• SpecIT Independent Vendor Selection Management
• Kuiper’s funnel method
• Dobrin’s 3D decision support tool
• Clarkson Potomac method

Overview

Irrespective of whether the company is a multi-national, multi-million dollar organization or a small company with single digit million turnover, the goal of system selection is to source a system that can provide functionality for all of the business processes; that will get complete user acceptance; management approval and, most importantly, can provide significant return on incestment for the sharehoders.

Since the mid-1970s, when there was widespread introduction of computer packages into leading companies to assist in Material Requirements Planning  software companies have strived, and for the most part succeeded, to create packages that assist in all aspects of running a business from Manufacturing; Supply Chain Management; Human Resources; through to Financials. This led to the evolution of ERP Systems.

Accordingly, a significant number of packages purporting to be ERP systems have entered into the marketplace since 1990 ^]. There are packages at the upper end of the market such as SAP; Oracle; Movex; and IFS among others in addition to medium enterprise systems such as Microsoft Navision; Axapta; Tropos; Great Plains, Dynamics; iRenaissance; Sage; and Epicor Vantage and a vast quantity of other packages that vendors claim to be ERP Systems. There are also packages that claim to be best of breed for certain processes [such as Planning] and sold merely as an add-on to an ERP System. The options are many and this, in reality, creates a problem for the company who has to make a decision.

Attempting to select an ERP system is further exacerbated by the fact that some systems are geared for discrete manufacturing environment where a distinct amount of items make up a finished product while others are more suited to process industries such as chemical and food processing where the ingredients are not exact and where there might be re-work and byproducts of a process.

In the last decade, companies have also become interested in enhanced functionality such as Customer Relationship Management and e-Commerce capability.

Given all of the potential solutions, it is not uncommon for companies to choose a system that is not the best fit for the business and this normally leads to a more expensive implementation. Thus, it is understandable that “ERP Costs can run as high as two or three percent of revenues”. A Proper ERP System Selection Methodology will deliver, within time and budget, an ERP system that is best fit for the business processes and the user in an enterprise.

Poor system selection

It is seldom that companies adopt a fully objective system selection methodology when choosing an ERP System. Some of the common mistakes that companies resort to are:

Incomplete set of requirements

When a new ERP has been implemented in an enterprise, Wallace & Kremzar state that “it requires people to do their job differently”.Therefore, it is very important to understand the requirements of each user for current processes and for future processes [i.e. before and after the new system is installed]. One can then review systems that have the best fit from a functionality perspective. It is also imperative that the requirements go into great detail for complicated processes or processes that may be unique to a particular business.

Reliance on vendor demos

Vendor Demonstrations tend to be focus on very simplistic processes. A typical demonstration will show an ideal order to cash process where a customer orders a quantity of product that is in stock. The reality in most businesses is that most customers have varying and more complicated commercial arrangements and products are not always in stock.

Over-emphasis on system cost

According to Finlay and Servant “The differential in purchase price between packages is unlikely to be the dominant factor”.While the cost of an ERP system is very important for a company, there tends to be a lack of focus on the other important decision criteria such as functionality; future proofing; underlying infrastructure [network & database]; and e-commerce capability among others.

Selection bias

It is not unusual that the decision on which system to purchase is made by one individual or by one department within the company. In these situations, an ERP system that may be excellent at one function but weak at other processes may be imposed on the entire enterprise with serious consequences for the business.

