Advantages of Enterprise Resource Planning

1. Inventory Reduction: Through this process it is possible to procure a component as it is needed thereby avoiding cost of carrying it and excessive safety stock is inventory.

2. Reduction in Production and Delivery Lead Time: By coordinating inventories and procurement and production decisions the delay in production is avoided.

3. Realistic Commitment: By using ERP the production department can give the marketing department timely information about delivery times to customers thus maximizing customer’s service.

4. Increased Efficiency: The information provided by ERP encourages and supports production proficiency.

5. Modular Approach: With a modular approach ERP vendors are on the right track because it would be complex to cover all of the separate functions in a single module. This approach enables ERP users to implement only those modules that they consider would add maximum value to their business.

6. Decision Support: ERP assists in the dissemination of information of all the functions of a business to the top level management and enable them to take the right decision at the right time.

7. Distributed Computing: The move toward client server technology or distributed computing means using multiple small computers instead of single large ones for a business computing needs. ERP software programs are small enough to run on personal computers. Additionally since many important and inventory decisions ten to get made in different locations and at different levels in an organization ERP and its toolbox of software functions is a good fit for distributed computing.

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