Chapter Highlights

images Enterprise resource planning (ERP) is software designed for organizing and managing business processes by sharing information across functional areas using a common database and a single computer system. ERP systems typically have modules for finance and accounting, sales and marketing, production and materials management, and human resources.

images First-generation ERP systems provide a single interface for managing routine activities performed in manufacturing. Second-generation ERP systems or SCM software is designed to improve decision making in the supply chain. The current trend is integrating e-commerce and ERP systems.

images Tangible benefits from ERP systems include reductions in inventory and staffing, increased productivity, improved order management, quicker closing of financial cycles, reduced IT and purchasing costs, improved cash flow management, and increased revenue and profits. Intangible benefits include improved visibility of corporate data, improved customer responsiveness, and improved flexibility. The cost of ERP systems ranges from hundreds of thousands of dollars to several million dollars.

Material requirements planning (MRP) systems are designed ...

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