Enterprise Resource Planning

Enterprise resource planning(ERP) is a cross-functional enterprise system that serves as a framework to integrate and automate many of the business processes that must be accomplished within the manufacturing, logistics, distribution, accounting, finance, and human resources functions of a business. or e!ample ERP software for a manufacturing company will typically track the status of sales, inventory, shipping, and invoicing, as well as forecast raw material and human resource re"uirements. igure# illustrates the ma$or application components of an ERP system.
S al es, D i stri buti on, O rder M anagem ent P roducti on P l anni ng

%ustomer& Employee
H um an R esources I ntegrated L ogi sti cs

A ccouti ng and F i nance

%ompanies are finding ma$or business value in installing ERP software in two ma$or ways' ERP creates a framework for integrating other systems and improving customer service, production, and distribution efficiency. ERP provides vital cross-functional information "uickly on business performance to managers to significantly improve their ability to make better business decisions across the enterprise.
%olgate-Palmolive' (he )enefits of ERP %olgate-Palmolive is a global consumer products company that implemented the *+P&R, enterprise resource planning system. %olgate embarked on an implementation of *+P&R, to allow the company to access more timely and accurate data, get the most out of working capital, and reduce manufacturing costs. +n important factor for %olgate was whether it could use the softtware across the entire spectrum of the business. %olgate needed the ability to coordinate globally and act locally. (he implementation of *+P across the %olgate supply chain contributed to increased profitability. -ow installed in operations that produce most of %olgate.s world wide sales, *+P will be e!panded to all %olgate divisions worldwide by /00#. 1lobal efficiencies in purchasing-combined with product and packaging standardi2ation-also produced large savings. )efore ERP, it took %olgate 3.*. anywhere from one to five days to ac"uire an order, and another one to two days to process the order. -ow, order ac"uisition and processing combined takes four hours, not up to seven days. 4istribution planning and picking used to take up to four days5 today, it takes #6 hours. 7n total, the order-to-delivery time has been cut in half. )efore ERP, on-time deliveries used to occur only 8#.9 percent of the time, and cases :rdered were delivered correctly 8;.9 percent of the time. +fter R&, the figures are 8;.9 percent and 88.0 percent, respectively. +fter ERP, domestic inventories have dropped by one-third and receivables outstanding have dropped to //.6 days from ,#.6. <orking capital as a percentage of sales has plummeted to =., percent from ##., percent. (otal delivered cost per case has been reduced by nearly #0 percent.