What is ERP ?

Enterprise resource planning (ERP) is business process management software that

allows an organization to use a system of integrated applications to manage the business
and automate many back office functions related to technology, services and human
resources. ERP software integrates all facets of an operation including product
planning, development, manufacturing, sales and marketing in a single database,
application and user interface.

Enterprise Application :- ERP software is considered to be a type of enterprise

application, that is software designed to be used by larger businesses and often requires
dedicated teams to customize and analyze the data and to handle upgrades and
deployment.

In contrast, Small business ERP applications are lightweight business management

software solutions, often customized for a specific business industry or vertical.

Enterprise ERP Trends

The ERP field can be slow to change, but the last couple of years have unleashed forces
which are fundamentally shifting the entire area. The following new and continuing
trends affect enterprise ERP software:

1. Mobile ERP

Executives and employees want real-time access to information, regardless of where they
are. It is expected that businesses will embrace mobile ERP for the reports, dashboards
and to conduct key business processes.

2. Cloud ERP

The cloud has been advancing steadily into the enterprise for some time, but many ERP
users have been reluctant to place data cloud. Those reservations have gradually been
evaporating, however, as the advantages of the cloud become apparent.

3. Social ERP

There has been much hype around social media and how important or not it is to
add to ERP systems. Certainly, vendors have been quick to seize the initiative, adding
social media packages to their ERP systems with much fanfare. But some wonder if there
is really much gain to be had by integrating social media with ERP.

4. Two-tier ERP

Enterprises once attempted to build an all-encompassing ERP system to take care of

every aspect of organizational systems. But some expensive failures have gradually
brought about a change in strategy adopting two tiers of ERP.

ERP Vendors
Depending on your organization's size and needs there are a number of enterprise
resource planning software vendors to choose from in the large enterprise, mid-market
and the small business ERP market.

Large Enterprise ERP (ERP Tier I): The ERP market for large enterprises is
dominated by three companies: SAP, Oracle and Microsoft. (Source:
EnterpriseAppsToday; Enterprise ERP Buyer's Guide: SAP, Oracle and
Microsoft; Drew Robb)

Mid Market ERP (ERP Tier II): For the midmarket vendors include Infor, QAD,
Lawson, Epicor, Sage and IFS. (Source: EnterpriseAppsToday; Midmarket ERP
Buyer's Guide; Drew Robb)

Small Business ERP (ERP Tier III): Exact Globe, Syspro, NetSuite, Visibility,
Consona, CDC Software and Activant Solutions round out the ERP vendors for
small businesses. (Source: EnterpriseAppsToday; ERP Buyer's Guide for Small
Businesses; Drew Robb)

Note:-

Business Process

(1) A business transaction that requests information from or changes the data in a
database. (2) A specific event in a chain of structured business activities. The
event typically changes the state of data and/or a product and generates some type of
output. Examples of business processes include receiving orders, invoicing, shipping
products, updating employee information, or setting a marketing budget. Business
processes occur at all levels of an organization's activities and include events that the
customer sees and events that are invisible to the customer. The term also refers to the
amalgam of all the separate steps toward the final business goal.

Integrated

(1) A popular computer buzzword that refers to two or more components merged
together into a single system. For example, any software product that performs more
than one task can be described as integrated.
(2) Increasingly, the term integrated software is reserved for applications that combine
word processing, database management, spreadsheet functions, and communications
into a single package.

Enterprise Application:-

An enterprise application is the phrase used to describe applications (or

software) that a business would use to assist the organization in solving
enterprise problems. When the word "enterprise" is combined with "application,"
it usually refers to a software platform that is too large and too complex for
individual or small business use.
What is Supply Chain?

Supply chain is the sequence of processes involved in the Production and distribution of
a commodity.

A supply chain is actually a complex and dynamic supply and demand network. A
supply chain is a system of organizations, people, activities, information, and resources
involved in moving a product or service from supplier to customer.

Note :-

Commodity:- a raw material or primary agricultural product that can be bought and sold,
such as copper or coffee.

What is Supply Chain Management ?

Supply chain management (SCM) is the oversight of materials, information, and finances as
they move in a process from supplier to manufacturer to wholesaler to retailer to consumer.
Supply chain management involves coordinating and integrating these flows both within and
among companies. It is said that the ultimate goal of any effective supply chain management
system is to reduce inventory (with the assumption that products are available when needed).
As a solution for successful supply chain management, sophisticated software systems with
Web interfaces are competing with Web-based application service providers (ASP) who
promise to provide part or all of the SCM service for companies who rent their service.

Supply chain management flows can be divided into three main flows:

The product flow

The information flow
The finances flow

The product flow includes the movement of goods from a supplier to a customer, as well as any
customer returns or service needs. The information flow involves transmitting orders and
updating the status of delivery. The financial flow consists of credit terms, payment schedules,
and consignment and title ownership arrangements.

There are two main types of SCM software: planning applications and execution applications.
Planning applications use advanced algorithms to determine the best way to fill an order.
Execution applications track the physical status of goods, the management of materials, and
financial information involving all parties.
Some SCM applications are based on open data models that support the sharing of data both
inside and outside the enterprise (this is called the extended enterprise, and includes key
suppliers, manufacturers, and end customers of a specific company). This shared data may reside
in diverse database systems, or data warehouses, at several different sites and companies.