Failure to use objective professional services

One of the main reasons for failure in system selection is the understandable lack of knowledge within the company. Experienced Consultants can provide excellent information on all of the packages that are available in the marketplace; the latest functionality available in the most common packages and, most importantly, can assist the user in deciding whether a specific requirement would provide added value to the user and to the business. However, it is worth noting that the professional help must be provided by objective consultants who have no affiliation with ERP System vendors. “If a consultancy has built up an expertise in the use of a particular package then it is in its interest to recommend that package to its client”

Inability to understand offering by ERP vendor

“It is estimated that approximately 90% of enterprise system implementations are late or over budget” . A plausible explanation for implementations being late and over budget is that the company did not understand the offering by the vendor before the contract was signed. A typical example of this would be the scenario where a vendor may offer 5 days of services for the purpose of data migration. The reality is that there is a huge amount of work required to input data onto a new system. The vendor will import the data into the new system but expects the company to put the data into a file that is easy to import into the system. The company are also expected to extract the data from the old system; clean the data and add new data that is required by the new system. “ERP, to be successful, requires levels of data integrity far higher than most companies have ever achieved – or even considered. Inventory records, bill of materials (BOM), formulas, recipes, routings, and other data need to become highly accurate, complete and properly structured”. This typical scenario is one of many issues that cause implementations to be delayed and invariably lead to requests for more resources.

A proper system selection methodology

To address the common mistakes that lead to a poor system selection. It is important to apply key principles to the process, some of which are listed hereunder:

Structured approach

The first step in selection of a new system is to adopt a structured approach to the process. The set of practices are presented to all the stakeholders within the enterprise before the system selection process begins. Everyone needs to understand the method of gathering requirements; invitation to tender; how potential vendors will be selected; the format of demonstrations and the process for selecting the vendor. Thus, each stakeholder is aware that the decision will be made on an objective and collective basis and this will always lead to a high level of co-operation within the process.

Focused demonstrations

Demonstrations by potential vendors must be relevant to the business. However, it is important to understand that there is considerable amount of preparation required by vendors to perform demonstrations that are specific to a business. Therefore it is imperative that vendors are treated equally in requests for demonstrations and it is incumbent on the company [and the objective consultant assisting the company in the selection process] to identify sufficient demonstrations that will allow a proper decision to be made but will also ensure that vendors do not opt out of the selection process due to the extent of preparation required.

Objective decision process

“Choosing which ERP to use is a complex decision that has significant economic consequences, thus it requires a multi-criterion approach.”. There are two key points to note when the major decision makers are agreeing on selection criteria that will be used in evaluating potential vendors. Firstly, the criteria and the scoring system must be agreed in advance prior to viewing any potential systems. The criteria must be wide-ranging and decided upon by as many objective people as possible within and external to the enterprise. In no circumstance should people with affiliations to one or more systems be allowed to advise in this regard.

Full involvement by all personnel

The decision on the system must be made by all stakeholders within the enterprise. “It requires top management leadership and participation… it involves virtually every department within the company”.Representatives of all users should:

• Be involved in the project initiation phase where the decision making process is agreed;
• Assist in the gathering of requirements;
• Attend the Vendor Demonstrations;
• Have a significant participation in the short-listing and final selection of a vendor.

Conclusion

The implementation of an ERP system takes a significantly longer time and level of resource than the selection process. However, the extent of the implementation will be profoundly influenced by the level of resource and objectivity within the selection. Companies that use a proper System Selection Methodology reap the benefit not only during the implementation phase but also and most significantly during the life of the ERP System.

References

1. Frédéric Adam, David Sammon, The enterprise resource planning decade, p. 94, http://books.google.com/books?id=dlAeqOOZ6WUC&pg=PA94
2. Orlicky’s material requirements planning by By Joseph Orlicky, George W. Plossi 1994
3. Daniel Edmund O’Leary, Enterprise resource planning systems: systems, life cycle, electronic commerce, and risk, Cambridge University Press, 2000. ISBN 0521791529.
4. Thomas E. Vollman, William L. Berry, D. Clay Whyberk, F. and Robert Jacobs, Manufacturing Planning and Control Systems for Supply Chain Management, 2005, page 96. ISBN 007144033X.
5. C. Escalle, M. Cotteleer, and R. Austin, Enterprise Resource Planning (ERP), Report No 9-699-020, Harvard Business School, Cambridge, MA, USA, 1999.
6. Thomas F. Wallace and Michael H. Kremzar, ERP: Making it Happen. ISBN 0471392014.
7. ^{a b} Paul N. Finlay and Terence Servant, Financial Packaging Systems, 1987. ISBN 0850125847.
8. Martin, M., ‘An ERP Strategy’, Fortune, 2 February 1998, pages 95–97.
9. Oyku Alanbay, ‘ERP Selection using Expert Choice Software’, ISAHP 2005, Honolulu, Hawaii, July 8–10, 2005.

