ERP Book Excerpts Zaveri Revised

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ERP Business Blueprint

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This ERP book is available from:Himalaya Publishing House Pvt. Ltd. Offices as follows

Mumbai (Head Office)Mr. Neeraj Pandey / Mr. Anuj PandeyHimalaya Publishing House`Ramdoot`, Dr. Bhalerao Marg, Girgaon,Mumbai - 400 004, Maharashtra, India

Tel : (91) (22) 23863863/23860170, Fax: (91) (22) 23877178E-mail : [email protected], Website : www.himpub.com

NEW DELHI"Pooja Apartments", 4-B, Murari Lal Street,Ansari Road, Darya Ganj, New Delhi 110 002.Tel : (91) (11) 2327 03 92, Fax: (91) (11) 2325 62 86.

NAGPURKundanlal Chandak Industrial Estate,Ghat Road, Nagpur 440 018.Tel: (91) (712) 0712 272 12 16, Fax: (91) (712) 0712 272 12 15.

BANGALORENo. 16/1 (Old 12/1), 1st Floor, Next to Hotel Highlands,Madhava Nagar, Race Course Road, Bangalore 560 001.Tel: (91) (80) 2228 15 41, 2238 54 61, Fax: (91) (80) 2228 66 11.

HYDERABADNo. 2-2-1 167/2H, 1st Floor,Near Railway Bridge,Tilak Nagar, Main Road, Hyderabad 500 044.Tel: (91) (40) 5550 17 45, Fax: (91) (40) 2756 00 41.

CHENNAINo. 85/50, Bazullah RoadT.NagarChennai 600 017Tel No 044-28144004/ 28144005

PUNEFirst Floor. Laksha Apartment,No. 527 MehunpuraSaniwarpeth

Near Prabhat Theater, Pune -411 030Tel No 020-24496323/ 24496333

LUCKNOWC-43, Sector C,Ali GunjLucknow 226 024Tel No- 0522-2339329.

AHMADABAD114, Shahil1st FloorOpp. Madhu Sudan House,C.G.RoadNavrang PuraAhmedabad -380 009

Tel No- 079-26560126Mobile- 09327324149 09314679413

ERNAKULUM39/104 A, Lakshmi ApartmentKarikkamuri Cross RoadErnakulum, Cochin 622011Tel No 0484-2378012, 2378016Mobile 09344199799


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Seamless Integration of business processes in ERP

Sub-ContractorOUT

Production

BOM

LOCALPURCHASE

ImportPurchase

ISO / Q C

VATSECURITY

COST SHEETESTIMATE

SUB-CONTRACTOR

IN

CRM

Orderfulfillment

EXPORT

AccountsPAYROLL

HR

AccountsPAYROLL

HR

PLANTMAINTENANCE

MaterialManagement

After SalesService

PLANTMAINTENANCE

MaterialManagement

After SalesService

MRP

Sales &

DistributionResource

Matrix

EXCISE E-Business

Multi-location

Send /Receive data

Automatic

E-Mail

Alerts

Multi-location

Send /Receive data

Automatic

E-Mail

Alerts


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Copyright 2009-2011 Zaveri Jyotindra. All rights reserved. No part of this bookmay be reproduced, translated, converted into audio-video media, stored in a

retrieval system or transmitted in any form or by any means electronic,

mechanical, photocopying, recording, or otherwise without the prior writtenpermission of P rof. Zaveri Jyotindra.

Permission may be sought directly from Prof. Zaveri. [email protected] .

The export rights of this book are vested with Prof. Zaveri Jyotindra.

The ERP Software is registered with the government of India and copyright law protects thesame. Any use of unauthorized source or ERP software is illegal. All rights are reservedwith Prof. Zaveri Jyotindra for the ERP computer program.

Limits of liability and disclaimer of warranty:Notice: The author and publisher of this book have tried best to ensure that the programs,procedures, and functions described in the book are correct. However, the author andpublishers make no warranty of any kind, expressed or implied, with regard to theseprograms or documentation contained in this ERP book. The author and publisher shall notbe liable in any event of any damages, incidental or consequential, in connection with, or

arising of the furnishing, performance or use of the ERP software package, procedures, andfunctions. Product name mentioned are used for identification purposes only and may betrademarks of their respective companies. All trademarks referred to in the book areacknowledged as properties of their respective owners.

No responsibility is assumed by the author for any damage to persons or property as matterof products liability, negligence or otherwise, or from any use or operations of any methods,instructions, or ideas contained in the material herein. Because of rapid advances in theInformation Technology and business challenges, independent verification of methodsshould be made.

The author has used its best endeavors to ensure that any URLs for websites referred to inthis ERP book are correct and active at the time of going to press. However, the author orpublishers has no responsibility for the websites and can make no guarantee that a site willremain live or that the content is or will remain relevant.

First edition: 2009

Published by Himalaya Publishing House.

This softcopy edition revised again in 2010.


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About the book

Some companies use information to innovate, control costs, or capture new markets.Others gather and evaluate information, but seem unable to translate data into productivity.In this ERP book, the author examines how companies use the management information togain the competitive edge.

Enterprise Resource Planning (ERP) helps the organization, especially manufacturingcompanies to manage the growth. There will be one more w in the WWW that is wWWW,the wireless-World-Wide-Web. SME cannot keep on using the bullock cart method of doingbusiness anymore.

What is new in this ERP book?

Unlike other ERP textbooks, this book gives actual data entry screens, reports, and masterfiles details for practical learning. This book is a good reference for various key functionsmanagers, such as accounts, purchase, sales, production, etc. It is not just a book but alsoa companion for corporate commandos. This ERP book might not seem extra-ordinary, butit is. Business processes integrated in ERP should have already been demystified, but it hasnot been.

What does this ERP book offer to lecturers, faculties, consultants?The book is projected to be a comprehensive guide to all aspects of deploying ERP within anorganization. Reader will find that this ERP book has a good range of case studies tosupport their teaching.

Who should use this ERP book?

This book is useful for existing ERP users and ERP power-users as well. Senior managersand directors, CEO, CFO, COO, seeking to deploy ERP to benefit their organization. Forcompanies who have deployed ERP but not able to understand why real benefit is not seen.Study of this book will reveal the mistakes made by management, ERP coordinators, ERPtask force, or ERP steering committee. Use this book before, during and after ERP isdeployed, as a reference material. The knack to making informed decisions is necessary forsuccess. Yet many times, managers make vital decisions without real information. Use thisbook to understand how you can use ERP to enhance your decision-making aptitude. Thisbook will be of immense value to professionals dealing with ERP implementation, I. T.professionals, mangers handling sales and distribution, logistic, supply chain and finance.

MBA Students:This ERP book will be very useful to the B-Schools students who want to pursue their MBA.All these aspiring managers must know ERP well. In the interviews now on companies willnot ask whether you know MS office or not, they will ask, Do you know ERP? This will beuseful for managers working in small and medium size enterprises (SME).

