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Unit 1: ERP Overview

notes

Task Suppose your father run a general store in a local area. If you implement ERP
over there what are the benefits your father get after implementing ERP.

1.4 evolution of erp

The evolution of ERP systems closely followed the spectacular developments in the field of
computer hardware and software systems. During the 1960s most organizations designed,
developed and implemented centralized computing systems, mostly automating their inventory
control systems using inventory control packages (IC). These were legacy systems based on
programming languages such as COBOL, ALGOL and FORTRAN. Material requirements
planning (MRP) systems were developed in the 1970s which involved mainly planning the
product or parts requirements according to the master production schedule. Following this route
new software systems called manufacturing resources planning (MRP II) were introduced in the
1980s with an emphasis on optimizing manufacturing processes by synchronizing the materials
with production requirements. MRP II included areas such as shop floor and distribution
management, project management, finance, human resource and engineering. ERP systems first
appeared in the late 1980s and the beginning of the 1990s with the power of enterprise-wide inter-
functional coordination and integration. Based on the technological foundations of MRP and MRP
II, ERP systems integrate business processes including manufacturing, distribution, accounting,
financial, human resource management, project management, inventory management, service
and maintenance, and transportation, providing accessibility, visibility and consistency across
the enterprise.

During the 1990s ERP vendors added more modules and functions as “add-ons” to the core
modules giving birth to the “extended ERPs.” These ERP extensions include advanced planning
and scheduling (APS), e-business solutions such as customer relationship management (CRM)
and supply chain management (SCM). Figure 1.6 summarizes the historical events related with
ERP.

figure 1.6: erp evolution

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