Consider IBM, a company making many different products in many plants with thousands of employees. To prepare a plan involving every product and employee to satisfy market demand would be virtually impossible, and the attempt would be extremely costly. Even if successful, necessary change would require much effort to keep the plan current. Therefore plans are made in an aggregate fashion. Aggregation means to bring a group of individual things together to make a whole.

1. Facilities planning. Top management makes decisions regarding the products that will be produced and the facilities required to produce them. These are strategic decisions made with an eye to the long-term future- in the order of five years.

2. Aggregate planning. These are medium term decisions, two to eighteen months in duration. The aggregate planning process produces decisions about how many to produce to meet demand. The decisions are made by top and middle management.

3. Schedule. Scheduling decisions are made by shop managers and are the decisions that are required to implement the aggregate plan.

Aggregation can be done on several bases:

1. Products. The most common system uses segregation by product. GM, for example might decide to produce one million cars, a half million vans, three hundred and fifty thousand trucks, and two hundred thousand sport utility vehicles. Even though a variety of different brands of car are produced by General Motors in many plants around the world, one number is decided on as the aggregate of all cars to be produced. The idea is to create broad product families so that the plan can include all products without including detail on any of them.

2. Labour. Often a company has groups of employees with similar skills that it can identify and use as a part of the aggregate. A company with specialized labour with various skills might be aggregated on the basis of these skills. We could think of IBM as doing this. Many software projects might be contemplated, but by aggregating the programmers, a single decision can be made on how many programmers to employ, and the individual projects can be considered in detail later.

3. Time. We might also tally time required for part of the effort, and add up the time required thus aggregating on the basis of time. A law firm might do this, allowing so many employee hours for criminal law, so many for corporate law, and so on.

While it is not obvious here, the basis on which to aggregate is usually quite obvious when the company is examined. The basis generally presents itself.

Production planning needs to be done on several time scales

Long-range. Top management oversee strategic plans and makes strategic planning decisions. This plan is done annually for perhaps a five-year term. It is a game plan, in which management links possible markets, company expertise and facilities, and financial capability, and plots of direction for the company for the next five years.

Medium range. Medium range decisions are made for two months to a year. Based on the game plan above, medium range production goals are determined. This is where aggregate planning is used. Medium range goals are expressed as aggregate goals: so many cars and trucks, this year for GM, for example, so much code produced by IBM, so many new product developed, so many computers built. The medium range plan is desegregated into the MPS, the master production schedule. It is a schedule of the products that must be produced for each of the planned time periods.

Short range. The short range is no more than two months, with plans for perhaps a week or two. This is the plan or schedule that details what machine will be run for what period of time, what personnel will be assigned to what tasks etc.. This results in a schedule from which is formed the MRP, materials requirement plan. This plan lists all the materials, parts and so on, that will be required to produce the required volume.

The MRP is based on requirements of the MPS, and on inputs from the bills of materials for each product, which state what components of raw materials will be required for the production volume, and the state of inventory of both finished parts and components and raw materials. The MRP is now the basis for a detailed schedule of work centre loading, and of purchasing requirements.

The planning problem

Planning involves three items. First is the work force level, the number of workers required for production. Second is production rate, the number of units produced per time period. The final item is the inventory level. This is the remainder of unused units carried from the last time period.

The problem is for each time period to find a production level, inventory level, and number of workers, that will meet the required forecast. This must be done at minimum cost.

