The major benefit of ERP systems is the elimination of manual
processes that cause operational inefficiencies and poor data quality. The
following example illustrates how ERP improves the order fulfillment
process (Koch). Upon entry of a customer order into an ERP system, the
customer services representative has access to all the information
necessary to process the order such as the customer's credit rating and
order history from the finance module, the company's inventory levels from
the warehouse module and the shipping dock's trucking schedule from the
logistics module. Staff in all departments have access to the same
information and know the status of an order at any point in time. And,
after one department finishes with the order it is automatically routed via
the ERP system to the next department. The automated order process means
that the order gets processed more quickly and, therefore, customers get
their orders faster and with fewer errors than before. ERP can apply the
same benefits to a variety of other major business processes such as
employee benefits or financial reporting.
The top five reasons companies implement ERP include: (Koch)
Integrate financial informationâ€"ERP creates a single version of the
truth that cannot be questioned because everyone is using the same
Integrate customer order informationâ€"Companies can keep track of
orders more easily, and coordinate manufacturing, inventory and
shipping among many different locations at the same time.
Standardize and speed up manufacturing processesâ€"Standardizing these
processes and using a single, integrated computer system can save
time, increase productivity and reduce head count.
Reduce inventoryâ€"ERP reduces work-in-progress inventories and it can
help users better plan d...