An ERP system is a real-time business supporting system that provides to the data demands of the whole organisation using a single repository of informations (a database) and a very sophisticated set of highly-customizable software modules which, together, ease decision-making and the activities based on these decisions. This invariably results in extremely effective operations and a resultant competitive reward. SAP, originated by SAP AG, settled in Walldorf, Germany, is one such proprietary ERP system.
The SAP system is organised into some sets of ‘solutions’ (essentially, modules) that comprehend the info wants of limited areas of any corporation’s processes. Sitting on top of these already-integrated individual modules is the Cross-Application layer, components of which farther ensure that these various solution ‘talk’ to each other in a cohesive style.
There is a saying, “If you fail to plan, you are actually planning to fail”. Hence, a right starting point for visualizing SAP is it’s Project System which deals each activity within the enterprise as part of several project. Placed on current orders (or perceived demand), this module is applied specify projects that will implement these orders and begin tracking them from then on. A typical project would take on a combination of several manufacturing actions as well as any referred procurement (raw materials as well as bought-out items). Going After every such project right from inception, through to its completion and beyond (post-project analysis) is capably managed by this module.
For project activities that link up to manufacturing, the Production Planning module handles the particulars of capacity planning, production scheduling down to the individual jobs on the store floor. This takes on handling data on the availability and deployment of human resources, machinery, tools and fixtures, consumables and energy requirements to name a few.
With streamlined production occurs Plant Maintenance which deals preventive maintenance, breakdown maintenance along with the associated down-time of equipment and lost hrs of the work-force as well as the time, material and labor necessary for such maintenance.
The Materials Management module interfaces with Production Planning and Plant Maintenance to learn a) Timely delivery of stuffs and b) Cut down cost of inventory. Its range begins with material requisitions (based on Bills of Material emanating from production programs as well as for unplanned purchases) and leads them from placing orders to receipt of goods, their acquiring review (quality control), their being needed into stock and being subsequently supplied for production. This module also addresses finished-goods inventory.
The Costing module interfaces with each entity that has a cash value affiliated with it. It gets into consideration the several cost-centers and all the related prices : equipment, material, labor and services. The same makes true for the profit centers. This costing module has a provision for product-based costing (which could fail to manage certain prepared costs accurately ) as well as activity-based costing which is well-advised more scientific and supplies for cross-functional dealing of all the drivers of these costs.
The Sales and Distribution module tracks all transactions from inquiries, requests for proposals/ quotations and pricing to interfacing with the finished-goods inventory (in factory and warehouses) to picking, packing, shipping and delivery.
The Financial Accounting module logs financial transactions in the electronic equivalent of primary books of accounts, maintains the General Ledger and every defined sub-ledgers, consolidates all this into the final books of accounts (essentially, Profit & Loss account and the Balance Sheet), manages tax-related transactions/adjustments and interfaces with book closure. Incidentally, most of this is of a statutory nature and gets implemented with the country-specific options of SAP.
Asset Management is practiced for chasing after assets from the time they are purchased, right through their lifetime with regard to their depreciation (and, thus their latest valuation) to the point they are either sold or wrote off.
The Quality Management module, along with the Project System, really overlaps all other procedures and interfaces with every 1 of them throughout the lifetime of the organization. Quality, they say is never by chance; it is always by innovation. That is why this module is applied to facilitate all activities that construct quality into the organization’s products/services (preventing defects/errors taking place in the 1st place). This is done by planning (essentially, incorporating preventive steps in the organization’s work-flow), performing these quality programs and dealing periodic inspections to detect deviations, if several. Important to the company’s icon and credibility in the outside universe, are actions that result to the several applicable certifications getting which is likewise handled effectively by this module
This was a simplistic point of a very general application called SAP.