ERP Case studies:The author has worked on live ERP projects for over 200 organizations, in India and abroad.This is result of some twenty years of practical ERP experience. The author had anopportunity to offer I. T. solutions to small and large organizations, private and Governmentorganizations. The ERP book also includes several case studies to illustrate various points inthe book. This important book gives tactics about ERP implementation. The need hasnever been more crucial. Global economic scenario is unpredictable. The competition isincreasing. Business executives are challenged to leverage I. T., to improve the enterprise


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performance. This book attempts to answer questions such as, How do you become astrategic ERP consultant, that enables efficient business management and improveoperational efficiency? ERP is also evolving. Author discusses the emerging developmentsand compelling Business Process Management (BPM) for success.

What can ERP do for the SME?Act confidently. Improve operational efficiency. Give the enterprise the edge it needs to

succeed. Study this book to see why even small and medium business (SMB) units areusing ERP software to achieve a competitive advantage.

The decision making process is enriched if additional, relevant information is available.However, collecting information is costly. Hence, cost of additional information need also tobe controlled. ERP will help user in this aspect immensely. Decision making underuncertainly will be facilitated. ERP is synonym to the DSS or Decision support system.

This ERP book explains how ERP as a management tool, in a SME is a powerful and strategicset of applications that provides business visibility with real-time personalized access toenterprise data, for the purpose of analyzing, and benchmarking customers, suppliers, andthe overall business' performance.

This book discusses the common questions asked, to run a manufacturing companyefficiently: Do you get information when you want? Do you have islands of information? Isstores-in-charge able to give you correct quantity of raw material in stock, as of now? Ispurchase order linked to material inwards? Is inventory and accounts integrated?

The companion w ebsite:Faculty and students can use the online resource for this book at www.ERPerp.com. Thiscompanion website will be helpful for students as well as lecturers. Make the most of yourstudies.

This book attempts to answer all questions about ERP that you wanted to ask, but did notknow whom to ask.


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Learning Objectives

What is in it for me?Upon completion of this book, reader will be able to:

1. Describe the concept of ERP.2. Define key terms as they relate to ERP.3. Understand the Material Requirement Planning and supply chain

management.

4. State the benefits of ERP.5. State the pitfalls of ERP implementations.6. Understand the need for change management or Business Process

Reengineering.

7. Learn about the MIS or Management Information System.8. Understand the Total Cost of Ownership (TCO).9. Write a business case to justify an ERP implementation10. Align strategic goals, people, knowledge processes, and internal systems11. Concept of business processes linking with other processes.12. Understand a key business processes. Improve and simplify a business

process. Apply the result of business process analysis to an ERPimplementation.

13. Explain the interrelationships among the core business processes of salesorder or Order Receipt Information or Order Acceptance, Bill of Materials(BOM), and work order to production.

14. Describe the technological infrastructure requirements in implementing ERP.15. Describe project management and its use in implementing an ERP system.

Describe steps necessary to successfully implement an ERP system

16. Describe the roles and responsibilities of the key organization players orstakeholders.

17. Describe how ERP can be used to achieve and sustain competitive advantage.


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About the author

Prof. Zaveri Jyotindra, Computer Engineer (Germany), I. T. consultantsince 1975.

Independent faculty and management consultant .

Visiting faculty for teaching management subjects: Information Technology, e-Marketing,Social media marketing, ERP, MIS, e-Business, e-Commerce, Data mining and web mining.

o Providing professional consultancy for above subjects. Visiting faculty in leading management institutes and colleges. Sought after speaker for

seminars and management training programs.

Mr. Zaveri works with business users to determine and translate business requirementsinto Internet Technology solutions.

Mr. Zaveri provides management training and consultancy for ERP, Internet, e-Marketing,Website using WEB 2.0, SEO, e-Business, e-Commerce, Data mining, Business Intelligence,

and social media marketing strategy. Cyber branding. He specializes in creating "Social

Media Marketing" campaign. Experienced faulty for subjects such as ERP, MIS, e-Commerce

solutions, 'Supply Chain Management', Change Management (B. P. R.), Sales & Distribution

systems, , and automation of manufacturing business process.

Mr. Zaveri is the architect who designed the ERP software called Digital Nervous System or"DNS", in 2002. Now used by hundreds of users. DNS ERP software package is intellectual

property of Mr. Zaveri. This is an Integrated Business Management package. He has also

designed ERP for Doctors, ERP for Institute management.

Formerly with IBM, trained in Germany (1977). Knowledge of networking and fundamentals of computer systems architecture a unique

combination of expertise in computer hardware, software, and Internet.

Over thirty-five years of experience in software development, implementation, and I. T.training. See year-by-year record of accomplishment since

1975. http://www.dnserp.com/track_record.htm

Publications:

Prof. Zaveri is author of following books: (1) Book on ERP (2) Book on Internet Programmingand Cyber Law (3) Book on MIS (4) Book on Business Applications.

For professional networking http://in.linkedin.com/in/jyotindrazaveri

Traveled abroad: From India - Bahrain, France, Germany, Italy, Japan, Malaysia, Nederland,

Singapore, Switzerland, Thailand, UAE, UK, and USA.


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Foreword

I read carefully, and with keen interest your book on Enterprise Resource Planning sopainstakingly written by you. It throws a new light on the concept of Enterprise Resource

Planning and would be of great help to senior Managers as well as academicians. It coversall the aspects of Enterprise Resource Planning (ERP) and therefore, would be a greatsource of guidance to the readers concerned. This is a first ever kind of book I have comeacross written in a scientific manner and presenting the same in a lucid and simplelanguage.

ERP as a concept and as a business process model is of recent development. You havewritten the book specifically for the functional managers targeting the SME sector (Smalland Medium size Enterprises). This book exhaustively covers different modules in theindustries and actual data entry screens, reports, master files of the business processes andsufficient case studies to understand the ERP in practice. You have wonderful track recordof rich and vast experience and knowledge of India and abroad.You have amply demonstrated it in the book. The book can be definitely used by business

schools as a reference book for ERP. It is useful to corporate to follow the steps given byyou in order to reap the benefits of ERP in their organization. The chapter regarding theHumor is an interesting addition to the book not to be found commonly in such referencebooks.

I would certainly like everyone concerned to use this book for reference purposes.

Please accept my appreciation and congratulations for writing this book on a valuablesubject.

Regards,

Dr. P. C. Shejw alkar ,

[Director IME, President ASM. Ex DeanFaculty of Management & Professor Emeritus of Commerce & Management Sciences,University of Pune].


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Book review

I appreciate Prof. Jyotindra Zaveri for making immense efforts in authoring the book"Practical Guide to Enterprise Resource Planning". It reflects several years of experienceand sincere efforts to present the complex subject in simple language loaded with live

cases.

Prof. Jyotindra Zaveri has been helping enterprises, especially from the Small and MediumEnterprises segment in implementing ERP to gain competitive advantage. Several cases inthe book clearly reflect the dexterity. It is especially useful in the highly dynamic anddemanding market environment of the 21st century that SME have to face.

This book is a real treasure of the very best concepts from academics, relevant andinsightful case studies, and powerful prescriptions for practicing managers. Prof. JyotindraZaveri has tried his best to keep away the hype and jargon. Reader can easily navigate theworld of ERP.

B-School students as well as practicing managers will certainly find this book very

interesting especially with its own companion website.

Dr . M i l ind M. Oka

[Dr. Oka holds Ph.D. from University of Pune. He is Certified Assessor of Quality Systems.He has rich experience of over 35 years. He is an Academician, Management Consultant,Author, and Corporate Trainer.]


