An enterprise resource planning system is a software that ensures a smooth flow of commercial processes within a company. The recording and optimization of inventory movements and stocks, scheduling, sales and purchasing can also be handled on a cross-company basis. “As a rule, the aim of such a computerized system is to control ordering, stocking and sales “*.
An enterprise resource planning system, abbreviated as ERP, is a software-based application system with which different company divisions can work with and access independently of each other. In particular, all processes of procurement, transport, storage, picking and shipping of merchandise (merchandise management) are controlled. However, the process steps of transport, pickingand storage cannot be compared with the usually complex work steps in transport logistics. An ERP is usually designed for more manageable goods movements. An example is a classic retailer who displays his inventory in the local store and has a small replenishment depot in the basement or a separate room – in this case, several stores can also be networked together in order to share a larger warehouse. Large distribution centers, on the other hand, tend to rely on a warehouse management system and material flow control.
The functional scope of an enterprise resource planning system is fluid
If the functional scope of an enterprise resource planning system is extended by special personnel modules (human resources management) or modules relating to document management, it is still considered as an ERP. Moreover, it does not matter whether the system is closed, open or integrated.
- Closed ERP: Purchasing, sales, production and warehouse are covered by one system exclusively within one company.
- Open system: Individual modules, at least one, are adopted from other software systems.
- Integrated system: This is a ‘closed system’ which, however, allows interfaces to banks, suppliers, store systems, marketplaces (for example Amazon, Zalando).
The informationof an enterprise resource planning system consists of the classic master data (articles, suppliers, customers) and the so-called transaction data (quotations, delivery bills, notifications, orders, invoices).
Commercial processes or possible components at a glance
- Database maintenance (CRM) of suppliers / customers
- Booking of goods receipts – goods receipt
- Booking of goods issues – goods issue
- Simple inventory management
- Accounting / auditing
- Accounting
- Goods movement
- Offers (template system)
- Shipping processing
- Interface to the POS system (direct sales of the POS)
- Personnel management, time recording
- Data exchange, for example EDIFACT / EANCOM
- Controlling
- Marketing
- Interface to the online store / e-commerce system
- Option to send inventory notifications
- Interface to a production planning and control system (PPC system)
- Ordering
- Customer care
- Returns Management (RMA)
- Inventory processing
- Archiving
Summary – Enterprise Resource Planning System
An enterprise resource planning system covers all functions in purchasing (ordering) and sales within a company and, in addition to the flow of goods (warehouse and inventory management), controls the provision of inventory and provides the associated article, customer and supplier data in processed form. It also supports the user in order, quotation and invoice management, inventory and can generate statistics on collected data if desired. Thus, it is also an important tool for corporate marketing.
* Michael ten Hompel & Volker Heidenblut, Taschenlexikon Logistik, 3rd, revised and expanded edition, page 341.
Teaser image: Christoph Schachner
Also available in Deutsch (German)
