ENTERPRISE RESOURCE PLANNING

04 Dec 2018

ERP (Enterprise Resource Planning) is a concept to plan and manage company’s resources covering fund, human, machine, spare parts, time, material and capacities that have wide influence from top management to operational in a company to be utilized optimally for generate added value for all interested parties.

The concept aims to integrate the company’s activities to be more responsive to the various needs of the company such as: elimination of processes that do not need (process elimination), simplification of complex processes or rambling (process simplification), the unification of redundant processes (process integration), and automation of manual processes (process automation).

 

History of ERP Software Creation and Development

 

In the early 1960s, there was an information system called Material Requirement Planning (MRP) which was the initial stage of ERP software development with the concept of material needs planning with functions in the area of ​​Inventory Management and Company Production.

The concept of MRP began to develop in the 1970s to Close-Loop MRP until it was transformed into MRP II (Manufactur Resource Planning) in 1980 and created ERP which was an extension of some business processes in the 1990s.

 

The advantages of using this ERP system include:

  1. ERP offers an integrated system within the company, so that process and decision making can be done more effectively and efficiently.
  2. ERP also allows to integrate globally. Barriers that were in the form of currency differences, language differences, and cultural differences, can be bridged automatically, so that data can be integrated.
  3. ERP not only combines data and resources, but also eliminates the need for updating and rectification of many separate computer systems.
  4. ERP allows management to manage operations, not just monitor them. With ERP, management is not only able to answer the question ‘How are we?’ But more able to answer the question ‘What should we do to be better?’
  5. ERP helps smooth the implementation of supply chain management with the ability to integrate it.