ERP (Enterprise resource planning) can be defined as a “ software solution that addresses the enterprise needs taking the process view of the organization, to meet the organizational goals tightly integrating all functions of an enterprise[1] ” It is an industry term for the broad set of activities supported by multi-module application software that help a manufacturer or other business manage the all the parts of its business[2] . ERP facilitates integration of company-wide information systems with the potential to go across companies.
Evolution
of ERP
In the 1960’s inventory control assumed prime importance and most of the
software at that time were designed to help in inventory management. Typically,
these were handled by tools called BOM processors (Bill of materials). The focus
shifted in the 1970’s to Material Requirement planning (MRP) as the complexity
of manufacturing operations increased. The tools to support these continued to
evolve by adding further functionalities to meet the increased requirements.
Then in the 1980's the concept of Manufacturing Resources planning (MRP-II),
which was nothing but extension of MRP to shop floor and Distribution management
activities, grew in importance.
However, in the early 1990’s, increased complexity of businesses and the need to
integrate all the functions within an enterprise to sustain in the dynamic
environment lead to development of ERP (Enterprise Resource planning) tool. ERP
was extension of MRP II to cover the range of activities within any enterprise.
(Figure 1) Additionally it addressed technology aspects like
client/server-distributed architecture, RDBMS, object oriented programming.