What is an ERP System?
The abbreviation ERP stands for “Enterprise Resource Planning” – the planning and management of resources available in a company, including personnel, capital, equipment, materials, and information technologies. Consequently, enterprise resource planning affects all core functions and areas of a company, such as manufacturing, finance, logistics, as well as human resources and procurement. ERP software or ERP systems holistically manage and largely automate these processes.
ERP as a central data source
ERP systems form the basis for efficiently handling all daily business processes. The data required for control should reside in the ERP system as a central data source for the entire company.
Functional areas of ERP systems (not an exhaustive list):
- Procurement
- Production planning
- Production control
- Inventory management
- Requirements planning
- Finance and accounting
- Controlling
- Human resources
- Marketing
- Sales
- Master data management
- Document management
- Dispatching
The finance department requires the ERP system for preparing monthly and annual financial statements. The logistics department uses ERP software to ensure timely material availability for production and reliable delivery of products to customers. Sales manages customer orders through the ERP system. Accounts payable uses ERP software to correctly pay suppliers.
TMS as ERP
ERP systems are often referred to as the “heart” of a company and are increasingly offered as cloud solutions. In logistics providers and freight forwarders, transport management systems (TMS) typically serve as ERP software.
The most well-known example of an ERP system is SAP, but Microsoft Dynamics (Navision), proAlpha, and Nissen & Felten are also widely used in Germany.
