EPS Class Part 02

Enterprise Planning Systems
Part 02
©DrArunPhadke-2022-23 Page 1
Business wants to know….
Which are our
lowest/highest margin
customers ?
Who are my customers
What is the most and what products
effective distribution are they buying?
channel?
What product prom- Which customers

-otions have the biggest are most likely to go
impact on revenue? to the competition ?
What impact will
new products/services
have on revenue
and margins?
What is Data Warehouse?
• Defined in many different ways, but not rigorously.
– A decision support database that is maintained separately
from the organization’s operational database
– Support information processing by providing a solid platform
of consolidated, historical data for analysis.
• “A data warehouse is a subject-oriented, integrated, time-
variant, and nonvolatile collection of data in support of
management’s decision-making process.”—W. H. Inmon
• Data warehousing:
– The process of constructing and using data warehouses
Data Warehouse – Subject Oriented
• Organized around major subjects, such as
customer, product, sales
• Focusing on the modeling and analysis of
data for decision makers, not on daily
operations or transaction processing
• Provide a simple and concise view around
particular subject issues by excluding data
that are not useful in the decision support
process
Data Warehouse – Integrated
• Constructed by integrating multiple, heterogeneous
data sources
– relational databases, flat files, on-line transaction
records
• Data cleaning and data integration techniques are
applied.
– Ensure consistency in naming conventions, encoding
structures, attribute measures, etc. among different
data sources
• E.g., Hotel price: currency, tax, breakfast covered, etc.
– When data is moved to the warehouse, it is converted
Data Warehouse—Time Variant
• The time horizon for the data warehouse is
significantly longer than that of operational
systems
– Operational database: current value data
– Data warehouse data: provide information from a
historical perspective (e.g., past 5-10 years)
• Every key structure in the data warehouse

– Contains an element of time, explicitly or implicitly
– But the key of operational data may or may not contain
“time element”
Data Warehouse—Nonvolatile
• A physically separate store of data transformed from
the operational environment
• Operational update of data does not occur in the data
warehouse environment
– Does not require transaction processing, recovery, and
concurrency control mechanisms
– Requires only two operations in data accessing:
• initial loading of data and access of data
Data Warehouse vs. Operational DBMS
• OLTP (on-line transaction processing)

– Major task of traditional relational DBMS
– Day-to-day operations: purchasing, inventory, banking,
manufacturing, payroll, registration, accounting, etc.
• OLAP (on-line analytical processing)
– Major task of data warehouse system
– Data analysis and decision making
• Distinct features (OLTP vs. OLAP):
– User and system orientation: customer vs. market
– Data contents: current, detailed vs. historical, consolidated
– Database design: ER + application vs. star + subject
– View: current, local vs. evolutionary, integrated
– Access patterns: update vs. read-only but complex queries
So, what’s different?
OLTP vs. OLAP
OLTP OLAP
users Customers knowledge worker
function day to day operations decision support
DB design application-oriented subject-oriented
data current, up-to-date historical,
detailed, flat relational summarized, multidimensional
isolated integrated, consolidated
usage repetitive ad-hoc
access read/write lots of scans
index/hash on prim. key
unit of work short, simple transaction complex query
# records tens millions
accessed
#users thousands hundreds
DB size 100GB 100TB
metric transaction throughput query throughput, response
Application-Orientation vs. Subject-Orientation
Application-Orientation Subject-Orientation
Operational Data
Database Warehouse
Credit
Loans Card Customer
Vendor
Trust Product
Savings Activity
Why Separate Data Warehouse?
• High performance for both systems
– DBMS— tuned for OLTP: access methods, indexing,
concurrency control, recovery
– Warehouse—tuned for OLAP: complex OLAP queries,
multidimensional view, consolidation
• Different functions and different data:
– missing data: Decision support requires historical data which
operational DBs do not typically maintain
– data consolidation: DS requires consolidation (aggregation,
summarization) of data from heterogeneous sources
– data quality: different sources typically use inconsistent data
representations, codes and formats which have to be
reconciled
• Note: There are more and more systems which perform OLAP
analysis directly on relational databases
To summarize ...
❖ OLTP Systems are

used to RUN a business
❖ The Data Warehouse helps

to Optimize the business
What is a Supply Chain?
A supply chain is the system of
organizations, people, activities,
information and resources involved in
moving a product or service from
supplier to customer. Supply chain
activities transform raw materials and
components into a finished product
that is delivered to the end customer.
SCM
• Supply Chain Management deals with the
management of materials, information, and
financial flows in a network consisting of
suppliers, manufacturers, distributors and
customers
• Logistics involves “managing the flow of

