Enterprise Resource Planning

UNIT III ERP MODULES

Basic Modules of ERP System – ESDS

Enterprise Resource Planning System (ERP), just by considering name we can simply define ERP
as System or software that used to manage all the resources of the whole enterprise. Right
from employee payments to a single screw coming into the enterprise, everything can be
managed & tracked by using ERP Systems. ERP is cross-functional software that supports all the
business processes within the organization.
In an organization, ERP helps to manage business processes of various departments & functions
through the centralized application. We can make all the major decisions by screening the
information provided by ERP.

There are many vendors in the market which are providing traditional ERP solutions or Cloud-
based ERP solutions. Though implementation platforms or technologies are different, there are
common & basic modules of ERP which can be found in any ERP System. Depending on
organizations need required components are integrated & customized ERP system is formed.
All the below-mentioned modules can be found in an ERP system:
 Manufacturing
 Human Resource
 Inventory
 Sales & Marketing
 Purchase
 Finance & Accounting
 Customer Relationship Management(CRM)
 Engineering/ Production
 Supply Chain Management (SCM)
Enterprise Resource Planning

Each component mentioned above is specialized to handle the defined business processes of
the organization. Let us go through the introduction of the various modules.

Human Resource Module(HR):

Human Resource module helps to HR team for efficient management of human resources. HR
module helps to manage employee information, track employee records like performance
reviews, designations, job descriptions, skill matrix, time & attendance tracking. One of the
important submodules in the HR module is Payroll System which helps to manage salaries,
payment reports etc. It can also include Travel Expenses & Reimbursement tracking. Employee
Training tracking can also be managed by ERP.

Inventory Module:
Inventory module can be used to track the stock of items. Items can be identified by unique
serial numbers. Using that unique numbers inventory system can keep track of item and trace
its current location in the organization.

e.g. you have purchased 100 hard disks, so using inventory system you can track how many
hard disks are installed, where they are installed, how many hard disks are remaining etc.

Inventory module includes functionalities like inventory control, master units, stock utilization
reporting etc.

There may be an integration of the inventory module with the purchase module of ERP.

Sales Module :
Typical sales process includes processes like Sales queries & inquiry analysis & handling,
quotation drafting, accepting sales orders, drafting sales invoices with proper taxation,
dispatch/Shipment of material or service, tracking pending sales order. All these sales
transactions are managed by the sales module of ERP. CRM module can take the help of the
Sales module for future opportunity creation & lead generation.

Purchase Module:
As the name indicates, purchase modules take care of all the processes that are part of the
procurement of items or raw materials that are required for the organization. Purchase module
consists of functionalities like supplier/vendor listing, supplier & item linking, sending quotation
request to vendors, receiving & recording quotations, analysis of quotations, preparing
purchase orders, tracking the purchase items, preparing GRNs(Good Receipt Notes) & updating
stocks & various reports. Purchase module is integrated with Inventory module &
Engineering/production module for updating of stocks.

Finance & Accounting module:

Whole inflow & outflow of money/capital is managed by the finance module. This module
keeps track of all account-related transactions like expenditures, Balance sheet, account
ledgers, budgeting, bank statements, payment receipts, tax management etc. Financial
Enterprise Resource Planning

reporting is an easy task for this module of ERP. Any Financial data that is required for running
the business is available on one click in Finance module.

Customer Relationship Management (CRM) module:

CRM department is helping to boost the sales performance through better customer service &
establishing a healthy relationship with customers. All the stored details of the customer are
available in the CRM module.

CRM module helps to manage & track detailed information of the customer like communication
history, calls, meetings, details of purchases made by the customer, contract duration etc. CRM
module can be integrated with the Sales module to enhance sales opportunities.

Engineering / Production module:

Production module is a great help for the manufacturing industry for delivering the product.

This module consists of functionalities like production planning, machine scheduling, raw
material usage,(Bill of material)preparation, track daily production progress production
forecasting & actual production reporting.

Supply Chain Management (SCM):

SCM module manages the flow of product items from manufacturer to consumer & consumer
to manufacturer.

Common roles involved are a manufacturer, Super Stockiest, Stockiest, distributors, retailers
etc. SCM involves demand & supply management, sales returns & replacing process, shipping &
transportation tracking etc.

Today many SMBs face challenges in their process automation. ERP is a great help for such
organizations. ERP can efficiently streamline the business operations of the organization. Above
introduction of modules can help you to choose & customize the ERP modules depending on
your organization’s requirements.

