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Use of ERP in six sigma implementation

Use of ERP in six sigma implementation: In the late 1980’s, the focus on ERP packages was on manufacturing resource planning and attempted to improve processes  such as processing, manufacturing and distribution. Gradually, the packages extended their focus to finance, Human resources and project management. They also recognized the importance of the integration of various functions in an organization.

However, while these ERP systems excelled in the areas of order processing, payroll management and inventory management, they failed to contribute to enterprise level planning. Once an order is received, The ERP system quickly process the orders, updates information across all the departments, and helps managers prepare production schedules that result in optimum utilization of resources. But the system failed to provide information that could help managers determine the profitability of the order. They did not help managers change plans in line with changes in the business environment. The plan developed by the system when the order is placed may not be the optimum plan for the entire period of production. Hence the ERP system should provide the organization with the flexibility to change plans according to the situation. Another, limitation of a majority of ERP systems was that they facilitated integration only at the enterprise level and failed to integrate with the external business partners including customers and suppliers.

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