An Enterprise Wide System refers to software applications that provide a central storage system that is accessible to everyone to a strategy for management of a particular process across all departments. Generally, the term enterprise system is used to denote the fact that a particular process influences all functions of a company as opposed to a single department within a company. Executive management in a company formulate strategic plans and set objectives and thus they have to consider ways in which business contribute towards enterprise wide goals. Enterprise business systems range from Enterprise Resource Planning to Customer Relationship Management (CRM). For example, a CRM allows teams to share customer and prospects information that is aimed at improving customer management (Lipsky, et al, 174). Therefore, departments that use enterprise business systems allow them to plan supply orders and share resources collaboratively.
Businesses often use enterprise systems to establish a company wide access to business knowledge, minimize duplication of company data and increase employee productivity. Therefore, enterprise systems enable businesses to reduce manual data input as well as the cost of information technology hence resulting in benefits such as team work support, improved response to the market, greater employee collaboration and increased work quality. These systems have various protocols, formats and applications that allow businesses to integrate processes such as account receivables, sales and deliveries by sharing information across different employee hierarchies and business functions. Enterprise wide systems replace independent systems that lack the capacity to interact with systems or support particular business functions (Lipsky, et al, 179).
For instance, an Enterprise Resource Planning system supports all sales processes such as pre- sales activity, sales orders, sourcing of inventory, billing and customer payments.
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For instance, an Enterprise Resource Planning system supports all sales processes such as pre- sales activity, sales orders, sourcing of inventory, billing and customer payments.
Types of Enterprise Wide Systems The most common enterprise systems are Customer Relationship Management (CRM), supply chain management (SCM), and enterprise resource planning (ERP) systems. The goal of CRM systems is to address the need to raise the productivity of the sales department and improve efficiency in customer management. CRM functions such as sales opportunity management enables a business to know more about its customer’s buying behavior and needs and combines such data with market information to improve the company’s sales forecast and marketing plans. Another characteristic of CRM systems is that they give access to employees through mobile devices thus allowing them to update and compare data as well as access pertinent information from any location. Also, CRM supports email communications within an organization and automates sales processes to ensure enhanced employee productivity.
Supply Chain Management is the process of managing people, equipment, tasks and data resources required to develop and deliver products from the business to its customers in a way that is efficient and effective and thus give the company a strategic advantage. SCM system integrates product development, sourcing of raw materials, production and logistics activities as well as information flow in these activities to enable supply chain partners coordinate their operational and strategic plans and flow of goods through the supply chain.
Just as a business integrates purchasing, finance, inventory and human resource management processes, Enterprise Resource Planning (ERP) systems integrates their respective software applications. An ERP has software sales, accounts receivable and quality management modules that communicate and share data, with each module having multiple applications required to complete end to end business processes. For example, a sales module has applications responsible for developing and managing sales orders, contracts, order pricing and invoices (Giachetti, chapter 3). ERP applications do not only support operational and administrative tasks like the creation of a time sheet but also can be customized to support a given industry, in this case, the manufacturing industry.
ERP in the manufacturing industry Given the highly competitive and dynamic nature of the manufacturing industry, it is crucial for businesses in the industry to develop integrated solutions that enhance efficiency, increase sales and profitability, slash costs and most importantly, support the business to make informed, accurate and strategic decisions. An ERP is the solution to this problem because it integrates resources and operations as well as monitoring, reporting and finance functions through a single database thus enabling businesses to run smoothly. At a basic level, an ERP in the manufacturing industry integrates inventory, accounting, order management, marketing and human resources function to streamline these processes and make information more accessible throughout the company. The ERP modules that support manufacturing processes include inventory management and purchase order (Bill Of materials).
Inventory Management The goal of every manufacturing company is to have the right amount of inventory to meet the expectations of customers and maximize its profits and therefore it is important to maintain a safety level of stock to prevent stock-outs. Inventory management module is critical to the ERP process because it helps with the management of retail locations and warehouses. For instance, an inventory management ERP system would assist in organizing items by giving unique identification numbers and allowing its confirmation, as well as allowing for regular checking of stock levels for a given category of items (Huang, and Handfield, 2). An inventory management module within the ERP gives the company efficient stocking methods that improve internal operations through features such as drop-shipping, multi-warehouse and cross docking.
An inventory management ERP process An ideal inventory management process for a global manufacturing business would begin with a ‘dynamic stock status’ feature that gives visibility of material movement within the warehouse, and between domestic and international location.
This feature tracks individual items through stocking, consigned and in-process locations.
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This feature tracks individual items through stocking, consigned and in-process locations. The dock-to-stock process ensures smooth flow from receiving to inspection by highlighting the material’s status, location and final destination and thus ‘a dock-to-stock’ feature allows one to automatically preset and direct movement through the required locations. In some cases, an item has different buying, selling or stocking units of measure and thus an ‘units of measure’ feature allows a business to transact with suppliers and customers on their terms and maintain the business’ terms on its end by providing generic or item specific units of measure conversion factors. Also, an inventory management module has inventory hierarchy tables that define a sequence of locations within a warehouse thus helping the process of controlling issuance of materials. Such tables generate an optimal picking sequence which helps to save labor and time resources (Huang, and Handfield, 10).
