Operations Integration
An application that integrates all aspects of a company's far-flung operations--from receiving through distribution and everything in between--over the company's network
An enterprise resource planning (ERP) strategy aims to integrate all of a company's discrete functions--planning, design, manufacturing, procurement, inventory control, sales, marketing, logistics, and more--into a seamless whole, optimized for meeting customer needs. ERP compresses processes, removing non-value-added steps, squeezing out costs, and saving time.
When ERP is fully implemented, product design changes can be communicated instantly to manufacturing. Quality issues can be discovered and addressed more quickly. Rapid sales of a product can trigger additional production, including procurement of needed raw materials and components. Customer orders can initiate account receivable activity, update account histories, and provide data for online order tracking--all without multiple instances of human intervention.
ERP allows companies to:
Improve internal collaboration and communication
Deliver products to market faster, through compressed cycle times
Improve responsiveness to customer needs
Enhance decision-making by providing managers and all other connected employees with production, sales, and administrative information in real time, accessible from anywhere in the organization
Automate routine processes in areas such as accounting, inventory control, and procurement
Implementing Enterprise Resource Planning
In most organizations, ERP depends on the integration numerous independent business processes and a range of frequently incompatible information systems.
First, ERP requires that all points in the business process--from initial planning through final delivery--be connected to a common information infrastructure. Knowledge must move seamlessly across organizational boundaries and, depending on the company's shape and size, to many dispersed locations. ERP software packages usually provide a gradual migration path, proceeding from basic functionality to greater integration through the addition of modules. But infrastructure issues need to be included from the very start: companies can't afford to neglect planning of network power, capacity, or security. Often, ERP packages place heavy new demands on the network, and failure to consider future needs up front can lead to costly retrofitting and upgrades down the road.
Second, consider the impact on the business. ERP breaks down barriers between corporate groups and forces new ways of communicating and sharing ideas. To succeed, ERP implementation should begin as a strategic planning process, a fundamental look at how to make all aspects of a business work together more fluidly.