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Book review

The book on ERP by Prof. Jyotindra Zaveri presents in a very lucid way and simple languagevarious aspects of ERP. Especially he highlights seamless integration of business processesin ERP by using more than 300 diagrams / pictures / tables and giving practical case studiesand examples from purchase, accounts, exports, material management, HR and all

departments, which has increased its usefulness and value.

I can safely say that even a layman like me or anybody working in ERP system will get allpractical hints and guidelines regarding what, why, where, when and why of ERP.

Mr. Shriniwas Rairikar, M. Com., MPM, LLB, DLL & LW,ISO 9001-2000 Lead Auditor. ISO 9001-2000 Diploma (U.K.).

Senior Director, MCCIA.

Founder Director Dasbodh Management academy.

Book review

Dear Sir,

At the very outset, I would like to congratulate you for the launch of your book.

I have just one comment - being an institute in e-business, of all the books on ERP that Ihave gone through, yours might be in the top 10 books that I have read so far. Many ofthem are by international authors also.

Once again, congratulations for the launch of the book. I am sure it will be a great success.

Thanking you,

With warm regards,

Jai SinghDirector IIeBM, Management Institute.


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Book review

The recognition of ERP as a business application does deserve a special mention. The mostcrucial factor in the whole system of ERP is the implementation aspect. The implementationphase can decide the fate of ERP and its success.

The success of an ERP implementation again lies on the speed at which it is introduced andapplied. For this, necessary training needs to be imparted to all concerned who canimplement ERP at the fastest speed. This training converted into practice byimplementation of ERP would reveal the real advantages that an organization would receivein terms of cost control and cost reduction at every stage and improvement in profitability.

The present work is the outcome of Prof. Zaveris hard work of over a period of nearly twodecades in this area of ERP. The contents of this book depict his deep knowledge about thesubject. His step-by-step approach with logical explanation at every stage leads a reader toend up with a thorough understanding of the subject. Even a nonprofessional canunderstand the language that he has used in his book.

Prof. Zaveris interaction with various industries as well as students has helped him toassimilate his ideas in writing this book.

I encourage and recommend SMEs, corporate, and others to read this book, understand thesubject thoroughly and to implement ERP at their organizations. This book would also beextremely useful to students to understand the subject since it is written in a most lucidway.

I wish all success to Prof. Zaveri in launching this unique book for the first time in themarket.

Dr . A. P. Ghosh

DirectorBalaji Institute of Modern Management (BIMM)

Sri Balaji Society, Pune

[Dr. A. P. Ghosh has a Ph. D. in Financial Management from University of Pune. He iscertified corporate director from World Council for Corporate Governance London. He hasauthored many books on finance and management].


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Preface

India Inc. is growing. SME are growing faster. In the midst of the Internet revolution, theyare caught between the two methods of doing business. One is bullock cart method (legacyprocedures) and the other is business process driven method.

This book gives the reader the basic as well as advanced concepts of ERP. The businesslogic is prepared from the business rules approved by the top management. The entireorganization, business partners, associates, employees, work as per the system defined bythe business rules. The ERP captures these business rules. ERP software system will nowensure that everybody follows the same. ERP and ISO procedures go together. ERP iscomplete integrated business management software. This manual intends to define theconcept and explain the logic on which ERP is designed and customized for a typicalorganization, especially the manufacturing business, as this poses the biggest challenge indeploying ERP on the shop floor.

What is ERP?

The name ERP or the Digital Nervous System is mentioned in the book Business @ speed ofthought, written by Mr. Bill Gates. The ERP is like the nervous system of the human body

for the business. Reader will find the word ERP used in the book as synonym to ERP. MISor the Management Information System in the business organization is the result of goodERP software. All kinds of organizations are using ERP to get good MIS. For instance,hospitality industry, hospitals, airlines, institutes, etc. This book also deals with themanufacturing business, which is yet unexplored. The supply chain management (SCM) isalso one of the key business processes that are integrated in a good ERP system.

There is a need for ERP book that give practical guidelines. Managers do not understandthe idea that manufacturing activity can be viewed as a process and then improved. Once Ihad a chance to talk to someone in an MNC food chain joint. He showed me a manualwhere it was clearly written serve the glass of the soft drink with four cubes of ice and putin the left side of the plate. There are not many SME organizations that have bothered tomake a proper SOP (Standard Operating Procedures) manual. Sometimes the MD argueswith me, what is there to write? In other words, hardly any document is available.

This book does not discuss the hard-core programming used in the ERP software. Bits andbytes, tables of the backend RDBMS is not described in this book. This book is not for adeveloper who is looking for programming techniques used in ERP.

Zaveri Jyotindra, [email protected]


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Acknowledgements

The author would like to thank the team at ERP e-Business Consultancy for their help in thecreation of this book. Many thanks to the reviewers who have greatly assisted indeveloping the book. I thank Dr. P. C. Shejwalkar to read the book and write the foreword.I thank Mr. Shriniwas Rairikar (MCCIA), Dr. A. P. Ghose to give me guidance, especially

stressing focus for the MBA students. I thank Dr. Milind Oka for taking his time forreviewing this book and give valuable suggestions.

Care is taken to alter the actual data so that real name or actual information is notdisclosed. However, in some case of screen dumps or showing graphics image of ERP input/ output, some name may also appear, but the care is taken that the same does not harmthe businesses. Especially while presenting case studies, organization may not like topublish the name directly, so I have avoided taking the name of the organization whereverpossible.

I would like to thank Mr. Surendra K. of Himalaya Publishing House for publishing this ERPbook. I also thank Mrs. Savita Anil Shinde to carry out the typesetting work.

Effort has been made to trace the owners of copyright material, in a few cases this hasproved difficult. I take this opportunity to offer my apologies to any copyright holderswhose rights I may have unwittingly infringed.

Zaveri Jyotindra


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CONTENTS

PART I ..................................................................................................................................................................... 21CHAPTER 1. INTRODUCTION ..................................................................................................................... 22HOW TO USE THIS BOOK? ........................................................................................................................... 22WELCOME TO ERP ............................................................................................................................................ 23

ERP Definition ................................................................................................................................................ 23ERP vendors.................................................................................................................................................... 25What is the difference between SAP and ERP? ................................................................................. 25ERP customization........................................................................................................................................ 26

ABOUT SMALL AND MEDIUM SIZE COMPANIES ............................................................................. 27COMPUTER NETWORK SYSTEM SCHEMATIC ..................................................................................... 30IT INFRASTRUCTURE RECOMMENDATIONS CHECKLIST ........................................................... 31ERP IMPLEMENTATION PROJECT MANAGEMENT ........................................................................... 33

Implementation Strategy .......................................................................................................................... 34Roadmap.......................................................................................................................................................... 39

