Tag Archive for: ERP Declaration

ERP Systems: Meaning and Functionality

The somewhat different attempt to explain an ERP system

It is said that a good professor can explain the basics of theoretical physics on a beer mat. We look at a similar example, but replace the physics with an ERP system and the beer mat with a supermarket store. This blog post plays the role of the professor. We will take you on a journey through the vastness of the supermarket shelves and begin a slightly different kind of explanation.

At the beginning of any attempt at explanation is a curious person. If you are a die-hard connoisseur of ERP software, an ERP sommelier so to speak, you can skip this blog post and move on to the next entry – or you can stay and get your daily dose of confirmation. This blog post is for those for whom ERP is (still) a green field.

Stepping Through the Sliding Glass Door

Getting started with an ERP program should be as easy as going to the supermarket, but you shouldn’t rush into it. In our example, this can be easily explained with the equation

 

BIG Formel ERP Supermarkt

The decision for or against should therefore be well considered and not rushed, otherwise it will crash. To help you decide, we don’t send out food or fragrance samples, but we do offer a free demo download.

The Sales Floor

Imagine your company as a sales floor in a supermarket with many products. The ERP system represents the shelves and allows you to store your products in a traceable and organized way. Is there not enough jam on the shelf? Is the rigatoni out of stock again? The ERP system provides you with information at an early stage and allows you to plan the organization of your articles. Whether with serial or batch numbers, First In – First Out (FiFo) or Last In – First Out (LiFo), the ERP system is not only a genius but also a master of chaos. For the particularly curious, here is a short additional detour on inventory management.

supermarkt-regal

At the meat counter

Cordon Bleu is on your shopping list. As you know, it is French and means “blue ribbon”. Sounds impressive, but what about its ingredients? This is where we build the bridge to the production planning processes within an ERP system.

Goods are processed, refined and, if necessary, assembled from different components. This is also the case with our cordon bleu. To continue our metaphor, the ERP system provides the platform for managing and controlling all production processes. It shows me the ratio of ham, cheese and schnitzel, and gives me the breading directly in the bill of materials. Thanks to production planning, it is possible to transparently control and track what (Cordon Bleu) is, has been or has to be produced, where (at meat counter 2) and by whom (butcher Smith). Still have questions about the digital meat counter? Read more about production planning and ist applications.

Behind the scenes

Supermarkets generally operate on a “FeFo” (First Expired – First Out) basis, meaning that products are sorted by perishability. ERP systems offer the possibility to organize the storage according to personal taste – including the inventory of the storage contents.

The procurement of new items is constantly monitored so that you are not left out in the cold. Whether jam or rigatoni, material requirements planning (MRP) makes it easy to determine purchasing and/or production requirements for minimum inventory levels, customer orders, and batch sizes agreed upon with suppliers in the ERP system. This means that the warehouse is only filled with what is actually needed.

Back to the meat counter. Butcher Smith wants to take a vacation during the European Championship. To ensure that he does not have to stand at an unmanned counter, the ERP system has a personnel planning function (PEP). Holidays, illness, shift work – PEP ensures that everything runs smoothly. So that barbecuing with friends is saved.

Final spurt at the checkout

The cash register represents sales within an ERP system. Quotations, orders, delivery notes, invoices or credit notes – an ERP system provides comprehensive support for the daily sales processes. Open items and their settlement by the customer’s payment can be accessed at any time.

Supermarkt Einkaufswagen gefüllt

Did you know that the receipt is both an invoice and a delivery note? This is called direct invoicing. This saves time and money, but it does not prevent you from regularly fishing your predecessor’s receipt out of your shopping cart. To make sure you don’t lose track of your own receipts, you could use a budget book at home. The digital document management system (DMS) in the ERP system ist he solution. A quick scan and you have all relevant documents at your fingertips – ordering can be that easy.

Want to know more about ERP systems, their meaning or special features?

The purchase is paid for, your head is full, and you slowly realize that this blog post would hardly have fit on a beer mat. The exit comes just in time! If all went well, you are no longer standing on a greenfield site and know everything about ERP systems, their meaning and functionality.

If you would like to learn more about ERP or the full range of TimeLine ERP functions and how implementing different modules can improve the efficiency of your business, please send us a message using the contact form, write to [email protected] or contact our sales team at +49 212 230 35 200. We look forward to hearing from you and will be happy to advise you!

