Monday 31 December 2018

What is ERP (Enterprise Resource Planning)

Enterprise Resource Planning

ERP stands for Enterprise Resource Planning which in Indonesian language often referred to as Enterprise Resource Planning. According to the definition in the dictionary of the American Production and Inventory Control System (APICS). It is an Enterprise Resource Planning or ERP is a system of Information Oriented Accounting. To identify and plan your company's resources to create, send and take into account customer orders.

While the definition of ERP on Wikipedia is an information system intend for manufacturing or service company. That serves to integrate and automate business processes related to aspects of the operation, production or distribution in the company concern.

There is also a saying that ERP is the Planning System company base integrate computer application use to manage internal and external resources of the company. The company's resources including intangible assets, financially, material and human resources.

So basically, ERP (Enterprise Resource Planning) combines several management functions into an integrated system and facilitate. All the current information on the management functions. The ERP is designed to automate basic processes throughout the Organization through a centralized database and eliminating. The need for different systems run by the various work units in an organization.

The advantage of applying ERP (Enterprise Resource Planning)

On the organization or company that does not implement an ERP system, generally using a separate database system. Where every work unit has its own database, such as database marketing has the marketing, the production has a data marketing, human resources or HUMAN RESOURCES DIVISION has its own HRD database, the database has purchased Purchasing by itself, and part Finance (finance) has its own financial database.

Separate system thus has a different database and frequent discrepancies making it difficult to manage them. ERP (Enterprise Resource Planning) was develop to replace the separate systems to be integrate so that its management more effective and efficient.

Below are some of the benefits that can be enjoy by the organizes who successfully implement ERP or Enterprise Resource Planning (Enterprise resource planning).

  • Business Integration and better Data Accuracy

    ERP system consists of various modules and Sub-module that can represent the components of a particular business. If the data being enter in a module (e.g. data reception material) then the other modules such as "Payment" and "Inventory" will automatically update too. This innovation happening in "real time" or just at the time of occurrence of the transaction. The data need only be enter once only income i.e. the transaction so that there is no more data entry on other modules. Thus, the need for data entry several times can be eliminate (remove) and the possibility of data typing errors and duplicate data can also be minimize. Centralize database structure also allows the Administration and better security or to avoid the loss of important data.

  • Planning and management information systems 

    ERP systems have tools supporting good decision-making tools such as planning and simulation tools can help management to better utilize its resources such as human resources, material and machinery or equipment work. In presenting the report, ERP systems can generate standard reports require by management and the report can be access by management at any time when need.

  • Increase efficiency and productivity

    In addition to providing better planning, ERP systems can also improve the efficiency of daily routine activities such as ordering, shipping, quality management, supplier performance management cash and sales realizations. With the ERP system, the cycle time to cash sales and payments to suppliers can also be shorten.

  • Establishment of Standardization Procedures

    ERP systems base on international best practice process adopt by organizations that implement it. The work became more structure so that it does not depend on individuals or only certain workers.

The main modules of the ERP

As previously mention, ERP system consists of various modules and the modules that represent the components of a business. Module or sub-the module can be select according to the needs of organizations that want to implement it. The following are some of the main Module or a basic module. Which is most often found in the ERP system.

  1. Human Resource Module (Modules of human resources)

  2. Inventory Module (Inventory/Inventory)

  3. Sales and Marketing Module (the module sales and marketing)

  4. Purchase Module (Purchase Module)

  5. Finance and Accounting Module (finance and Accounting Module)

  6. Customer Relations Management Module (Module Customer Relationship Management)

  7. Manufacturing Module (Module Manufacturing)

  8. Supply Chain Management Module (Module Supply Chain Management)

In addition to the modules above, there are actually many more modules or other sub modules are made in accordance with the needs of each organization.

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