ERP: Manufacturing Module

Manufacturing is the process by which raw materials are transformed into finished products.
The role of the ERP manufacturing module is to complete the inventory management by
implementing the operations specific to a streamlined manufacturing process.Manufacturing
recipes management in ERP

The first phase of the process is represented by the entry of a project into manufacturing
process and it involves the generation of recipes, based on which the final product will be
Enterprise Resource Planning

created. In the ERP system it is named composed product and it can have one or more attached
recipes. The recipe types are: promotion, manufacturing, composition, decomposition.

• A promotional recipe is used if there is no manual labor involved. Eg: if you buy 10 pencils you
get a free sharpener. When such a promotional product is selected, the system automatically
discharges the components.
• Composition, decomposition or manufacturing recipes are used in specific processes.

Human resources Module in ERP

People produce the products all manufacturers sell. The human resources module in ERP
supports those people. ERP helps by controlling the payrollrates and benefit packages each
employee earns. Management knows when an employee is due for an appraisal or raise, and
the new pay rate can be immediately used to calculate payroll costs. The HR module works with
the quality module tracking what training and certifications an employee needs to perform
their current work or to become eligible for a promotion. Workers who fall behind in their
certifications cannot be scheduled for work in the production scheduling module.

HR modules are where management uses future employee characteristics as a model helping
locate and hire employees with the skills that will be required tomorrow.

Plant Maintenance ERP: A module to support operational needs

ERP Software Finance Module the Plant and Machine Maintenance module in resource ERP
provides an integrated solution for supporting the operational needs of an enterprise-wide
system. The module includes an entire family of products covering all aspects of plant/machine
maintenance and becomes integral to the achievement of process improvement.

Resource ERP Plant & Machine Maintenance module supports various options for structuring
technical systems with its object, type and function-related views, and enables flexible
navigation. Data concerning the planning processing and history of maintenance tasks is
documented in the system and complies with business verification requirements.

All maintenance tasks such as inspection, servicing and repair activities are saved in a historical
database. In addition to standard indicators, diverse analysis options are also available in the
system for evaluating this data.

Plant and Machine Maintenance module provides you with technical and business reports and
various presentation options, according to the criteria used: for example organizational unit,
location, execution period for tasks, or system manufacturer. This information helps you to
reduce the duration and costs of plant down times as a result of damage and to recognize
possible weak points within your technical system in good time.
 Enterprise Resource Planning

It also forms the basis for defining an optimum maintenance strategy in the sense of 'Total
Productive Maintenance (TPM) or risk-optimized maintenance.

The major sub-systems of e resource ERP Plant & Machine Maintenance module are:

 Breakdown Repair Log

 Equipment Master Register
 Machine Breakdown Log
 Maintenance Type1
 Man Power for Machine Details
 Preventive Maintenance Record
 Spare Part Installation Log

Materials Management module in ERP:

(RHR MM) consists of all master data, system configuration, and transactions to complete the
Procure to Pay process.

ERP - MM Module

 Vendor Master and Material Master Data.

 Consumption Based Planning.
 Purchasing.
 Inventory Management.
 Evaluation of Materials.
 Invoice Verification.

ERP Materials Management is a part of SAP Logistics functionality. ...Materials

Management contains many aspects of SAP functionality, including purchasing, goods
receiving, material storage, inventory, and invoicing. Disclaimer: Content Accuracy is assured as
much as possible. Discretion advised. Materials handling, packaging, warehouse planning,
accounting, scrap, surplus and obsolete materials disposal, finished goods safety and care are
the activities managed by the materials management department

Data Warehousing:

Enterprise resource planning (ERP) systems integrate and automate internal and external
management of information. They allow for basic financial planning primarily by aggregating
departmental budgets. They tend to provide static reporting rather than analysis, which often
involves transforming the data to answer the question.
Enterprise Resource Planning

Data warehouses are required because ERP systems don’t store the data in a manner that
supports analysis and reporting. They also do not always gather all available data because of
system incompatibilities and increasing amounts of information from systems external to the
enterprise.

The purpose of data warehouses is to extract data from disparate sources, cleanse it, and align
it so that it can be aggregated, compared, and analyzed to enable business decisions. Then, it is
stored in a single common platform optimized to support enterprise-wide data analysis.

