enn570erp (purchasing,material management on erp)
*costs data system on ERP:
There are five main costs data in the list below, which include Bill of Material, Work Center, Routing, Activity and Material Master Record.
1.Bill of Material (BOM) ：It is the material constitution list of product, which reflects the product from raw materials, sub-assemblies, intermediate assemblies, sub-components, components, parts and the quantities of each necessary to manufacture a final product (2009).
2.Work Center: It is the most important part of ERP system including BOM establishment, Capacity Planning, Routing Design and enterprise’s technology integration to achieve supply chain demand.
3.Routing: It is the working procedures (Operation) of product manufacture, which includes manufacturing projects, manufacturing flow, material requirements, necessary tools, productive schedules planning, productive capacities, quality control and costs management According to the Glowise software technologies (2000), there are three different types of routing:
a) Normal routing : It defines all material and data on working processes, which were carried out on all processes
b) Alternative routing: It defines different routings on different business contexts.
c) Standard routing : Standardized production processes implemented by the multiple routing concept ,which include “the material to be produced, the period of its validity, the valid lot size range, the status which determines in which context the routing may be used and the work scheduler who controls the production”(2000).
4.Activity: It is the standard working activities of ERP procedure including for production management, performance analysis, and quality control machine interface and labor compliance.
5.Material Master Record: It controls the necessary information of material including product costs, material prices, and productive quantities.
Product cost is a productive and accounting area of ERP. Standard rules Set-up can control all costs efficiently, analyses enterprise’s internal flow and compares with different product and different routing.
*Benefits analysis on ERP
There are four advantages in the list below, which include costs control, simplism on accounting, price strategies and mistake avoidance.
1.Costs control: Through the cost standard establishes to control resources consumption and the quantitative limits. In the cost forming process, according to the cost standard to control disbursement, judge necessary saves or waste, discover the consumption on surpassing cost standard. Advantage for the enterprise is to improve rapidly and achieve the goal of reducing the cost.
2.Simplism on accounting: The prices follow the standard cost counts, and record the cost diversity in the sub-assemblies, intermediate assemblies, sub-components, final products and the sales cost of the ERP standard cost system. ERP reduces the work load, simplifies the bookkeeping process.
3.Price strategies: The product standard cost is the most important basis in an enterprise, which provide timely and identical cost information, eliminate the waste and low efficiency in the management and avoid the price change to effect correct judgments..
4.Mistake avoidance: ERP is easy to be tracked, clear to be recorded and uniform to be saved, which reduces and avoids mistake happening rates.
Enterprises face external and internal environmental change. In order to exist with the market competition, the enterprise should implement ERP flexibly and apply ERP merit on process of production management.
References List
n.b. (2009). Bill of Material. http://en.wikipedia.org/wiki/Bill_of_materials Last accessed 15 August 2009.
n.b. (2000). Routing. http://www.glowise.com/solutions/p-canias-rou.html Last accessed 15 August 2009.
Bill of Material from Wikipedia, the free encyclopedia. http://en.wikipedia.org/wiki/Bill_of_materials
Routing from Glowise software technologies http://www.glowise.com/solutions/p-canias-rou.html
n.d. 2009. Wikipedia, the free encyclopedia. http://en.wikipedia.org/wiki/Main_Page
(accessed August, 15, 2009)
n.d. 2000. Glowise software technologies http://www.glowise.com/index.html
(accessed August, 16, 2009)
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