Enterprise Resource Planning (ERP) integrates core business areas such as manufacturing, distribution, financials and human resources. ERP is often implemented in companies together with process-oriented organization or Supply Chain Management (SCM). In order to manage the information-flow of such structures, new IT-systems are generated - known as ERP-Systems. IT-systems of this kind allow managers from all departments to look vertically and horizontally across the organization to see what others are accomplishing or not. It attempts to integrate all departments and functions across a company onto a single computer system that can serve all those different department's particular needs. ERP-systems also implement and automate business processes, putting them into a useful format that is standardized across the corporation and between their suppliers and customers. ERP-systems capture data about historical activity, current operations and future plans and organize it into information people can use to help develop business strategies.
In the ERP industry, the systems are often referred to as the 4M's. Man, Money, Materials and Machines. This type of system brings all four aspects of business together, giving them a synergistic value. ERP is an enabling technology that can give corporations a strong competitive edge. In addition, this technology is as close to virtual enterprises as business today has ever seen.
Evolution of ERP.
The history of ERP can be traced back to the 1960's, when the focus of systems was mainly towards inventory control. Most of the systems software were designed to handle inventory based in traditional inventory concepts. The 1970's witnessed a shift of focus towards MRP (Material Requirement Planning). This system helped in translating the master production schedule into requirements for individual units like sub assemblies, components and other raw material planning and procurement.