There are a number of things we try to minimize. These are costs, inventory, work force changes, overtime, use of subcontractors, changes in production rate, number of machine set-ups, and idle time. At the same time we try to maximize customer service and profits.

It is similar in appearance to many Gantt charting software packages that are available, but is distinguished from these in that the object of study of TCHART is a repeating task,  whereas the object of study of all the others (I have seen) is a one time only task, such as a project.

The program features the calculation of slack time for each element, which is the amount of time the element can be increased with no increase in overall cycle time.

TCHART is particularly beneficial in the analysis of work cells consisting of multiple entities in which the cycle time or sequence of events of the work cell is not readily apparent or laborious to compile.

One use of this program is in the design of semi-automatic systems.  For example, in a machine tending problem, the program may help you:

• Determine a workable sequence of operations
• Identify which devices or machines may be slowed down and which need to be sped up
• Justify the existence of machine pre-loaders to reduce operator waiting and/or cycle time
• Justify the existence of load stands to facilitate the operator relinquishing a sub-assembly and returning to it at a more convenient time
• If multiple operators are working the same production cell, to help insure they don’t cross paths
• To help perform certain safety checks, such as operator proximity to a machine when it is cycling

We offer a fee based service that operates as follows:

1. You email us your data
2. We solve the data
3. We email you the solution
4. You read in and chart the solution, using the free user version of the program

There are two methods of invoking the Solver:

1. Having a TCHART Customer Service agent Solve it for you “by hand”.
2. Using the email auto-responder, whose address appears in the title of this web page.  Systems consisting of 5 elements or fewer may be Solved for free using this method.

Key words / phrases:

• computer program
• cpm, critical path method
• cycle time chart
• cycle time visualization
• excel
• gantt chart
• throughput, thruput
• time study software
• vba, visual basic for applications

SPIEGEL: Mr. Apotheker, you are taking the helm of Europe’s biggest software company in the midst of an economic crisis. Software sales declined by a third in the first quarter. Did you imagine getting started in your new position this way?

Apotheker: The timing for taking office under perfect circumstances certainly could have been better. No one predicted an economic crisis of this magnitude. But I have been with SAP for a long time, and we have also weathered earlier crises.

SPIEGEL: In later January, your company decided to cut jobs for the first time in its history. About 3,000 of the 51,500 employees will be let go. Travel budgets are being cut and expenses trimmed. What does this mean for a company so accustomed to success?

Apotheker: These are indeed extremely difficult decisions. Job cuts simply did not fit into SAP’s worldview. As a result of our strong growth in the past, we have always hired new employees slightly ahead of schedule. This meant that new employees were always very well trained and thus able to carry forward our course for growth.

SPIEGEL: And this generous planning became a problem as a result of the crisis?

Apotheker: The downtown last fall came so quickly that we were forced to react immediately. We spent many a night discussing the situation. In the end, the board agreed that it would be better, and more equitable for employees, to pull the emergency brake in time, so as not to jeopardize the whole company.

SPIEGEL: That seems a bit exaggerated for a company that boasts roughly a 25 percent return on sales. You can hardly claim that the company is on the verge of going under.

Apotheker: Everything is relative. The question is: With whom are you comparing yourself?

SPIEGEL: Very few companies are as profitable as SAP. Deutsche Bank CEO Josef Ackermann, for example, was sharply criticized for his plan to achieve a 25 percent return on equity.

Apotheker: We have to measure ourselves against the competition. Those companies are called Microsoft and Oracle, and they make significantly more money than we do. If we don’t want to become a takeover candidate, we have to be able to play in that league. It’s also what our customers demand. Only a strong SAP gives them the confidence that the software they have installed within their companies will continue to be developed in the long term.

SPIEGEL: Is the cost-cutting plan that has now been approved enough to keep SAP strong?

Apotheker: Who can provide guarantees nowadays? All I can say is this: No further cost-cutting plans are in the works at this point.

SPIEGEL: And the headquarters in Walldorf, Germany are not — as some employees fear — up for negotiation?

