Most organizations deal with the buying and selling processes to gain profit. Several such processes ensure that goods are received in an organization, mainly if they are being imported to be delivered on time. Processes involved, such as finance, procurement, fulfilment, warehouse, and manufacturing, are interrelated. This is because they depend on one another to ensure the company runs swiftly in terms of customer satisfaction. This essay will discuss all these processes bringing to light the impact of enterprise resource planning systems on each.
Finance Process
The finance process refers to a series of activities done by the Office of Finance to ensure that the finance-related organizational functions are conducted smoothly (Woodson, 2021). The primary purpose of having a finance process is to create business models to make financial decisions. Therefore, through finance processes, a company aligns its objectives and activities with economic realities.
Steps in Finance Process
The first step in a finance process is data collection. Here, finance managers get information from all departments and factors in the company’s financial orientation. The data collected enables the company to develop a budget that financial officers create for a certain period based on the organization’s financial records (Woodson, 2021). Once a budget has been created, the financial officers develop a strategic plan to manage a consistent cash flow within the set budget. Planning involves how resources should be allocated, sales plan, projects goals, and a capital plan.
In addition, the finance process includes a forecast whereby what is expected to happen shortly is determined. An abstract of the financial situation is then created before the financial close. After this, several assets, liabilities, and available financial items are consolidated into one strong product that will meet financial requirements. A financial report that covers the set period is then written for the management team.
Impact of ERPS on the Process
In this case, the Enterprise Resource Planning System impacts the automation of the entire financial process. The system performs all the tasks within a short period making the process easier, quicker, and more efficient (Maryam et al., 2018). Since the system is less prone to errors, it also reduces the rate of financial mistakes in the records
Procurement Process
The procurement process refers to obtaining goods and services and agreeing and signing the set terms and conditions (Nicoletti, 2018). A company can acquire the products and services through bidding or offering tenders. The logistics division is held responsible for the process as its primary purpose is the acquisition of goods necessary for product manufacturing.
Steps in the Procurement Process
Every process requires the organization to have a sketch of what is needed. Therefore, the procurement manager has to write down all the company needs with detailed information for each. The list is then presented before the board of directors, cross-checked against the company’s budget, and eliminated unnecessary goods (Nicoletti, 2018). Only needed requirements are approved, after which the procurement team sends out several requests for quotations amongst different suppliers.
Once the solicitation is done, the procurement team and a selected evaluation Committee go through the different quotations to choose which supplier best fits their needs. A vendor is chosen, and the contract is written immediately. If the vendors agree to the terms, the purchase is requested. The order should arrive within the stipulated time, and the invoice is written and approved if the products match the order given out. Finally, are records and invoices are safely preserved for easy retrieval and recording purposes.
Impact of ERPS on the Process
ERPS enables tracking of the procurement process and ensures that the process was conducted in the best manner possible (Maryam et al., 2018). The system makes the process way more efficient because it is easier. After all, the purchases are automated together with the approval of invoices and record keeping.
The Fulfillment Processes
Order fulfilment occurs when an organization receives goods, processes them, and subsequently delivers them to customers. This process begins when a customer places an order and ends when the customer gets the order placed. In case of a refund demand from the customer, the fulfilment process management oversees the transaction (Maia et al., 2019). In summary, the process entails receiving shipments recorded in the inventory, storing the received products, processing the orders customers had placed, shipping products to customers, and in case of returns, processing them as well.
Organizational divisions involved in the fulfilment process mainly use the logistics division; since the main processes involved in the fulfilment process are ordering, shipping, and warehousing (Jakeš, 2016). The procurement department is also affected since it keeps records of inventory. Additionally, the finance department is also involved in calculating profits made after purchasing, shipping goods, and selling them out. It also deals with the minimization of losses in case they are incurred.
Impact of ERPS on the Process
In this process, enterprise resource planning ensures improved shipping efficiency. Improved reporting and planning enable customers to get their products efficiently and on time, increasing returns, customer retention, and the process is even more effective with flowing stocks.
The Inventory and Warehouse Management Process
Inventory and warehouse management involves: the reception of shipments in an organization, storing inventory received and tracking them while in the warehouse. It also requires the management of warehouse staff. The process also involves optimization of storage space while minimizing costs and maximizing returns. All this directly impacts fulfilment, shipping as well as customer experience in general.
The procurement department handles inventory management in an organization since they manage the records of goods brought in and those leaving the warehouse. The HR department also plays a significant role in inventory and warehouse management by taking care of human labour (warehouse staff who record inventory and arrange the warehouse) (Atieh et al., 2016). In the case of in-house fulfilment, the logistics department will also play an essential role in ensuring shipment received from an outsource is the exact amount received in the warehouse.
