An ERP system is a real-time business supporting system that provides to the data demands of the whole organisation using a single repository of informations (a database) and a very sophisticated set of highly-customizable software modules which, together, ease decision-making and the activities based on these decisions. This invariably results in extremely effective operations and a resultant competitive reward. SAP, originated by SAP AG, settled in Walldorf, Germany, is one such proprietary ERP system.
The SAP system is organised into some sets of ’solutions’ (essentially, modules) that comprehend the info wants of limited areas of any corporation’s processes. Sitting on top of these already-integrated individual modules is the Cross-Application layer, components of which farther ensure that these various solution ‘talk’ to each other in a cohesive style.
There is a saying, “If you fail to plan, you are actually planning to fail”. Hence, a right starting point for interpreting SAP is it’s Project System which deals each activity within the organization as part of several project. Settled on occurrent orders (or perceived demand), this module is practiced specify projects that will accomplish these orders and begin chasing after them from then on. A normal project would take on a combination of different manufacturing activities as well as whatever linked procurement (raw materials as well as bought-out items). Tracking each of such project right from inception, through to it’s completion and beyond (post-project analysis) is ably dealt by this module.
For project actions that refer to manufacturing, the Production Planning module handles the particulars of capability planning, production scheduling down to the individual chores on the store floor. This takes on handling data on the accessibility and deployment of human resources, machinery, tools and fixtures, consumables and energy requirements to list a few.
With streamlined production gets Plant Maintenance which treats preventive maintenance, breakdown maintenance along with the associated down-time of tools and lost hours of the work-force as well as the time, material and labor involved for such maintenance.
The Materials Management module interfaces with Production Planning and Plant Maintenance to see a) Timely delivery of materials and b) Reduced price of inventory. It’s range starts with material requisitions (based on Bills of Material emanating from production programs as well as for unintentional purchases) and tracks them from placing orders to receipt of goods, their receiving inspection (quality control), their being taken into stock and being subsequently published for production. This module also treats finished-goods inventory.
The Costing module interfaces with every entity that has a money value affiliated with it. It takes into consideration the various cost-centers and all the related costs : equipment, material, labor and services. The comparable holds true for the profit centers. This costing module has a provision for product-based costing (which could fail to manage particular fixed prices accurately ) as well as activity-based costing which is thought more scientific and supplies for cross-functional dealing of each of the drivers of these costs.
The Sales and Distribution module tracks all transactions from queries, requests for proposals/ quotations and pricing to interfacing with the finished-goods stock (in factory and warehouses) to picking, packing, shipping and delivery.
The Financial Accounting module logs financial transactions in the electronic equivalent of primary books of accounts, keeps the General Ledger and every last defined sub-ledgers, consolidates all this into the ultimate books of accounts (essentially, Profit & Loss account and the Balance Sheet), deals tax-related transactions/adjustments and interfaces with book closure. Accidentally, most of this is of a statutory nature and gets applied with the country-specific choices of SAP.
Asset Management is practiced for chasing after assets from the time they are purchased, right through their lifetime with regard to their depreciation (and, thus their latest valuation) to the point they are either sold or wrote off.
The Quality Management module, along with the Project System, really overlaps all other procedures and interfaces with every 1 of them throughout the lifetime of the organization. Quality, they say is never by chance; it is always by innovation. That is why this module is applied to facilitate all activities that construct quality into the organization’s products/services (preventing defects/errors taking place in the 1st place). This is done by planning (essentially, incorporating preventive steps in the organization’s work-flow), performing these quality programs and dealing periodic inspections to detect deviations, if several. Important to the company’s icon and credibility in the outside universe, are actions that result to the several applicable certifications getting which is likewise handled effectively by this module
This was a simplistic point of a very general application called SAP.
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