THE APPLICABILITY OF ERP

ERP and its predecessor, MRP II, have been successfully implemented
in companies with the following characteristics:
• Make-to-stock
• Make-to-order
• Design-to-order
• Complex product
• Simple product
12 ERP: M I H
• Multiple plants
• Single plant
• Contract manufacturers
• Manufacturers with distribution networks
• Sell direct to end users
• Sell through distributors
• Businesses heavily regulated by the government
• Conventional manufacturing (fabrication and assembly)
• Process manufacturing
• Repetitive manufacturing
• Job shop
• Flow shop
• Fabrication only (no assembly)
• Assembly only (no fabrication)
• High-speed manufacturing
• Low-speed manufacturing
Within the universe of companies that make things—manufacturing
enterprises—ERP has virtually universal application. This
book deals with how to implement ERP in any of the above environments.
Some people struggle with this applicability issue; they
sometimes say: “We’re different, we’re unique, it won’t work for us.”
We’ve heard that a lot over the years. What we have never heard is:
“We’re different, we’re unique, Generally Accepted Accounting
Principles (GAAP) won’t work for us.” Well, ERP is the logistics
analog of GAAP. It’s a defined body of knowledge that contains the
standard best practices for managing that part of the business. The
main difference between the two is that ERP and its predecessors
have been with us for about four decades; double-entry bookkeeping
and its offshoots have been around for four centuries. More on
this later.
Enterprise Resource Planning 13