Apotheker: Of course not. However, Walldorf cannot and may not be the fixed star around which everything has to revolve. We are a global corporation with customers around the world. We achieve about 80 percent of our sales outside Germany. But our roots are in Walldorf, and we don’t want to cut them off. Otherwise we’ll lose our identity.

SPIEGEL: You describe yourself as cosmopolitan. How does it feel, working in a town in southwestern Germany?

Apotheker: I have been living in Heidelberg for some time now, and it’s a very nice small city. But sometimes, when I sit on my balcony in the evening and look down at the Neckar River, I think to myself: Where is the rest of the city?

SPIEGEL: Life is a little different in Paris, where you have your main residence.

Apotheker: Of course, but Paris is ultimately just a conglomerate of many villages.

DER SPIEGEL

Graphic: SAP at a glance

SPIEGEL: Almost simultaneously with your predecessor, the physicist Henning Kagermann, other senior members of the SAP board are leaving the company. Your roots are in sales. Is the era of dominance by engineers over?

Apotheker: We are taking control of the company at a time when several important changes force us to seek new answers. We are experiencing the global economic crisis and are rushing headlong toward an environmental crisis. At the same time, a generational shift of sorts is happening in society. For the first time, we have a generation entering positions of leadership that grew up with computers and the Internet, and for which the virtual world is the real world. SAP must also adjust to all of these developments. In this regard, a new era is beginning.

SPIEGEL: Will the sale of products under salesman Apotheker be more important than the development of software, a concern recently voiced by SAP co-founder Klaus Tschira?

Apotheker: The enthusiasm for innovative technologies and software possibilities remains unchanged in the executive board. However, the market has changed. In the past, there were relatively long product cycles for software. These cycles have accelerated rapidly and, at the same time, customer demands have risen considerably. That’s why we have to become even faster — and better.

SPIEGEL: You had planned a particularly speedy market launch of Business ByDesign, or ByD, a small and mid-sized business software that was announced with great fanfare almost two years ago. About €400 million ($296 million) was invested in the project, and yet the software is still not ready for the market.

Apotheker: We did indeed invest a lot of money, as we still are, because ByD is not just a new product. In fact, it provides us with a completely new business model as a service provider …

SPIEGEL: … which is intended to pave the way for SAP’s necessary expansion from large companies to small and mid-sized businesses. Why has this been so difficult?

Apotheker: ByD is software that will also allow smaller companies to perform virtually all of their business-related tasks. But this software will not run on mainframe computers, as in the past, but will simply be installed and maintained via the Internet, and it will be available on every office PC. To be able to offer this service around the clock, 365 days a year, at reasonable prices, we had to do more than completely reorganize sales. We had to provide the necessary storage capacity in our own computer centers and those of our partners, as well as create the necessary network structures.

SPIEGEL: But that’s something you could have known two years ago.

Apotheker: And we did know it. But we did not expect that we would have to fine-tune the model so much to make it profitable, not just for our customers, but also for us.

SPIEGEL: How can a company that sells its customers planning software, among other products, miscalculate so glaringly in its own business?

Apotheker: As the executive responsible for sales at the time, I sought to convince the executive board that we had to bring the product to market quickly. That was a mistake, but we learned from it and rolled up our sleeves.

SPIEGEL: So far, the program has only been in trial operation with about 100 customers.

Apotheker: We have made a lot of progress in recent months. We are a lot further along today than at the beginning of the year. We now have a realistic timetable to resolve the remaining problems during the course of the year. For this reason, I assume that we will bring ByD onto the market in the first half of 2010.

SPIEGEL: You have just taken 800 of a total of 2,600 developers off the project. Isn’t that more indicative of a slow exit?

Apotheker: That’s the wrong interpretation. The fact is that we simply had too many people working on the project, which made everything even more complex. Now the project is organized more effectively. And the 800 developers, armed with a wealth of knowledge about ByD, can work more productively elsewhere.

