Enterprise Resource Planning Paper
Introduction
While most firms already have ERP systems implemented, there are still others who have not yet invested in it. The idea for not implementing an ERP system is based on many reasons; it is seemingly costly, operations are running smoothly without the system, or maybe a company feels incapable of implementing it (Caglio, 2003). In other cases, the ERP implementation has failed, for example, Hershey. DHL Supply Chain is a good example of companies whose ERP system implementation has succeeded, and the company is enjoying the numerous benefits associated with the system across all its supply chain operations.
Define and describe typical ERP functions and business processes
Bart (2020) defines an ERP system as the process used by an enterprise to integrate and manage the important parts of their businesses. An ERP system allows a company to make use of an integrated application system to automate and manage its back-office functions related to inventory purchasing, human resources, sales and marketing, planning, and more. In organizations like DHL and its business processes, an ERP system is associated with various functions. According to (Caglio, 2003), ERP offers a wide array of services for the company in attempts to raise efficiency in operations. For example, in DHL, the ERP system is constantly updated to provide the speediest and most reliable supply chain services. Also, an ERP system functions to manage a company’s resources to ensure that the resources are utilized in a cost-efficient and effective manner. Besides, the system functions to ensure the proper use of raw materials and the movement of materials from one point of sale to another (Perskins, 2020). In DHL, for example, ERP helps the company track its production capacity, purchase orders, cash levels, payroll information, and raw materials at its disposal.
Provide a brief historical background of the development of ERP
According to (Thomson, 2020), the history of ERP systems dates back in the 1940s from calculating machines. The highly capable solutions of ERP systems we see today have been reaped after the constantly changing and innovative evolution. In the 1960s, computing solutions were designed due to the increased focus on factory output, quality control, inventory control, and inventory management. As per (Rashid, Hossain, & Patrick, 2002), ERP systems were innovated to solve a significant problem of human enterprise. Since this time, ERP systems have grown to be implemented in most industries and work roles, providing unparalleled integration of vastly different organizational departments. Such functionality has grown to define the ERP software to what enterprises and managers know and use today.
Summarize the benefits of ERP systems
ERP system allows standardization of procedures: Research by (Ram, Wu, & Tagg, 2014), indicates that organizations with ERP systems are more capable of standardizing procurement, financial reconciliation, and invoice collection procedures that those without ERP. With standardized processes and procedures, companies like DHL Supply Chain ensure efficiency, consistency, and reliability across all supply chain operations. Unlike Hershey, whose ERP implementation failed, DHL’s ERP has brought about cost efficiency, reduced errors, and reduced wastages of raw materials.
Optimization of operations: DHL and other companies using ERP systems can finish demand forecasting and plan faster than those companies without ERP or whose ERP implementation has failed, like in Hershey. Thus, an ERP system enables a company to maintain ideal levels of inventory, optimize inventory management, and ensure on-time delivery of finished products to clients and customers located in different zones in a timely way (Thomson, 2020).
Improved supply chain management: ERP system improves supply chain management for organizations that move physical inventory and those dealing with production. Thus, firms using ERP enjoy shortened lead times, timely deliveries, superior scalability, improved workflow, information security, and flexible modality (Perskins, 2020). Unlike organizations without ERP system, organizations using ERP lower over usages involving stock and production while improving profitability.
Conclusion
Today, technology has taken over all sectors. The inexistence of visibility experienced by organizations that do not use an ERP system cause struggles in terms of efficiency and accuracy. An ERP system enables companies to ensure tight control on inventory and costs, address internal efficiencies, reduce overhead, and establish cash flow from within. Therefore, all companies should implement the use of an ERP system for purposes of efficiency, quality control, performance improvement, and competitiveness.
References
Caglio, A. (2003). Enterprise resource planning systems and accountants: towards hybridization? European Accounting Review, 12(1), 123-153.
Perskins, B. (2020). What is ERP? Key features of top enterprise resource planning systems. Enterprise Resource Management, 4-28.
Ram, J., Wu, M. L., & Tagg, R. (2014). Competitive advantage from ERP projects: Examining the role of key implementation drivers. International Journal of Project Management, 32(4), 663-675.
Rashid, M. A., Hossain, L., & Patrick, J. D. (2002). The Evolution of ERP Systems: A Historical Perspective. Michigan: Idea Group Publishing.
Thomson, P. (2020). The Complete History of ERP: Its Rise to a Powerful Solution. Management, 1-23.