What is the abbreviation of ERP? Can you give a brief introduction?

Enterprise resource planning is written in Chinese! It is a modern enterprise management software or management concept!

The concept of ERP system and its management thought

In the early 1990s, Gartner Group Inc, a famous American IT analysis company, predicted the development trend and upcoming changes of manufacturing management information system in the information age according to the development of IT (information technology) and the demand of enterprises for supply chain management at that time, and put forward the concept of ERP (enterprise resource planning).

In recent years, with the acceleration of global economic integration, the rapid development of IT technology, and the wide application of Internet/Intranet technology and e-commerce, human beings have entered the era of knowledge economy from the era of industrial economy. In the era of knowledge economy, the business environment in which enterprises live has undergone fundamental changes. Rapidly changing customer demand, accelerating technological innovation, shortening product life cycle and increasingly fierce market competition constitute three major service forces that affect the survival and development of modern enterprises: customer, competition and change (3C for short). In the era of industrial economy, it is difficult for large enterprises to achieve competitiveness in today's market through large-scale production. In the era of industrial economy, the business rules, "bureaucratic" management mode and management method based on MRPII application are no longer applicable to the development of today's enterprises, and even seriously affect their survival. In order to adapt to the external environment characterized by "customer, competition and change", enterprises must carry out the revolution of management thought, the reengineering of management mode and business process, and the reform of management means (called 3R by Hampson), which triggered a management mode with BPR (business process reengineering) as the main content all over the world.

I. Development of ERP system

ERP system is an enterprise management software system that mainly manages material resources, capital resources and information resources for manufacturing industry. In order to fully understand the concept of ERP, it is necessary to review the development of ERP system first.

After the industrial revolution in the eighteenth century, mankind entered the era of industrial economy, and the main body of social economy was manufacturing. The competition in the era of industrial economy is the competition of product production cost, and mass production is an effective way to reduce production cost. Due to the development of production and technological progress, mass production has brought many difficulties to the manufacturing industry, mainly in the following aspects: raw materials needed for production can not be supplied on time or in short supply; Parts production is not matched, and the backlog is serious; The production cycle of products is too long and difficult to control, and the labor productivity decreases; The backlog of funds is serious, the turnover cycle is long, and the efficiency of capital use is reduced; Changes in market and customer demand make business plans difficult to adapt. In short, the main contradiction in reducing costs is to solve the problem of overstock and shortage of inventory.

In order to solve this key problem, American Production and Inventory Control Association (APICS) was established on 1957, and began to study and spread the theory of production and inventory control. With the commercial application of computers in 1960s, the first set of MRP (Material Requirements Planning) software came out and was applied to enterprise material management. In 1970s, on this basis, on the one hand, people incorporated the capacity operation plan, workshop operation plan and procurement operation plan into MRP, and at the same time, they added the feedback information from workshops, suppliers and planners during the implementation of the plan, and used this information to balance and adjust the plan, thus forming a unified closed-loop system around the material demand plan, which is the closed-loop MRP developed from the early MRP. Closed-loop MRP decomposes material requirements every week or even every day, making MRP a practical planning system and tool, not just an ordering system, which is a major development of enterprise logistics management.

The appearance of closed-loop MRP system unifies all subsystems of production planning. As long as the master production plan is really worked out, the closed-loop MRP system can run well. But this is not enough, because in the management of enterprises, production management is only one aspect, which involves logistics, and logistics is closely related to capital flow. In many enterprises, accounting is managed separately, which leads to repeated data entry and storage, and even inconsistent data. It reduces efficiency and wastes resources. Therefore, people think that an integrated management system should be established to eliminate unnecessary repetitive work, reduce the inconsistency between data and improve work efficiency. To realize the unified management of capital flow and logistics, it is required to combine the financial subsystem and the production subsystem to form an integrated system, which makes the closed-loop MRP take a big step towards MRP II. Finally, in the 1980s, people integrated manufacturing, finance, sales, procurement, engineering technology and other subsystems into an integrated system, which was called manufacturing resource planning system, abbreviated as MRP in English. In order to distinguish it from the material requirements planning system (also abbreviated as MRP), it is recorded as MRP II. Under careful planning, MRP II can effectively utilize various manufacturing resources, control capital occupation, shorten production cycle and reduce costs, but it is limited to the management of internal logistics, capital flow and information flow. Its most significant effect is to reduce inventory and material shortage.

