ERP Definition:
The ERP system is the operating mode of modern enterprise management. It is a highly integrated system that is applied throughout the company. Which covers customer, project, inventory and procurement, supply, production, and other management tasks. And maximizing resource efficiency by optimizing enterprise resources.
How ERP Works?
ERP in business helps to integrate raw material prices, shipping costs, packaging costs, taxes, extra fees, etc., and generate purchase orders for each supplier. Next, ERP also helps to manage logistics information of the raw materials, decide what kind of transportation method to use and the warehouse, etc.
The materials in hand indicate the completion of production. Now, there are two places to consider, one is inventory and the other sales. In terms of sales promotion, it includes the customer information obtained by the sales team and the customer through various communication, sales orders, logistics information of the delivery, and financial information left by the final payment.
From the production to the final delivery of the product to the customer. The information generated by a series of processes, ERP will help to record and manage the whole process. Finally, the integration of all the above information, generating the overall report which helps to analyze the business situation. Thus, ERP concept helps to format the all business process effortlessly.
Modules
Accounting
Accounting is mainly to realize the functions of cash register software recording, accounting, reflection and analysis of asset management. The ERP accounting module consists of a general ledger module, an accounts receivable module, an accounts payable module, a cash management module, a fixed asset accounting module, a multi-currency module, a payroll module, and a cost module.
Financial management
Financial management is mainly to achieve accounting functions to achieve financial data analysis, forecasting, management, and control. ERP selection is in the middle of financial management needs, focusing on the control, analysis, and forecasting of invoicing in the financial plan. The financial management module developed by ERP includes financial planning, financial analysis, financial decision-making, etc.
Production control management
The production control management module is the core of the cash register software system. It organically combines the entire production process of the enterprise, enabling the enterprise to effectively reduce inventory and improve efficiency. For the development needs of the enterprise, the enterprise completes the ERP selection and connects the invoicing process to make the production process coherent. When selecting ERP, enterprises should note that the ERP system production control management module includes: main production plan, material demand plan, capacity demand plan, workshop control, manufacturing standards, etc.
Logistics management
The logistics management module mainly grasps the logistics cost. It uses the beneficial relationship between logistics elements to organize logistics activities scientifically and reasonably. Through effective ERP selection, it can control the expenditure of logistics activities, reduce the total logistics cost, and improve the enterprise and social economy. benefit. The ERP system logistics management module includes the composition of logistics, the specific process of logistics activities.
Purchasing management
The Purchasing Management module determines the order quantity and identifies the safety of suppliers and products. Orders, acceptance information, tracking, urging outsourcing or subcontracting materials can be provided at any time to ensure the timely arrival of goods. The ERP system creates a supplier profile that adjusts inventory supermarket management costs with up-to-date cost information. The ERP system procurement management module specifically includes supplier information inquiry, reminder, procurement, and subcontract processing supermarket management statistics, price analysis and other functions.
Distribution management
The distribution management module mainly manages and counts information on products, regions, customers, etc., and analyzes the sales volume, amount, profit, performance, customer service and so on. The distribution management module includes managing customer information, sales orders, analyzing sales results, and more.
Inventory control
The inventory control module is used to control the management of storage materials, it is a dynamic, real inventory control system. The inventory control module can adjust inventory at any time in conjunction with departmental requirements and accurately reflect inventory status. The inventory control module includes: establishing inventory for all materials, managing daily business such as inspection and storage, and receiving and dispatching materials.
Human resources management
The previous ERP system was basically centered on the manufacturing and sales process. With the development of human resources, human resource management has become an independent module and has been added to the ERP system, and the financial and production systems form an efficient and highly integrated enterprise resource system. The ERP system human resource management module includes an auxiliary decision system for human resource planning, recruitment management, payroll accounting, working hours management, and travel accounting.
ERP Benefits
Many enterprises that use the ERP system conduct standardized management of enterprises through ERP.
ERP in business helps to reduce :-
The number of days of material inventory turnover.
The capital occupied by inventory, help enterprises save various costs.
The workload between departments, introduce advanced management concepts, improve efficiency, and promote the quality of staff.
The enterprise costs, and provide corporate profits and liquidity.
In addition, the ERP system can improve the company's internal management structure as well.
With the development of the times, the information network is becoming more and more mature. The operation modes of many enterprises are gradually changing with time.
Many enterprises have changed the way of relying on labor and old employees. Moreover, the company has improved its efficiency through ERP software. There is a sharp increase in field departments, copying, picking, delivery, procurement, finance, marketing and other departments, by more than 50%. And reduce costs by 30%.
Many company customer data are not managed in a unified manner. ERP software now helps in customer data management, field management, visit planning, and overall price system management to keep the sales process consistent, strictly control customer arrears, and regulate the process of corporate collection and quotation.
Before the enterprise applies the ERP system, the business and finance are often independent of each other. After the business system completes the sales invoice processing, the relevant data is recorded again in the financial system. The logically related business and financial data are divided into different ones.
After applying the ERP system, the enterprise ensures the synchronization of the capital flow, logistics, and the data consistency. The ERP system maintains financial funds and strengthens the financial planning, in-process monitoring and post-tracking ability of the business.
In short, the manufacturing ERP system allows enterprises to standardize the management of various businesses, facilitate the organization of business, promote the information sharing of enterprise personnel, streamline the internal organizational structure, and promote the significant improvement of the economic benefits of enterprises. Now, from the above details its quite clear that why ERP is important for a business enterprise.
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