CHAPTER 2. MASTERS DATA AND PRI NTING CONCEPTS .......................................................... 43MASTER DATA ENTRY FORMS.................................................................................................................... 43PRINTING (HARDCOPY) ............................................................................................................................... 47CHAPTER 3. CHANGE MANAGEMENT ..................................................................................................... 49BPR OVERVIEW ................................................................................................................................................. 52WHAT USER WANTS? ..................................................................................................................................... 55CHAPTER 4. TCO OF ERP .............................................................................................................................. 56CHAPTER 5. ERP IMPLEMENTATION ..................................................................................................... 58OATH ........................................................................................................................................................................ 58WHY ERP PROJECT FAILS ............................................................................................................................ 59ERP IMPLEMENTATION TIPS FOR SUCCESS ..................................................................................... 64IMP ORTANT INSTRUCTIONS ..................................................................................................................... 65CUSTOMIZATION .............................................................................................................................................. 67IMPORTANCE OF QC DATA .......................................................................................................................... 71CRP ........................................................................................................................................................................... 73TEST RUN: CHECKING AND MARKING .................................................................................................. 75PROOF OF CONCEPT FILE ............................................................................................................................ 77DRAFT OF LETTER TO INFORM VENDORS / CLIENTS.................................................................. 81CHAPTER 6. GETTING STARTED ............................................................................................................... 82ERP CONCEPT ..................................................................................................................................................... 83

Material outward........................................................................................................................................... 85


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CHAPTER 7. SCOPE OF ERP MODULES.................................................................................................. 86CHAPTER 8. ERP DOCUMENT FLOW AND MATERIAL FLOW ................................................... 110PART II ................................................................................................................................................................. 112SECURITY MODULE & CLOSING BALANCE ....................................................................................... 114CLOSING BALANCE ........................................................................................................................................ 114CLOSING STOCK .............................................................................................................................................. 117CHAPTER 9. PROCUREMENT MODULE ................................................................................................. 121

PURCHASE MASTER.............................................................................................................................................. 123Vendor Type Master .................................................................................................................................. 123Vendor Master ............................................................................................................................................. 124

PURCHASE TRANSACTIONS ................................................................................................................................. 127GRN (Goods Receipt cum inspection)................................................................................................. 136Job Order ....................................................................................................................................................... 136

PURCHASE REPORTS ............................................................................................................................................ 137CHAPTER 10. IMPORT PURCHASE ........................................................................................................ 137CHAPTER 11. MATERIAL MANAGEMENT (MM) MODULE .......................................................... 139

INVENTORY MASTER ............................................................................................................................................ 140

Item Master .................................................................................................................................................. 141Finished Goods (Products) ...................................................................................................................... 142Location concept ......................................................................................................................................... 144Subcategory Master................................................................................................................................... 145UOM (Unit of Measurement) Master.................................................................................................... 146

INVENTORY TRANSACTIONS................................................................................................................................ 147Goods Receipt Note (GRN) / Purchase Bill data entry screen ................................................... 147Stock Transfer Challan (STC) ................................................................................................................ 148Purchase return........................................................................................................................................... 148Stock Adjustment Note ............................................................................................................................ 149

INVENTORY

REPORTS

........................................................................................................................................... 149

GRN OR PV Register .................................................................................................................................. 149Item Ledger .................................................................................................................................................. 151Stock Statement ......................................................................................................................................... 151Item List......................................................................................................................................................... 151MIN Register: ............................................................................................................................................... 152Stock Adjustment Note Register:......................................................................................................... 152

CHAPTER 12. BOM MODULE ..................................................................................................................... 153CHAPTER 13. SUBCONTRACTOR OUT MODULE ............................................................................. 173CHAPTER 14. PRODUCTION MODULE ................................................................................................. 185

MAKE TO ORDER-MAKE TO STOCK .................................................................................................................... 188E-MANUFACTURING ............................................................................................................................................. 190ERPPRODUCTION MODULE LOGIC .................................................................................................................... 190ASSEMBLY PRODUCTION ..................................................................................................................................... 191PRODUCTION MASTER ......................................................................................................................................... 191MACHINE MASTER................................................................................................................................................ 192LOCATION ............................................................................................................................................................. 192PRODUCTION TRANSACTIONS............................................................................................................................. 192WORK ORDER ...................................................................................................................................................... 192PRODUCTION ENTRY ............................................................................................................................................ 193


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SUB-CONTRACTOR OUT ..................................................................................................................................... 193FAQ FOR PRODUCTION MODULE ......................................................................................................................... 195PRODUCTION REPORTS........................................................................................................................................ 197

Work Order Register.................................................................................................................................. 197PROCESS PRODUCTION .............................................................................................................................. 198

PRODUCTION MASTER ......................................................................................................................................... 199MACHINE MASTER EXPORTED TO EXCEL SHEET IS SHOWN BELOW: ................................................................ 199

OPERATOR MASTER ............................................................................................................................................. 200PROCESS PRODUCTION TRANSACTIONS............................................................................................................ 200WORK ORDER ...................................................................................................................................................... 200

Production Planning ................................................................................................................................... 201Process Production Entry ......................................................................................................................... 202

STAGE WISE INSPECTION................................................................................................................................... 203PRODUCTION REPORTS........................................................................................................................................ 204

Work Order Register.................................................................................................................................. 205Production Register.................................................................................................................................... 206MRP .................................................................................................................................................................. 206Production Indent....................................................................................................................................... 208

CHAPTER 15. ORDER FULFILLMENT MODULE ................................................................................ 212

Customer Type Master ............................................................................................................................. 213Coordinator master.................................................................................................................................... 215Sales Engineer master.............................................................................................................................. 215Dealer Master............................................................................................................................................... 219Delivery Mode Master ............................................................................................................................... 219Lead ................................................................................................................................................................. 221Delivery Schedule....................................................................................................................................... 226Sales Menu.................................................................................................................................................... 226Sales Invoice ................................................................................................................................................ 228Commercial invoice.................................................................................................................................... 229Sales Quotation ........................................................................................................................................... 230Sales Invoice

................................................................................................................................................ 234Return Goods note..................................................................................................................................... 237Purchase Return (Excisable) Invoice. ................................................................................................. 238

ORDER FULFILLMENT (SALES)REPORTS ........................................................................................................... 239Invoice Register .......................................................................................................................................... 239Invoice Register .......................................................................................................................................... 244Enquiry register........................................................................................................................................... 245Sales Invoice Register .............................................................................................................................. 245Quotation Register ..................................................................................................................................... 247OA (ORI) Register ...................................................................................................................................... 248Reverse Invoice Register ......................................................................................................................... 248ORI OR OA Status Register .................................................................................................................... 248Ledger ............................................................................................................................................................. 248Sales Analysis .............................................................................................................................................. 251Dashboard ..................................................................................................................................................... 251

EXPORT MODULE ............................................................................................................................................ 253CHAPTER 16 . SUB-CONTRACTOR I N .................................................................................................... 257MATERIAL INW ARD TRANSACTION .................................................................................................... 259CHAPTER 17. ACCOUNT MODULE .......................................................................................................... 260


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CHART OF ACCOUNTS RECOMMENDATIONS ....................................................................................................... 264ACCOUNT MASTER ............................................................................................................................................... 266

Group (Schedule) Master ........................................................................................................................ 266Subgroup Master ........................................................................................................................................ 267GL Master ...................................................................................................................................................... 268Details master: Narration Master......................................................................................................... 268

ACCOUNT TRANSACTIONS................................................................................................................................... 269MONEY RECEIPTS ................................................................................................................................................. 270

