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An ERP system is a real-time business support system that caters to the info requires of the whole company using a sole repository of information (a database) and a really sophisticated set of highly-customizable software modules which, together, help decision-making and the activities set on these conclusions. This invariably outcomes in highly capable operations and a resultant competitive advantage. SAP, developed by SAP AG, sited in Walldorf, Germany, is 1 such copyrighted ERP system.
The SAP system is organized into some sets of ‘solutions’ (essentially, modules) that comprehend the information requires of specified regions of any corporation’s operations. Sitting on top of these already-integrated individual modules is the Cross-Application layer, components of which farther ensure that these several solution ‘talk’ to each other in a cohesive mode.
There is a saying, “If you fail to plan, you are actually planning to fail”. Consequently, a easy introductory aim for interpreting SAP is it’s Project System which treats every action within the enterprise as part of some project. Set on actual orders (or perceived demand), this module is practiced define projects that will meet these orders and begin chasing them from then on. A regular project would include a combination of some manufacturing activities as well as whatsoever associated procurement (raw materials as well as bought-out items). Trailing every such project right from inception, through to it’s completion and beyond (post-project analysis) is ably handled by this module.
For project activities that link to manufacturing, the Production Planning module manages the particulars of capacity planning, production scheduling down to the personalized jobs on the store floor. This includes 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 comes Plant Maintenance which manages preventive maintenance, breakdown maintenance along with the related down-time of equipment and lost hrs of the work-force as well as the time, material and labor required for such maintenance.
The Materials Management module interfaces with Production Planning and Plant Maintenance to check a) Timely delivery of stuffs and b) Reduced cost of inventory. Its range goes with material requisitions (based on Bills of Material emanating from production programs as well as for unintentional purchases) and tracks them from placing orders to receipt of goods, their acquiring inspection (quality control), their being needed into stock and being subsequently issued for production. This module also handles finished-goods inventory.
The Costing module interfaces with every entity that has a money value connected with it. It takes into thoughtfulness the different cost-centers and all the related prices : equipment, material, labor and services. The identical makes true for the profit centers. This costing module has a provision for product-based costing (which could fail to manage certain prepared prices accurately ) as well as activity-based costing which is advised more scientific and provides for cross-functional apportioning of each of the drivers of these costs.
The Sales and Distribution module tracks all proceedings from enquiries, requests for proposals/ quotations and pricing to interfacing with the finished-goods stock (in factory and warehouses) to picking, packing, shipping and delivery.
The Financial Accounting module logs financial transactions in the electronic equivalent of outstanding books of accounts, keeps the General Ledger and every last defined sub-ledgers, consolidates all this into the last books of accounts (essentially, Profit & Loss account and the Balance Sheet), handles tax-related transactions/adjustments and interfaces with book closure. Accidentally, most of this is of a statutory nature and gets implemented with the country-specific options of SAP.
Asset Management is used for chasing after assets from the time they are bought, right through their lifespan with regard to their depreciation (and, therefore 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 some other procedures and interfaces with each 1 of them throughout the life of the corporation. Quality, they say is never by accident; it is always by design. That is why this module is used to facilitate all activities that build quality into the enterprise’s products/services (preventing defects/errors happening in the first place). This is done by planning (essentially, incorporating preventive steps in the organization’s work-flow), performing these quality programs and conducting periodic inspections to discover deviations, if some. Important to the enterprise’s icon and credibility in the outside universe, are activities that leave to the various applicable certifications getting which is also cared in effect by this module
This was a uncomplicated view of a very comprehensive application called SAP.