Data Mining:

Data mining is the computational process that involves a wide variety techniques in statistics
being applied to big data sets usually to discover patterns. It is normally applied to predict
events or end results and also detect trends by making use of methods that involve artificial
intelligence, database systems, machine learning, and statistics.

This is often done with the general goal of extracting information from a set of data to
transform it into a structure that is understandable for further use. The concise and valuable
knowledge of interest that has been discovered can be incorporated into a decision support
system and the results are used to make informed business decisions by firm owners.

Data Mining ERP software is what results. This is an integration of specific applications meant to
ease the input of data and the output of sensible information for business owners.

This software has become a great industry, producing components that flourish a variety of
business functions. Such software is now considered a key organizational tool because of its
ability to put together diverse organizational systems and facilitate transactions and production
free from error.

The ERP software runs on several networks and computer hardware configurations, usually
making use of a database as an information source.

Quality Management:
Quality management includes customer-driven quality, top management leadership and
commitment, continuous improvement, fast response, actions based on facts, employee
participation and above all a quality management culture. Each part of the company is involved
in total quality, operating as a customer or supplier to one another.
Ultimately whatever be the industry in which you’re present or the size, to survive and succeed
in the present scenario, it is imperative that you maintain a very high quality at all stages of
manufacturing and distribution
Quality Management module in Ramco ERP on Cloud addresses:
 Enterprise Resource Planning

 Procurement & Subcontract process (for Goods or Services): During the Goods receipt or on
completion of Services, the quality parameters and attributes can be captured. This serves as
the basis for clearance, usage and supplier payment
 Inventory & Storage: During the storage of materials, a periodic quality check can be done to
assess the quality
 Production: During the start of a batch or a new product, or periodically – it would be
required to check and record the Quality at different stages based on which action pertaining
to re-work, recalibration, tool setting, etc would be undertaken
 Sales & Dispatch: Quality inspection can also be carried out before dispatch of goods
 Project Tasks: Quality check could be done for tasks being executed as part of a project

Some of the specific features pertaining to quality include:

 Facility for In-process Inspection and Quality Clearance

 Ability to define control points based on control factors like Warehouse, Master Recipe,
Supplier, Customer, etc
 Ability to define inspection plan for each control point
 Ability to have attribute / non-attribute based (check list) inspection plan
 Facility to define standard operating procedures
 Ability to capture Analysis methods for attributes
 Ability to specify attribute values for each inspection plan
 Ability to override sample result status
 Ability to suggest lot change / item change based on Quality Clearance Feedback

Sales and Distribution:

Sales and Distribution Module to keep pace with rapid changes in the business world,
companies need an integrated and flexible enterprise system that supports all aspects of their
business with state-of-the-art functionality. This innovative solution should upgrade effortlessly
and interface easily with third-party applications as well as have the ability to incorporate
existing systems while extending its reach to the Internet and e-commerce.

In today's competitive business environment, companies are increasingly being forced to

streamline business processes. In a world where it is no longer enough to simply have the best
product; companies are focusing on core competencies and closer partnerships over the whole
supply chain.

Here, increased efficiency in sales and distribution is a key factor to ensure that companies
retain a competitive edge and improve both profit margins and customer service. In helping
business to 'beat them on delivery', the Sales and Distribution module of resource ERP systems
offers a comprehensive set of best-of-bred component for both order and logistics
management.
 Enterprise Resource Planning

Resource ERP system is tightly integrated with the Sales and Distribution module. This
integration enables the mapping and supply of single-site or multi-site organizations.
Developing precise logistics planning for just-in-time deliveries, this system can also generate
replenishment orders by using defined warehouse requirements.

The following are the sales related business transactions:

 Sales queries, such as inquiries and quotations

 Sales orders
 Outline agreements, such as contracts and scheduling agreements
 Delivery/Shipment
 Invoicing/billing
 After sales support

During sales order-processing the following basic functions are carried out:

 Inquiry handling
 Quotation preparation and processing
 Contracts and contact management (order management)
 Monitoring the sales transaction
 Checking for availability
 Transferring requirements to materials planning (MRP)
 Scheduling the delivery
 Calculating pricing and taxes
 Checking credit limits
 Invoicing/billing
 Creating printed or electronically transmitted documents

Depending on how your particular system is configured, these functions may be completely
automated. The data that results from these basic functions is stored in the system where it can
be displayed. Resource ERP’s Sales and Distribution module very actively interacts with the
material management and financial accounting module for delivery and billing.