ADJUSTMENT WINDOW ........................................................................................................................................ 271JOURNAL VOUCHER .............................................................................................................................................. 272PAYMENT VOUCHER ............................................................................................................................................. 273CONTRA ENTRY .................................................................................................................................................... 274ADJUST OPEN SALES INVOICE ........................................................................................................................... 274ADJUST OPEN PAYMENT VOUCHER..................................................................................................................... 274CREDIT NOTE ....................................................................................................................................................... 275DEBIT NOTE ......................................................................................................................................................... 276EXPENSE VOUCHER .............................................................................................................................................. 278ACCOUNT REPORTS ............................................................................................................................................. 279CREDIT NOTE REGISTER ..................................................................................................................................... 279DEBIT NOTE REGISTER ....................................................................................................................................... 280SUB LEDGER TRIAL BALANCE ............................................................................................................................. 280GENERAL LEDGER ................................................................................................................................................ 281BANK BOOK .......................................................................................................................................................... 281CASH BOOK.......................................................................................................................................................... 281TRIAL BALANCE.................................................................................................................................................... 281CONTRA ENTRY REPORT ...................................................................................................................................... 282CREDIT NOTE REGISTER ...................................................................................................................................... 282DEBIT NOTE REGISTER ........................................................................................................................................ 282JOURNAL VOUCHER REGISTER............................................................................................................................ 282CUSTOMER FULL LEDGER .................................................................................................................................... 283

CHAPTER 18. ACCOUNTS POINTS ......................................................................................................... 284CHAPTER 19. SALES TAX AND VAT....................................................................................................... 288

CHAPTER 20. EXCISE INTEGRATION .................................................................................................. 291DAILY STOCK ACCOUNT OR DSA REGISTER ................................................................................... 294GAR 7 CHALLAN .......................................................................................................................................... 295CHAPTER 21. SARBANES-OXLEY ........................................................................................................... 298CHAPTER 22. AFTER SALES SERVICE MODULE ............................................................................. 299MACHINE HISTORY CARD OR HC .......................................................................................................... 299CHAPTER 23. PAYROLL MODULE ........................................................................................................... 305CHAPTER 24. AUTOMATI C EMAIL ALERT .......................................................................................... 314CHAPTER 25. SEND DATA / RECEIVE DATA .................................................................................... 316CHAPTER 26. ERP MAJOR TRANSACTIONS LIST .......................................................................... 319CHAPTER 27. OTHER MASTERS .............................................................................................................. 321CHAPTER 28. BACKUP .................................................................................................................................. 323CHAPTER 29. BLOG & TWITTER ............................................................................................................. 329HTTP:/ / TWITTER.COM/ FOLLOWERP ................................................................................................. 329


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PART III ............................................................................................................................................................... 330CHAPTER 30. CASE STUDIES ................................................................................................................... 331

ERP FOR CONSTRUCTION INDUSTRY ................................................................................................................. 332ERP FOR A CORRUGATED BOX MANUFACTURING COMPANY.............................................................................. 333ERP FOR VADA PAV COMPANY ........................................................................................................................... 341ERP FOR LENS MAKING COMPANY ...................................................................................................................... 345ERP FOR OEM SUPPLY OR MAKE TO ORDER ...................................................................................................... 352

ERP IN PRECISION MACHINING MANUFACTURING............................................................................................. 354ERP FOR CHEMICAL INDUSTRY ........................................................................................................................... 355ERP FOR A UPS MANUFACTURING..................................................................................................................... 356ERP FOR ELECTRONIC CONTROL INSTRUMENTS MANUFACTURING................................................................... 358ERP FOR AN INDUSTRIAL SYSTEM MANUFACTURING......................................................................................... 359ERP FOR SPM MANUFACTURING........................................................................................................................ 361ERP FOR FURNITURE MANUFACTURING ............................................................................................................. 362ERP FOR TOYS MANUFACTURING ....................................................................................................................... 364

CHAPTER 31. MC DONALDS STORY ..................................................................................................... 367CHAPTER 32. AUTOMOBI LE ENTERPRISES ..................................................................................... 370CHAPTER 33. RFID ......................................................................................................................................... 371

CHAPTER 34. QUESTIONS ......................................................................................................................... 372CHAPTER 35. ERP DATA VALIDATION ............................................................................................... 378CHAPTER 36. E-LEARNING WEBSITE FOR ERP. ............................................................................ 386CHAPTER 37. HUMOR ................................................................................................................................... 387GLOSSARY ........................................................................................................................................................... 391INDEX .................................................................................................................................................................... 397


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Island of information:

Material Management

Production

Sales Group

Finance

Corporate office

My growth

will be OK . No?

My growth

will be OK . No?

WHY E.R.P ?

BECAUSE OF ISLANDS OF INFORMATION

Figure 1: Why ERP? Islands of information.


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Part I


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Chapter 1.Introduction

How to use this Book?

This ERP book gives overall scope of generic ERP software package. To understand the ERPin-depth the author has used a package called ERP. Hence, ERP appears in many screenshots. Actual print-screen of the data entry screen and the actual layout of the outputs aregiven for key procedures. The explanation of each ERP module gives the business blueprintwhere as the printouts shown gives the Proof of Concept (or POC).

This Business Blueprint and POC will also be related to a particular avatar (or version) ofERP and make of the ERP. This may vary depending on the ERP vendor, versions, etc.

This is a very important reference document and therefore it is necessary that the ERPimplementer consultants, ERP coordinator, and ERP users all study the concepts well before

embarking on to the ERP software deployment. This ERP book is a good companion duringthe software installation.

This book is organized into three parts:

1. The first part discusses the ERP implementation methodology and overview ofimplementation of ERP system for effectiveness of ERP systems.

2. The second part discusses details about ERP modules or business processes such asaccounts, purchase, sales, production, etc. These chapters are further divided intosections containing information about master, transaction, and report.

3.

The third part gives some interesting case studies.


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Welcome to ERP

This ERP book is meant for both Power User (ERP experienced user) as well as First TimeUser. This book will introduce all important concepts and features of this advanced ERPpackage. The ERP package versions (avatar) may undergo changes as the development,customization, and implementation take place. The book will also discuss many advancedconcepts of ERP software.

The ERP is short for Digital Nervous System. The word ERP is synonym with the word ERP.Throughout this book, reader will find the word ERP used instead of ERP.

ERP is all about making smarter as well as faster decisions. To make well-informed andtimely decisions, you need instant access to accurate information from every function inyour enterprise. You need to focus on urgent tasks, instead of fire fighting. This bookexamines how to gain reliable, accessible information using ERP, and how to use thatinformation to make better decisions, to a stronger competitive position.

What is the relation of MIS and ERP?

MIS (Management Information System) is a system to give information to managers for

making decisions. ERP ensures the data capture in chronological order. ERP ensures thatthese managers get MIS. ERP is management software that will ensure correctness of inputdata and completeness of input data. Therefore, MIS is the output of ERP. What user willsee on the computer screen is real time information. Behind the scene is business processmanagement (BPM) done by the Enterprise Resource Planning software.

ERP Definition

There seems to be no universally accepted definition of the ERP software, but DeloitteConsulting has defined ERP as follows:

ERP definition by the author:

Enterprise Resource Planning software is complete integrated business management

software, which captures data in chronological order, and is used to link businessesprocesses automatically, and give real time information, to authorized user.

