Operations Planning Flashcards Preview

Business Studies A2 Levels > Unit 4. Chapter 21. Operations Planning > Flashcards

Study These Flashcards

FLASHCARDS IN UNIT 4. CHAPTER 21. OPERATIONS PLANNING DECK (5)
1

Def. ERP

Enterprise Resource Planning: The use of a single computer application to plan the
purchase and use of resources in an organisation to improve the efficiency of
operations.

Supply chain management (SCM) is the main application for ERP software.

Def. Supply chain

All of the stages in the production process from obtaining raw materials to selling to the
consumer - from point of origin to point of consumption.

How does ERP help with the main stages of SCM? (6)
• Plan: Deciding which resources (workers and machinery) are needed and their
quantity

• Suppliers: Choosing cost effective suppliers and order to arrive in time

• Costs: At all stages costs can be calculated to help decide on appropriate pricing

• Manufacture: Check the quality and rate of progress

• Deliver: Pick most efficient and effective transport systems

• Returns: If there's a faulty product, it would be taken back and added to costs to the
business

Benefits of ERP (6)

• Supply only according to demand -> lead production with minimum waste

• JIT applicability

• Reduces costs at all stages

• Improved delivery times and consumer services

• Departments are more linked by 1 database - allowing better coordination

• Increase in information for managers to analyse for future decision making.

Limitations of ERP (3)

• The system is expensive

• The multiple ways of operating in different departments is reduced to one -> may
cause resentment and require training

• Full implementation of ERP may take 1-3 years, and the technology might have
advanced even further (fast changing markets)