Impact of ERPS on the Process
In this case, Enterprise resource planning ensures sufficient human labour is allocated to the warehouse department to ensure less time is consumed when receiving shipments to the warehouse (Atieh et al., 2016). It is also essential to minimize losses as it would increase the care involved when handling delicate packages. Implementation of the technology will also decrease the errors likely to occur.
Manufacturing Process
This process can be defined as the production of goods with the help of machines, tools, and, most importantly, human labour. In other words, it involves the transformation of raw materials into finished goods (Kaushish, 2010). The process involves three main stages; pre-processing, processing, and post-processing. Some of the organizational elements involved in the manufacturing process include the finance, operation, and marketing departments (Kaushish, 2010). The finance department is involved with inventory control, accounting, and financial planning, while the operation department oversees all the operations involved in the manufacturing process. Finally, the marketing department ensures that the product reaches the market in all locations by advertising.
Five stages of the Manufacturing Process
The manufacturing process entails five critical stages for manufacturers to understand and customize the nature of production truly. These stages include;
Concept and Development
This stage can also be defined as product designing. In this stage, there is a possibility for redundancy and waste since it involves trial and error. An organization needs to invest enough time and resources during this assessment phase. It is an opportune time to build in lean manufacturing efficiency.
Ordering Process
Manufacturing is all about efficient demand and supply for finished goods by the manufacturers. One of the primary steps in the manufacturing process is to place orders to manufacture a particular quantity of products. For the manufacturing process to be successful, a streamlined ordering process should be put in place. It accounts for complicating factors like sales volume, current stocks on hold, and future trends.
Production Scheduling
Production is then scheduled after the order is placed. Productions should maximize a company’s manufacturing resources. Goods manufactured within the stipulated period enable a manufacturing company to cater to the demand generated during the ordering process. For a manufacturing process to be efficient, the production schedule should be tightly run.
Manufacturing
After streamlining the scheduling process, manufacturing can begin on the available product lines and machinery. In this process, sit is critical to eliminate waste and become leaner. To do this, manufacturing companies can incorporate machine monitoring software with modern secure cloud analytics, easily accessible, automatic updates, and little maintenance cost (Kaushish, 2010). It is the stage that determines the profitability ratios of the company.
Transportation
The last stage is the transportation of the finished products to different geographical locations. It can be taken to warehouses, dealers, stores, distributors, or retailers. A company needs to ensure proper transportation means are available as this contributes to meeting the customer needs. Improper transportation can lead to cancellation and delayed payments, resulting in a loss of the whole manufacturing process.
Impact of ERPS in the Manufacturing Process
ERP fits the manufacturing process due to the numerous processes that occur every day. ERP helps in inventory management where it acts as a centralized resource for inventory tracking. It is also vital in the supply chain since it tracks vendors’ performance, resulting in more efficient planning and management (Belhadi et al., 2019). ERP also helps in maintenance as it centralizes scheduling, work order management while enabling data analytics to improve the effectiveness of care.
References
Atieh, A. M., Kaylani, H., Al-Abdallat, Y., Qaderi, A., Ghoul, L., Jaradat, L., & Hdairis, I. (2016). Performance improvement of inventory management system processes by an automated warehouse management system. Procedia Cirp, 41, 568-572.
Belhadi, A., Zkik, K., Cherrafi, A., & Sha’ri, M. Y. (2019). Understanding big data analytics for manufacturing processes: insights from literature review and multiple case studies. Computers & Industrial Engineering, 137, 106099.
Jakeš, J. (2016). Position of Logistics in Organizational Structures – Trends. Journal of International Business Research and Marketing, 2(7), 42-50.
Kaushish, J. P. (2010). Manufacturing processes. PHI Learning Pvt. Ltd.
Maia, M., Pimentel, C., Silva, F., Godina, R., & Matias, J. (2019). Order fulfillment process improvement in a ceramic industry. Procedia Manufacturing, 38, 1436-1443.
Maryam, S., Murad, D. F., Fernando, E., Dewi, M. A., & Murmanto, I. R. (2018). Evaluate the implementation of enterprise resource planning (ERP) system. In 2018 International Conference on Information Management and Technology (ICIMTech) (pp. 119-124). IEEE.
Nicoletti, B. (2018). Procurement Processes and Finance. In Procurement Finance (pp. 9-38). Palgrave Macmillan, Cham.
Woodson, W. I., & Marshall, E. V. (2021). Chapter Four Finance. In The Family Office (pp. 57-83). Columbia University Press.