Enhancing Manufacturing Performance with ERP Systems

Rajagopal Palaniswamy and Tyler Frank

Information Systems Management

Summer 2000, 43-55

1)      Current global environment

  1. a) Characteristics
  2. i) Customer driven markets
  3. ii) Shorter product life-cycles

iii)     Narrow niches

  1. b) Use of manufacturing as a competitive weapon
  2. i) Enhance manufacturing performance
  3. ii) Advanced information technology implementation
  4. c) Manufacturing processes
  5. i) Now intellectually stimulating rather than physically exhausting
  6. ii) Advanced Manufacturing Technology (AMT)

(1)   Allows mass customization

(2)   Makes manufacturing processes highly complex

(3)   Caused islands of automation and coordination problems

iii)     Barriers

(1)   Incompatability of systems

(2)   Redundant systems

(a)    Waste caused by multiple entry and storage

(3)   Differences in systems between countries

(4)   Lack of control

  1. iv) How to overcome

(1)   ERP

(a)    End-to-end connectivity

2)      Problems with disparate systems

  1. a) Requires increased coordination
  2. b) Lack of accurate information
  3. c) Requires expensice interdaces
  4. d) Redundancy in information

3)      ERP Systems

  1. a) An IT driven enterprise management system
  2. i) Seamless integration between supply chains and their systems
  3. b) Features
  4. i) Less emphasis on functional silos
  5. ii) Emergence of a new class of user

iii)     New meaning of decision support

  1. iv) Real-time integration of applications
  2. v) New paradigms for business simulation and optimization
  3. vi) Increased importance of knowledge and computer-based applications
  4. c) Evolution of ERP
  5. i) MRP -> MRPII

(1)   Technique for converting the master production schedule of end products into detailed schedule of materials

(2)   Tool for planning organizational resources

(3)   Less relevant because

(a)    Make-to-order environment

(b)   Quality and costs are order winners

  1. ii) Manufaturing execution system (MES)

iii)     ERP

(1)   Affect/consider every aspect of an organization

(2)   Smooth flow of information

4)      ERP Implementation Issues

  1. a) Requires business process reengineering
  2. i) Employees need to understand the system
  3. b) Employee turnover
  4. i) Employees with ERP experience are in demand
  5. ii) Firms will lose their trained employees to better offers

5)      Benefits of ERP

  1. a) Cost savings
  2. b) Reduced inventory
  3. c) More efficient lot sizes and machine allocations
  4. d) Improved inter-facility coordination
  5. e) Improved information flow

6)      Conclusion

  1. a) Organizations must to be able to digest the amount of information to make quick decisions
  2. b) ERP can provide : right information in the right place at the right time.