In today's fierce global market, whether it is process or discrete manufacturing, whether it is single-piece production, multi-variety and small-batch production, repeated production of few varieties or batch production of standard products; The internal management of manufacturing industry may encounter the following problems: for example, the enterprise may have excellent sales staff to promote products, but the workers on the production line can't deliver the goods on time, and the workshop manager complains that the purchasing department doesn't supply the raw materials they need in time; In fact, the efficiency of the purchasing department is too high, some materials are piled up in the warehouse 10, which can not be used up, the warehouse location is saturated, and the capital turnover is very slow; Many companies need 6 ~ 13 weeks to calculate the required material quantity, so the order cycle can only be 6 ~ 13 weeks; The purchase order and the date on the purchase order are different from the date on the bill of materials, and they are both uncertain; The financial department does not trust the data of the warehouse department and does not use it to calculate the manufacturing cost. . . . . .

Undeniably, the above situation is a serious problem faced by most enterprises in China at present. However, is there any effective way to solve this phenomenon? The fact is that when the business circles in China have not fully realized the seriousness of this problem, foreign ERP/MRP II software manufacturers have quietly entered the China market, and with the passage of time, ERP has gradually been recognized by the business circles and theoretical circles in China.

ERP phenomenon

Today, as long as we look through newspapers and magazines related to management and information technology, a large number of MRP II/ERP advertisements and related reports will appear. Just when people are still confused about what ERP is, a new generation of concepts such as "ERP in e-commerce era" and "iERP" keep coming.

In fact, the huge benefits that ERP can bring are indeed quite attractive to many enterprises. According to the data of American Production and Inventory Control Association (APICS), using MRP II/ERP system can bring the following economic benefits to enterprises on average:

1. Inventory decreased by 30% ~ 50%. This is the most talked about benefit. Because it can reduce the inventory investment of general users by 1.4~ 1.5 times and improve the inventory turnover rate by 50%.

2. Delayed delivery is reduced by 80%. When the inventory is reduced and stabilized, the customer service level is improved, which makes the on-time delivery rate of enterprises using ERP/MRP II increase by 55% on average and the delayed delivery rate decrease by 35% on average, which greatly improves the reputation of the sales department.

3. The procurement lead time has been shortened by 50%. With timely and accurate production planning information, purchasing personnel can concentrate on value analysis, source selection, research negotiation strategies, understand production problems, shorten procurement time and save procurement costs.

4. The downtime is reduced by 60%. Due to the transparency of parts demand, the plan has also been improved, which can be timely and accurate, and parts can arrive on time at a more reasonable speed. Therefore, the phenomenon of production line shutdown will be greatly reduced.

5. The manufacturing cost is reduced by 12%. Due to the reduction of inventory cost, labor saving, procurement cost saving and a series of human, financial and material effects, the production cost will inevitably be reduced.

6. With the improvement of management level, the number of managers decreased by 10%, and the production capacity increased by 10% ~ 15%.

In addition, the rapid growth of ERP market in recent years also shows its great development potential:

From the domestic situation, the average annual growth rate of MRP II/ERP industry in China from 1995 to 1997 is about 27%, while the growth rate of 1998 is as high as 35% (excluding financial software), and the market sales amount reaches 420 million yuan. 1999 Due to the lag effect of the Asian financial turmoil and other factors, the ERP market has obviously declined. However, with the successful convening of the Fortune Forum in Shanghai and the final signing of the WTO agreement between China and the United States, most Chinese and foreign-funded enterprises have strengthened their confidence in further investment. This made the ERP market reappear in the second half of 1999 and 2000. According to Hong Kong Ta Kung Pao, the market size of ERP software products in China will reach about10 billion yuan in the next two years. According to statistics, there are about11million registered enterprises in China, of which 10% are large enterprises. Among southern enterprises, more than half of large and medium-sized enterprises have plans to adopt and purchase ERP products, but there are fewer small and medium-sized enterprises, while the number of ERP products purchased by northern enterprises is gradually increasing.

Judging from the whole international situation, AMR Research, an authoritative market forecasting research institution in the United States, predicts that the global ERP market will develop at an annual compound growth rate of 37% in the next five years. From 65438 to 0998, the total revenue of global ERP market reached148 billion US dollars, and this figure will increase to 52 billion US dollars in 2002.

As can be seen from the above figures, ERP has set off a revolution in management thought and technology, both in China and around the world. What is more noteworthy is that MPR II has developed into ERP in today's e-commerce era in just a few years before it has been fully recognized by business people in China. It can be seen that this new management method and means is being applied and developed in China enterprises at an unimaginable speed, which undoubtedly injects new blood into many enterprises struggling in the tide of market economy. Therefore, in order to better master and use this new management tool, we need to have a clear understanding of ERP first.