Page 176 - DCAP307_PLANNING_AND_MANAGING_IT_INFRASTRUCTURE

Planning and Managing IT Infrastructure

Notes significantly reduces the productions planning time, material planning time and
also work order time. From the previous BOM the company makes everything
which is required for manufacturing the product through ERP.
Store: ERP reduces the time taken to know the inventory level and the inventory
valuation during the inventory audit. ERP reduces the time taken from material
movement and material traceability. It means tracking which item can be used for
which purpose and who can take which item. If it’s not returned in proper time then
the company charge that parson / department for that particular item. ERP reduces
to make material requisition slip. If a customer orders for 1000 items, then it is
easier to generate requisition slip through ERP, because ERP stores it when it is
made for the first time. It also makes Goods Receipt Notes. Company can make
Delivery Challan or Delivery Order for sales and job work.
5. Unaccounted Inventory loss: Any company which is working through pen paper, they
tend to face high amount of inventory losses, as it is not possible to memorize each and
every item which is there in the store. If the company uses ERP they can stop the unaccounted
inventory losses. And it is seen that the company who don’t follow the ERP has at least 2%
inventory loss over the inventory valuation where it is very easy to reduce it to less than
0.5 % using ERP. Through the ERP the company can easily keep track of the items which
are in the store. The company can easily track who is responsible for which item and the
purpose also. In this way the company can easily protect the unaccounted inventory loss.
6. Ease of sales planning: Sales planning help the company to quote competitively in the
complex market environment. Normally the quotation is done by raw materials cost
multiplied by overhead cost. And ERP calculate both the things easily, more effectively
and more accurately. Company can calculate overhead cost of the materials, overhead
time very easily using the ERP. Through ERP software a company can quote more
competitive rates than the other company. So it increases the possibility that they win the
tender and after bagging the tender it reduces the possibility that they end up making loss.
ERP reduces the winner’s curse by a huge margin.

7. Over consumption: Because people are more accountable they tend to be more careful and
the accountability comes from monitoring any extra usage of raw materials or consumables
during production. ERP reduces over consumption during the production. Through ERP
the company knows the inventory level of the store. So it is easier to purchase or produce
the material as per requirement. It also reduces the misuse of the raw materials during the
production which means the production department uses the exact amount which is required
during the production. ERP reduces 3% of material consumption easily. It also increases
the growth of the learning curve.

!

Caution People tend to be very careful when the companies produce any product during
their work.
8. Strong organizational process: Through ERP any company can make strong organizational
process. ERP focuses that the companies follow few industry best practices. ERP ensure the
company is on time for the full delivery. There are different strategies used by the different
companies to grow up their business. Some basic rules are

Just In Time (JIT)
SCRUM
Getting Things Done (GTD).

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