Enterprise resource planning systems and its implications for operations function

Over the last decade, our world has changed dramatically due to the growing phenomenon of globalization and revolution in information technology. There is tremendous demand on companies to lower costs, enlarge product assortment, improve product quality, and provide reliable delivery dates through effective and efficient coordination of production and distribution activities. To achieve these conflicting goals, companies must constantly re-engineer or change their business practices and employ information systems.In 1990s, Enterprise Resource Planning (ERP) systems have emerged as an enabling technology, which integrates various functional (operations, marketing, finance) information systems into a seamless suite of business applications across the company and thereby, allowed for streamlined processing of business data and cross-functional integration. Thus, ERP systems provide an enticing solution to managers who have struggles with incompatible information systems and inconsistent operations policies. However, successful implementation of ERP systems requires active participation from senior-level managers from various functional areas so as to delineate its impact on the business level as well as functional level strategies.In this paper, we have endeavored to provide operations managers a brief overview of ERP systems and highlight its implications for operations function. Specifically, the objective of this paper is to give a broad based overview of enterprise resource planning systems. Using SAP R/3 as an example system, we discuss how an ERP system can assist in enhancing strengthening business strategy and making consistent operations decisions: process design, production planning and scheduling, inventory management, quality management, human resource management.