In the middle and late 1990s, the real society began to undergo revolutionary changes, that is, from the era of industrial economy to the era of knowledge economy, the background and competitive environment of enterprises have changed greatly, and the ERP system of enterprise resource planning came into being under this background. In the design of ERP system, it is considered that it is impossible to effectively participate in the market competition only by the resources of its own enterprises. All parties involved in the operation process, such as suppliers, manufacturers, distribution networks and customers, must be brought into a close supply chain, so as to effectively arrange the production, supply and marketing activities of enterprises, meet the needs of enterprises to use all market resources quickly and efficiently for production and operation, further improve efficiency and gain competitive advantage in the market. At the same time, it is also believed that enterprises should organize not only "mass production" but also "multi-variety and small batch production" to adapt to the changes in market demand. When these two situations coexist, it is necessary to make plans in different ways.

Second, the difference between ERP system and MRPII

ERP is an enterprise management system developed on the basis of MRPII. In order to further understand the concept and main functions of ERP system, it is necessary to clarify the difference between ERP and MRPII.

1. Differences in resource management scope

MRP II mainly focuses on the management of human, financial and material resources within enterprises, while ERP system expands the scope of management on the basis of MRPII. It integrates customer demand, manufacturing activities within the enterprise and manufacturing resources of suppliers, forms a complete supply chain of the enterprise, and effectively manages all links in the supply chain, including order, procurement, inventory, planning, manufacturing, quality control, transportation and transportation.

2. Differences in production mode management.

MRP II system divides enterprises into several typical production modes for management, such as repeated manufacturing, mass production, make-to-order production, assemble-to-order and make to stock, and each mode has a set of management standards. In the late 1980s and early 1990s, in order to keep up with market changes, enterprises mainly adopted multi-variety, small-batch production and kanban production. Single production mode develops to mixed production, and ERP can well support and manage the mixed manufacturing environment and meet the diversified business needs of enterprises.

3. Differences in management functions

In addition to the manufacturing, distribution and financial management functions of MRPII system, ERP also adds transportation management and warehousing management to support the material circulation system in the whole supply chain. Support quality management, laboratory management, equipment maintenance and spare parts management of production assurance system; Support the management of workflow (business process).

4. Differences in transaction control.

MRP II controls the whole production process by rolling the plan in time, which has poor real-time performance and can only realize the control in the process. ERP system supports on-line analytical processing OLAP (online analytical processing), after-sales service and quality feedback, and emphasizes the pre-control ability of enterprises. It can integrate design, manufacturing, sales and transportation, and carry out various related operations in parallel, providing enterprises with real-time analysis ability on key issues such as quality, adaptation to change, customer satisfaction and performance.

In addition, in MRPII, the financial system is only a summary of information, and its function is to transform the quantitative information in supply, production and sales into value information, which is the embodiment of logistics value. ERP system integrates financial planning function and value control function into the whole supply chain. For example, in the production planning system, in addition to retaining the original master production plan, material demand plan and capacity plan, the sales execution plan SOP and profit plan are also expanded.

5. Differences in transnational (or regional) commercial transactions.

Nowadays, with the development of enterprises, the coordination between organizational units within enterprises and between enterprises and external business units has become more and more important. ERP system can support the application requirements of multinational operation in many countries, regions, factories, languages and currencies.

6. Differences in computer information processing technology

With the rapid development of IT technology and the application of network communication technology, ERP system can realize the integrated management of the whole supply chain information. ERP system adopts client/server (C/S) architecture and distributed data processing technology, and supports Internet/Intranet/Extranet, e-commerce and EDI. In addition, interoperability among different platforms can be achieved.

Third, the management thought of ERP system

The core management idea of ERP is to realize the effective management of the whole supply chain, which is mainly reflected in the following three aspects:

1, which embodies the idea of managing the whole supply chain resources.

