1. Enterprise Resource PlanningEnterprise Resource Planning
(ERP)(ERP) & Transportation& Transportation
By: Omer Maroof
MBA: 3rd
Sem…….Enroll: 110130

2. What is Enterprise ResourceWhat is Enterprise Resource
Planning (ERP)?Planning (ERP)?
 ERP is an enterprise-wide information systemERP is an enterprise-wide information system
designed to coordinate all thedesigned to coordinate all the
 resourceresources,s,
 information,information,
 activities neededactivities needed
to complete business processes such asto complete business processes such as;;
 orderorder fulfillmentfulfillment
 billing.billing.

3. ERPERP
 A typical ERP system would use multipleA typical ERP system would use multiple
component of computer software andcomponent of computer software and
hardware to achieve integrationhardware to achieve integration
 ERP delivers aERP delivers a single databasesingle database that containsthat contains
all data for the software moduleall data for the software module

5.  Some organizations - typically those with sufficient in-house IT skills
to integrate multiple software products - choose to only implement
portions of an ERP system and develop an external interface to
other ERP or stand-alone systems for their other application needs.

6.  This is very common in the retail sector, where even a mid-sized
retailer will have a discrete Point-of-Sale (POS) product and
financials application, then a series of specialized applications to
handle business requirements such as warehouse management,
staff rostering, merchandising and logistics.

7.  Ideally, ERP delivers a single database that contains all data for the
software modules, which would include:
 Manufacturing: Engineering, Bills of Material, Scheduling, Capacity,
Workflow Management, Quality Control, Cost Management,
Manufacturing Process, Manufacturing Projects, Manufacturing
Flow
 Supply Chain Management: Inventory, Order Entry, Purchasing,
Product Configuration, Supply Chain Planning, Supplier Scheduling,
Inspection of goods, Claim Processing, Commission Calculation
 Data Warehouse: and various Self-Service interfaces for
Customers, Suppliers, and Employees

8.  ERPs are cross-functional and enterprise wide. All functional
departments that are involved in operations or production are
integrated in one system. In addition to manufacturing,
warehousing, logistics, and Information Technology, this would
include accounting, human resources, marketing, and strategic
management.

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10. Solutions of ERPSolutions of ERP
 Financial ManagementFinancial Management
 Inventory ManagementInventory Management
 PurchasingPurchasing
 Sales ManagementSales Management
 Production PlanningProduction Planning
 Advanced Visual PlanningAdvanced Visual Planning
 Manufacturing ManagementManufacturing Management

11. How ERP systems are implementedHow ERP systems are implemented
within companies?within companies?
 ERP Software Companies start analysing theERP Software Companies start analysing the
prospective company(s), identifing theirprospective company(s), identifing their
individual needs.individual needs.
 Setup of ERP systemsSetup of ERP systems
 For Mid-size companies 5-12 monthsFor Mid-size companies 5-12 months
 Large Companies 6-18 monthsLarge Companies 6-18 months

12. Companies before ERP SystemsCompanies before ERP Systems

13. ExampleExample
 Industrial Engineering Faculty wants to buy aIndustrial Engineering Faculty wants to buy a
new Printer.new Printer.
 For this reason Secretary gives a purchasingFor this reason Secretary gives a purchasing
order by filling purchasing order forms.order by filling purchasing order forms.
 Next slide shows how this purchasing requestNext slide shows how this purchasing request
process flow was working before ERPprocess flow was working before ERP
systems.systems.

14. New Printer Purchasing ProcessNew Printer Purchasing Process
1. Purchase order form for a new printer
2. Head of Department Confirmation- Faculty Head
3. Purchase order document sent to E.M.U. Account Office
4. Account Office Secretary sents the purchase order to the Responsibles
5. Purchase order- Responsible personal Confirmation
6. Purchasing department- Manager Confirmation
7. Transfer to Finance Department Secretary for processing
8. Finance Department Responsible’s Confirmation
9. Transfer to Secretary Office
10.Secretary- Confirmation
11.Confirmation Transfer, to Purchase Department Secretary
12.Purchase Responsible personal commends with Purchase:

15. Secretary’s New printer
application
Transfer to Finance
Departmen
Transfer to Accounting
Office
Transfer to Manager
Transfer to
Accounting Office
Example: Before ERP Systems

