ERP - What is ERP

ERP (enterprise resource planning) is an industry term for the broad set of activities supported by multi-module application software that assisst a service provider, manufacturer (or other type of  business),  manage the critical aspects of its business, including finance, accounting,  human resources (payroll), production planning, purchasing, material management, distribution, interacting with suppliers, providing customer service, order tracking, and e-business: business to business transactions, business to consumers . ERP can also include specific vertical application modules for certain vertical businesses (ie. Utilities, Petrochemicals etc. etc.). 

ERP can also include  customer relationship management or CRM, and supply chain management or SCM.

However some firms may purchase CRM and SCM separately. CRM is an information industry term for methodologies, software, and usually Internet capabilities that help an enterprise manage customer relationships in an organized way. For example, an enterprise might build a database about its customers that described relationships in sufficient detail so that management, salespeople, people providing service, and perhaps the customer directly could access information, match customer needs with product plans and offerings, remind customers of service requirements, know what other products a customer had purchased, and so forth. This is a very useful for planning purposes. Most industry analysts agree that CRM covers the following areas: Helping an enterprise to enable its marketing departments to identify and target their best customers, manage marketing campaigns with clear goals and objectives, and generate quality leads for the sales team. Assisting the organization to improve telesales, account, and sales management by optimizing information shared by multiple employees, and streamlining existing processes (for example, taking orders using mobile devices). Allowing the formation of individualized relationships with customers, with the aim of improving customer satisfaction and maximizing profits; identifying the most profitable customers and providing them the highest level of service. Providing employees with the information and processes necessary to know their customers, understand their needs, and effectively build relationships between the company, its customer base, and distribution partners.

SCM is the oversight of materials, information, and finances as they move in a process from supplier to manufacturer to wholesaler to retailer to consumer. Supply chain management is the combination of demand planning, supply planning, and demand fulfillment and it involves coordinating and integrating these flows both within and among companies. It is said that the ultimate goal of any effective supply chain management system is to reduce inventory and save time(with the assumption that products are available when needed). As a solution for successful supply chain management, sophisticated software systems with Web interfaces are competing with Web-based application service providers (application service providers -ASP's) who promise to provide part or all of the SCM service for companies who rent their service.

Supply chain management flows can be divided into three main flows:

• The product flow
• The information flow
• The finances flow

There are two main types of SCM software: planning applications and execution applications. Planning applications use advanced algorithms to determine the best way to fill an order. Execution applications track the physical status of goods, the management of materials, and financial information involving all parties.

Some SCM applications are based on open data models that support the sharing of data both inside and outside the enterprise (this is called the extended enterprise, and includes key suppliers, manufacturers, and end customers of a specific company). This shared data may reside in diverse database systems, or data warehouse, at several different sites and companies.

By sharing this data "upstream" (with a company's suppliers) and "downstream" (with a company's clients), SCM applications have the potential to improve the time-to-market of products, reduce costs, and allow all parties in the supply chain to better manage current resources and plan for future needs.

Increasing numbers of companies are turning to Web sites and Web-based applications as part of the SCM solution. A number of major Web sites offer procurement marketplaces where manufacturers can trade and even make auction bids with suppliers.

 See www.e-rfpservices.com.