In addition, inventory management entails serial control software that identifies and tracks critical goods as well as traceability capabilities used to enforce recording of trace information during the production process. Maintaining a history of activities for a given lot number is critical to a business where warranties and recalls are important. The consigned inventory management feature allows for identification, management and reporting of supplier and customer owned inventory. The multi-location management feature helps to identify readily available materials and those that can be immediately committed to a production order. That information is used in planning shipment and receipt of materials between warehouses and manufacturing plants. Other inventory control mechanisms include empty bin analysis and inactive items. the material movement feature has user defined routing tables that drive dock to stock transaction, assists to conduct inspection of received or produced materials and records the results , assign storage locations, oversee return to supplier processing and captures material scrap to ensure inventory accuracy(Huang and Handfield, 25).
Inventory management ERP process in a manufacturing company
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Inventory management ERP process in a manufacturing company
i. Purchase Order ERP (ERP Bill Of Materials) A company sends a purchase order to a supplier to request a product and once received, the company enters a corresponding sales order to fulfill the customer’s purchase request.
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i. Purchase Order ERP (ERP Bill Of Materials) A company sends a purchase order to a supplier to request a product and once received, the company enters a corresponding sales order to fulfill the customer’s purchase request. a purchase order system provides information on the history of product ordered from a supplier and timeliness of its delivery.
In a manufacturing company, the ERP Bill of Materials (BOM) system receives a customer purchase order for a finished product and determines the materials required to manufacture a product.
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In a manufacturing company, the ERP Bill of Materials (BOM) system receives a customer purchase order for a finished product and determines the materials required to manufacture a product.
A well-defined BOM enables a company to plan for purchases of raw materials, estimate material costs, gain inventory control, plan and track material requirements, reduce wastes and maintain accurate records (Schuh, 472).
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A well-defined BOM enables a company to plan for purchases of raw materials, estimate material costs, gain inventory control, plan and track material requirements, reduce wastes and maintain accurate records (Schuh, 472).
The BOM Structure for an Assembly Line A manufacturing BOM entails all parts required to complete a product, inclusive of packaging materials for shipping. The module stores all information pertaining to manufacturing processes and when run, the bill of materials are exploded for finished products that have been ordered. this system calculates materials needed to be purchased and when then the manufacturing order should be started based on the set delivery date.
A BOM is the foundation of production planning systems because the information it provides is critical to manufacturing resource planning, material provision for production, product costing and plant maintenance.
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A BOM is the foundation of production planning systems because the information it provides is critical to manufacturing resource planning, material provision for production, product costing and plant maintenance.
A BOM is hierarchical and includes product codes, parts description, quantity, specifications and costs.
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A BOM is hierarchical and includes product codes, parts description, quantity, specifications and costs.
A single level bill of materials, each assembly is shown alongside corresponding quantities required to create a product.
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A single level bill of materials, each assembly is shown alongside corresponding quantities required to create a product. However, this type of BOM is unsuitable for complex products because it does not identify the relationship the parent-child parts relationship and thus difficult to establish the parts that should be replaced in the event that the product fails. On the other hand, a multi-level BOM offers more details, gives a parent-child parts relationship, and shows the total materials required (Schuh, 472).
A single level BOM A multi-level BOM A primary bill is a list of frequently used components for building a material and acts as the default in defining a job, rolling up costs and calculating cumulative item lead costs.
Oracle Master Scheduling uses a BOM for model and option class products to generate a list of available options.
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Oracle Master Scheduling uses a BOM for model and option class products to generate a list of available options.
A model bill of materials defines option classes to choose and specifies compulsory items required for each configuration for a model.
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A model bill of materials defines option classes to choose and specifies compulsory items required for each configuration for a model.
An option class it made of optional components that become a level in the model bill of materials.
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An option class it made of optional components that become a level in the model bill of materials.
When carrying out functions that require a BOM such as building an item and rolling up costs, one must specify whether to use the primary or alternate bill.
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When carrying out functions that require a BOM such as building an item and rolling up costs, one must specify whether to use the primary or alternate bill. While both bills may perform the functions, entries in the alternate bill cannot be revised.
Oracle Master Scheduling allows one to define item and routing revisions.
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Oracle Master Scheduling allows one to define item and routing revisions.
Each revision is unique to an alphanumeric revision identifier and revision date and according to the ASCII rules, each revision must be greater than the previous one.
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Each revision is unique to an alphanumeric revision identifier and revision date and according to the ASCII rules, each revision must be greater than the previous one.
When updating a bill, the revision dates should not overlap with existing dates because revisions are time stamped.
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When updating a bill, the revision dates should not overlap with existing dates because revisions are time stamped.
also, types of items assigned must be based on the type of bill and parent item type.
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also, types of items assigned must be based on the type of bill and parent item type. each component has attributes such as usage quantity, operation sequence, yield, supply type, supply sub inventory among others. every bill of material has information such as parent item, components, attachments and descriptive elements and every standard component has multiple reference designators and substitute components (Schuh, 478).
