1

• Introduction
• Finance
• Plant Maintenance
nce
• Quality Management
• Materials Managem
gement

2
 • ERP Packages contains many modules
• Features vary with ERP packages
• Most common modules in ERP are:
– Finance
– Manufacturing & Production Planning
– Sales and Distribution
– Plant maintenance
– Quality Management
– Materials Management etc

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 • Concept of Information technologies
means providing:
– Right information
– Right time
– Right people
– Can make critical difference to the
organization
• Financial data provides key information

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 – Financial Accounti
ting
• (General Ledger, Accounts Receivables/
Payable, Fixed Assets Accounting, Legal
consolidation)
– Investment Mana
agement
• (Investment planning,
g, Budgeting, controlling,
Depreciation, Forecast Simulation Calculation)

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 – Controlling
⋅ (Overhead cost controllin
lling, Activity based costing
Product cost Accounting Profitability analysis)
– Treasury
⋅ (Cash Management, Treasury Management, Market
Risk Management, Funds Management)
– Enterprise Controllin
ng
⋅(Executive Information System (EIS), Business
Planning and Budgeting, Profit centre Accounting)

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 • Objective :

– Integration of financial information

essential for strategic decision-making

– Centrally track financial accounting data

within international framework

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 Financial Accounting...
Acc

• Essential for financial accounting and

decision making
• Serves as a central pool of financial
data and in accounting area, Origin of a
transaction can be traced,
• Supports all the functional needs in
financial accounting.

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 Financial Accounting...
Acc

⚫ Typical General Ledger

contains i.e. summary information of other
components:

– Purchasing (Quantity and value)

– Sales (order and bill)
– Vendor (Payable)
– Customer (Receivables)
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– Fixed assets 9

– Employees (salary and wages)

 Financial Accounting...
Acc

• These subsystems are integrated with

all other subsystems where financial
data originates: both with General
Ledger ,Sales and Distribution, Material
Management.
• Transaction performed automatically

10
 Financial Accounting...
Acc

• Accounts Receivable and Payable

functions include:
– Internet integration
– Document management
– Important support for EDI processing
– Enterprise-wide credit management
– payment automation

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 Financial Accounting...
Acc

• Serves as a sub ledger to the General

Ledger
• Manages company’s fix assets and
provides detail info abt assets related
transaction.
• Integration with plant management
• Management of leased assets and lease
under construction

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 Financial Accounting...
Acc

• serves as a tool to make a consolidated

financial statement with operational
data
• Legal consolidation is closely integrated
with Financial Accounting system
• permit direct data transfer from
individual statement into consolidated
report

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 • Ease the workload and reduces data
entry error
• Allows multiple view of ur consolidation
data.
• Generate reports about legal entries
and segments of ur business.

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 FINANCE

• Introduction

– Gathers functions for Internal cost

accounting

– Versatile information system

• Generate reports

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 Controlling... FINANCE

OverheadCost Contro
olling:
• Focus on monitoring n allocation of overhead
Cost Centre Accountin
ng:
• Analyses where overhead occurs
OverheadOrders:
• Collects and analysis cost based on individual
internal measures
• Monitors and automatically check budgets
assign to each measures

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 Controlling... FINANCE

ActivityBased Costing
g:
• Goals of the entire enterprise should
come before the goals of individual
activity
Product Cost Controlli
ling:
• determine cost of product or services
• Use to determines the lowest price
limit

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 Controlling... FINANCE

Cost Object Controlling

ng:
• Helps to monitor manufacturing orders
• Integration with logistics, provides actual
cost of the object costs
• Determine n analysis Variance betw actual
manufacturing cost and plan cost
Profitability analysis:
• Examines the sources of returns.
• Revenues are assigned according to market
segment
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 • Investment planning – Where to invest, what is
the expected profit of eachh ventures. Which
department to need more investment?
• Budgeting – Financial layout of new or existing
project – Availability and cost of finance
• Controlling – The expensses, the overheads
• Depreciation - Budgeted balance sheets and cost
planning are always on current values.
• Forecast – Speculation and forecast of market
trend. Rising or declining?
• Simulation Calculation:: Making a mathematical
model and deriving alternatives to choose from.

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 FINANCE

• Managing long ,short, medium

payment flow
• Managing Risk factor
• Planning financiall transaction.

