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4

CHAPTER 2

EVOLUTIONOF ERP

SYSTEMS

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The evolution of

ERP systems

closely followed

the spectacular

developmentsin

the field ofcomputer

hardware and

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software systems.

During the

1960smost

organizations

designed,

developed andimplemented

centralizedcompu

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ting systems,

mostly

automating their

inventory control

systems

usinginventorycontrol packages

(IC). These were

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legacy systems

based

on programming

languages such as

COBOL, ALGOL

and FORTRAN.Materialrequirem

ents planning

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(MRP) systems

were developed

in the 1970s

whichinvolved

mainly planning

the product orparts

requirements

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according to

themaster

production

schedule.

Following this

route newsoftware systems

calledmanufacturi

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ng resources

planning (MRP

II)

were introduced

in the 1980s

withan emphasison optimizing

manufacturing

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processes by

synchronizing

thematerials with

production

requirements.

MRP II includedareas such as

shopfloor and

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distribution

management,

project

management,

finance,

humanresourceand engineering.

ERP systems first

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appeared in the

late 1980s and

the beginning of

the 1990s with

the power of

enterprise-wideinter-

functionalcoordin

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ation and

integration. Based

on the

technological

foundations of

MRPand MRP II,ERP systems

integrate business

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processes

includingmanufac

turing,

distribution,

accounting,

financial, humanresourcemanagem

ent, project

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management,

inventory

management,

service

andmaintenance,

andtransportation,

providing

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accessibility,

visibility

andconsistency

across the

enterprise.During the 1990s

ERP vendors

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added more

modules and

functions asadd-

ons to the

core modules

giving birth to theextended ERPs.

TheseERP

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extensions includ

e advanced

planning and

scheduling

(APS), e-

businesssolutionssuch as customer

relationship

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management

(CRM) and

supply

chainmanagement

(SCM). Figure2.1 summarizes the

historical eventsrelated

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