What is Enterprise Resource Planning?

Enterprise Resource Planning generally refers to process management software that helps organizations to integrate operations, systematize standards and streamline procedures. Software giant Microsoft, like so many companies that produce IT solutions, sell cutting-edge Enterprise Resource Planning software. These programs help with financial management, such as improving control over cash flows, and help with supply chain management, such as through centralizing purchasing, manufacturing and inventory systems. Enterprise Resource Planning applications collect business intelligence, improve customer relationships and increase the effectiveness of human resources activities.

Production Management

Enterprise Resource Planning software is used for production manufacturing purposes. These software programs help with resource planning, coordination, procurement and commodity management. Production managers use Enterprise Resource Planning software to secure the correct materials in order to meet scheduled production needs and unexpected customer requests. Production managers can use this helpful software for coordinating run forecasts, conducting material analysis, maintaining stock levels and tracking in-transit products. They also use it to conduct annual production forecasts that are used to renegotiate contracts, drive accountability with vendors and promote production accuracy. Enterprise Resource Planning applications is used to compare historical customer demand, market volatility and labor scheduling data to make better decisions. Production managers sometimes use these software solutions to meet with engineering, procurement and quality management leaders in order to identify issues, determine solutions and recognize opportunities.

Finance Operations

Enterprise Resource Planning software is used by finance and accounting leaders for budget planning, risk forecasting, predictive analysis, monthly forecasts, internal audits and trend evaluations. Enterprise Resource Planning software helps management to understand the big picture of integrated operations in order to provide technical and strategic support to executives. Finance and accounting leaders use Enterprise Resource Planning software to analyze, integrate, and summarize data used for recommendations and insightful analysis. From an operation perspective, these managers will use Enterprise Resource Planning applications to better track and improve expenditures, overhead rates, capacity planning and overhead processes. Enterprise Resource Planning software can be used to prepare routine and ad hoc reports through generating financial models, variance analysis and presentation materials that support executives. It is usually used to perform financial analyses that support monthly forecasts and assists with the development of gap closing measures.

Inventory Forecasting & Demand Planning

Enterprise Resource Planning is always used for inventory forecasting and product demand planning because these programs generate periodic forecast reports and statistical models for inventory management. Business leaders, such as warehouse and supply chain managers, use them to continuously improve forecasting metrics, techniques and overall accuracy. Many companies now use Enterprise Resource Planning applications for the preparation of detailed inventory plans that help with reducing costs and streamlining processes. Inventory managers use these software programs to manage the company’s forecast planning performance using inventory level, production speed and product demand data to estimate future output. Production managers may work with inventory managers to gather, analyze and evaluate Enterprise Resource Planning date to develop solutions for increasing production. Supply chain managers will use these applications to design and develop metrics that provide accurate forecast.

Related Resource: How Do You Become an Operations Manager?

Other business leaders, such as sales, marketing, customer service and information technology managers, may also contribute Enterprise Resource Planning data. They usually access this data for reporting, measurement and performance purposes.