Unit 4. Chapter 21. Operations Planning

Question 1

Def. ERP

Answer 1

Enterprise Resource Planning: The use of a single computer application to plan the purchase and use of resources in an organisation to improve the efficiency of operations.
Supply chain management (SCM) is the main application for ERP software.

Question 2

Def. Supply chain

Answer 2

All of the stages in the production process from obtaining raw materials to selling to the consumer - from point of origin to point of consumption.

Question 3

How does ERP help with the main stages of SCM? (6)

Answer 3

• Plan: Deciding which resources (workers and machinery) are needed and their quantity
• Suppliers: Choosing cost effective suppliers and order to arrive in time
• Costs: At all stages costs can be calculated to help decide on appropriate pricing
• Manufacture: Check the quality and rate of progress
• Deliver: Pick most efficient and effective transport systems
• Returns: If there’s a faulty product, it would be taken back and added to costs to the business

Question 4

Benefits of ERP (6)

Answer 4

• Supply only according to demand -> lead production with minimum waste
• JIT applicability
• Reduces costs at all stages
• Improved delivery times and consumer services
• Departments are more linked by 1 database - allowing better coordination
• Increase in information for managers to analyse for future decision making.

Question 5

Limitations of ERP (3)

Answer 5

• The system is expensive
• The multiple ways of operating in different departments is reduced to one -> may cause resentment and require training
• Full implementation of ERP may take 1-3 years, and the technology might have advanced even further (fast changing markets)