CORE IDEA OF THE ERP SYSTEM

There are three main types of ERP systems that function with different deployment model options. The most common types of ERP systems include cloud ERP, on-premise ERP, and hybrid ERP.

PURPOSES

BENEFITS

It was already mentioned that enterprise resource planning software offers multiple powerful opportunities that may be turned into profitable perks by a skillful person. So, let’s cut to the chase and review the potential benefits of enterprise systems.

INTRODUCTION OF THE ERP MODULES

1 WHAT ARE THE MODULES OF THE ERP SYSTEM ?

ERP module - is designed for specific business functions, providing the data and supporting the processes that will help those employees do their jobs. Every module plugs into the ERP system, so the system provides a single source of accurate data, even as the business adds new modules. If the ERP system is the toolbox, the modules are the screwdriver, wrench, hammer and other tools in the box that each have specific uses.

2 WHAT ARE THE MODULES OF THE ERP SYSTEM ?

The modular design of ERP allows it to meet the shifting needs of a business and is a big reason this software has become ubiquitous. An organization can purchase only the modules relevant to its business model, operations and key challenges. It can then add ERP modules to address new needs or challenges as the organization evolves. The beauty of modular ERP software is that a company can add this functionality while keeping the same foundation in place. There is no need to implement a new ERP system—a lengthy process—when requirements change, as long as the company chooses an established ERP provider with a wide selection of modules.

THE MODULES OF THE ERP SYSTEM

The finance and accounting module is the most important ERP module because it allows businesses to understand their current financial state and future outlook. Key features of this module include tracking accounts payable (AP) and accounts receivable (AR) and managing the general ledger. It also creates and stores crucial financial documents like balance sheets, payment receipts and tax statements. The financial management module can automate tasks related to billing, vendor payments, cash management and account reconciliation, helping the accounting department close the books in a timely manner and comply with current revenue recognition standards. It also has the data that financial planning and analysis employees need to prepare key reports, including profit and loss (P&L) statements and board reports, and run scenario plans.

The procurement module in ERP aims at making available the required materials of the right quality, in the correct quantity, at the right time, and at the right price for the smooth functioning of the organization. Procurement module streamlines the procurement of required raw materials. In addition, it automates the processes of buying.Processes include identifying potential suppliers and negotiating the price. Awarding purchase orders to the supplier and billing processes are also included. ERP procurement module is tightly integrated with the inventory control and production planning modules and is often combined with supply chain management module. The procurement module in the ERP system is a powerful tool for businesses to track and monitor their purchase orders. By being aware of this, you can better anticipate upcoming needs and ensure that your business has enough supplies on hand as it continues to grow.

Material requirements planning (MRP) systems, were designed for manufacturers, and manufacturing remains a key piece of ERP. Today, ERP systems typically have a production management or manufacturing execution system (MES). The manufacturing module helps manufacturers plan production and make sure they have everything they need for planned production runs, like raw materials and machinery capacity. During the manufacturing process, it can update the status of goods-in-progress and help companies track actual output against forecasted production. It also provides a real-time picture of the shop floor, capturing information on items in progress and finished goods. It can calculate the average time to produce an item and then compare supply with forecasted demand to plan adequate production.

The inventory management module enables inventory control by tracking item quantities and location down to individual SKUs. This module offers a complete picture of not only current but also incoming inventory, through an integration with the procurement tool. This piece of software helps businesses manage inventory costs, making sure they have sufficient stock without tying up too much cash in inventory. An inventory management application can weigh sales trends against available product to helps companies make informed decisions that boost margins and increase inventory turn (a measure of how often inventory is sold over a certain period). It can help prevent stockouts and delays, which enhances customer service. Businesses that lack other supply chain management modules may also use the inventory management application to handle purchase orders, sales orders and shipping. Larger organizations will need a version of this solution that can track inventory across multiple locations.

An order management module tracks orders from receipt to delivery. This piece of the ERP feeds all orders to the warehouse, distribution center or retail store after customers place them and tracks their status as they’re prepared, fulfilled and shipped to the customer. The order management module prevents orders from being lost and boosts on-time delivery rates to keep customers happy and cut unnecessary expenses for expedited shipping. More advanced order management applications can help a company determine the most cost-effective option for fulfilling an order—a store vs. a warehouse vs. a third-party fulfillment partner, for example—based on available inventory and the buyer’s location.

A warehouse management module can deliver a rapid return on investment for businesses that operate their own warehouses. This application can efficiently guide warehouse employees through all warehouse processes based on the layout of the facility, from putaway when shipments arrive to picking to packing and shipping. It can also help companies plan labor based on expected order volume. The warehouse management module can support different picking strategies like batch picking, wave picking and zone picking depending on which is most efficient for a given business, and some modules can show employees the most efficient pick path. When the warehouse management module is integrated with inventory management and order management applications, employees can quickly find the right products and get shipments out the door quickly. Faster delivery ultimately increases customer satisfaction.