Enterprise Resource Planning System is a multi-user, multi-location, and multi-company,software solution.

An Enterprise Resource Planning system is a packaged business softw are

system that allows a company to:

Automate and in tegrate the majority of its business processes Share common data and practices across the entire enterprise Produce and access information in a real-time environment

Source: Deloitte Consulting, New York, 1999.


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ERP-centric organization Non-ERP-centric organization

Understands that integrated businessprocesses add significant value to theorganization. Understands that businessprocesses are a significant contributor tothe fulfillment of an organizations

strategy.

Does not fully appreciate the contributionthat integrated business process make tothe organization and the realization of theorganizational strategy.

Incorporates ERP into the managementpractices of the organization.

Management of business processes is notthe primary focus.

ERP and Internet were probably the two most important information technologies to emergeinto widespread use in the 1990s.


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In 1999, total revenue from the ERP software and services market was US$18.3 billionand US$ 19.9 billion in the year 2000. ERP implementation costs are often reported tobe five to ten times the cost of software licenses. If so, organizations worldwide spentsomething like US$100 billion per annum on ERP software systems. In short,organizations around the world have made huge investments in ERP software systems inthe past decade.

Source: Second wave ERP published by Cambridge

ERP vendors

There are hundreds of software companies offering ERP solutions. There are two kinds ofERP companies. (1) ERP software developing organizing and (2) ERP implementingpartners.

Some examples of ERP vendor companies:SAP, Oracle Apps (this includes PeopleSoft and JD Edwards), Microsoft Dynamics (Navision),

Baan, etc.

Some examples of the ERP implementer partners:Siemens InfoTech, PwC, Infosys (recent acquisition of Axon, for instance), etc.

What is the difference between SAP and ERP?

This is wrong question. It is like asking, What is the difference between a car and HondaAccord?

Honda Accord is one of the models of cars. Car is a generic name given to vehicle.Similarly, ERP is generic name given to enterprise management integrated software.

Please note that SAP is a well-known, leading ERP company in the world. However, SAP isnot the only ERP vendor. There are many ERP companies.SAP is one of the ERP companies in the world. There are hundreds of them.ERP is a generic name of the business management software. SAP is a specific name of theone of the companies, which has developed ERP software. Therefore, it is wrong way toask, What is the difference between SAP and ERP? One may ask a question, What is thedifference between SAP and MS Dynamics?? That makes more sense.

SAP Certification:I would like to caution a student who is going for SAP course without any practical workingexperience, whatsoever. No doubt SAP is considered as # one ERP, and learning SAP ERPwill be a feather in your cap, however, (first you need the cap). Many students in Indiaunfortunately are carried away by the brand name of SAP, without understanding that, justby sitting in the Mercedes car, you cant learn driving. Make sure that SAP certificate isbacked by adequate practical training and at least two years of work experience. A fresherwith SAP certificate is a sad joke.


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ERP vendors:

Group I Group II Group II I

SAPOracleOracle eBusiness Suite

Oracle JD EdwardsOracle PeoplesoftMicrosoft Dynamics

EpicorSageInfor

IFSQADLawsonCDC Software

ABASActivant Solutions Inc.Bowen and Groves

CompiereExactNetSuiteVisibilityCGSHansa WorldConsonaSyspro

ERP customization

Usually ERP captures the best business practice that would meet standard requirements.

Adding new requirements is called customization. This may be non-standard feature. Thisinvolves changing software codes. It can range from relatively simple changes, such asdeveloping very special reports, through major changes, such as changing the programsource code itself.

ERP software is a semi-finished package! The user organization must configure to theirneeds. This is also referred as parameterization, enabling, or disabling certain businessprocess. This configuration or initial setup procedure will allow user to use the package as itis.

An implementation that involves configuring but not customizing the ERP is called a Vanillaimplementation. This is fastest and cheapest way to get into ERP for SME.

Although most ERP software are standard software package, in practice it is observedthat 80% to 90% procedures are standard and can be used as it is. About 10% to 20%procedures need to be customized (changed) during the implementation. Thesechanges (or fine-tuning) will depend on many factors such as final product, currentlegacy procedures, maturity level of senior executives, kind of customers, etc.


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About Small and Medium size companies

Corrugated Box Industrial springs n Toys and games

Safety Valve Special Purpose Machine Fire fighting equipment

Eye lens Vada Pav UPS and Inverter

Glass windows Industrial oven Sofa-set


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Figure 2: Small and Medium Sized companies products


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Small and Medium size companies are using ERP to gain competitive advantage.

Many SME or small and medium size companies in India are growing. They all needcomplete integrated business management software to manage that growth. The companymay be engineering, making plastic toys, making lenses, or discreet products, all need ERPsoftware.

Why ERP?

Traditional accounting packages are Financial reports-centric. They are primarilydesigned to inform management of a companys financial condition long after it hasconducted its business.

On the other hand, ERP adopts a day-to-day perspective. It provides strategicinformation and tools in real-time, when you need it the most.

ERP is answer to the following frequently asked questionsDo you get information when you want?

Do you have islands of information?

Pune emerges as major hub for German companies: Pune has emerged as the citywith the single highest concentration of German companies in India. A significantnumber of prospective new comers are likely to be from the area of advancedmaterials used in the automotive and machine building sectors. These companieswill largely be SMEs. According to the Indo-German Chamber of Commerce. There

are over 950 German companies in India, of which 100 are located in India. Thismay become 200 in about two years. Mercedes Benz and Volkswagen are alreadypresent in Pune. Source: Mr. Zubin Kabraji, regional director, Indo-GermanChamber of Commerce, Pune.


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COMPUTER NETWORK SYSTEM SCHEMATIC

Local Area Network or LAN

Figure 3: Server computer and users PC

SERVER HIGHPERFORMANCECOMPUTER (e.g. Xeon)

With MS Windows 2003Server Operating System

MS SQL 2005 SERVERRDBMS

ANTI-VIRUS SOFTWARESERVER EDITION

User PC -Purchase

User PC -Production

User PC -Sales

User PC -Stores

Switch

UPS

Printers as perrequirement

ERP Network

Server PC must have a CD / DVD Drive for Backup.

Server network with Switch Gigabit LAN. CAT 5 LAN cables.Switch or Wi-Fi network, supported by UPS battery backup.

User PC -Accounts


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IT infrastructure recommendations checklist

Checklist to plan hardware, software, and personnel for ERP deployment:

1. At head office, provide one High performance Processor Server (e.g. Intel Xeon CPU)with Minimum 2 GB RAM, minimum 80 GB HDD. (With CD or DVD writer for takingperiodical backup). With at least two nodes (256 MB or 512 MB RAM) with Operatingsystem WIN XP or Vista for your software Coordinator and our QC team to test EXE,prepare master data, give training, etc. Other client sides PC (nodes) with MS

Windows XP (or later versions) with at least 256 MB RAM. ERP development teamand implementation team will also use these computers during the initial phase.These nodes (client PC) should be networked with the ERP Server computer. MSWindows 98 is not recommended.

2. Recommended Memory: Minimum 512 MB RAM on client computer and 512 MB or 2GB on Server. MS Excel on client PC. For Microsoft Windows Vista OperatingSystem it is recommended to have 4 GB RAM.

