Example Of ERP Essay

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{Institution Affiliation [name of Author’s institute]}

Procurement Process 3

Organizational Levels 3
Master Data 4
Fulfillment Process 5
Organizational Levels 5
Master Data 6
b. Integrated Business Process Steps 7

Organization of Choice: Dell Computers 8

Procurement - Buy 8
Production - Make 8
Fulfillment – Sell 9

References 10

Organisational Levels in an Enterprise System
Enterprise Resource Planning (ERP) support Human Resource, Finance, Sales, Accounts, Procurement, Distribution and Fulfilment processes (Magal and Word, 2013). There are different organizational levels within each process and an associated master data. Here the Procurement and Fulfilment processes of the ERP are discussed.
Procurement Process
Procurement process is the function of acquiring materials and products according to the nature of business of the organization. The trigger of procurement starts from the warehouse, moving to purchasing department, vendor, accounting, and purchase department (Franch and Pastor, 2000).
Organizational Levels
The procurement function for most ERP systems is a five-step process spreading across three organizational levels. The levels that entail the procurement process are client, company code and plant (Magal and Word, 2013).
Company Code
The organization levels have a hierarchical structure. Each company code represents a legal and sperate entity in the organization. A client can have multiple company codes. However, a company code can be mapped to only one client. Procurement process is carried out mostly at this organization level. An organization data that are significant at this level is purchasing group (Magal and Word, 2013).
Plant
Plant is an essential entity for any organization and consists of multiple ERP functions that include the creation of products or services, storage and distribution, production planning and maintenance. Plan relate to the physical entity that can be a warehouse, factory, distribution or service center or a set of buildings. For the procurement process, an Organization data that is significant is Storage location (Magal and Word, 2013;Bendoly and Schoenherr, 2005).
Master Data
There are different types of master data for an ERP system. The master data associated with the Procurement process are Material, Vendor, Purchasing Info Records, and Conditions Master.
Material Master
This master consists of information and description regarding the material. Apart from the basic material data with respect to the procurement process the material master also includes data for financing, purchase and storage (Magal and Word, 2013).
Vendor Master
The vendor master data consists of all data with respect to the vendors involved in the procurement process. The data in this category is grouped into different sections like general, accounting and purchasing data (Magal and Word, 2013).
Purchasing Info Records Master
This type of master is a cross-section of Material and Vendor data. It can also be considered like a mapping data between material and vendor information. The purchasing info consists of data that is relevant with respect to the procurement process like price info, discounts, freight, and taxes.
Conditions Master
This type of master data consists of conditions that are relevant to the procurement process. The organization can use data from the conditions master to determine pricing for various purchase orders (Magal and Word, 2013).
Fulfillment Process
The fulfillment process is the process that consists of all the actions involved in selling and delivery of a product to the customer.
Organizational Levels
There are several organizational levels that get involved in the fulfillment process that include client, company code, plant, Storage location, Sales Organization, Distribution Channel, Shipping point and Credit Control.
The fulfillment process is concerned with effectively providing service to customers. The subsidiaries and companies that come under the client are involved in this process.
Plant & Storage Location
For the fulfillment process, the plant and storage location come under the flow of procurement as a customer request is made. The fulfillment process has delivery plan and storage location as part of the flow.
Sales Organization
The sales organization level comes into the picture during the fulfillment process as they are involved in the negotiation, proving legal and liability information and finalizing the terms and conditions of the sales.
Distribution Channel
Distribution channel is an organization level that comes into the picture after a sale is complete, and the product or material must be delivered to the client.
Shipping Point
In terms of the fulfillment process, shipping point is the organization level that denotes the location from which the order must be shipped to the customer.
Credit Control
This organization level is the one that is responsible for the finances of the customer. The credit control organization level holds information that is relevant to the customer’s creditworthiness and sets and manages the credit limit for each customer.
Master Data
The master data relevant to the Fulfillment process are Material, Customer, Customer-Material Information, Pricing, Conditions and Credit Control.
Material Master
This master data stores material information. Apart from the basic material data with respect to the fulfilment process the material master also consists of data for sales and plant storage location (Magal and Word, 2013).
Customer Mater
The customer master is the one that holds information that relates to the customer data. The data involves storing customer details like name, address, contact information and transactional data.
