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The evolution of the systems dates back to the

year 1960 as per ERP history. The Earlier Systems  were designed to assist the manufacturing process. The first software  developed in this process happens to be MRP (material Resource Planning) in the year 1975 which  was followed by another advanced version namely MRP2 which stands  for Manufacturing Resource planning. It is observed that none of them yielded the benefit of ERP.

Inventory Management & Control  : Inventory Management and control is the combination of information technology and business processes of maintaining the appropriate level of stock in a warehouse.

Material Requirement Planning (MRP) : Materials Requirement Planning (MRP) utilizes software applications for scheduling production processes. MRP generates schedules for the operations and raw material purchases based on the production requirements of finished goods, the structure of the production system, the current inventories levels and the lot sizing procedure for each operation.

Manufacturing Requirements Planning (MRP II) : Manufacturing Requirements Planning or MRP utilizes software applications for coordinating manufacturing processes, from product planning, parts purchasing, inventory control to product distribution.

Enterprise Resource Planning (ERP) : Enterprise Resource Planning or ERP uses multi-module application software for improving the performance of the internal business processes. ERP systems often integrates business activities across functional departments, from product planning, parts purchasing, inventory control, product distribution, fulfillment, to order tracking.

ERP SYSTEM MODEL :                                                       

                      ERP System Model







In this example we will consider the business growth in three stages .

Stage 1 :

 a) The shop keeper collects goods from vendor and stores it in the shop .  
b) Sells items / goods to customers .
c) When the shop is out of stock , he notes it down and orders from vendor .
d) He maintains daily accounting book to calculate his profit or Loss .

The business florishes and the shop keeper has now become a whole saler . He opens many branches , hires peoples for working , maintains a small database for the business and he arranges for a transportation services for his business

Stage 2: 

 a) He collects goods / items from vendor and now stores them in inventory .
 b) Takes orders from shop keepers / customers.
 c) Maintains a small database for goods , shopkeepers & employee informations .
 d) He delivers goods to customers / shop keepers using transportaton system .
e) Due to increase in business transaction he uses computer for accounting .

The business still grows and now he is recognized globally . He starts operating his business from worldwise centers and customers placed globally . As such he now has multinational organization . To operate his business he uses e-commerce , phone marketing etc .

Stage 3 :

a) The owner is now not able to visit all his branches all over the world daily .
 b) He maintains a huge database to store his daily business transactions .
c) Various other departments emerges internally like employees need to maintain  the cash    received from sale , pay vendors , maintain employee salary etc .
d) Employees of each department need to communicate among each other to maintain 
    correct informations .
 e)The owner now possess huge asset and it need to be maintained .
 f) As the transactions are huge in numbers so seperate employeew need to employed
       in order to find out any discrepancy in accounting and find out profit &   losses .
g) The owner appoints managers who needs reports to make future predictions on
      the business .

Now stage 1 & 2 can be maintained with ease , but in case of stage 3 the efficiency of the business decreases due to the proper lack of co-ordinations among departments . There is a huge loss of time in waiting while communicating among each other or with external agencies like customers or vendors . This is the situation when we need a proper integrated software
which would help us in running the business with ease and within time bound scenarios .
Such complex softwware can be termed as ERP ( Enterprise Resource Planning ) like Oracle Application , SAP , People Soft , JD Edwards etc .


Integrated Oracle ERP Modules