SAP ERP - Overview:
SAP ERP is enterprise resource planning software developed by the German company SAP SE. SAP ERP incorporates the key business functions of an organization. The latest version (SAP ERP 6.0) was made available in 2006. The most recent Enhancement Package (EHP8) for SAP ERP 6.0 was released in 2016.
Business Processes included in SAP ERP are Operations (Sales & Distribution, Materials Management, Production Planning, Logistics Execution, and Quality Management), Financials (Financial Accounting, Management Accounting, Financial Supply Chain Management), Human Capital Management (Training, Payroll, e-Recruiting) and Corporate Services (Travel Management, Environment, Health and Safety, and Real-Estate Management).
Process of SAP ERP
- Client contacts the sales team to check the availability of the product.
- Sales team approaches the Inventory department to check for the availability of the product
- In case the product is out of stock, the sales team approaches the Production Planning Department to manufacture the product
- The production planning team checks with inventory department for availability of raw material
- raw material is not available with inventory, the Production Planning team buys the raw material from the Vendors
- Then Production Planning forwards the raw materials to the Shop Floor Execution for actual production
- Once ready, the Shop Floor Team forwards the goods to the Sales Team
- Sales Team who in turn deliver it to the client
- The sales team updates the finance with revenue generated by the sale of the product. Production planning team update the finance with payments to be made to different vendors for raw materials.
- All departments approach the HR for any Human Resource related issue.
Functions of ERP
1. Supports the integrated business process inside the organization.
2. Improves capital planning and helps in executing organizational plans and strategies.
3. In case the product is out of stock, the sales team approaches the Production Planning Department to manufacture the product
4. Helps speed up the decision-making process over the analysis of accurate data.
5. Helps extend the business network to wider domains, expanding the products and services to reach more customers, suppliers, and partners.
6. Identifies operational risks to improve governance.
7. Provides protection against organizational data breaches and security threats to leakage of information.
8. Makes the organization adaptable to the rapid changes in the business process according to the needs.
9. Gives long-term profit by providing means to increase the customer base.
ERP is a business management software is usually a suite of integrated applications that a company can use to collect, store, manage, and interpret data from many functional areas including −
1. Financial Accounting: Deals with financial transactions and data.
2. Human Resource: Deals with information related to employee of an organization.
3. Customer Relationship Management: Deals with capturing and managing customer’s relationship, facilitating the use of customer experience to evaluate the knowledge database.
4. Sales and Distribution: Deals with order placement, delivery, shipment and invoicing.
5. Logistics and Warehouse Management: Deals with storage of products and shipment.
6. Manufacturing and Material Management: Deals with the production and production planning activities.
7. Supply Change Management Deals with the movement of products, storing, managing, and controlling supplies.
8. Business Intelligence: Analyzes data and converts the same to information.