ERP - Business Process Modules

There are three different nature and types of businesses that are operated with the purpose of earning profit. Each type of business has distinctive features.

• Trading Business – Trading simply means buying and selling goods. Hence inventory accounting is required. This industry requires accounting as well as inventory modules
• Manufacturing Business – This type of business includes all aspects of trading business plus additional aspect of manufacturing. This type of industry requires accounting and complete inventory along with manufacturing module.
• Service Business – This type of business does not have any inventory. This industry does not require inventory module.

 

Different types of industries require different modules.

 

1. Financial Accounting Module: Following are the key features of this module:
   • Tracking of flow of financial data across the organisation.
   • General Ledger Accounting.
   • Account Payables
   • Account Receivables
   • Asset Accounting
   • Tax Configuration.

 

b.Controlling Module:

It controls the business flow in an organization. This module helps in analyzing the actual figures with the planned data and in planning business strategies.

Two kinds of elements are managed in Controlling –Cost Elements and Revenue Elements. Key features of this module are as under.

• Cost Center Accounting;
• Activity-Based-Accounting (Analyzes cross-departmental business processes);
• Product Cost Controlling
• Profitability Analysis
• Profit Center Accounting

c.Sales and Distribution Module

Sales and Distribution is used by organizations to support sales and distribution activities of products and services, starting from enquiry to order and then ending with delivery.

 

Sales and Distribution Process

• Pre - Sales Activities –identifying prospective customers, gathering data, contacting them and fixing appointments, showing demo, discussion, submission of quotations, etc.
• Sales Order – Sales order is recorded in our books after getting a confirmed purchase

 

order from customer.

• Inventory Sourcing – ensuring goods are ready and available for delivery.
• Material Delivery – Material is delivered to the customer as per sales order.
• Billing – raising an invoice against the delivery of material to customer.
• Receipt from Customer – This is a transaction of receiving amount from customer against sales invoice and shall have a linking with sales invoice.

 

Key features of Sales and Distribution Module are :

• Setting up Organization Structure creation of distribution channels, maintaining sales offices, storage location etc.
• Defining Pricing
• Setting up sales document types, billing types, and tax-related components
• Setting up Customer master data records

 

d.Human Resource Module

This module manages data within HR department and assist in following:

• hiring a person and evaluating performance
• promotions
• compensations
• record attendance
• advance or loan to employees
• Holiday master

 

e.Production Planning (PP) Module

PP Module is module that is designed specifically for production planning and management.

• Master Data – This includes the material master and bill of materials.
• SOP - Sales and Operations Planning (SOP) provides the ability to forecast sales and production plans based on historical, current and future data.
• DRP - Distribution Resource Planning (DRP) allows companies the ability to plan the demand for distribution centres.
• Production Planning – This includes material forecasting, demand management, long term planning and master production scheduling (MPS).
• MRP - Material Requirements planning relies on demand and supply elements with the calculation parameters to calculate the net requirements from the planning run.
• Capacity Planning – This evaluates the capacity utilized based on the work centres available capacity to show capacity constraints.

 

f.Material Management(MM) Module

MM Module as the term suggests manages materials required, processed and produced in enterprises.

• Purchase Requisition from Production Department: Production department sends a request to purchase department for purchase of raw material required for production.

• Evaluation of Requisition: Purchase department shall evaluate the requisition with the current stock position and purchase order pending position and shall decide about accepting or rejection the requisition.
• Asking for Quotation: If requisition is accepted, quotations shall be asked to approve vendors for purchase of material.
• Evaluation of Quotations: Quotations received shall be evaluated and compared.
• Purchase Order: Placing order, with date time quantity location etc.
• Material Receipt: This is a transaction of receipt of material against purchase order.
• Issue of Material: Material received by stores shall be issued to production department as per requirement.
• Purchase Invoice: This is a financial transaction. Should be tallied with goods received against purchase order.
• Payment to Vendor: Payment shall be made to vendor based on purchase invoice recorded earlier.

 

g.Quality Management Module

Quality Management Module helps in management of quality in productions across processes in an organization.

Quality Management module collaborates in

• procurement and sales,
• production,
• planning,
• Inspection.

• Quality Planning: Quality planning is the process of planning the production for meeting the customer requirementsin time, within the available resources.
• Quality Control: It is a system for ensuring the maintenance of proper standardsin manufactured goods
• Quality Assurance: Quality assurance concentrates onidentifying various processes, monitoring and measuring the performance, taking suitable actions on deviations and continuously improving the systems.
• Quality Improvement: Quality improvement is a never-ending process. The customer’s needs and expectations are continuously changing depending on the changes in technology, economy, political situation, ambitions and dreams, competition, etc.

 

 

h.Plant Maintenance Module

This handles the maintaining of equipment and enables efficient planning of production and generation schedules.

•Objectives of Plant Maintenance Module

• To achieve minimum breakdownand to keep the plant in good working condition at

 

the lowest possible cost.

• To keep machines and other facilities in a condition that permits them to be used at their optimum capacitywithout any interruption or hindrance.

• Equipment Master is a repository of the standard information that one needs related to a specific piece of equipment.
• Equipment/Plant Maintenance provides a variety of reports to help us to reviewand manage information about our equipment and its maintenance.
• Plant Maintenance (PM) Reports are used to review and manage information about preventive maintenance schedules and service types within any maintenance organization.
• Maintenance messages;
• The frequency of occurrencefor selected service types; and

• All equipment transactions.

 

i.Project Systems Module

Enables project management process such as cost and planning budget, scheduling, requisitioning of materials and services.

 

j.Supply Chain Module

This module provides extensive functionality for logistics, manufacturing, planning, and analytics.

In Supply Chain Management System, any product which is manufactured in a company, first reaches directly from manufacturer to distributors

Distributors supply that product to retailer and then finally customers receive that product from retailer. This is called Supply Chain

k. Customer Relationship Management (CRM)

Customer Relationship Management is a system which

• aims at improving the relationship with existing customers,
• finding new prospective customers, and
• winning back former customers.

This system can be brought into effect with software which helps in collecting, organizing, and managing the customer information.

Key benefits of a CRM module are as under.

• Improved customer relations: One of the prime benefits of using a CRM is obtaining better customer satisfaction.
• Maximize up-selling and cross-selling: A CRM system allows up-selling which is the practice of giving customers premium products that fall in the same category of their purchase. The strategy also facilitates cross selling
• Increase customer revenues: By using a CRM strategy for your business, you will be able to increase the revenue of your company.