What is ERP?

 ERP stands for Enterprise Resource Planning, and it is a critical ingredient to the success of excellent manufacturing. Enterprise Resource Planning is a business philosophy that is based on the use of a single company-wide system to provide vital information about a business. It is called Enterprise Resource Planning because it can be used in any business enterprise. An ERP system consists of a central library of product and resource data in the form of master files that contain records for every item that is bought, made, or sold by the company. These master records are used for planning, scheduling, purchasing, production, costing and selling of all the products. A resource is anything that could potentially be used in the production or delivery of a finished product to a customer. Typical resources planned by ERP include raw materials, supplies, labor, energy, equipment, tools, and finances etc.

 An ERP system acts in a very similar way to the navigational system for a boat, it keeps track of where we are, where we have been, and where we are going as a business. It also provides guidance and advice to managers when things are getting out of control, it allows performance goals to be set and monitored, and enables management to follow up on areas where performance targets are being missed.

 A company with an effective ERP system in place has a definite competitive advantage, because they are using solid reliable data as a basis for decision-making, instead of relying of personal opinions and gut feelings.