ENTERPRISE RESOURCE
PLANNING
&
MATERIAL REQUIREMENT
PLANNING
Prepared by:
YvanneVien M. Yongkol
BSAT-IV
Submitted to:
Ms. Ginalyn P. Castillo, CPA
(professor)
ENTERPRISE RESOURCE PLANNING
INTRODUCTION
Enterprise Resource Planning software systems (ERP) encompass a wide range of
software products supporting day-to-day business operations and decision-making. ERP serves
many industries and numerous functional areas in an integrated fashion, attempting to automate
operations from supply chain management, inventory control, manufacturing scheduling and
production, sales support, customer relationship management, financial and cost accounting,
human resources and almost any other data oriented management process. ERP systems are
designed to enhance organization’s competitiveness by upgrading an organization’s ability to
generate timely and accurate information throughout the enterprise and its supply chain. There
are some benefits of implementing ERP Systems just like it increased revenue and market share,
product differentiation, shortening of post-merger integration by twelve to eighteen months,
substantial cost saving, data transparency and interaction with satellite systems.
To integrate all aspects of a business' operation into one easy-to-use system, many companies
turn to Enterprise Resource Planning (ERP) solutions. Enterprise Resource Planning Solutions
store that information in one database, giving businesses a simplified look at how all their
systems are running.
COMPANY THAT ADOPT AN ENTERPRISE RESOURCE PLANNING
LG Electronics implementation of Enterprise Resource Planning
When the global giant - LG Electronics (LG) - having 114 subsidiaries, more than 82,000
employees across 40 countries - tried to harmonize its HR functions, the challenges were of a
similarly giant scale. High maintenance costs, local controls lacking transparency, inefficient
decision making, under-utilization of resources, manual processes, etc. made it difficult for LG
to operate as a global company, which then decided to take the ERP route.
The challenges for LG Electronics:
Location specific multiple systems leading to unclear top-level reporting, lack of
optimum resource utilization
Location specific processes lacking transparency and automation needs for a global
reporting
Disengaged employees, limited outlook, no room for information or best practices
sharing
Limited localized resources for employee learning & training
Challenges with decision making, with significant business impact
Selection criteria for ERP solutions:
LG’s familiarity with Oracle technology due to earlier Oracle usage made it easier to
finalize a solution. It offered large data hosting, seamless migration of old data, easy scalability,
multiple modules addition as needed and centralized access and control. LG hired Oracle
Consulting to build a single centralized system which integrates available Oracle HR modules
for uniform use at global level, thereby replacing location specific system dependency.
Achieved benefits:
The Enterprise Resource Planning Solution, which included a data mart, performance
management system, staff portal, and e-learning application, enabled the following benefits for
LG:
Centrally managed a single system with minimal maintenance costs
Transparency in the recruitment and employee appraisal processes which enabled hiring,
engaging and rewarding performance based on the right competencies and proven
performance
Real time reporting for higher management and tracking of set goals and objectives
Informed decision making due to readily available real time reports
Centralized control over HR processes, with region level flexibility to implement
localized changes
Efficiency improvement for HR functions and processes
Cost savings due to not having to maintain multiple systems
Easy sharing of best practices across the various centers
Easy access self-service function made available for employee self-help
Easy learning facilitated for common tasks through document sharing and online
tutorials, resulting in time and cost savings
Increased employee morale, productivity and engagement
ANALYSIS AND CONCLUSION
There are many reasons for successful Enterprise Resource Planning implementations.
The ERP solution enabled LG to mitigate the challenges posed by vastly spread global centers,
for its Human Resource Management System requirements. Establish the business processes
prior to selecting the software. Train the users thoroughly on the process changes and flow of
information in addition to the actual software. The project doesn’t end with “go-live”, but must
be continually monitored. Today, LG continues to benefit with the automated ERP solution, and
continues to enhance it further as needed.
MATERIAL REQUIREMENT PLANNING
INTRODUCTION
Material Requirement Planning is an effective method to determine the quantity and
timing of material requirements. It will be more effective and useful technique with the use of
the available version of WINQSB program. Each company can easily maintain priorities updated
and valid, requirements change, customers change order quantities and / or timing, and suppliers
deliver late, unexpected scrap results from manufacturing, and Equipment breaks down. MRP
helps in planning production to layout the right materials in the suitable place at the required
time. It is one of the available tools in controlling inventory planning, purchase management and
production steps. Its ultimate goal is to keep adequate inventory levels to ensure that the required
materials are available as they are needed. This are the main objectives of material requirement
planning: Maintain the lowest level of inventory possible, ensure that materials are available for
production and products are available for delivery and create and plan delivery schedules,
manufacturing activities and purchasing activities
Information Technology plays a major role in designing and implementing Material
Requirements Planning systems and processes as it provides information about manufacturing
needs as well as information about inventory levels.
COMPANY THAT ADOPT AN ENTERPRISE RESOURCE PLANNING
MRP PROVIDES A COMPETITIVE ADVANTAGE FOR “WHEELED COACH”
Wheeled Coach, headquartered in Winter Park, Florida, is the largest manufacturer of
ambulances in the world. The $200 million firm is an international competitor that sells more
than 25% of its vehicles to markets outside the U.S. Twelve major ambulance designs are
produced on assembly lines (i.e., a repetitive process) at the Florida plant, using 18,000 different
inventory items, of which 6,000 are manufactured and 12,000 purchased. Most of the product
line is custom designed and assembled to meet the specific and often unique requirements
demanded by the ambulance's application and customer preferences. This variety of products and
the nature of the process demand good material requirements planning. Effective use of an MRP
system requires accurate bills of material and inventory records. The Wheeled Coach system,
which uses MAPICS DB software, provides daily updates and has reduced inventory by more
than 30% in just 2 years. Wheeled Coach insists that four key tasks be performed properly. First,
the material plan must meet both the requirements of the master schedule and the capabilities of
the production facility. Second, the plan must be executed as designed. Third, inventory
investment must be minimized through effective "time-phased" material deliveries, consignment
inventories, and a constant review of purchase methods. Finally, excellent record integrity must
be maintained. Record accuracy is recognized as a fundamental ingredient of Wheeled Coach's
successful MRP program. Its cycle counters are charged with material audits that not only
correct errors but also investigate and correct problems.
Wheeled Coach Industries uses MRP as the catalyst for low inventory, high quality, tight
schedules, and accurate records. Wheeled Coach has found competitive advantage via MRP.
Wheeled Coach and many other firms have found important benefits in MRR
Benefits of Using Materials Requirement Planning To Wheeled Coach
These benefits includes (1) better response to customer orders as the result of improved
adherence to schedules, (2) faster response to market changes, (3) improved utilization of
facilities and labor, and (4) reduced inventory levels. Better response to customer orders and to
the market wins orders and market share. Better utilization of facilities and labor yields higher
productivity and return on investment. Fewer inventories frees up capital and floor space for
other uses. These benefits are the result of a strategic decision to use a dependent inventory
scheduling system. Demand for every component of an ambulance is dependent.
ANALYSIS AND CONCLUSION
Wheeled Coach implement MRP software to track and organize their inventories, as well
as to ensure that the required products and parts are in place when a service is made. When
implemented and maintained properly, material requirement planning will increase profitability,
reduce cash flow and lead times, improve productivity, and give companies the ability to be
proactive in their inventory management efforts
In order to maximize the money brought in, these companies need to establish a good
balance between inventory and product demand. Without the right balance, companies will incur
unnecessary costs.
