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ERP Perspective
Part 1 of 9


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Lean Manufacturing Articles

Taking the widely read 1994 paper, "Enterprise Resource Planning (ERP): An Executive Perspective" to the next level, this discussion will assist an executive in under­standing what ERP is and the benefits that can be achieved from implementing it. Through executive-level historical overviews, illustrations, and "war stories," learn how ERP correlates with other concepts such as supply chain management, advanced planning systems (APS) and e-commerce.

BENEFITS TO THE PARTICIPANT

1.       You will learn how ERP evolved, why it evolved, what
ERP really does, how it relates to MRP II, JIT, ad­
vanced planning systems (APS), workflow, supply
chain management, and e-commerce.

2.       You will understand the documented tangible and
intangible benefits that can be achieved from prop­
erly implementing and using ERP.

3.       You will appreciate what it really costs to implement
ERP not only in terms of costs but also in time and
managerial energy.

Note: When I refer TO ERP in its current evolved state circa 2000, I'll use the term extended ERP. The reason for this is that ERP had a number of significant tech­niques added to its conceptual framework as well as an increase in the scope of its coverage of enterprise busi­ness processes during the 1990s. This rapid and ongo­ing evolution is the catalyst for updating my earlier discussion on ERP from 1994.

DISCUSSION OUTLINE

1.       What is extended ERP?

2.       The benefits associated with extended ERP.

3.       What it really costs to implement extended ERP.

WHAT IS EXTENDED ERP?

Understanding extended ERP is best achieved by looking at it from a variety of perspectives, such as those that follow:

1.       A historical perspective or overview of extended ERP's
evolution

2.       The major elements of extended ERP

3.       How extended ERP relates to concepts and techniques
such as advanced planning systems (APS), e-business,
supply chain management, etc.

4.       What extended ERP really does for the manufacturing enterprise.

EXTENDED ERP'S EVOLUTION

Extended ERP is the result of decades of positive evolu­tion starting with the major milestones of material re­quirements planning (MRP) in the 1960s, followed by closed-loop MRP (1970s), which was eclipsed by manu­facturing resource planning (MRP II) in the 1980s, fol­lowed by enterprise resource planning in the 1990s. Each milestone in the evolution significantly enhanced and broadened the scope of planning and controlling re­sources within the enterprise, and with trading partners. Every milestone was based on innovation and incorpo­ration of techniques that worked and could be imple­mented on a practical and doable basis. Incorporation required surviving the test of time and practicality. Each milestone had a credible evangelist spreading the good news-MRP and closed-loop MRP had APICS, MRP II had Ollie Wight, and ERP had Gartner Group.

All the evolutionary milestones were made possible by the advancements of computing technology. MRP, closed-loop MRP, and MRP II benefited from the de­creasing costs of computing. ERP and extended ERP benefited from a variety of advanced computing tech­nologies, technologies such as artificial intelligence, computer networks, and the Internet. Unfortunately, from time to time the importance of computer technol­ogy has been exaggerated as a factor in determining suc­cessful implementation of the good business practice that each evolutionary milestone represented. We will revisit this "mistake" later in our discussion.

To Be Continued

For balance of this article, click on the below link:

Lean Manufacturing Articles and click on Series 13


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