A supply chain management module tracks each step in the movement of supplies and goods throughout the supply chain, from sub-suppliers to suppliers to manufacturers to distributors to retailers or consumers. It can also manage any materials or products returned for refund or replacement. As noted earlier, supply chain management can include a wide array of modules like procurement, inventory management, manufacturing, order management and warehouse management. However, it may have functionality beyond the core capabilities of those modules.

The customer relationship management (CRM) module stores all customer and prospect information. That includes the company’s communication history with a person—the date and time of calls and emails, for example—and their purchase history. A CRM improves customer service because staffers can easily access all the information they need when working with a customer. Many businesses also use CRM to manage sales leads and opportunities. It can track communication with prospects and suggest which customers should be targeted for certain promotions or cross-sell opportunities. More robust CRM modules may support customer segmentation (enabling more targeted marketing) and advanced contact managers and reporting tools.

A professional services automation (PSA) module, also called a service resource management module, allows an organization to plan and manage projects. Services- based businesses often use this module. The application tracks the status of projects, managing human and capital resources throughout, and allows managers to approve expenses and timesheets. It facilitates collaboration between teams by keeping all related documents in a shared place. Additionally, the PSA module can automatically prepare and send bills to clients based on rules around the billing cycle.

A workforce management module is similar to a human resource management module but is designed for companies with more hourly than salaried employees. It can monitor workers’ attendance and hours and measure things like employee productivity and absenteeism. Payroll could also fall under the workforce management module. A payroll sub-module automatically distributes paychecks to employees on a set schedule with the appropriate taxes deducted and handles expense reimbursement. It can also provide reports on payroll expenses, total overtime hours and similar KPIs.

A human resource management (HRM) or human capital management (HCM) module usually encompasses all the features of a workforce management application and offers additional capabilities. HRM could be viewed as CRM for employees. This popular module has detailed records on all employees and stores documents like performance reviews, job descriptions and offer letters. It tracks not only hours worked but also paid time off (PTO)/sick days and benefits information. Since the HRM module stores a vast amount of information on every employee across the organization, it eliminates a lot of duplicate or inaccurate data that many organizations store in various spreadsheets.

Certain ERP vendors offer an ecommerce module for businesses that want to sell online. This module allows companies to quickly launch a business-to-business (B2B) or business-to-consumer (B2C) ecommerce website. Leading commerce applications include user-friendly tools that allow employees to easily add new items, update product content (item descriptions, titles, specs, images, etc.) and change the look and feel of the website. When the ecommerce application is integrated with other ERP applications, all payment, order and inventory information feeds from the ecommerce module into the shared database. That ensures all transactions are added to the ledger, out-of-stock items are removed from the site and orders ship on time.

Like with ecommerce, certain software providers have developed a marketing automation module. A marketing module manages marketing campaigns across digital channels like email, web, social media and SMS. It can automate email sends based on campaign rules and has advanced customer segmentation features, so customers only receive relevant messages. Marketing automation software, whether part of the ERP system or a separate solution, can provide detailed reports on the performance of campaigns to shape future marketing plans and spend. These applications increase leads, customer loyalty and, over time, sales.

A Production Planning module is a component of ERP software that helps manufacturers plan and control the manufacturing process. It allows companies to design products, track production, and deliver products to customers. ERP Production Planning Module also helps manufacturers meet their objectives by providing a framework for effective planning.The evolution of manufacturing requirements planning (MRP) II into ERP happened. In this process, vendors have developed more robust software for production planning.Consulting firms have accumulated a vast knowledge of implementing ERP production planning modules.The ERP production module will do a small part of the work. It starts with product creation. Then, related to it, there will be a component master and stage master in the database.This module is designed to track day-to-day production progress. On completion of any work order, information will be sent for delivery. In addition, reports on the delivery schedule will be available in this module.

The sales module is an integral part of the ERP system. It helps in managing the sales and marketing activities effectively. The sales module is an essential function for an organization. Sales handle all the activities for domestic and export sales of an organization.The customer and product databases are maintained in the sales module. The module facilitates sales cycle steps. Broad steps include : Capturing inquiries , Order placement , Order scheduling , Dispatching and e.t.c . Stock transfer between warehouses is also covered. Besides all this, you can also generate reports to help with decision-making and strategic planning. The information will guide you in making the right choices for your business. You can also export the documents to use however you need.

The logistics and transportation module drastically improves the productivity of the industry. It helps in delivering the items on time without any wastage of time. The module scans the bar-codes and stores them in the central server. This makes it easy for workers to easily track the shipment and locate it. The scanning of bar-codes reduces order processing time. The logistics and movement module makes transportation easy for the industry.