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Enterprise Resource Planning System & Its Role In Supply Chain Management

2515 words - 11 pages

20th century is a competitive, fast growing and continually changing era. Many new business departments evolved out of which supply chain management becomes one of the major and core function of modern business. According to the entrepreneurs the mantra of success depends on the integration among various business departments. i.e. ( Hrm, Marketing, Finance and Scm ).
Supply chain management is the flow of goods and services from company suppliers to product/services users. The Supply chain varies from company to company the long it is more complex it is. Supply chain management includes the coordination of different intermediaries having different objectives from each other; therefore, So, for this effective and efficient coordination of different intermediaries, organizations are now moving towards the implementation of electronically managing the supply chain activities so that not only customers but also the other stakeholders of the organization must be willing to have long term business relationships with all the entities in a supply chain. This e-based supply chain management has its implication in the ERP systems, which not only automates important transactions but also results in better long and short term planning as well.
Supply chain management has three components that are:
1. Materials flow from suppliers and their “upstream” suppliers at all levels.
2. Transformation
3. Distribution of products to customers and their “downstream” customers at all levels.

In that diagram suppliers that providing raw materials categorized as upstream activity in supply chain management, the departments involved in any kind of purchasing decisions are categorized as transformation and last sets of distributors, retailers and customers are categorized as downstream activity.
As we know that the larger the supply chain the more complicated to handle and to maintain records. Companies who are doing small business easily record their supply chain activities through excel but companies with large business and number of products finding it very difficult to collect the various kinds of information from their internal departments and as well as from suppliers and customers outside the organization.
The concept of ERP was come from MRP (manufacturing resource planning). MRP performs various manufacturing functions so keeping that in mind ERP was developed. ERP not only concern with manufacturing but also record the transactions of suppliers and customers and also it is used for internal connection among various departments.
ERP stands for “Enterprise Resource Planning”. It is software that is designed to control and falcate the flow of data between the various integrated functions that are performed by organization like inventory management, accounting, financing, sales, manufacturing etc. ERP effectively internally integrate various departments in company through a simple program...


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