The description of fixed functions of ERP systems for a mashinostoroyeniye

"The" functionality

First of all, it should be noted that the mechanical engineering is for ERP systems "the territory" — well-known that enterprise management systems began the development as an optimization appliance of activity of industrial enterprises, and to other sectors of economy extended later. Respectively, in mechanical engineering functions, "primordial" for ERP systems, on which the systems of this class are based are used. It is possible to carry to a similar "standard" set of the functional units implementing the concept of ERP at the level of an information system:

• Block of production resource planning;
• Block of financial accounting and planning;
• Control block fixed assets;
• Control block personnel;
• Block of commodity accounting and management of warehouse transactions/stocks;
• Control block purchases;
• Control block logistics;
• Control block marketing efforts;
• Control block order processing;
• Control block sales;
• E-commerce block;
• Business intelligence block;
• Control block projects;
• Control block design-technology documentation;

The listed above list, actually, reflects a full range of functions of a modern ERP system (taking into account variations at the level of specific software products). Blocks of production resource planning, management of design-technology documentation and project managements provide control automation with the business processes which are directly connected with productive activity of the enterprise.

Production resource planning

In particular, within the first of three listed blocks decide, including, such tasks as demand management and formation of sales plans and production; materials requirement planning; and production capacity planning; and also, in limited scope, inventory management and purchasing activity. As a rule, these functions are implemented within methodology of MRPII though recently purchases popularity newer methodology of APS (Advanced Planning and Scheduling is Expanded volume scheduling) providing synchronous planning of necessary production capacities and materials requirements, unlike the iterative, provided MRPII. Besides, there are program implementations which are based on other approach to production planning — "lean production" (Lean Manufacturing). If MRPII and APS are based on "pushing through" (push) of production based on a demand forecast, then at the organization of "lean production" "pulling" (pull) based on real demand is used. In this case the main accent becomes not on resource requirement planning (raw materials and capacities), and on the most accurate organization of interaction of all divisions of the enterprise.

Management of technology data

The second of listed three functional units (management of design-technology documentation) is necessary for review production schedules with technology specifications of products and the corresponding refining of these plans. As a matter of fact, without it detailed planning of finished product output and semi-finished products and also purchase planning of raw materials and accessories is impossible. In spite of the fact that this block (Product Data Management — PDM) is stated as an obligatory part of ERP-sistemy, it is implemented within single solution by only rather small number of vendors (for example, SAP, Oracle, Infor), in the majority of cases its functionality is provided due to integration of ERP-sistemy and the specialized PLM/PDM-solution. Moreover, even if the PDM block is also present at a system initially, very often its functions are all the same performed by the external specialized solution. This results from the fact that PDM/PLM system is much closer to the CAD/CAM/CAE systems, the problem of integration into which at the real enterprises is much more important than a problem of integration with ERP-sistemy. For this reason and taking into account that at ERP-sistemy engineering enterprises, as a rule, are implemented much later, than CAD/CAM/CAE and PLM/PDM, customers prefer integration of "the" management systems for design-technology documentation with ERP-sistemy. Besides, owing to specificity of PDM systems and existence of serious differences of the principles of their work from like those at ERP-sistemy, the integral units of PDM are functionally limited and often just do not correspond to requirements of the enterprises.

Management of project activity

The third functional unit, project managements provide control automation with business processes, though is not specific to production (it is used by both the project organizations and service companies and investment), is important for engineering enterprises in the conditions of the happening transition to serial and job order production and also in the knowledge-intensive productions which initially release the products in small lots or in general by the piece. In the specified context planning and industrial process control is exercised at two levels: at the enterprise level in general and at the level of accomplishment of separate external orders. Process of accomplishment of each external order (at its sufficient uniqueness), at the organizational level is considered as the separate project within which production capacity planning, materials requirements and also financial planning and budgeting is performed. Thus, the project management system should provide both management of development of each project separately, and project portfolio management of the enterprise in general.

Inventory management, purchases and logistics

Also blocks of commodity accounting and management of warehouse transactions / stocks are directly connected with production planning; purchase managements; and the logistics managements making basic functionality of SCM (Supply Shain Management). If at the level of the modules MRPII or APS materials requirement, for accomplishment of the production plan is calculated, the module SCM provides its satisfaction, optimal from the economic point of view, taking into account the existing warehouse stocks, already made orders, volumes of the materials and component parts which are at present en route from the supplier to a warehouse, etc. Also, the choice optimal for each purchase order of materials or component parts of the supplier taking into account the history of relationship with partners, the current selling prices at everyone, a difference in transportation costs, the quality level of deliverable materials and other factors is provided here. Thus, these three functional units of SCM supplement a circuit of production planning and provide timely and cost-efficient execution of the orders arriving from its party. Besides, functions of the module SCM can be used also for purchase of the tool and the equipment, ensuring auxiliary productions and also non-productive activity of the enterprise.

