Page 98 - DCAP302_ENTERPRISE_RESOURCE_PLANNING

Enterprise Resource Planning

notes 4. Inventory management
5. Invoice verification and material inspection

1. Pre Purchasing Activities: It specially includes items with services and items with
materials. For this data and manual entry efforts are reduced to minimum. The entering
service specification may be planned and unplanned.

Planned service specification means that services whose precise nature and intended scope
are already known at beginning of procurement project.
Unplanned service specifications are service, which are not defined initially. A procurement
project may include number of individual services, which can not or do not wish specify in
detail is having unplanned service specification.

2. Purchasing: The system performs the functions like procurement of materials and services,
determination of possible sources of supply for requirement identified by the materials
planning and control systems or arising directly within a user dept monitoring of deliveries
and payments of vendors etc.
3. Vendor Evaluation: This system also offers the users a point based evaluation system. This
evaluation is based on certain selection criteria the performance of vendor is measured
eg price, quality, delivery, support, replacement of returns, lead times etc. The scores are
computed automatically with the help of predefined criteria.

4. Inventory Management: Inventory management is not only related to the stock but also
handles goods movement and maintaining information pertaining to this like
(a) Stock value for inventory management

(b) Account assignment for cost accounting
(c) Corresponding G/L accounts for financial accounting via automatic account
assignment
5. Invoice Verification and Material Inspection:

(a) Starts with purchase requisition, continues with purchasing and goods receipt and
ends with invoice receipt.
(b) It allows invoices that do not originate in materials procurement to be processed e.g.
on line buying
(c) It permitted credit memos to be processed, either as invoice cancellation and
discounts
Sales and distribution: Tracks activities from the receipt of a request for qualification to billing
and shipping the products.
Order entry and processing: Automates the data entry process of customer orders and keep track
of the status of orders.
Warehouse management: Maintains records of warehoused goods and process movement of
products through warehouse.

Transportation management: Arranges, schedules and monitors delivery of products to customers
by trucks, trains and other vehicles.
Project management: Monitors costs and works schedules on a project by project basis.

Plant maintenance: Sets plans and oversees the upkeep of internal facilities.
Customer service management: Administers installed base service agreements and checks
contracts and warranties when customers call for help.

92 LoveLy professionaL university