Components and

modules in ERP
Chanuka Lakshan Liyanage

Organization
Sales & Marketing

Procurement
QA

Manufacturing

Finance
Human Resource

Inventory

Maintenance
IT

Manufacturing

Business Process

Business process or business

method is a collection of related,
structured activities or tasks that produce
a specific service or product or particular
goal

Business Process (Detailed)

Direct
Delivery
Supplier
Customer
Customer
Order

Customer
Order
Reservation

Receipt

Delivery

Picking

Purchase
Requisition
Receipt
(Components)
Receipt
Purchase
Requisition

Inventory

Purchase
Order

Purchasing
Purchase
Requisition
(Components)

Receipt (Finish Goods)

Manufacturing
Requisition
Material Issue

ERP(Enterprise Resource Planning)

ERP is an industry term for the broad set

of activities supported by multi-module
application software that helps a
manufacturer or other business, to
manage the important parts of its
business, including product planning, parts
purchasing, maintaining inventories,
interacting with suppliers, providing
customer service, and tracking orders.

ERP Providers
Vendor Company Name

Package

Microsoft Business Solutions

Dynamics AX

Microsoft Business Solutions

Dynamics GP

Microsoft Business Solutions

Dynamics NAV

Microsoft Business Solutions

Dynamics SL

Microsoft Business Solutions

Small Business Manager

Oracle Corporation

JD Edwards EnterpriseOne & World

Oracle Corporation

NetLedger

Oracle Corporation

Oracle Financials (E-Business Suite)

Oracle Corporation

PeopleSoft Enterprise

Sage Software

BusinessWorks

Sage Software

ePeachtree

Sage Software

MAS 90

Sage Software

MAS200

Sage Software

MAS 500

Sage Software

Peachtree

Sage Software

Timberline

SAP

Business One

SAP

mySAP All-in-One

SAP

mySAP ERP

SAP

R/3

IFS

IFS

Accounting software's
Vendor Company Name

Package

MYOB

AccountEdge

MYOB

BusinessEssentials

MYOB

Premier Accounting Small Business Suite

Sage Software

Accpac ERP

Sage Software

Simply Accounting

Quick books

Selected Functions
Distribution
Manufacturing
Finance
Maintenance

Distribution
Material handling
Supply Chain Management
Customer Relationship Management

Material handling
Inventory:

Inventory is the total amount of goods and/or materials

contained in a store or factory at any given time.

Stocks or items used to support production (raw materials and

work-in-process items), supporting activities (maintenance,
repair and operating supplies) and customer service (finished
goods and spare parts).

Examples for few activities

support
Planning.
Order Proposals.
Requisitions.
Transactions.
Counting.
Traceability.
Shortage Management.
Calculations.
Valuation.

Valuation

An inventory valuation allows a company

to provide a monetary value for items that
make up their inventory.

Material Flows

PURCHASE
Arrival of purchased raw material.
ORDER
Arrival of purchased parts.
Return of parts to inventory.
SHOP ORDER
Receive manufactured parts.
Return of issued material.
Receive from subcontracting.
MANUALLY
RECEIVED
Manual receipt of material.
Switching of inventory locations.
Receive from transport.
INVENTORY
Return of picked parts to inventory.
Transfer of parts from shipping location.

INVENTORY

SCM & CRM-Definition

Supplier Chain
Management.(SCM)

The integration of the supplier,

distributor, and customer logistics
requirements into one cohesive process
to include demand planning,
forecasting, materials requisition,
order processing, inventory allocation,
order fulfillment, transportation
services, receiving, invoicing, and
payment

Customer Relationship
Management.(CRM)

The technique of establishing and

maintaining a long-term business
relationship with your customers.
CRM involves utilizing the data
collected during your customer
interactions to determine the
demographics and future needs of
each customer

Purchasing Definition
The

business functions of procurement planning,

purchasing, inventory control, traffic, receiving, incoming
inspection, and salvage operations
- APICS Dictionary, Eighth Edition, 1995.

