Management Information Systems ERP

1
Management Information Systems (ERP)
Marian Krupa PhD University of Information
Technology and Management in Rzeszow
2
AGENDA

• Information Systems in Business Management
• Information Systems Development historical
  background
• Integrated Management Information Systems
  Profiles from MRP to DEM
• Information Systems Business Applications
  functional perspective
• ERP Benefits and Future Developments
• SAP R/3 on-line presentation

3
1. Information Systems in Business Management
4
IS and Management?

• SYSTEM Ludvig von Bertalanffy

• Number of components, or entities, that form a
  whole.
• These entities interact is such a way as to
  achieve a goal.
• System also has boundaries, inputs and outputs.

R. Schulteis, M. Sumner, Management Information
Systems, Irwin, USA 1989, p. 55-56.
L. Bertalanffy, General System Theory
Foundations, Development, Applications, New York
Braziller, 1968.
5
IS and Management?

• MANAGEMENT
• planning, organizing, leading and
  controlling Fayol

Setting priorities

• Coordinating work activities so that they are
  completed efficiently and effectively with and
  through other people.
• Efficiency ability to achieve high levels of
  output with a given resources.
• Effectivness performed efforts support the
  stated goals of the business.

Robbins, Coulter, Management, Pearson/Prentice
Hall, USA 2005, p. 7.
R. Schulteis, M. Sumner, Management Information
Systems, Irwin, USA 1989, p. 68.
6
IS and Management?

• INFORMATION data with meaning

• Information facts or details about sb/sth
  Oxford Dictionary
• Information knowledge Websters Dictionary
• Information system (IS) subsystem of the
  business system of an organization.

R. Schulteis, M. Sumner, Management Information
Systems, Irwin, USA 1989, p. 44-45.
7
IS and Management?

• MIS - Management Information Systems

• The study of information systems is usually a
  commerce and business administration
  discipline, and frequently involves software
  engineering.
• MIS should not be confused with computer science
  which deals mainly with software creation, and
  not with computer engineering, which focuses
  more on the design of computer hardware.

http//en.wikipedia.org
8
IS and Management?

• MIS - Management Information Systems

• MIS the information systems that support the
  strategic planning and tactical functions of the
  enterprise.
• MIS provide information that can be used to
  identify future plans and to control resources
  to support the achievement of business goals.

R. Schulteis, M. Sumner, Management Information
Systems, Irwin, USA 1989, p. 55-56.
9
IS and Management?

• MIS - Potential benefits of MIS investments

• Can support a core competency can create a
  significant barrier to entry for other
  companies.
• Can enhance distribution channel management can
  ensure quicker delivery times, problem free
  delivery, and preferential treatments.
• Can help build brand equity customer
  relationship management.
• Can mean better production processes Automated
  systems are the most cost efficient way to
  organize large scale production.

http//en.wikipedia.org
10
IS and Management?

• MIS - Potential benefits of MIS investments
  cont.

• Can leverage learning curve advantages gains
  experience using IT systems, it becomes
  familiar with a set of best practices.
• Can impact mass customization production
  processes flexibility can increase margins and
  increase customer satisfaction.
• IT investment takes a significant amount of
  money anything that increases capital
  requirements is a barrier to entry.

http//en.wikipedia.org
11
2. Management Information Systems Development
historical background
12
MIS Development

• TPS transaction processesing (1950-1960)

• Transaction Processing System (TPS) - collects,
  stores, modifies, and retrieves the
  transactions of an organization.
• A transaction is an event that generates or
  modifies data that is eventually stored in an
  information system (data base).

http//en.wikipedia.org
13
MIS Development

• DW data collection and integration (1960-1990)

• A Data Warehouse - a database that collects
  information from different sources.
• When it's gathered in real-time transactions it
  can be used for analysis efficiently if it's
  stored in a data warehouse.
• It provides data that is consolidated,
  subject- orientated, historical and read-only

http//en.wikipedia.org
14
MIS Development

• DSS business decision support (1980-1990)

• Decision Support System (DSS) - a class of
  computer-based IS or knowledge based systems
  that, in very different manner, support decision
  making activities.
• Especially developed for supporting the solution
  of a non-structured management problem.

http//en.wikipedia.org
15
MIS Development

• EIS information selection (1980-2000)

• Executive Information Systems (EIS) - a
  computer- based system intended to facilitate and
  support the information and decision making
  needs of senior executives.
• Providesan easy access to both internal and
  external information relevant to meeting the
  strategic goals of the organization.

http//en.wikipedia.org
16
MIS Development

• ES information focus (1990-2000)

• Expert Systems (ES) - carry the intelligence and
  information found in the intellect of experts
  and provide this knowledge to all members of
  the organization for problem-solving purposes.
• Could give advice within a very limited subject
  area.

http//en.wikipedia.org
17
MIS Development

• IMIS information and business processes
  integration (1990-2000)

• Integrated Management Information Systems (IMIS)
  integrate all business processes in one
  management information system (MIS).
• There are financial (FI, CO, AM), logistic
  (MRP/ERP), human recourses (HRIS), marketing
  (CRM) decision support (DSS, EIS, ES)
  integration systems.

18
MIS / IMIS Development
INTEGRATION
E-comerce
E-BUSINESS
CRM / SCM / HRS
LOGISTICS
FINANCE
DECISIONS
1950 1960 1970 1980 1990 2000
19
3. Management Integrated Systems Profiles from
MRP to DEM
20
MRP I Material Requirements Planning
21
MRP I - definition

• MRP - Material Requirements Planning

• Software based production planning and inventory
  control system used to manage manufacturing
  processes.
• Information tool that plans the types of
  material needed in the production process.
• What material? What quantity? When? Where? What
  cost?

http//en.wikipedia.org
22
MRP I - definition

• MRP - Material Requirements Planning

• the process of identifying stock that is low,
• identifying the lead time to get the stock from
  suppliers,
• identifying the most cost-effective order
  quantities,
• and then producing purchase orders for those
  stock items in the right amount at the right
  time,
• to ensure the stock will be on hand in the right
  place.