SPIEGEL: To be able to adhere to your growth objectives, you recently announced plans to significantly increase support fees, triggering a wave of indignation. Were you taken aback by the outrage coming from prominent SAP customers in Germany, like Miele, Bahlsen and Jenoptik?

Apotheker: The timing may have been a little unfortunate, in retrospect. If we had anticipated that the global economic crisis would erupt right afterwards, we might have taken a different approach. The fact is, however, that we drew attention to the issue because we are convinced that support should be tied much more closely to the creation of value by customers. That’s why we developed this fundamentally new support model, for which we will adjust fees to standard market prices in the course of the next seven years.

SPIEGEL: In other words, those who make a lot of money with SAP software should pay more for support?

Apotheker: When you consider the amount of influence software has in companies today, the old support models are completely outdated. It’s as if we were doing maintenance on a steam locomotive, even though it became an aircraft long ago. That’s why the model had to be changed.

In simpler words, an ERP is a massive software architecture that supports the streaming and distribution of geographically scattered enterprise wide information across all the functional units of a business house. It provides the business management executives with a comprehensive overview of the complete business execution which in turn influences their decisions in a productive way.

At the core of ERP is a well managed centralized data repository which acquires information from and supply information into the fragmented applications operating on a universal computing platform.

Information in large business organizations is accumulated on various servers across many functional units and sometimes separated by geographical boundaries. Such information islands can possibly service individual organizational units but fail to enhance enterprise wide performance, speed and competence.

The term ERP originally referred to the way a large organization planned to use its organizational wide resources. Formerly, ERP systems were used in larger and more industrial types of companies. However, the use of ERP has changed radically over a period of few years. Today the term can be applied to any type of company, operating in any kind of field and of any magnitude.

Today’s ERP software architecture can possibly envelop a broad range of enterprise wide functions and integrate them into a single unified database repository. For instance, functions such as Human Resources, Supply Chain Management, Customer Relationship Management, Finance, Manufacturing Warehouse Management and Logistics were all previously stand alone software applications, generally housed with their own applications, database and network, but today, they can all work under a single umbrella – the ERP architecture.

In order for a software system to be considered ERP, it must provide a business with wide collection of functionalities supported by features like flexibility, modularity & openness, widespread, finest business processes and global focus.

Integration is Key to ERP Systems

Integration is an exceptionally significant ingredient to ERP systems. The integration between business processes helps develop communication and information distribution, leading to remarkable increase in productivity, speed and performance.

The key objective of an ERP system is to integrate information and processes from all functional divisions of an organization and merge it for effortless access and structured workflow. The integration is typically accomplished by constructing a single database repository that communicates with multiple software applications providing different divisions of an organization with various business statistics and information.

Although the perfect configuration would be a single ERP system for an entire organization, but many larger organizations usually deploy a single functional system and slowly interface it with other functional divisions. This type of deployment can really be time-consuming and expensive.

The Ideal ERP System

An ERP system would qualify as the best model for enterprise wide solution architecture, if it chains all the below organizational processes together with a central database repository and a fused computing platform.

Manufacturing

Engineering, resource & capacity planning, material planning, workflow management, shop floor management, quality control, bills of material, manufacturing process, etc.

Financials

Accounts payable, accounts receivable, fixed assets, general ledger, cash management, and billing (contract/service)

Human Resource

Recruitment, benefits, compensations, training, payroll, time and attendance, labour rules, people management

Supply Chain Management

Inventory management, supply chain planning, supplier scheduling, claim processing, sales order administration, procurement planning, transportation and distribution

Projects

Costing, billing, activity management, time and expense

Customer Relationship Management

Sales and marketing, service, commissions, customer contact and after sales support

Data Warehouse

Generally, this is an information storehouse that can be accessed by organizations, customers, suppliers and employees for their learning and orientation

ERP Systems Improve Productivity, Speed and Performance

Prior to evolution of the ERP model, each department in an enterprise had their own isolated software application which did not interface with any other system. Such isolated framework could not synchronize the inter-department processes and hence hampered the productivity, speed and performance of the overall organization. These led to issues such as incompatible exchange standards, lack of synchronization, incomplete understanding of the enterprise functioning, unproductive decisions and many more.