By sharing this data "upstream" (with a company's suppliers) and "downstream" (with a
company's clients), SCM applications have the potential to improve the time-to-market of
products, reduce costs, and allow all parties in the supply chain to better manage current
resources and plan for future needs.

Increasing numbers of companies are turning to Web sites and Web-based applications as part of
the SCM solution. A number of major Web sites offer e-procurement marketplaces where
manufacturers can trade and even make auction bids with suppliers.

Note:-

For more details check the document in ASCP Doc>>Training

What is Demand?

Demand in economics is defined as consumers' willingness and ability to consume a given

good. An increase in price will decrease the quantity demanded of most goods. A decrease
in price will increase the quantity demanded of most goods. The inverse relationship
between price and quantity demanded of a good is known as the law of demand and is
typically represented by a downward sloping line known as the demand curve.

Demand Curve

The demand curve shows the quantity demanded of a given product at varying price
points, holding all else constant. For most goods, this is a downward sloping line. Every
individual person has his or her own demand curve for a given product. How many quarts
of ice cream would you consume mid-summer at $1/quart, $5/quart, and $10/quart? Your
responses to these price points would create your individual demand curve for ice cream
mid-summer. Your best friend may have had slightly different quantities at each price,
either as a result of varying income levels or personal preferences. Aggregating all individual
demand curves for ice cream mid-summer would create the market demand curve for that
product.
Assume this demand curve is your individual demand curve for ice cream mid-summer. At
$5/quart, the quantity demanded by you is 6 quarts, represented by point A on the chart. If
the price were to increase to $10/quart, the quantity demanded by you would decrease to 1
quart (point B). If the price decreases to $2/quart, the quantity demanded by you would be 9
quarts (point C).

Moving from point A to B or C is not a change in demand but rather movements along the
demand curve, shown by the green arrows. Your demand, willingness and ability to
consume ice cream at varying price points, holding all else constant, did not change. Only
the price of ice cream changed, which prompted a change in how many quarts you would
consume, the quantity demanded, of ice cream. In other words, the amount you would
consume moved from point A on the demand curve to a different point on the same
demand curve as a result of changes in price.

Shifts in Demand

Up to this point, whenever we referred to a change in quantity demanded as a result of a

change in price, it was caveated with 'holding all else constant'. What happens to demand
when those other factors are not held constant? Consider again the demand for ice cream
mid-summer. Other factors that may also help shape your demand probably include income
and temperature. The image represents how your demand may shift as the other factors,
such as income and temperature changes.
If it were an extremely hot summer, you would most likely consume more ice cream, even if
the price remained at $5/quart. This would cause your demand curve to shift out,
represented by line D. The increase in temperature shifted demand outward, resulting in an
increase in quantity demanded at all price points, relative to the quantity demanded during
a typical summer. At $5/quart, you would consume 8 quarts (point B) as opposed to 6 (point
A), creating an outward shift in demand.

Types of Demand:-

In general, the higher the price of a product, the fewer units of that product produced
and consumed, while the lower the price of that product, the more units produced and
consumed. The precise number produced and consumed and the price at which this
occurs depends on the interaction of the demand and supply of that product -- demand
being the number that consumers are wiling to purchase at each price, and supply being
the number that producers are willing to produce at each price. Demand for a product
that is influenced by the demand for another product is called dependent demand.

Demand

Demand is the number of units of a specific product that its consumers are willing to purchase at

each price. As such, it can be expressed as a mathematical equation. For example, if consumers

are willing to purchase 10 units of a product and two fewer units per $1 increase in price, that can

be written as Q = 10 - 2P, where Q is quantity and P is price.

Independent Demand

Although independent demand is called thus, it can still be influenced by economic factors external

to the demand-supply model such as general consumer sentiment and consumers' available

disposal income. However, businesses that need to predict the number of products with

independent demand needed to sate their customers have it easier than businesses that must

calculate the demand for products with dependent demand because there are fewer factors to

consider.

Dependent Demand

Dependent demand means that demand for the product in question is influenced by the demand

for some other product. The demand for both products can either move in tandem or in the

opposite direction -- both categories are counted as products with dependent demand. Producing

estimates based on a product with dependent demand is harder because the business must also

take into account how demand for its counterparts influences its demand and how outside

economic factors are likely to impact both products.

Substitutes and Complements

Both substitutes and complements are considered products with dependent demand. Substitutes

are products that can be used in place of other products, like how beef and pork are substitutes for

one another. In contrast, complements are products that are used together, like ketchup and hot

dogs. They are considered products with dependent demand because demand for one rises when

demand for the other falls and vice versa, while demand for complements changes in tandem.

Forecast:-

A planning tool that helps management in its attempts to cope with the uncertainty of the future,
relying mainly on data from the past and present and analysis of trends.

Forecasting starts with certain assumptions based on the management's experience, knowledge,
and judgment. These estimates are projected into the coming months or years using one or more
techniques such as Box-Jenkins models, Delphi method, exponential smoothing, moving
averages, regression analysis, and trend projection. Since any error in the assumptions will result
in a similar or magnified error in forecasting, the technique of sensitivity analysis is used which
assigns a range of values to the uncertain factors (variables).