Management of fixed assets, maintenance and repairs

The control block is also close connected by fixed assets (Enterprise Assets Management — EAM) with products production process. In it are implemented as functions of accounting and management of fixed assets (buildings, constructions, the equipment, etc.) that allows the management of the enterprise to be constantly informed on the level of their moral and physical deterioration and also cost assessment, and gives the chance of strategic planning of their updating, and control function of a MRO (Maintenance and repairs) which allow to estimate actual production capacity at the tactical and operational levels, to plan optimal loading of the equipment and also not to allow or reduce the probability of emergence of accidents and related failures of accomplishment of the production plan and the corresponding losses.

Financial and accounting functions

Other of the functional units listed at the very beginning of material have no tough binding to productive activity, and to mechanical engineering in particular, however can need additional setup under the corresponding specifics. The block of financial accounting and planning provides, as well as in other industries, reflection of all economic transactions in accounting, financial, managerial and tax accounting, planning and budget performance monitoring, management of cash flows, creation and accounting of payment documents, formation of the internal and external reporting, etc.

Personnel management

The control block at engineering enterprises, first of all, provides with personnel payroll of employees by the techniques accepted at the enterprise and also all charges and deduction. It provides automation of maintaining professional, the soldier and pension accounting, a time recording, planning and maintaining the staff list, personnel document flow, information analysis on labor productivity and also formations of all internal and external reporting. Besides, functional filling of the module HRM (Human Resource Management) allows to perform planning of the personnel budget, to create a talent pool, to manage motivation of employees, compensations and also advanced training, career development, etc.

Customer relationship management

Control blocks marketing efforts, managements of order processing, sales management and e-commerce make basic functionality of CRM (Customer Relationship Management). From it industrial enterprises most often use only control block by order processing as many plants prefer to cooperate with wholesalers and not to work with the end consumer, or make unique products which sale happens only by request and, respectively, does not require carrying out marketing efforts, traditional for products of broad consumption. At the same time, rather large number of the enterprises making goods of final consumption opened trading houses for sale of the products or participates in electronic biddings on the platforms B2B or B2C. In these cases the functionality of CRM is demanded, and sometimes even the separate CRM system which is integrated with ERP is implemented.

Business intelligence

The block of a business intelligence provides the management and managers of the lower links of operational information about the state of affairs at the enterprise, allows to make the directed analysis for the purpose of identification of weak points, assessment of activity of separate divisions and their management, identification of sources of profit earning and sources of losses, perspective and deadlock activities, etc. All this information is presented in the form of the analytical reports constructed on the scheme set in advance and created automatically, on demand. Besides, more "advanced" users can independently create reports of any format for the solution of special tasks of the analysis of business information.

The similar functionality, on the one hand, is in demand as the management of the enterprise simply is very frequent does not possess the complete information that it really happens there. As result, sometimes even implementation projects of the systems of a business intelligence implemented in the form of independent products are implemented. From other party, a BI system only finds and provides only that information which is in a system in the set form. Therefore in order that the business intelligence was qualitative, it is necessary that all events which are taking place at the enterprise were fixed in the unified information system. And it is possible only at full-scale implementation of the Enterprise resource planning and the corresponding reorganization of an organizational system. In the majority of cases such ideal conditions are simply unattainable, respectively, and the advantage of a subsystem of a business intelligence becomes disputable.

A system should be complete but it is not obligatory - monolithic

It is possible to note that the mechanical engineering requires functionally complete ERP system with the developed "production" functionality. At the same time, it does not mean that "neproizvolstvenny" functions can be implemented in it at the rudimentary level or are not implemented in general. In that case this system, actually, it will be necessary to call not ERP, but MRPII or an APS system, and to customers it is necessary to add functionality of the financial block, control block personnel, CRM and SCM by means of integration into separate solutions of third-party developers that is integrated to increase in the corresponding costs and risks. At the same time, it should be noted that at the Russian market there are today functionally complete ERP systems which have blocks of financial accounting and planning and personnel management simply are not localized. Thus, it turns out that a system conforms to all requirements to ERP, but customers the incomplete functionality compensated for the account of integration into solutions of best-of-breed is all the same offered. On the one hand, when choosing such solution it is necessary to estimate very carefully possible ghost effects, but with another — successful experience of use of integration of the ERP system into the solutions HRM confirms an opportunity and even an economic benefit of use of similar solutions.

More detailed information on the market of ERP systems in mechanical engineering and military industrial complex in the report  of TAdviser.