items, information, cash and ideas through
the coordination of supply chain
processes and through the strategic
addition of place, period and pattern
values
SCM
• Integrated activity
– Among functions such as logistics,
manufacturing, distribution,
design/engineering, marketing, finance etc
– Multiple organizations i.e., suppliers,
customers& 3 PL providers
– Coordination of conflicting goals, metrics, etc.
• Responsible for multiple flows
– Information (Orders, Status, Contracts)
– Physical (Finished Goods, Raw Material, WIP)
– Financial (Payment, Credits, etc.)
Supply Chain
Supplier Manufacturer Distributor Retailer Customers
A Supply Chain Example…
V. Highlands
Kroger
Peachtree
Publix
GA
Coke Ocean Drive
End customer
Ft. Laud.
JNJ FL
Kellog
AL
P&G
TX
Tier 1
suppliers
State Local stores
distributors Super market
chains
SCM
• Supply Chain includes
Supplier Manufacturer Distributor Retailer Customer
Upstream
Downstream
• Aims to achieve
+ + + + + =
The right The right The right The right The right The right Higher
Product Price Store Quantity Customer Time Profits
Supply Chain Management
• Supply Chain Management is the
design and management of processes
across organizational boundaries with
the goal of matching supply and
demand in the most cost effective way
Supply Demand
Mission impossible: Matching Supply and Demand

Why so Difficult to Match Supply and Demand?
• Uncertainty in demand and/or supply
• Changing customer requirements
• Decreasing product life cycles
• Fragmentation of supply chain ownership
• Conflicting objectives in the supply chain
• Conflicting objectives even within a single firm
– Marketing/Sales wants: more FGI inventory, fast delivery,
many package types, special wishes/promotions
– Production wants: bigger batch size, depots at factory,
latest ship date, decrease changeovers, stable production
plan
– Distribution wants: full truckload, low depot costs, low
distribution costs, small # of SKUs, stable distribution plan
Supply Chain Performance Measures
• Cost
– Total Supply Chain Cost is the sum of all
supply chain costs for all products
processed through a supply chain during a
given period
– Inventory Turnover is the ratio of the cost
of goods sold to the value of average
inventory
– Weeks of inventory is the ratio of average
inventory to the average weekly sales
Supply Chain Performance Measures
• Customer Service
– Average Response Time is the sum of delays of
ordering, processing, and transportation between
the time an order is placed at a customer zone and
the time the order arrives at the customer zone
• On Time and Complete
– Orders delivered with ALL items & On Time
promised to customer
• Inventory Turns
– How often the company replenishes inventory.
High value of inventory turnover means that the
inventory was not sitting around a long time
CRM
• Customer Relationship Management
(CRM) is the integration of sales,
marketing, service and support strategy,
process, people and technology to
maximize customer acquisition, value,
relationships, retention and loyalty.
• An integrated approach to identifying,
acquiring and maintaining customers
• Allows companies to coordinate their
approach across channels,
departments and also geographically
History of CRM
• 1980 – Database Marketing Emerges
• 1990 – CRM leads to programs such as
frequent flyer miles and bonus points
on credit cards
• 2000 – Internet has helped expand from
stagnant database and allows off-site
information storage
• CRM Now – Cloud, Mobile & Analytics
CRM
• Builds a database that describes the
customers and the relationship they hold with
the company
• Database: a collection of information that is
organized in a way that allows it to be easily
accessed, managed and updated
• Provides enough detail so that the company
can offer the client the product/service that
matches their need the best
• May contain information about their past
purchases, who is involved with the account
and a summary of all conversations
Benefits of CRM
• Help marketing departments identify
and target their best customers,
manage campaigns as well as discover
qualified leads
• Improve sales and streamline existing
processes
• Form individualized relationships with
customers
• Give employees information needed to
improve customer service and also to
better understand customer needs
Benefits of CRM
• Is a fast way to identify and handle
potential problems
• Tracks all points of contact between a
customer and the company
• Provides all employees with product
specs, product use information and
technical assistance
• CRM quickly manages the scheduling of
follow-up sales calls to assess the
satisfaction of customers and their
repurchase probabilities (when and how
much)
ERP Market Place
• Three Categories of Organization
– Large Enterprise – 2500 Cr+ turnover
– Mid Range – 250-2500cr Turnover
– Small Business – less than 250Cr
• ERP vendors
– Leaders in Global Organization
• SAP
• Oracle
• PeopleSoft
– Small and Medium business
• Microsoft Dynamics
• Epicor
• Infor
ERP Deployment
• On premises
– SAP
– Oracle
• Cloud
– Microsoft Dynamics
– Oracle
– SAP
• SaaS
– Pay As per use No of Users
ERP Vendor
• SAP
– S4 Hana – Large enterprises
– Business One – For Small Business
– Business All-in-one – Mid size enterprises
• Oracle
– ERP – Financial
– Siebel – CRM
– Peoplesoft – Large organization
– JD Edwards – ERP
ERP Vendors
• Microsoft Dynamics 365
– Business
– Enterprise
• Infor
• Epicor
• Sage
• QAD
• Ramco systems
P2P Cycle
• Procure-to-Pay cycle
O2C cycle
• Order-to-Cash Cycle
H2R Cycle
• Hire-to-Retire cycle
ERP Module – Finance & Controlling
• ERP Financial Accounting – FI
– Allows the generation and supervision of
financial statements, mainly for external
reporting purposes. It includes tools such as :
• Balance Sheet which summarises the
company’s assets, liabilities and capital
over a given period
• Cash-Flow for forecasting liquidity to
cover payment obligations
• Income Statement to analyse expenditure
and income over a given period
ERP Module – Finance & Controlling
• ERP Controlling Module – CO
– Enables effective planning and decision
making mainly for internal needs at the
controlling level. It includes tools such as :
• Cost centre reports provides
expenditure and income information to
obtain the financial situation of the cost
centres
• Sales & profit analysis for profitability
analysis by segment, market or
department
FI-CO Enterprise Structure
• Client
– Client is at highest level in ERP system
– Data that is maintained at client level is valid
for all organizational levels
• Company and Company Codes