Customer-Material Information
This master data consists of mapping information of customers with the respective material purchased. It is an important information dataset in the fulfillment process.
Pricing
The pricing master holds data that is relevant to each material, and it is related to the invoice generation as part of the final order fulfillment of the customers.
Conditions Master
This master data holds conditions that are relevant to the fulfillment process. The data from conditions master can be used to determine the pricing (Magal and Word, 2013).
Credit Control Master
The credit control master consists of data that is related to the customer’s credit history, credit limit, and credit worthiness. The data from this master is used for determining the mode of payment and credit availability to the customer (Magal and Word, 2013).
Integrated Business Process Steps
ERP systems had evolved over time and currently support much more functions than when it started initially. Organizations were implementing an ERP system not focus on the broader function of the supply chain. Organizations have integrated business support functions integrating manufacturing, finance, procurement, accounting, human resources, shipment and fulfilment processes. The advent of the internet and high scale technological solutions have added to the revolution in the integrated business processes (Davenport, T. H. and Brooks, J. D. 2004).
Organization of Choice: Dell Computers
An organization of great reputation that has successfully integrated all functions to provide a successful and profitable solution is Dell.
Procurement - Buy
Dell computers is an organization that demonstrates a great ability to manage the procurement of materials from different vendors and subsidiaries. It has managed to implement solutions that facilitate buying of products and materials from global locations including United States, Ireland, Poland and Malaysia (Magal and Word, 2013).
The process involves buying materials that are functional and important for the smooth functioning of the organization’s primary business process. The company buys raw materials like microprocessors. Dell has a central system that caters to the demands of procurement globally. The price negotiation and management of services is part of the business process. (Kraemer, Dedrick and Yamashiro, 2000).
Production - Make
Dell manufacture products that include desktops, laptops, and servers. Dell has manufacturing units at different global locations like Unites States, China, Brazil, and India. Dell has set manufacturing units at most regions globally. The business process is smoothly implemented by the organization that adds to the global functioning of its business. The process of production or making of materials is managed centrally, but the local manufacturing units maintain control over day to day functions of the process (Magal and Word, 2013).
Fulfillment – Sell
The process of fulfillment is the task of executing steps that result in customer satisfaction. Successful organizations understand their business structure and the associated processes along with their IT systems and integrate them effectively into the business processes (Holland and Light, 1999).
Fulfillment starts a chain of processes that involve many other functions that include Warehouse Management, Material Planning, Asset Management, Financial Reporting and Sales and Customer Management. The order process starts with the sales team that then forwards the information to other respective processes for the completion and fulfillment of the customer request and customer orders. Dell has a well-integrated process for customer order fulfillment. Dell invokes many processes as part of this process. When a customer places an order, raw materials are procured, which is then assembled, managed into warehouse, invoiced and then shipped to the customer. (Magal and Word, 2013).
Dell Computer is one such company that has successfully integrated all these functions by creating an organization of high repute. The exceptional results of the company demonstrate the results of a completely integrated business process.
The high cost of inventory management and warehouse upkeep had always been a concern for most companies. Where most companies were grappling with the issue, Dell Computers seized the opportunity to its benefit. Dell has achieved landmarks by innovating its business processes and pioneering a business model that redefines the selling process. The result was high customer satisfaction and reduced cost for the company and increased revenues (Kraemer, Dedrick and Yamashiro, 2000).
References
Bendoly, E. and Schoenherr, T., 2005. ERP system and implementation-process benefits: Implications for B2B e-procurement. International Journal of Operations & Production Management, 25(4), 304-319.
Davenport, T. H. and Brooks, J. D., 2004. Enterprise systems and the supply chain. Journal of Enterprise Information Management, 17(1), 8-19.
Franch, X. and Pastor, J. A., 2000. On the formalisation of ERP systems procurement. In Workshop on Ensuring Successful COTS Development (22nd Int. Conf. on Software Engineering).
Holland, C. P. and Light, B., 1999. A critical success factors model for ERP implementation. IEEE software, 16(3), 30-36.
Kraemer, K. L., Dedrick, J. and Yamashiro, S., 2000. Refining and extending the business model with information technology: Dell Computer Corporation. The Information Society, 16(1), 5-21.
Magal, S. R. and Word, J., 2013. Integrated business processes with ERP systems. Hoboken NJ: John-Wiley & Sons.