In the era of knowledge economy, it is impossible to effectively participate in market competition only by relying on the resources of its own enterprises, and all parties involved in the operation process, such as suppliers, manufacturers, distribution networks, customers and so on. , must be incorporated into a close supply chain, so as to effectively arrange the production, supply and sales activities of enterprises, meet the needs of enterprises to use all market resources of the whole society for production and operation quickly and efficiently, so as to further improve efficiency and gain market competitive advantage. In other words, modern enterprise competition is not the competition between individual enterprises, but the competition between one enterprise supply chain and another. ERP system realizes the management of the whole enterprise supply chain and meets the needs of market competition in the era of knowledge economy.

2. Reflect the ideas of lean production, synchronous engineering and agile manufacturing.

ERP system supports the management of mixed production mode, and its management ideas are manifested in two aspects: one is the idea of "lean production", which is the business strategy system put forward by MIT. That is, when an enterprise organizes production by mass production, it brings customers, sales agents, suppliers and cooperative units into the production system. The relationship between enterprises and sales agents, customers and suppliers is no longer a simple business relationship, but a cooperative partnership with * * * interests. This kind of partnership constitutes the supply chain of enterprises, which is the core idea of lean production. The second is the idea of "agile manufacturing". When the market changes and enterprises meet specific market and product requirements, the basic partners of enterprises may not be able to meet the requirements of new product development and production. At this time, the enterprise will organize a short-term or one-off supply chain composed of specific suppliers and sales channels to form a "virtual factory", regard suppliers and cooperative units as components of the enterprise, and adopt "synchronous engineering" to organize production, so as to bring new products to the market in the shortest time and keep products at all times.

3. Reflect the idea of planning in advance and controlling in the process.

The planning system in ERP system mainly includes master production plan, material demand plan, capacity plan, purchase plan, sales execution plan, profit plan, financial budget and human resource plan, and these planning functions and value control functions have been completely integrated into the whole supply chain system.

On the other hand, the ERP system defines the accounting subjects and accounting methods related to the transaction, so as to automatically generate accounting entries when the transaction occurs, and ensure the synchronous record and data consistency of capital flow and logistics. Therefore, according to the present situation of financial funds, we can trace the ins and outs of funds, further trace related business activities, change the situation that funds information lags behind material information, and facilitate the control and real-time decision-making in the process.

In addition, the functions of planning, transaction processing, control and decision-making are all realized in the business process of the whole supply chain. It is required to give full play to everyone's work potential and sense of responsibility in the business process of each process, and emphasize the spirit of cooperation between processes, so as to give full play to everyone's subjective initiative and potential in an organic organization. Realize the transformation of enterprise management from "towering" organizational structure to "flat" organizational structure, and improve the response speed of enterprises to dynamic changes in the market.

In a word, with the rapid development and application of IT technology, ERP system can transform many advanced management ideas into practical computer software systems. Nevertheless, there are still some shortcomings in the ERP system, mainly in the following aspects:

First, although ERP system considers how enterprises adapt to the changes of market demand and how to use all market resources of the whole society quickly and efficiently for production and operation, it does not fundamentally consider the requirements of continuous technological innovation and rapid changes in market competition environment in the era of knowledge economy for dynamic adjustment of enterprise production processes and management processes. At present, ERP systems are generally provided to users in a pre-fixed mode structure. When an enterprise establishes its management system, first of all, the software cannot flexibly adapt to the requirements of personalized enterprise management process, which has to require the enterprise management process to run according to the inherent mode of ERP system, otherwise it will be used after secondary development; Second, once the ERP system is implemented, it is difficult for enterprises to achieve the effect of comprehensive reorganization from organizational structure, production process and business process when they need to carry out management and business process reengineering, that is, the structure and function of the existing ERP system restrict the dynamic reorganization process of enterprises. Therefore, the further development of ERP system needs to separate the management mode from the software system in order to realize the dynamic reorganization process of enterprises.

