What is ERP?

ERP is an abbreviation for enterprise resource planning.  The ERP System’s function can be clearly explained by using the example of a newly-opened bakery in Amsterdam.  In 2001 Mr X and his wife – a lover of pastries and talented confectioner and baker – set up their very first company.  At the beginning of their business operation they focus on producing a narrow assortment – dark and light bread.  Mr and Mrs X use natural ingredients for their production of bread which are purchased from nearby farmers.  Thanks to a long-term contract Mr and Mrs X have a discount on farm products. They also agree to display a poster in their workplace which advertises nearby farms.  The bakery is located not in the very center of the city and not too far away from the residential estate where rent is slightly lower.  Initially, it was difficult for Mr and Mrs X to manage their finances because of the high costs they incurred from equipping their new company. Nowadays there is a tendency to opt for healthy food therefore residents living close to bakery X are very keen to pop by.  Over time, the company starts to make a profit and Mr and Mrs X expand their business by introducing sweet rolls, toasted sandwiches and cakes.  They also employ an additional worker and a driver responsible for delivering the products to the bakery. Mr X reorganizes the bakery by adding several tables where customers can drink coffee and eat pastries.  Three years later, the bakery is so popular that the owners decide to expand their business and open more branches in nearby neighborhoods.  After 5 years their company comprises of 1 large bakery, a warehouse and seven branches where their products are sold.  Additionally, a total of 30 people are employed.

CheckERP – Sii

This small neighborhood bakery has grown into a medium-sized company.  In this case, one person is not able to supervise the entire activity of the company.  A team of managers and an efficient work management system is required.  This is where ERP comes into play.  The solution proposed by Microsoft is Microsoft Dynamics AX Software.  This ERP System would be a perfect fit for Mr and Mrs X’s company.  The use of this system would allow them to integrate three elements of business:

  1. WAREHOUSE
  • Localization of products
  • Convenient product placement
  • Stock status
  • Booking, ordering new products
  • Organization of work
  • Delivery

 

  1. PRODUCTION
  • Capacity
  • Planning and coordination of production
  • Employee shift system

 

  1. SALES DEPARTMENT AND BRANCHES
  • Quantity of finished products for sale
  • Execution of larger orders
  • Information on customers placing larger orders
  • Coordination of work

In addition, ERP guarantees:

  • Fast real-time operation – the ERP System (Dynamics AX and Dynamics AX ERP) enables remote work and the oversight of many processes that take place in a company without having to physically participate in them
  • All business processes in one place – accounting, distribution, marketing, production – and in addition, ERP is easy to modify and adapt to the needs of the organization
  • Security – each employee has specific privileges and access in a password-protected system so that company data is protected