16. Companies after ERP SystemsCompanies after ERP Systems

17. E.M.U. After ERP SystemsE.M.U. After ERP Systems

18.  Online Data Flow decreases the process timeOnline Data Flow decreases the process time
 Fast & Online ConfirmationFast & Online Confirmation
 Less PaperworkLess Paperwork
 No need for folder storageNo need for folder storage
 Database SecurityDatabase Security
 Less Employee neededLess Employee needed
 Easy Financial ManagementEasy Financial Management
 Better Inventory ManagementBetter Inventory Management
In this real case there the benefits of the
ERP systems

19. What is SAPMM?What is SAPMM?
SAPMM(Materials Management)SAPMM(Materials Management)
 SAP MM iSAP MM is a module is used for Procurement Handling ands a module is used for Procurement Handling and
Inventory Management.Inventory Management.
 The module has two important master data -The module has two important master data - materialmaterial andand
vendorvendor..
 Broadly, the various levels that can be defined for a SAP MMBroadly, the various levels that can be defined for a SAP MM
implementation are:implementation are:
 Client,Client,
 Company Code,Company Code,
 Plant,Plant,
 Storage LocationStorage Location,,
 Purchase Organization.Purchase Organization.

20. Material ManagementMaterial Management ((MMMM))
LOGICAL STRUCTURELOGICAL STRUCTURE
 vendor
 supplier
 production
 Distribution
 customer

21. SAP FICOSAP FICO
Financial AccountingFinancial Accounting (FI) Module(FI) Module
 The SAP FICO module includes 2 major categoriesThe SAP FICO module includes 2 major categories;;
 Financials (FI)Financials (FI)
 Controlling (CO)Controlling (CO)
FIFI (Financial Accounting) module(Financial Accounting) module includesincludes;;
 AAccounts payableccounts payable
 AAccounts receivableccounts receivable
 GGeneral ledgereneral ledger

22. ControllingControlling (CO) Module(CO) Module
TheThe COCO (Controlling) Module has multiple configuration steps that(Controlling) Module has multiple configuration steps that
must be followed for complete implementation of this module.must be followed for complete implementation of this module.
 Cost CenterCost Center
 Order ManagementOrder Management
 Commitment MgtCommitment Mgt
 Profit AnalysisProfit Analysis
 ActActivityivity-Based Costing-Based Costing

23. Mail
Fax
Telex
Teletext
Printe
r
EDI
OUTPUTS of ERP Systems
DOCUMENTS
Proposal
Orders approval
Delivery plans
Shipping papers
Warehouse check list
Material document
Accounting document
Delivery/shipping document
Invoice
Dept & credit doc.

24. ERP Software CompaniesERP Software Companies
& Marketshares& Marketshares
SAP; 15,6
Peoplesoft;
4,9
Oracle ; 4,8
Baan; 3
CA; 3
JDE; 2,2
SSA; 2,1
GEAC; 2
IBM; 1,8
JBA; 1,7
Others ; 59
Software Market Share
SAP 15.6
Peoplesoft 4.9
Oracle 4.8
Baan 3.0
CA 3.0
JDE 2.2
SSA 2.1
GEAC 2.0
IBM 1.8
JBA 1.7
Others 59.0

25. SAP Packet Providers

26. SAP Packet Providers

27. Advantages
 ERP delivers a single database that contains all data for the
software modules across an entire company. People in different
departments all see the same information and can update it.
 Computer security is included within an ERP system to protect
against both outsider and insider crime

28. Advantages
 ERP systems tie together varied processes using data from across
the company. For instance, a typical ERP system manages
functions and activities as different as the bills of materials, order
entry, purchasing, accounts payable, human resources, and
inventory control, to name just a few of the modules.

29. Advantages
 ERP software combined the data of formerly separate applications.
This made the worry of keeping information in synchronization
across multiple systems disappear. It standardized and reduced the
number of software specialties previously required.

30. Advantages
 ERP systems allow companies to replace multiple complex
computer applications with a single integrated system.
 ERP systems replace two or more independent applications and
eliminate the need for external interfaces previously required
between systems and provide additional benefits that range from
standardization and lower maintenance to make reporting
capabilities easier.

31. Disadvantages
 There are several disadvantages to enterprise
resource planning:
 Cost
 Implementing ERP is very expensive, price can range from
$30,000 - $500,000, depending on the size of the company.
 ERP vendors can charge a license renewal fee annually which
can also be costly for any business.
 Consultants may need to be used for installation or to maintain
the ERP.
 Employees may need to be trained in ERP so they can fully
utilize the system. Training times takes away from work time and
can also cost additional funds.