For example: The financials could not coordinate with the procurement team to plan out purchases as per the availability of money.

Hence, deploying a comprehensive ERP system across an organization leads to performance increase, workflow synchronization, standardized information exchange formats, complete overview of the enterprise functioning, global decision optimization, speed enhancement and much more.

Implementation of an ERP System

Implementing an ERP system in an organization is an extremely complex process. It takes lot of systematic planning, expert consultation and well structured approach. Due to its extensive scope it may even take years to implement in a large organization. Implementing an ERP system will eventually necessitate significant changes on staff and work processes. While it may seem practical for an in-house IT administration to head the project, it is commonly advised that special ERP implementation experts be consulted, since they are specially trained in deploying these kinds of systems.

Organizations generally use ERP vendors or consulting companies to implement their customized ERP system. There are three types of professional services that are provided when implementing an ERP system, they are Consulting, Customization and Support.

• Consulting Services – are responsible for the initial stages of ERP implementation where they help an organization go live with their new system, with product training, workflow, improve ERP’s use in the specific organization, etc.
• Customization Services – work by extending the use of the new ERP system or changing its use by creating customized interfaces and/or underlying application code. While ERP systems are made for many core routines, there are still some needs that need to be built or customized for a particular organization.
• Support Services – include both support and maintenance of ERP systems. For instance, trouble shooting and assistance with ERP issues.

The ERP implementation process goes through five major stages which are Structured Planning, Process Assessment, Data Compilation & Cleanup, Education & Testing and Usage & Evaluation.

1. Structured Planning: is the foremost and the most crucial stage where an capable project team is selected, present business processes are studied, information flow within and outside the organization is scrutinized, vital objectives are set and a comprehensive implementation plan is formulated.
2. Process Assessment: is the next important stage where the prospective software capabilities are examined, manual business processes are recognized and standard working procedures are constructed.
3. Data Compilation & Cleanup: helps in identifying data which is to be converted and the new information that would be needed. The compiled data is then analyzed for accuracy and completeness, throwing away the worthless/unwanted information.
4. Education & Testing: aids in proofing the system and educating the users with ERP mechanisms. The complete database is tested and verified by the project team using multiple testing methods and processes. A broad in-house training is held where all the concerned users are oriented with the functioning of the new ERP system.
5. Usage & Evaluation: is the final and an ongoing stage for the ERP. The lately implemented ERP is deployed live within the organization and is regularly checked by the project team for any flaw or error detection.

Advantages of ERP Systems

There are many advantages of implementing an EPR system. A few of them are listed below:

• A perfectly integrated system chaining all the functional areas together
• The capability to streamline different organizational processes and workflows
• The ability to effortlessly communicate information across various departments\
• Improved efficiency, performance and productivity levels
• Enhanced tracking and forecasting
• Improved customer service and satisfaction
  

Disadvantages of ERP Systems

While advantages usually outweigh disadvantages for most organizations implementing an ERP system, here are some of the most common obstacles experienced:

• The scope of customization is limited in several circumstances
• The present business processes have to be rethought to make them synchronize with the ERP
• ERP systems can be extremely expensive to implement
• There could be lack of continuous technical support
• ERP systems may be too rigid for specific organizations that are either new or want to move in a new direction in the near future

Production planning incorporates a multiplicity of production elements, ranging from the everyday activities of staff to the ability to realise accurate delivery times for the customer. With an effective production planning operation at its nucleus, any form of manufacturing process has the capability to exploit its full potential.

You can find everything that you could possibly need to know about production planning on this page by selecting the relevant article from the summaries below or the menu on the left.