The Implementation of ERP in Supply Chain

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Do you ever hear and understand about ERP in the supply chain? This ERP is very useful for a business that you do. Well, this article will inform you about it in detail. Below are the explanations.
The definition of ERP
The term ERP has a different meaning, depending on the user's point of view. From the viewpoint of some companies' managers, the compulsion is exactly on the "planning" word; managers interpret ERP as an approach of a comprehensive software in which it is to help and support business planning and control decisions.
Besides that, for the community of technology and information, ERP is basically a term or word that defines a system of software in which it integrates the programs of application in manufacturing, finance, marketing and sales, logistic, the resources of human, and also the other functions within a company.
Well, this kind of integration is achieved through a shared database by all data processing applications and functions. The systems of ERP are usually very efficient in handling some important transactions which help to document  the company's activities. The systems of ERP allow for the planning which is integrated in a company.
The company implements ERP to obtain benefits through efficiency obtained by the planning of the supply chain and integrated process control. In addition, a better response to customer needs is got through the information which is a real-time given by the ERP system.
  • ERP Application System
ERP as a core or backbone in a management information system that integrates all information system applications used in the company. ERP applications include finance, manufacturing and logistics, sales and marketing, and human resources.

  • Finance Application System
ERP systems provide a common platform for recording financial data, processing, and reconciling data to produce accounting and financial information in the form of a general ledger. From this general ledger, financial statements can then be presented after several adjustments have been made in accordance with the established accounting policies.
The real benefit of a financial ERP system is the process of recording financial data originating from the source of the transaction. For example, transactions regarding customer orders, in the financial ERP system, are required for production data and at the same time to update the accounts receivable data when the delivery of goods has been carried out.
Manufacturing and logistics application systems
The ERP system that is applied to manufacturing and logistics business processes is the most complex application because it consists of several modules which include:
Sales and operational planning
Raw material management
Maintenance of factory facilities
Quality management
Production planning and control
Sales and marketing
The ERP system used for sales and marketing business processes includes customer management activities, such as:
  • Sales order management
  • Forecasting
  • Order management
  • Credit checking
  • Distribution
  • Export control
  • Delivery of goods
  • Transportation management
  • Billing
  • Debate process
Human resources
ERP applications are used to support human resource management activities, which include: payroll, benefits administration, recruitment procedures, personal development planning, workforce planning, schedule and shift planning, attendance management, leave, and employee income tax management.

Implementing ERP
Many companies have benefited from the implementation of ERP, while on the other hand also found several companies face problems in implementing ERP.
ERP implementation requires investment and costs that are quite expensive, both the initial cost and running cost, require some customized or tailored to fit the ERP application system with the business process and the company's supply chain management, requiring costs and time for consultancy and training activities to ERP implementation.
In order for companies to succeed in implementing ERP, company management needs to conduct intensive training, starting from managerial level to the operational level. Cultural changes and ways of working need to be done to adjust and fit into new ERP-based business processes.
Those are the explanations about ERP in the supply chain.

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