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 Treasury... FINANCE

Cash Management:
• Analysis financial transaction for given period
• Manages cash inflow and d outflow
• Distinction is made according to time period (short
medium long)
• Information is available to make cash management
decision and for analyzing g purpose.
Treasury Management:
• Current liquidity, Currenccy, Risk position
• Conditions prevailing on the money and capital
market
• Consider all those beforee taking decision
• Securities and loans
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 Treasury... FINANCE

Market Risk Management nt:

• Ensures competitiveness
• Complex feed back loop: from data collection, risk
management, analysis and simulation
• Assessing the interest rates
rat
• Assessing the currency rates
rat
• Simulate market data – “what if” analysis
Funds Management:
• From budgeting to payment on one side and
• From Billing to actual receiving on the other
• Enables to control funds commitments and
determine the budget utility.
utilit
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 FINANCE

Introduction
• Compromise to optimize share holder
value, for growth and investment.
• Modules includes :
– Executive information system
– Business planning and budgeting
– Profit centre Accounting

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 FINANCE

Executive Information Sys stem:

• Provides overview of critical parameters
• Gets both internal and external data
• Drill-Down reporting to evaluated data
Business Planning and Budgeting:
Bud
• Business targets such as Return on investment
• Central investment planning, budget release and
tracking
Profit Centre Accounting:
• Analysis profit
• Possible to analysis selected balanced sheet items
and use for calculation of ratio such as ROI

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 • Introduction
– Preventive Maintenance control
– Equipment Tracking
– Component Tracking
– Plant Maintenance Calibration Tracking
– Plant Maintenance Warranty Claims
Tracking

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 Preventive Maintenan
enance Control:
• Planning • Keeping track of
– Hours of usage
• Scheduling Production produced
• Control of facilities – Consumables (fuel)
and equipment – Days in operation
• Equipment lubrication – Life of each component
• Component • Lower repair cost
replacement • Avoiding downtime, m/c
• Safety inspection breakage etc.
• Monitoring • Improve m/c reliability
whc leads to higher
production
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 Equipment tracking
ng:
• Equipment is an asset to be used, monitored and
protected
• History of equipment: acquisition to write off
• Operational dependencieses
• (special features, imported spare parts, their cost
and expected life ,Guarantee period, Next service
due)
• Information (model and serial no) for each
equipment to be made available.
• Provide detail information to technical specialist.

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 Plant Main
ntenance...

• Components are typica

ally sub-set of large
equipment.
• Enable to identify chronic repair problem of
component – replacement or repair
• Do not wait for components to fail, replace it
before that
• Reduce downtime
• Also include repair/excha
ange history and
component service life.

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 Plant Maintenance Calibration
Tracking :

• Allows organization to lev

everage their investment in
Plant Maintenance module by providing for tracking
of equipment calibration in support of ISO 9000
requirement

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 Plant Maintenance Warranty
Wa Claim
Tracking :
• Administrative system designed to provide control
of all items covered by manufacturer and vendor
warranty
• Recover imbursement to which they are entitled.
• Type and length of warraanty – elapsed time
,operating unit
• generate Complete informmation regarding warranty
service provider

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 • Introduction
– ISO Standards defines:
• Functions of QM
• Elements of QMS
– In Production, Quality Assurance
• No longer just “Inspection” and “Elimination”
• But also the production process becomes the
focus of attention.
– Quality spreads to the entire loop: Product
development – procurement of sales and
distribution – (entire usage phase)
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 Quality Mai
aintenance...

• CAQ : Computer Aided Quality

Q Management
– Isolated, cnt carry outt comprehensive tasks of
QMS
• CIQ: Computer – Integrated Quality Management
– More appropriate
• Supports quality management in procurement,
product verification, qualit
lity documentation,
processing of the problem
em
• Module do not direct interact wit other modules

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 The quality Management ModuleMo fulfills the
following functions:
• Quality Planning :
– Management for basic data for quality planning
and Inspection planning, Material Specification
• Quality Inspection:
– Trigger inspections, Inspnspection processing with
inspection plan selecti
ction and sample calculation,
– Print shop papers for sampling and inspection.
– Records results and defects
de
– Makes the usage decision and trigger follow up
action
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 Cont...
• Quality Control:
– Dynamic sample deterrmination on the basis of
Quality level history.
– Application of statisticcal process control
techniques using qualit lity control charts
– Quality scores for insp
spection lots,
– Quality notification forr processing internal or
external problems and initiating corrective action
to correct the problems
– Inspection of lot proce essing
– QMIS (Quality Management Information System)
for inspection and inspection results and quality
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 CIQ(Computer – Integrated Quality
Management)
• Only an integrated system can support all the
elements of Quality Management System according
to ISO 9000.
• Quality Management function influence all the
function within company, affecting all the phase.
• QM Module integrate with other modules to link the
task on quality management.