3. For outputs (reporting): Inkjet or Laser Jet printer (A 4 size paper), or a Dot matrixprinter with fanfold setting 8.5 X 12 selection. It is recommended that users shouldphase out the dot matrix printer (if not done already).

4. The monitor resolution setting should be 800 X 600.5. Arrange to deploy licensed software: MS Windows 2003 Sever Operating System and

MS SQL 2005 Server RDBMS software. MS Excel. Check with ERP vendor for exactsoftware requirements.6. One PC with Internet connection for remote support from ERP vendors helpdesk. It

is better to send email to helpdesk email id instead of personal email id.7. UPS (battery backup) for the Server and switch (hub) is required for at least

two/three hours. Provide Generator set for power backup if necessary, for longerelectric power shutdown.

8. You may add more PCs as the data entry work increases and as users start beingtrained over a period. The PC (nodes) may be networked using wired LAN orwireless LAN technology. Wi-max solutions can also be considered if available inyour location. The V Pro CPU (Intel) based, PC may be considered for the client sidecomputers.

9. Anti-virus software with facility to update the signatures is required (a) Severversion for the server computer and (b) client version for each user PC.

10.At least one LaserJet (or DeskJet) printer for hard copy printouts. You may addmore printers as per requirements. This is a good time to phase out the Dot MatrixPrinter.

11.Appoint ERP Coordinator exclusively, who is available during the Software testing,implementation and deployment activity. Time commitment towards Softwareproject is essential.


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12.There will be a Chief-of-Project (sponsor) to monitor and review the progress duringthe software implementation. (Usually a very senior person, like owner, withnecessary authority to take crucial decisions).

13.Appoint network administrator to support the IT infrastructure, such as Server,networking, etc. He will also take care of anti-virus solutions, Firewall, Login andsecret password, etc. (May be same person as ERP project Coordinator).

14.For remote access, provide Server with static IP address for out-locations to login. Agood broadband connectivity at the server locations will be required. Internet /Email connectivity. The net connection is necessary for remote login for support.

15.Provide CD / DVD (or tape backup) for taking backup of database and importantsoftware programs.

16.UPS to supply electric power to the ERP Server. Battery backup for at least two /three hours. The same should also give uninterrupted power to the network-switch(or router). You may plan for separate UPS for each user PC. Generator power asper requirement.

17.Date and Time setting.a. Date and Time setting is done by the network support engineer (or the

computer hardware support person). The ERP server date and time setting isimportant and it is used at the time of capturing and saving transactions,preparing reports, etc.

b. The date format of each computer should be dd-mm-yyyy. This is set usingregional setting option, of control panel.

c. Do: 1. Set all clients PC's Timestamp to ERP Server Time Stamp. Time andDate should be same for all PCs connected to your ERP Server. 2. Setting ofAll "Time zones" of all the PCs should be GMT 5:30 New Delhi, (in India). Setthis from Windows control panel, Time and date Properties-Time Zone. 3.Care should be taken to ensure that user is not allowed to temper with thesystem data and time. Necessary password control is required.

d. Do not: Do notChange time and date of the server and any other client PC,in the network at any time.


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ERP Implementation project management

ERP Implementation step-by-step strategy:

Figure 4: Typical workflow for the implementation

1. Scope as perERP proposaland approvalfrom ERPprojectorganization

2. SystemRequirementSpecificationsas per SRStemplate

3.Legacydocuments /Logicsheets

4.DatabaseSetup,First-cutby DECteam

- --

7. QCDatabaseSetup on

ERPServer,deployEXE

9. First-cutby TaskForce team

5. Make Server ready and deploy ERP EXE

8. Trainingand Demoto the Task

Force

-

-

10. CRPChecklistand POCprintoutsby TaskForce

6. CRPChecklistand POCprintoutsby DECTeam

-

11.Essential

customization,

databasechanges

- 12. Complete CRPrun by task force,

complete CRPchecklists, and

print POC

-

13.Go Live. All

ERPauthorized

usersstarts using

ERP

-

14. Rollout -


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Implementation Strategy

1. IT Infrastructure Readiness: Please prepare Server computers and other items ofhardware and software as described above.

2. Software Project Preparation: Defining exact scope with help of the Chief ofproject. Prepare the legacy documents (file containing existing transactions /

reports). ERP implementer consultant will help you in preparing module wise legacyfile (AS IS business process).

3. Kick-off meeting: ERP implementation team makes Project kick-off presentation inpresence of complete Steering committee (key users).

4. Preparing the SRS: System Requirements Specifications. This is well documentedin the manual (called ERP Business Blueprint). Based on the legacy data andstandard best business practice a business cycle will be shown. The SRS may nowbe required to be documented to capture exceptional scenarios.

5. Gap Analysis: Clearly defines business logic. The ref. manual based on the first cutend-to-end cycle is prepared, given to ERP Coordinators for approval. Once thesame is received the changes / customization takes place. This will ensure user getsessential customization done. At the same time user may do BPR and accepts theERP business logic.

6. Appoint ERP Steering committee or the task force team. This is a teamcomprising of one or two persons from each business function (department).Headed by the chief of ERP project and ERP coordinator. These are the stakeholders in the ERP project.

7. Awareness / Training: To all ERP Users and the ERP Coordinator about ERPconcept and menus and sub-menus.

8. Business requirements: Discuss BPR (Business Process Reengineering) and decidethe need to customize to meet your specific business requirements. Roles andResponsibility Matrix (what menu to whom).

9. TO BE business process: Customization is carried out by our team (changing ourprograms) and preparing the Proof of concept file. This is configuring ERP softwarefor you. The entire package is run on the server using test database (QC data) with

sample master and transaction.10. CRP run: Conference Room Pilot. Task Force (and key users) is given training andasked to enter transactions and does the CRP run. ERP team will do necessaryconfidence building and handholding. A sample printouts of each transaction andreport will be printed and kept in file called POC file (proof of concept), for sign off.

11. Data Migration: One time data transfer from legacy (old) system to new (ERP)system may be considered. This will depend on the data format of the legacy data,accuracy, and completeness of the old records. Some time it is prudent to enter thedata again in the new ERP software. Although, one time migration saves time (andmoney) it should be done with due diligence. Many times, it is observed that thedata that was migrated in the new system was actually garbage data (not checked).Later to check and correct the masters took even more time (and money). E.g. incustomer master, we need the contact persons name, city, etc. as separate fields.

In legacy data if the same is not stored properly, how new ERP system will givebenefit.

12. Master data preparation for test run: E.g. Item master, customer master, vendormaster, BOM master, etc.

13. Ownership transfer from ERP Coordinator to end-users.14. Go-Live preparation: Cutoff date Inventory closing balance/account-closing

balance in live database.15. Roll out Go-Live: Start using ERP for all business activities.


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16. Post implementation support: Support is provided by ERP team if and whenrequire for about a month so that all users feel confident and system stabilizes

ERP project management

This is very important for the success of ERP implementation. ERP project management lifecycle consists of the following major phases:

1. Initiation.a. This includes deciding start date and finish date.b. Define working time and non-working time.c. Define the workweek, which days of the week are the usual workdays for this

ERP project. Select a date that should be a nonworking day, such as aholiday (E.g., 15 August) or a day off for your organization.

d. Define time units, such as 8 hours a day or 40 hours per week, or 25 days amonth, etc. in the calendar.

