Planning in ERP Part 1

Definition of ERP System

ERP stands for Enterprise resource planning. This system is the totally integrated with the business management system which covers the functional areas of the enterprise like with Logistics, Productions, Finance, Accounting and with the Human Resources. It organizes and integrates with the operation processes and the information flows to make optimum use of resources such as men, material, money, and machine.
ERP promises are as follows
1)one database, 
2)one application,
3)one user interface 
for the entire enterprise, where once disparate systems ruled manufacturing, distribution, finance, and sales.

Evolution of ERP:
In the ever-growing business environment, the following demands are placed
on the industry:
 1)Aggressive cost control initiatives
 2)Need to analyze costs/revenues on a product or customer basis
 3)Flexibility to respond to changing business requirements
 4)More informed management decision making
 5)Changes in ways of doing business.
One or more applications and planning systems have been introduced into the business world for achieving growth. These are as follows:
 1)Management Information Systems (MIS)
 2)Integrated Information Systems (IIS)
 3)Executive Information Systems (EIS)
 4)Corporate Information Systems (CIS)
 5)Enterprise-Wide Systems (EWS)
 6)Material Resource Planning (MRP)
 7)Manufacturing Resource Planning (MRP II)
 8)Money Resource Planning (MRP III)

ERP has evolved from the system known as MRPII (Manufacturing Requirement planning) system with the integration of information between
The vendor, Customer, and Manufacturer using networks such as LAN, WAN, and INTERNET etc.MRPII system again evolved from MRP (Material Requirement Planning) system. MRP is a techniquethat

explodes the end product demands obtained from Master Production Schedule (MPS) for the given product structure which is taken from Bill of Material (BOM) into a schedule of planned orders considering the inventory in hand.
MRPII has a number of drawbacks.
1) The main problem is that it has not been able to effectively integrate the different
functional areas to share the resources effectively.
2)The traditional application systems, which the organizations generally
 employ, treat each transaction separately
3)They are built around the strong boundaries of specific functions that a
 specific application is meant to cater.
For an ERP, it stops treating these transactions separately as stand-alone
activities and considers them to be the part of the inter-linked processes that
make up the business.