sector, the car manufacturers are trying to make sense out of the seemingly endless data that is available in their companies. It is believed that if the company makes available to its customer and supplier then there will be a transparent communication between them and it will be interpreted as if they are working for the same company. The individual who is operating the ERP system could be able to potentially participate on vehicle development projects, co-ordinate factory scheduling, set up just-in-time parts deliveries, exchange billing information and financial data, share human resource plans and run factory planning models. ERP system helps the company to manage its supply chain and enable its true just-in-time delivery. It helps in re-engineering and removes inefficiencies and redundancies in the network.