The latest step in this evolution is Enterprise Resource Planning
(ERP). The fundamentals of ERP are the same as with MRP II. However,
thanks in large measure to enterprise software, ERP as a set of
business processes is broader in scope, and more effective in dealing
with multiple business units. Financial integration is even stronger.
Supply chain tools, supporting business across company boundaries,
are more robust. For a graphical view of ERP, see Figure 1-5.
Let’s now look at a complete definition of ERP, based on the description
we saw a few pages back:
ENTERPRISE RESOURCE PLANNING (ERP) predicts and
balances demand and supply. It is an enterprise-wide set of forecasting,
planning, and scheduling tools, which:
10 ERP: M I H
Figure 1-5
ENTERPRISE RESOURCE PLANNING
STRATEGIC PLANNING
BUSINESS PLANNING
VOLUME
SALES & OPERATIONS
PLANNING
SALES
PLAN
OPERATIONS
PLAN
MIX
MASTER SCHEDULING
DETAILED PLANNING &
EXECUTION PROCESSES:
MRP, PLANT SCHEDULING,
SUPPLIER SCHEDULING, ETC.
DEMAND SUPPLY
CAPACITY PLANNING
FORECASTING AND DEMAND MGMT
EXECUTION
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