Flashcards in Unit 4. Chapter 21. Operations Planning Deck (5)
Enterprise Resource Planning: The use of a single computer application to plan the purchase and use of resources in an organisation to improve the efficiency of operations.
Supply chain management (SCM) is the main application for ERP software.
Def. Supply chain
All of the stages in the production process from obtaining raw materials to selling to the consumer - from point of origin to point of consumption.
How does ERP help with the main stages of SCM? (6)
• Plan: Deciding which resources (workers and machinery) are needed and their quantity
• Suppliers: Choosing cost effective suppliers and order to arrive in time
• Costs: At all stages costs can be calculated to help decide on appropriate pricing
• Manufacture: Check the quality and rate of progress
• Deliver: Pick most efficient and effective transport systems
• Returns: If there's a faulty product, it would be taken back and added to costs to the business
Benefits of ERP (6)
• Supply only according to demand -> lead production with minimum waste
• JIT applicability
• Reduces costs at all stages
• Improved delivery times and consumer services
• Departments are more linked by 1 database - allowing better coordination
• Increase in information for managers to analyse for future decision making.