DIFFERENCE BETWEEN A SYSTEM PROCESS WITH AND

WITHOUT ERP

1. Before ERP
Overall, the system is complex. The system exchanges information in a two way direction
between departments: Sales department, Warehouse, Accounting department, Purchasing
department and Vendor.

Sales department:
- Customers make orders with the sales department, and the sales department creates
customer demographic files.
- The sales department will check for parts in the warehouse.
- If parts not enough for the customer, warehouse inform back to the sales department “Not
in stock”, otherwise they will inform that they have ordered parts
Warehouse department:
- Receives a request from the sales department to check if the parts are in stock.
+ Case 1: “Not in stock”: Warehouse will ask for orders to the purchasing department
purchasing lacking products and the purchasing department will respond back the orders
result to the warehouse which the warehouse saves as inventory files.
+ Case 2: “Ordered the parts”: Warehouses inform the sales department that they have
ordered the parts so the sales department can send reports to the accounting department.
Then, warehouses directly send reports to the accounting department.
Accounting Department:
+ Receive Reports: Gets reports from both sales and warehouse regarding orders and
inventory status.
 - Handle Invoices: Receives invoices from the vendor and manages payments.
Purchasing Department:
- Gets information from the warehouse about the need for certain parts.
- Place Orders: Place orders with the vendor for the required parts.
- Receives confirmation from the vendor about the placed order.
Vendor:
- After receiving orders for products from the purchasing department, vendors ship parts to
the warehouse and send invoices to the accounting department.
2. After ERP
The system exchanges information between departments through an intermediate database
system (ERP), internal departments interacting through this database while the external
departments (vendor) do not and is handled by the accounting department:

Database:
- The database stores essential information about customers, vendors, products, inventory
levels. Users across different departments, such as sales, purchasing, accounting, and
warehousing, can access and retrieve relevant data from the database.
Sale department:
- Customer make orders parts to sales department
- All data about inventory, orders, purchasing orders will be compiled into an intermediate
database called an exchange system (ERP).
- Sales department input the data about the orders, parts from customers and check the
inventory data in the database.Warehouse department will input the purchase orders into
database.
+ Case 1: Enough parts, orders: Orders and parts are booked inventory against purchasing
order from the warehouse through the database.
 + Case 2: Not enough parts, orders: Orders are placed through a database, submitted to the
purchasing department. Purchasing department will record back the order into the database.
Purchasing department:
- Purchasing department then places orders with the vendor.
Vendor:
- Receive purchasing order from the company
- The vendor ships the parts to the warehouse.
Warehouse:
- Receive shipment from vendor
- The warehouse then updates the inventory data and books the inventory against the
purchase order in the intermidiate database (ERP).
Accounting department:
- The accounting department then invoices the customer. The customer pays the invoice and
the accounting department books the financial data against the purchase order.
3. Comparison

Comparison

Before ERP After ERP

Complex system Simple system

Delay due to communication barriers Easier to exchange information between

departments

Slower, manual process Faster, reducing manual information

exchange process