ERP application in daily business – an ERP system example

ERP systems date back to the 1970s. Initially, they were used only by large industrial companies for business processes. It was a standardized inventory management system for planning purchasing and production. This ensured that products were completed on time. Since then, ERP applications have changed and improved dramatically. However, many small and midsize businesses wonder why they should use an ERP system. But the question should no longer be “why” do you need an ERP system, but “which ERP system is right for you?

Your business is growing and things are changing. There are new challenges: Tasks are becoming more complex and departments are growing. In the course of significant growth, it is often necessary to reorganize your own structures and processes. More and more companies are already benefiting from the use of ERP solutions. Especially with limited resources, you can benefit from easy data maintenance and react quickly to market demands.

ERP applications pay off

If you want to stay on top of things, an ERP (Enterprise Resource Planning) system is the key. Today, a company can use a single ERP system to cover all areas of its business, from supply chain management, to manufacturing to day-to-day operations to accounting. This makes it possible to monitor, plan and control processes faster and more effectively. They are constantly being modernized and developed. Processes that used to be done manually are automated by an ERP system. But what is behind the use of ERP? Many companies wonder if it is worth buying and implementing an ERP system. Why is that? Because of the high license costs. However, a small amount of time saved can result in a large amount of money saved, as the following example of an ERP system shows.

einsatz-erp-system

Ms. Jones is an employee of your company. Ms. Jones spends two hours a day placing and tracking orders. She creates the order in a Word file, prints it, and faxes it. She then checks to see if the order has been received. Each order takes about ten minutes of her time. This means that Ms. Jones sends out twelve orders in two hours. The average salary of an administrative assistant is between 1,959 and 2,645 euros per month*. Let’s assume an average of 2,302 Euros per month and a working week of 40 hours. This means that Mrs. Jones has an hourly wage of 13.28 Euros**. Mrs. Jones spends two hours working to place the orders. If you multiply this by her hourly wage, your company incurs a cost of 5,312 Euros for 200 working days.

Why is using an ERP system useful?

For example, you decide to implement an ERP system in your company. After a short time, the ERP applications begin to pay off. With TimeLine Neo, you pay a one-time license fee of 1,490 euros per PC workstation. You have access to the full range of functions from the first workstation. Maintenance is optional and costs 20 percent of the license fee per year, or $298. Training for the program usually takes one working day for all employees. A fee of 800 euros is charged for eight hours. The price is significantly reduced for group training or multiple licenses. The cost of the license together with the maintenance and training fees is $2,588 for the first year. In the second year, only the maintenance fees are due.

With TimeLine Neo, Ms. Jones can create an order in about two minutes and send it by e-mail. For example, she can use a screen to see which orders are still open. She no longer needs two hours to complete twelve orders, but only half an hour. Calculated over 200 working days, her annual expenditure is reduced from €5,312 to €1,328. With access to the ERP system, Ms. Jones is able to focus on her core business.

Tabelle ERP Kosten Beispiel

After five years with an ERP system, your company has saved 16,140 euros. The purchase paid for itself in the first year. The administrative workload is reduced and you save space on shelves and office supplies – electronic document storage is also integrated. Saving time is also a competitive advantage for your business. If you are faster and more flexible, you will overtake slower competitors.

Additional benefits of ERP applications

This example of an ERP system is just one of the many benefits of ERP software. The same can be done for estimating or production, for example. Why is that? Many companies still organize their production on paper or analyze important data using only programs such as Excel. You have to make important – and financially significant – decisions based on instinct when it takes a long time to compile important data, such as incoming and outgoing orders, inventory levels, or order margins. Without real-time process data, you won’t know how your business is performing until the annual report is published.

Still unsure and want to try it first?

Try TimeLine ERP for 90 days free of charge and without obligation, simply download our demo version. The data entered in the trial version can be seamlessly transferred to your system after a purchase decision. Do you still have questions? Or would you like to find out more about the full range of TimeLine ERP functions and what they have to offer for your project or your industry? Then send us a message using the contact form, write to [email protected] or contact our sales team on +49 212 230 35 200. We look forward to hearing from you and will be happy to advise you!