Valid Parent/Component RelationshipsComponentvalid relationships Parent BOM Item Type Component BOM Item Type Standard Item Standard Item Model Item Standard Item, Model Item, Option Class Item Option Class Item Standard Item, Model Item, Option Class Item
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Valid Parent/Component RelationshipsComponentvalid relationships Parent BOM Item Type Component BOM Item Type Standard Item Standard Item Model Item Standard Item, Model Item, Option Class Item Option Class Item Standard Item, Model Item, Option Class Item
Planning Item Standard Item, Model Item, Option Class, Planning Item Valid Component Attributes and Bill TypesComponentvalid attributes and bill types Component Attributes Standard Parent Item Model Parent Item Option Class Parent Item Planning Parent Item
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Planning Item Standard Item, Model Item, Option Class, Planning Item Valid Component Attributes and Bill TypesComponentvalid attributes and bill types Component Attributes Standard Parent Item Model Parent Item Option Class Parent Item Planning Parent Item
Item Yes Yes Yes Yes Item Sequence Yes Yes Yes Yes Operation Sequence Yes Yes Yes No Effective Date Range Yes Yes Yes Yes Planning Percent No Yes Yes Yes Yield Yes Yes Yes No
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Item Yes Yes Yes Yes Item Sequence Yes Yes Yes Yes Operation Sequence Yes Yes Yes No Effective Date Range Yes Yes Yes Yes Planning Percent No Yes Yes Yes Yield Yes Yes Yes No
Enforce Integer Requirements Yes Yes Yes Yes Include in Cost Rollup Yes Yes Yes No Supply Type Yes Yes Yes No Supply Subinventory Yes Yes Yes No Supply Locator Yes Yes Yes No
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Enforce Integer Requirements Yes Yes Yes Yes Include in Cost Rollup Yes Yes Yes No Supply Type Yes Yes Yes No Supply Subinventory Yes Yes Yes No Supply Locator Yes Yes Yes No
Mutually Exclusive Options No Yes Yes No Optional Flag No Yes Yes No Check ATP Yes Yes Yes No Minimum Quantity No Yes Yes No Maximum Quantity No Yes Yes No
Basis No Yes Yes No Include in Shipping Doc.
Yes Yes Yes No Required to Ship Yes Yes Yes No Required for Revenue Yes Yes Yes No Quantity Yes Yes Yes No
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Yes Yes Yes No Required to Ship Yes Yes Yes No Required for Revenue Yes Yes Yes No Quantity Yes Yes Yes No
Descriptive Flexfield Yes Yes Yes Yes Comments Yes Yes Yes Yes Benefits of ERP Systems i. Automation and streamlining of processes More manufacturing companies are using ERP solutions because they automate and streamline business processes with greater adaptability. ERP systems allow for availability of data from a centralized location and provide visibility in development, design, inventory, procurement and production functionalities. ERP allow employees to monitor production status in real time without dependence on a particular team. For example, a product design employee can check the progress of production and give updates on requirements of additional raw materials to the finance department (Aloini, 171). Automation of such process creates efficiency, improves productivity, minimizes errors and ensures that the company maintains its customer commitments while at the same time significantly increasing profitability.
ii. Quicker response to market conditions Also, ERP systems provide real data analysis on various functions thus enabling businesses to estimate, plan and respond to changing market requirements better. Regular reports generated by ERP systems help decision makers to understand the diverse market demands and capitalize on opportunities presented (Aloini, 173). A holistic perspective on the market requirements and detailed insights reduce the possibilities of making forecasting eras.
iii. Strategic decision making ERP solutions provide insights and visibility into the company’s business processes thus improving the decision making process by ensuring the decision makers make spot on, fast and informed decisions. Particularly, manufacturing businesses use performance metrics such as sales margins to remain aligned to goals. Visibility of internal processes allows for optimization of day to day operations.
iv. Minimizing costs ERP software makes it possible for manufacturing companies to reduce operational costs since the automated and streamlined processes with real time information replace the time-consuming and manual processes thus increasing worker productivity (Aloini, 174). In addition, ERP solutions minimize labor expenses, lower error rates and enhance precision; all which curtail losses. Particularly, the ability of the inventory management ERP to accurately identify inventory and integrate inventory management with production planning eliminates warehouse and excess inventory costs.
v. Better customer satisfaction More control over inventory, accurate production planning and streamlined process scheduling allows manufactures to improve on time delivery of products to their customers thus maintain customer satisfaction (Aloini, 176). ERP solutions offer data in real time and hence allow decision makers to take note of inventory levels at any given time.
Conclusion With manufacturing BOM and Inventory Management ERP, manufacturing plants can streamline their processes and utilize information more effectively. However, as ERP software adopts new technology such as mobile, cloud, analytics and big data, the ERP system will become a more effective tool for businesses in the manufacturing industry. despite the many benefits that ERP s bring to a manufacturing company, using any software does not help a business to achieve its goals and thus the need to integrate the right software solution based on the type of business and its organizational goals.

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