The Five Building Blocks of an Integrated ERP System
When doing process analysis it’s imperative to identify your requirements from beginning to end – from Quote to Cash. However, when looking at the overall components of ERP, its helpful to segment it into the five building blocks – customer relationship management (CRM), manufacturing execution systems (MES), quality management systems (QMS), supply chain management (SCM) and executive information systems (EIS).
Customer Relationship Management
Effective management of the Customer experience certainly begins with Sales, but includes touch points throughout the order cycle. Typical CRM functionality includes:
1.Lead/Contact Management 2.Sales Process Management 3.Quote and Order Entry 4.Contract Management 5.Order Status 6.Shipment Tracking 7.Customer Service 8.Field Service / Performance Tracking 9.Returns/Exchanges/Warranty Service Manufacturers can improve pre and post-sales processes as well as the entire customer experience by integrating some or all of these functions.
Manufacturing Execution System
This portion of the system enables the manufacturer to reduce material, inventory and labor costs through demand-driven procurement, lean scheduling opportunities and increased real-time visibility throughout the production cycle. Typical processes include:
1.Material Planning 2.Workcenter Scheduling 3.Labor and Material Costing 4.Shopfloor Management 5.Traceability 6.Plant Maintenance As the core of the Enterprise, an integrated MES can provide real-time visibility and enhance strategic and tactical decision making.
Quality Management System
Many organizations maintain quality standards for compliance with standards such as ISO, QS-9000, TS-16949, AS-9100, etc. But even organizations that are not required to be certified to these rigorous standards benefit greatly from managing quality throughout their organization. Common process integrations include:
1.Quality documentation 2.Process Management 3.Product Data Management 4.In-process Inspection 5.Vendor Performance Management 6.Customer Satisfaction 7.Employee Development 8.Preventive Maintenance and Gage Calibration 9.Audit Management The overall benefits from such features includes reduced cost of quality, better vendor performance, improvements in process repeatability, production to tighter tolerances, reliable throughput, fewer defects and greater customer satisfaction.
Supply Chain Management
This discipline permeates every function within the organization. Program Management including the research, testing, lifecycle management and product launch teams benefit from integrated systems. SCM encompasses Electronic Data Interchange (EDI) for automated transactions, logistics and shipping, supplier performance management. SCM is also integrated throughout the sales order, purchasing, shipping/receiving functions and more. Key components:
1.EDI 2.Logistics 3.Vendor Contract Management 4.Warehouse Management 5.Executive Information System This essential building block includes tools and systems that provide greater visibility and decision-making criteria to the people tasked with daily management of the organization. Common integration points includes:
1.Business Intelligence (BI) 2.Costing 3.Human Resource Management Along with MES, the Executive Information Systems record and report transactions and information that is integral to strategic planning and daily operations. Key components may also include dashboard reporting, employee self-service or executive data systems available via mobile devices such as the Blackberry or iPhone.
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