What is ERP?
An ERP system (Enterprise Resource Planning) is intended for the integrated management of all processes and operations from a company in a single platform. ERP applications are popular for their ability to bring together people, know-how, software and hardware components and make them available to the entire organization, and for their contribution in achieving specific and general objectives of the company. An ERP system is composed of modules designed for various specific functional areas, including sales, purchasing, manufacturing, financial, accounting and others, with the difference that they are fully integrated and access a shared database
How does an ERP work?
Data represents the measurement unit of an ERP system, and the database is a central repository where they are stored and organized. The connection between the database and the functionalities that the ERP system meets is achieved through the ERP application. It is responsible for the activities of collection, validation, processing, transfer or export of data, activities made through the interface. Data can be collected by the ERP system through different methods like:
- User input: from the keyboard or directly – by scanning bar codes, for example
- Import from other databases
- Transfer through EDI (Electronic Data Interchange)
The ERP’s role is to make the connection between the database and the user interface that it provides.
What are the components of an ERP system?
The ERP system is composed of different modules for the management of specific activities:
- Administration – for defining the levels of access to information, customizing documents or setting back-up actions.
- Controlling – allows the planning of financial parameters: establishing and tracking income and expenses budgets.
- Accounting – intended for the automation of accounting operations and obtaining the accounting and financial statements, according to the European standards.
- Treasury – allows tracking of all financial transactions and their logical structuring.
- Fixed Assets – for tracking in detail the operations carried out on the fixed assets on the entire period of operation.
- Prices – for the intuitive and efficient management of the purchase and sales prices.
- Sales – for organizing and tracking sales activity and processing the specific documents.
- Purchasing – for managing supply chain activities.
- Manufacturing – for managing production recipes, entry or consumptions bills, wizards for the automatic generation of documents, stock reports generation, etc.
- Stocks – for real-time management of stocks and tracking of their characteristics.
- Car fleet – provides permanent evidence of the activity of each car in the fleet.
- Logistics – for infrastructure resource planning to their best use.
- Listings – contains information about customers, products, locations, personnel management, etc. and allows you to define the company’s information and the workflows mapping.
- Work Space – centralizes the current data handling activities and issuing of synthesis reports.
- Personnel – defining employees and tracking operations with them.
- Reports – generate various reports for each department or part of the company.
What are the advantages of implementing ERP?
- Integrated management of all components of the business, through access to a common database.
- Offers an online working mode, which facilitates communication between people, departments and locations.
- Automation and standardization of operational processes, elimination of manual operations that leads to increasing productivity.
- Improving the process of acquisition, through the possibility of adjusting the purchasing according to the size of the sale.
- Increasing the quality of customer service through the transparency of information about the products, stocks, prices.
- Decrease the time for orders delivery due to faster transfer of information between departments.
- Continuously improve the cash-flow through the implementation of coherent trade policies.