– Company code is the independent accounting
unit
– It is a legal entity that has its own profit, loss
and balance statement
FI-CO Enterprise Structure
• Example of Client & Company codes –
Alphabet, which oversees many, many
businesses such as Google and Calico, could
be considered a company. Each of these
subsidiary businesses, all doing their own
things while united under Alphabet’s
organization, is assigned a company code
• Credit Control Area
– Credit Control for Customers It can be done at
Company level or Individual Company Code level
• Profit Centres
• Functional Areas
– Sales, Marketing, Admin, Production….
ERP modules – Financial Accounting
• General Ledger
• Accounts Payable
• Account Receivable
• Special Purpose Ledger
• Bank Accounting
• Asset Accounting
• Extended Ledger
• Funds Management
• Travel Management
• Consolidation
ERP modules – Asset Management
• Asset Management process
– Purchase
– Sale
– Tracking
• Depreciation
ERP modules – Controlling
• Cost Element Accounting
• Cost Centre Accounting
• Internal Orders
• Activity-Based Costing
• Product Cost Controlling
• Profitability Analysis
• Profit Centre Accounting
• Overhead Cost controlling
• Material Ledger
ERP module – Material Management – MM
• Material Management & Inventory
Management
• It is the backbone of the Logistics area which
incorporates modules like Sales and
Distribution, Production Planning, Plant
Maintenance, Project Systems, Warehouse
Management
• Procurement Process, Master Data Material &
Vendor Master, Account Determination &
Valuation of Material, Inventory Management,
Invoice Verification, Material Requirement
Planning
MM – Enterprise Structure
• Client
• Company Code
• Plant
– Plant is an organizational unit within a
company where activities take place. A plant
will produce goods and makes goods available
for the company
– It is unit having manufacturing facility,
warehouse distribution center or a regional
sales office within logistic
• Storage Location
– Storage location is a place where stock is kept
physically
MM – Enterprise Structure
• Purchasing Organization
– Purchasing Organization is an organizational
unit under company or plant which is
responsible for procurement activities
according to requirements. It is responsible for
external Procurement.
– Purchasing organization can be at client level
i.e. centralized purchasing organization.
Purchasing organization can be at company or
plant level i.e. company specific or plant
specific
• Purchasing Group
– Procurement of a class of materials
MM – Master Data
• Material Information
• Supplier Information
• Storage Locations
• Quality Parameters for Materials
MM – Functions
• Purchasing
• Inventory Management
• Warehouse Management
• Invoice Verification
• Consumption Based Planning
• Data Transfer to Partners
• Materials Requirement Planning
• Material Ledger
ERP modules – Production Planning
• Sales and Operations Planning
• Capacity Requirement Planning
• Master planning
• Assembly orders
• Master Data / Information management
ERP modules – Production Planning
• Kanban/Just-in-Time
• Material Requirements Planning
• Plant Data Collection
• Production Planning for Process
Industries
• Repetitive Manufacturing
• Production orders
• Detailed Scheduling

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Enterprise Planning Systems

What product prom- Which customers

• Every key structure in the data warehouse

• OLTP (on-line transaction processing)

❖ OLTP Systems are

❖ The Data Warehouse helps

• Logistics involves “managing the flow of

Supplier Manufacturer Distributor Retailer Customers

Mission impossible: Matching Supply and Demand

• CRM Now – Cloud, Mobile & Analytics

• Company and Company Codes

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