What is ERP?
This passage provides an in-depth understanding of "ERP" and emphasizes the mature application of ERP in enterprises. It highlights the importance of having a grand vision and goals for enterprises and the need for solid foundational management work. The passage emphasizes that ERP is not just a software but a management philosophy that integrates internal and external resources.
Key Points:
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Definition of ERP: ERP (Enterprise Resource Planning) is a management platform based on information technology and systematic management thinking. It integrates internal and external resources, including people, finances, materials, production, supply, sales, and related logistics, information, resource, and management flows.
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Development History of ERP:
- 1930s: MIS system phase focused on inventory management.
- 1950s: Introduction of periodic MRP (Material Requirement Planning).
- 1970s: Closed-loop MRP with input and output control.
- 1980s: MRP II incorporating production centers, processing times, and financial functions.
- 1990s: Emergence of ERP, integrating material and financial management, value management, and human resources.
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Management Philosophy of ERP:
- Kanban management, just-in-time production, lean manufacturing, agile manufacturing, constraint theory, value chain, value-added chain, optimization of production technology, job-based management, advanced planning and scheduling.
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Core Values of ERP:
- Improving work efficiency, deepening insights, accelerating reporting processes, reducing risks, simplifying IT, and enhancing agility.
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ERP Implementation Benefits:
- Operational perspective: Enhances market competitiveness, standardizes processes, reduces costs, improves inventory turnover, and optimizes asset management.
- Business process perspective: Reduces management levels, promotes internal management efficiency, standardizes data standards, provides integrated business and financial information.
- Innovation and learning perspective: Promotes management innovation, automates repetitive work, enhances human resource management, and facilitates talent management.
- Business partner perspective: Integrates resources and value chains, improves market responsiveness, enhances customer management, establishes unified supplier management, and supports international expansion strategies.
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Common Modules of ERP:
- Production manufacturing, supply chain management, sales management, asset management, research and development, engineering, financial management, system services, sourcing and procurement.
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ERP Terminology:
- MPS (Master Production Schedule): Detailed plan specifying what and when to produce.
- MRP (Material Requirement Planning): System for inventory control based on material management.
- MRP II (Manufacturing Resources Planning II): Core theme of ERP, covering the entire production and operational system.
- BOM (Bill of Material): File describing the product structure, a dominant file in ERP.
- SCM (Supply Chain Management): Integrated management of logistics planning and control from suppliers to end-users.
- MTS (Make To Stock), MTO (Make To Order), ATO (Assemble To Order), ETO (Engineering To Order): Different production types based on inventory and order status.
The passage provides comprehensive insights into the definition, history, philosophy, and benefits of ERP, as well as key modules and terminology associated with ERP implementation.