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 Quality Maintenance...

• The quality Management Module is integrated

with the master data and processes of the
following applications...
– Material Management:
 Purchasing, inventory management, warehouse
management, Material requirement planning
– Production:
 Work scheduling, shop floor control
– Sales and Distribution:
 Delivery, creation of quality certificates

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 • The Quality Management module supports the
exchange of data with other application in order to:
– Prevent related data from
om being recorded and
stored redundantly.

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 Introduction:
• The Material Management Module optimizes:
– All purchasing process with work-flow
driven processing functions
– Enables automated supplier evaluation,
– Lowers procurement and warehousing
costs
– Integrates invoice verification
– In short decides - When to buy, What to
buy and How much to buy!

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 • The main Modules of Material Management
Module are:
– Pre-purchasing Activities
– Purchasing
– Vendor Evaluation
– Inventory Management
– Invoice Verifications and
– Material Inspection

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 Material Ma
anagement...

• Maintain service master database.

• Service specification which include service
wit item and item witith material.
• Manual entry effort is reduced
• 2 ways of entering service specification
– PLANNED
– UNPLANNED

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 Cont...

• Planned Serviced Specification:

– service whose precise nature n intended scope is
known at the beginning of the project
– Price n quantities are both stipulated
• Unplanned Serviced Specification:
– Services which cannott be initially specified in
detail
– No description
– Entered in the form off money value limit

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 Requirements Calculation

Requisition for Quotations

Vendor Rating

Quotation Evaluation

Vendor Selection
S

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 Purchasing :
• Important component of Material Management.
• Integrated with other modules and communicates
with them for constant flow of data
• Support all phase:
– Material planning and control, purchasing,
– goods receiving
– Inventory management
– Invoice management
• Follows task like
– Procurement of material, n service ,determine source of
supply , planning n control of material, monitoring
delivery n payment of vendors

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 Material Ma
anagement...

• Integrated into MM
• Information like delivery dates ,prices
n quantity are taken from purchase
order
• Also used data of QM

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 • In procurement of material:
– Select suppler according to existing supply
relationship
– Provide with proper information
in on prices n
terms of payment and delivery
– Evaluate vendors
• In procurement of service:
– Check reliability of vendors
– Check vendors performance

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 Inventory Managem
ment:
• Allows to manage stocks
• Obtain overview of current stock
• Shows all entries of stocks like
– warehouse,
– stock orders but not delivered,
– reserved for production or for customers,
• quality and quantity inspection and monitored of
stock
• Stocks frm vendors and from
f customers managed
separately
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 Material Ma
anagement...
Cont...

• Stocks are managed by values and quantity basis

• Prerequisite cost accountin
unting
• With every goods movement following are updated
– Stock value for inventory Management
– Account assignment for cost accounting
– G/L account
• Both quantity n values are updated automatically
with the goods movement
• Goods movement includesdes
– Internal movement (goods from production,stock transfer)
– External movement (goods from sales order)
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 Material Ma
anagement...
Cont...

• Inventory management includes

in inventory
methods:
– Periodic Inventory
– Continuous Inventory
– Inventory Sampling
– Cycle Counting

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 Invoice Verification and Material
Inspection:
• Link between MM and financial management,
controlling and asset acc
ccounting components
• It serves the following propose:
– Completes the material procurement
– Allows invoice that do not originate in material
procurement
– Allows credit memos

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 Material Ma
anagement...
Cont...

• Donot handle payment or o invoice

• Information is passed on to other department
• Invoice contains many information
in which has to be
posted i.e. enter into the system.
• Refers to current transaction, purchase transaction
• posting invoice completes es invoice verification
• System now contains datta necessary for invoice to
be paid.
• Accounting department retrieve
r this data for
appropriated payment

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