2. Planning.a. This includes defining major milestones, tasksb. Make a list of resourcesc. Mark dates to fix the training days, referred as ERP training calendar.d. ERP review meetings dates. Inform all stakeholders (resources).e. Define precedence of tasks. E.g., Task 2 can start after task 3 is finished.f. Make a base plan.

3. ERP implementation.a. Track and mange.

4. Go-live.a. Discard legacy and use ERP for business management.

ERP task force team manages the implementation using Project management software, suchas Microsoft Project.

Task:An activity that has a beginning and an end. ERP project implementation is made up ofseveral tasks. One must enter duration for each task.

Milestone:A reference point marking a major event in the ERP implementation. Milestone is used to

monitor the ERP projects progress. In MS project, any task with zero duration isautomatically displayed as a milestone.

Note: Do not start with the unreasonable end date and work back reducing the projectestimate.

It is better to increase the amount of resources, reduce scope, or change the plan. A lot oftime and pressure causes inefficiency with meetings to discuss why things are going wrong.


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Resource:

The taskforce members are resources. ERP Implementation consultant and ERP developerare also resources i.e. ERP coordinators, ERP taskforce member, ERP user, are all resource.

Ensure time is provided for planning, teambuilding, and ERP training. One may use a dateddiary, calendar, or MS Outlook to block the dates and commit for a given task as per plan.

The roles and responsibility matrix should be prepared. It is very important to assign loginID and passwords for using ERP software. If it is not done carefully, ERP server access iscompromised.

Predecessor:A task that must finish before another task can start.

ERP Tip: Please provide proper notebook for noting down the notes during training,clearly marked as ERP notes. Loose-leaf rough pad is not recommended.


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Figure 5: Every member in ERP team has times when they need support.

Helping ERP p roject team succeed.

I am sure the organization that is planning to use ERP, wants the ERP project manager tosucceed. Creating an environment that supports success is a major step towards helpingthe ERP project teams succeed. Everybody needs to work together and support each other;this includes not only the ERP implementation team but also vendors (suppliers) andcustomers.

Always encourage practice in planning. ERP roadmap is used to manage theimplementation and therefore must be kept up-to-date. If the plans that are created at thebeginning of the project are put in a file and forgotten, why bother creating them in the firstplace.

ERP Tip:


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There should be focus on implementation control, not just reporting. Sometimes it is alsonecessary to report if things are going as per plan. This is called positive reporting.Keeping quiet and not reporting is not good. Most ERP project fails because of lack ofcommunication or incomplete communication. Sometime people are afraid to tell that theyhave not done the task or failed to keep the deadline. In short, email should be sent aboutevery activity, milestone, and status to all stakeholders. This will ensure that people(resources) know where their business unit or department fits into the plan.


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Roadmap

If you fail to plan, may be you plan to fail.

Stakeholders:

Individuals, ERP implementers, and ERP user organization are all stakeholders. They areactively involved in the ERP project. Their interest may be affected by the ERP project.

Who will make the roadmap?The chief of ERP project, ERP coordinator along with ERP implementation team will preparethe roadmap.

Prerequisites:

1. List down tasks2. Mark milestones3. Fix the project start date4. Write duration for each task5. Identify resource for each task6. Define predecessor

The following is a sample plan showing various milestones and tasks. Please note thesequence of the task. The numbers of days are only for the example. This will depend onvarious factors such as resources allocated to task, data readiness, and availability ofresource during the project implementation, IT infrastructure and so on.


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ID Task / Milestones

Duration

days Predecessors

0 Total project duration 95 days

1 Planning 9 days

2 Scope list printout and softcopy 1 day

3 Install IT infrastructure 2 days 2

4 ERP Preparation 2 days 2

5Prepare Legacy file and send toERP

2 days 4

6 Kick-off meeting 1 day 4

7System RequirementSpecifications SRS

3 days 6

8 Legacy received by ERP team 1 day 5

9 Begin Implementation 89 days 6

10Prepare blank database to startERP

2 days 4

11 First cut by ERP team 10 days 8

12 Business Blueprint - first draft 3 days 8

13 POC spiral based on first cut 2 days 8

14Documents given to user- twospirals

2 days 12,13

15 Training 2 days 13

16 Training completed 15

17 CRP by ERP team 28 days 11

18 Start customization 11

19 Internal CRP - S1 10 days 11

20 Internal CRP - S2 10 days 19

21 POC file S3 8 days 20

22 ERP EXE Ready for first cut 51 days 21

23 First cut by Task force / users 7 days 21

24 Essential customization 9 days 11

25 CRP by task force / users 44 days 23

26Accounts Module GeneralLedger Accounts

5 days 23

27 VAT / Sales Tax Module 3 days 23

28 Excise Module 3 days 23

29Material Management (MM)Module

8 days 23

30 Purchase 4 days 29

31 Import Purchase 3 days 29

32 CRM Module 4 days 29

33 Sub-contractor OUT Module 3 days 31

34 BOM Module 5 days 31

35 PPC process production 3 days 31

36 Production Module 5 days 31

37 Sales 3 days 31

38 Export Sales 3 days 31

39 Sales & Distribution - trading 3 days 38

40 Plant Maintenance Module 3 days 38

41 M. R. P. 3 days 38

42 Costing Module 3 days 38


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Item code generator

In ERP, item code can be generated automatically using unique feature auto item-codegenerator. In item master, the RM Item Code Specification fields are fetched frommasters. While entering any new raw material item as you select the specifications fromthe drop down list one by one the item code is generated automatically.

Item Master

Example of Raw Material (FG).


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Example of Raw Material (Casting)

Figure 18: Example of Raw Material (Casting)

Everyone in the organization must call any material (item) by the same name(nomenclature). Proper classification or categorization of material is very important in ERP.This discipline helps in getting useful MIS (Management Information System) reports.Access / secret password to prepare the item master should be restricted to two peopleonly, to ensure correct grouping of items.

Finished Goods (Products)

The item that usually appears in the sales invoice is created under the FG category. Usuallyby selling the FG item the user organization gets the money.


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Semi-finished Item

The ERP software can also track semi-finished goods (SFG) or sub assembly.

For this, it is necessary to give item code and item description for such SFG items. Thesecan be classified as factory made items. Usually these items are produced (assembled) as a

result of some production process. The relation of child items consumed to produce theSFG item is defined in the BOM master.

If sub-assemblies (SFG) are required to be produced then BOM has to be prepared. Aninternal ORI OR OA and Work order is to be made followed by production entry.


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Location concept

Please study the work flow diagram in previous section.

Figure 19: Make logical locations and if possible physical locations as shown

Any material movement is always with respect to an inventory location that is defined inthe location and sub-location master database.

VENDOR HOLDWIP (SHOP

FLOOR)

F. G.STORES

CustomersREJECTION

TP

STORES


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Figure 20: ERP is multi-user and multi-location software

Subcategory Master

Note: There are two important flags (tick marks) provided on the Item sub-categorymaster.

Activate serial number: When ticked, ERP will keep track of serial number of th