Secondly, the development of ERP system originated from manufacturing industry, which is mainly used in manufacturing industry (the leading industry in the industrial economy era). It can be said that the advanced management thought of ERP has been fully exerted in production management. Although ERP system can be applied to non-manufacturing industries, such as financial management, distribution management, human resource management, etc., it will be difficult to fully reflect the advanced management ideas of ERP. In the current era of knowledge economy, service industry is the leading industry of social economy. The application of ERP in the service industry, especially in tracking customer service and realizing online customer service (like the function of foreign HelpDesk software system), is difficult to achieve rapid response and high satisfaction with customer service requirements.

Third, in the era of industrial economy, enterprise value is mainly the value of tangible capital (including physical objects and funds) and intangible capital. In the later period of industrial economy, people realized human resources and their capital value. Nowadays, in the era of knowledge economy, intellectual capital has become an important part of enterprise value. In order to enhance the value of enterprise intellectual capital, people realize the importance of knowledge management (including knowledge acquisition, processing and use, etc.). ). ERP system is still blank in how to establish knowledge management system and management means in enterprise or enterprise supply chain.

Fourthly, although ERP system provides workflow management, the workflow in ERP system is not closely integrated with the business process composed of ERP system functions, so there is no control and management of business process.

With the further development of IT technology and modern management ideas, the functions of ERP system will continue to develop. The development and application of ERP system will certainly improve the management level of China enterprises and greatly enhance the competitiveness of China enterprises in the international market.

Successful application mode of ERP system

Dr. Zhang Houqi from Beijing Hampton Management Consulting Co., Ltd.

"Black hole" in the application of information technology

Computer was applied to enterprise management in the early 1960s, and its advanced information processing can promote the standardization and innovation of enterprise management. It is predicted that the application of computer information processing technology in enterprises will greatly improve the economic benefits of enterprises. However, facts show that before the 1990s, the application of computer information processing technology in enterprises did not bring the expected visible economic benefits to enterprises.

According to an American statistic, in the whole 1980s, American enterprises invested 1 trillion dollars in the application of information technology. Despite the huge investment, the productivity of white-collar workers did not change substantially throughout the 1980s. During the ten years from 1975 to 1985, the number of blue-collar workers decreased by 6%, the actual output increased by 15%, and on the surface, the labor productivity increased by 2 1%. However, during the same period, the number of white-collar workers increased by 2 1%, and the productivity decreased by 6% compared with the actual output increase of 15%. None of these investments have achieved the expected goals. Economists call it "productivity paradox", and many enterprises think that their investment in information technology application has fallen into a "black hole".

According to the investigation of relevant parties in China, in the 1980s, Chinese enterprises had invested 8 billion yuan in the application of MRP II system, but the success rate of application was less than 10%, and few of them achieved the expected goal.

This phenomenon is particularly unreasonable in the current situation that global enterprises invest more in IT applications than in other capital goods. There is no doubt that the application of information technology has the potential to improve the efficiency of business processing, but the problem is how to release this alternative energy. This requires us to first analyze the reasons for the failure of information technology application.

Second, the reasons for the failure of information technology application

One of the reasons why the application of information technology has not released its alternative energy is that enterprises always follow the old or existing methods when applying information technology, instead of paying attention to how the work should be done, and then considering the application of information technology to help achieve it. The application of office automation system is a good example. The application of office automation information system dreams of "paperless office", which leads to more paper use. Whether the report is valuable or not, there are more and more reports with more and more beautiful formats. People spend a few days writing reports and drawing beautiful charts, hoping that higher management will recognize or approve their work. Because it is so easy to modify words and charts on office automation software, people modify and improve them again and again, so that they are appreciated by managers at all levels. The problem is that the process and way of handling office affairs have not changed.

When applying information technology to provide services to customers, it often leads to some problems. Running computer information processing technology to directly simulate manual business processing mode and process will automatically handle many unreasonable or invalid jobs (which may exist in manual business processing mode). Because people must work according to the requirements of computers rather than customers, the work efficiency may not be as good as that of manual methods. People often realize that it is beneficial to make some changes to the process, but it is often shelved because it is too expensive and time-consuming to change the computer system. Therefore, people often think that the application of information technology will lead to inflexibility rather than flexibility, and the application of information technology can not achieve the expected results at all.

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