32. Disadvantages
 Expertise
 Success of ERP depends on the skill level and experience of the
company’s work force.
 Enterprises view cutting training funds as a way to cut costs.
 Smaller companies may even need to under fund training this
means their ERP system is often operated by personnel with
inadequate education in ERP and the ERP vendor package
being used.
 Proper training of the workforce is dependent to success with
ERP.
 New employees must be trained before they can properly start
working because of the ERP system

33. Disadvantages
 Flexibility
 ERP’s can be very rigid and may not fit the business flow of the
company trying to use it.
 Company’s may need to customize their ERP package which
isn’t allowed by most ERP vendors.

34. Disadvantages
 Change
 Employees may be needed to change the way they work to
become more efficient. They may feel resistant to change which
can be a negative.
 Bugs!

35. Technical
 It is difficult and expensive to tailor an ERP system to the way a
specific company does business.
 Part of the challenge of building an ERP system for a company is
training. The ERP system is going to drastically change the way
many employees perform their jobs. This means they must be
trained to use the software efficiently and this will not occur
overnight.

36. Transport Fundamentals
 Transport involves
 equipment (trucks, planes, trains, boats, pipeline),
 people (drivers, loaders & un-loaders), and
 decisions (routing, timing, quantities, equipment size, transport
mode).
When deciding the transport mode for a given product
there are several things to consider:
 price
 Transit time and variability (reliability)
 Potential for loss or damage.
NOTE: In developing countries we often find it necessary to locate
production close to both markets and resources, while in
countries with developed distribution systems people can live in
places far from production and resources.
Most important component of logistics cost.
Usually 1/3 - 2/3 of total cost.

37. Routes of Goods
Goods at
shippers
Freight
forwarder
warehouse
Air
terminal
plane
air
Freight
forwarder
warehouse
Goods at
consignees
Container
terminal
vessel
sea May
change
transpor-
tation
modes
truck
land
railway
land barge
mid-streampier
bulk goodssea

38. Air
•Rapidly growing segment of transportation industry
•Lightweight, small items [Products: Perishable and time sensitive
goods: Flowers, produce, electronics, mail, emergency shipments,
documents, etc.]
•Quick, reliable, expensive
•Often combined with trucking operations
Rail
•Low cost, high-volume [Products: Heavy industry, minerals, chemicals,
agricultural products, autos, etc.]
•Improving flexibility
•internodal service
Truck
•Most used mode
•Flexible, small loads [Products: Medium and light manufacturing, food,
clothing, all retail goods]
•Trucks can go door-to-door as opposed to planes and trains.
Single-mode Service Choices and Issues

39. Water
•One of oldest means of transport
•Low-cost, high-volume, slow
•Bulky, heavy and/or large items (Products: Nonperishable bulk
cargo - Liquids, minerals, grain, petroleum, lumber, etc )]
•Standardized shipping containers improve service
•Combined with trucking & rail for complete systems
•International trade
Pipeline
•Primarily for oil & refined oil products
•Slurry lines carry coal or kaolin
•High capital investment
•Low operating costs
•Can cross difficult terrain
•Highly reliable; Low product losses
Single-mode Service Choices and Issues (Contd.)

40. Transport Cost Characteristics
 Fixed costs:
 Terminal facilities
 Transport equipment
 Carrier administration
 Roadway acquisition and maintenance [Infrastructure
(road, rail, pipeline, navigation, etc.)]
 Variable costs:
 Fuel
 Labor
 Equipment maintenance
 Handling, pickup & delivery, taxes
NOTE: Cost structure varies by mode

41. Transport Cost Characteristics
 Rail
 High fixed costs, low variable costs
 High volumes result in lower per unit (variable) costs
 Highway
 Lower fixed costs (don’t need to own or maintain roads)
 Higher unit costs than rail due to lower capacity per truck
 Terminal expenses and line-haul expenses
 Water
 High terminal (port) costs and high equipment costs (both fixed)
 Very low unit costs
 Air
 Substantial fixed costs
 Variable costs depend highly on distance traveled
 Pipeline
 Highest proportion of fixed cost of any mode due to pipeline ownership
and maintenance and extremely low variable costs