Purchasing Process..
Stores
Customer Order

Purchase
Department

Inspection/
Inventory

Finance and
Control

Production
Planning
(MRP)
(Next
Level
Demand)

Request for
Quotation

Purchase
Requisition

Purchase
Order

Receipt

Receive into
Inventory

Inspection

Customer
Order

MRP

Delivery
Surveillance

Supplier
Scheduling

Invoicing
Control

General
Ledger

Customer Order/Sales
Return

Customer
Quotation

Enter
Customer
Order

Aquisition

Reserve

Plan
picking

Report
picking

Delivery

Invoicing/
Crediting

Transfer
to
Finance

What is Manufacturing?
Manufacturing A series of interrelated activities and
operations involving the design, material selection,
planning, production, quality assurance, management,
and marketing of discrete consumer and durable goods.
Source: APICS Dictionary, 10th Edition, 2002

High Level Manufacturing Flow With

Organizational Responsibilities
Sales/ Production
Coordinator

Receive Order

Create Internal
Order to Track
and ensure Timely
deliveries

Production
Planner

Purchasing
Officer

Capacity
Requirement
Planning

Material
Requirement
Planning

Customer

Sales and Operational

Planning Team

Forecast

Stores
Store
Keeper

Production/Planning
executive
Release
Production Order

Aggregate demand
from different
sources and plan

Inspection

Perform
Work

Quality
Controller

Machines, Workers
Supervisors

Reserve/Issue
Material
Stores/Production
Executives

Selection of Components
A particular installation would require all or a subset of the
above modules depending on the business scenario. They are
namely:
Make to Order
Configure to Order
Make To Stock
Repetitive Manufacturing
Engineer to Order

Make To Order (MTO)

Make-to-Order (MTO) can be defined as a production environment

where a good or service can be made after receipt of a customers
order. The final product is usually a combination of standard items
and items customer-designed to meet the special requirements of the
customer.
Source: APICS Dictionary, Tenth Edition, 2002

Make To Order (Contd.)

Typically, MTO products are sold infrequently.
MTO production is usually scheduled after the receipt of customer orders so that
expensive inventory of completed products or components can be minimized.
Established customers may not purchase quantities of these products according to a
predictable schedule, so it may not make sense to produce inventory without firm
orders.
Customizations to these products may prevent them from being sold to other
customers without substantial rework.
The lead time for such products is typically longer than for make-to-stock and
assemble-to-order products.
E.g. Complex, option-rich products, such as Transportation equipment , Industrial products,
Industrial machinery.
Standard products sold in a variety of sizes and materials, such as Building products (i.e.,
windows or doors) Furniture , Computer equipment.

Configure to Order (CTO)

CTO is really a subset, or a specialty, of MTO, because it uses MTOs
elements, in addition to a couple components that are specific to CTO,
namely the ability to define a product as configurable and to describe the
characteristics and options that are associated with the configured
product.

Configure-to-Order (CTO) is a manufacturing and sales approach

that enables ordering, pricing, costing, and production of
multiple, complex variations of parts according to specified
characteristics and rules.

Make To Stock

A Production environment where products can be and usually are

made before receipt of a customer order. Customer orders are
typically filled from existing stock, and production orders are used to
replenish those stocks.

Source: APICS Dictionary, 10th Edition, 2002

E.g. Pulp and Paper, Pharmaceutical, Food and Beverages, Electrical Appliances.

Make to Stock Diagram

Forecast

Demand
Planning

Master Production Schedule

(MPS)

Human Resources
Finance
Capacity Requirement Plan
(CRP)
Maintenance
Quality Assurance
Decide Production Plan

Material Requirement
Planning (MRP)

SHOPORDER

Manufacture

Production
Schedule

Purchase

QUAMAN
Delivery
Customer

Warehouse
Order
Inventory

Repetitive Manufacturing

The repeated production of the same products or families of products.

Repetitive methodology minimizes setups, inventory and manufacturing
lead-times by using production lines, assembly lines or cells.
Manufacturing Orders are not necessary . Production scheduling and
control are based on production rate.
Source: APICS Dictionary, 10th Edition, 2002

E.g. Electronic Manufactures, Automotive Manufactures.