R. Schulteis, M. Sumner, Management Information
Systems, Irwin, USA 1989, p. 414.
23
MRP I

• MRP system is intended to meet 3 objectives

• Ensure materials and products are available for
  production and delivery to customers.
• Maintain the lowest possible level of inventory.
• Plan manufacturing activities, delivery schedules
  and purchasing activities.

http//en.wikipedia.org
24
MRP I - benefits

• MRP - Material Requirements Planning

• reduction of the stock level
• precise time of delivery creation
• precise production cost evaluation
• better production capacity implementation
• faster response to the change in the environment
• better production process control at every stage.

25
MRP how the system works?
Master production schedule
BOM
MRP
Stock level in the warehouse
BOM Bill of Material
Material Requirments schedule
26
MRP how the system works?
R. Schulteis, M. Sumner, Management Information
Systems, Irwin, USA 1989, p. 415.
BOM
Materials inventory files
Master Production schedule
BOM Bill of Material
Planned-order schedule - supppliers
MRP software
Engineering design
Planned-order schedule
Order releases to production
27
MRP I

• MRP the basic purpose of MRP software is

To ensure that proper amount of the right
materials are avaialable for the production
process at the right time.
R. Schulteis, M. Sumner, Management Information
Systems, Irwin, USA 1989, p. 414.
28
MRP II Manufacturing Resource Planning
29
MRP II

• MRP II (Manufacturing Resource Planning)

• Software that extends the production information
  system (material requirements planning) to
  production resources management and distribution

30
MRP II

• MRP II reffers to

• Project planning
• Planning and production control
• Material Requirements Planning (MRP I)
• Production capacity planning

31
MRP II Standard System
American Production and Inventory Control
Society (APICS)
MRP II Standard
http//www.apics.org
32
MRP II Standard System
SOP - Sales and Operation Planning DEM - Demanand
Managment MSP - Master Production Scheduling MRP
- Material Requirement Planning BOM - Bill of
Material Subsystem INV - Inventory Transcation
System
http//www.apics.org
33
MRP II Standard System
SRS - Scheduled Receipts Subsystem SFC - Shop
Floor Control CRP - Capacity Requirement
Planning I/OC - Input/Output Control PUR -
Purchasing)
http//www.apics.org
34
MRP II Standard System
DRP - Distributed Resource Planning TPC - Tooling
Planning and Control FPI - Finnancial Planning
Interface S - Simulations PM - Performance
Measurement
http//www.apics.org
35
How does the MRP II work?
Demand for the product or service
BOM
Stock overview
MPS Master Production Schedule
Warehouse management
Production Plan
Material requirements
MRP II
Purchase order
CRP Capacity Resources Planning
Production capacity planning
Production orders
Purchasing control
Production Control
Routings
36
ERP Enterprise Resource Planning
37
ERP - definition

• ERP (Enterprise Resource Planning)

• Software, business management concept and
  automation information system that integrates
  multiple (or all) business processes, including
  planning, manufacturing, logistic, inventory,
  accounting, human resources, sales, and marketing.

www.networkdictionary.com
38
ERP - definition

• ERP (Enterprise Resource Planning)

• System that integrates (or attempt to integrate)
  all data and processes of an organization into a
  single unified system.
• The acronym ERP originated in the manufacturing
  environment, today's use of the term ERP systems
  has much broader scope.

http//en.wikipedia.org
39
ERP mainly consists of

• CRM - Customer Relationship Management,
• SCM - Supply Chain Management,
• EDI - Electronic Document Interchange,
• Finance bookeeping, accounting, reporting.

40
ERP - implementation

• ERP typical implementation would include

• Manufacturing Engineering, Bills of Material,
  Scheduling, Capacity, Workflow Management,
  Quality Control, Cost Management, Manufacturing
  Process, Manufacturing Projects, Manufacturing
  Flow
• Supply Chain Management Inventory, Order Entry,
  Purchasing, Product Configurator, Supply Chain
  Planning, Supplier Scheduling.

http//en.wikipedia.org
41
ERP - implementation

• ERP typical implementation would include

• Financials General Ledger, Cash Management,
  Accounts Payable, Accounts Receivable, Fixed
  Assets
• Projects Costing, Billing, Time and Expense,
  Activity Management

http//en.wikipedia.org
42
ERP - implementation

• ERP typical implementation would include

• Human Resources Human Resources, Payroll,
  Training, Time Attendance, Benefits
• Customer Relationship Management Sales and
  Marketing, Commissions, Service, Customer Contact
  and Call Center support
• Data Warehouse and various Self-Service
  interfaces for Customers, Suppliers, and Employees

http//en.wikipedia.org
43
ERP - implementation
http//www.networkdictionary.com/images/erp.gif
44
How ERP system works?
45
ERP the market share?
http//www.erpfans.com
46
DEMDynamic Enterprise Modeling
47
DEM

• DEM (Dynamic Enterprise Modeling)

• Software solution that allows to change and
  develop application part and information
  technology area seperately.

www.networkdictionary.com
48
SAP Netweaver platform
49
SAP Netweaver platform
50
SAP Netweaver platform
http//www.sap.com/platform/netweaver/demos/index.
epx