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As a result of the widespread use of computers in businesses with new management and business approaches in parallel with developments in information and communication technology, Enterprise Resource Planning (ERP) has emerged. Enterprise Resource Planning (ERP) is computer software that enables businesses to manage all their functions from procurement to distribution with an integrated information management system. Businesses have been making significant strides in recent years to effectively use their resources. According to the productivity definition of output to input ratio, a decrease in the denominator value means productivity will increase. Many resources owned by the business affect the denominator. Various materials purchased in large amounts at the time that go unnoticed in the warehouse are an example. "Enterprise Resource Planning" software ensures the effective use of all these inputs and data. ERP is defined as commercial software that covers all sectors (telecommunications, retail, media, healthcare, public, etc.) and all activity units (after-sales service, maintenance, repair, human resources, etc.) and optimizes the integration of all information flow circulating in companies. It is a software system designed to plan, project, and control supply, production, and distribution resources in different geographical regions most effectively and efficiently to meet customer demands in the most appropriate way.
Enterprise Resource Planning, the equivalent of the term "Enterprise Resource Planning," is also known as "Business Resource Planning." It consists of all software programs that connect an organization's finance, production, purchasing, sales, supply, human resources, etc. functions. There is a reason for using the word "Enterprise" when naming ERP systems. This is because their scope includes all functions of institutions operating to produce a specific service or product. ERP systems, established with the understanding that the whole is more meaningful than the parts that make up the whole, based on this understanding, ensure that functions previously handled separately in institutions are managed in an interconnected manner and that information obtained from the company's data stored in a common location is accurately transferred to units. The goal of the application of increasingly widespread ERP systems is not only to provide process integration within the business but also to develop external connections and support the company's value chain activities.
ERP (Enterprise Resource Planning) features is cutting-edge software that stands out. The most important of these is that the business's factories, supplier companies, and distribution centers in different regions can share their resources in a coordinated manner. This way, which customer order should be fulfilled from which distribution center or produced in which factory, where all factories' material and service requirements should be met appropriately, and how the machines, materials, workforce, energy, etc. activities held by factories can be used in an integrated manner are determined. An ERP system is a completely integrated system that plans all the resources of the business and all information exchange made possible by information technology. In short, the most important feature of ERP is that it combines all departments' software and processes in a software application running on a single database and gives an organization the opportunity to share information throughout the organization. ERP, a unified database that holds data about business processes in addition to core data, also offers solutions related to basic business requirements.
It has a highly functional structure due to supporting many corporate management. ERP, developed to offer solutions independent of countries and regions worldwide, performs activities such as accounting transactions, creating specially formatted documents, and human resources management appropriately to requirements, varying from country to country. On the other hand, another feature of this software system is that it targets all sectors, not just some sectors, thanks to containing sufficient functionality. Another important feature that distinguishes ERP from other software systems is that this software supports repetitive and continuous business processes such as supply management, order management, and payment transactions.
The development of ERP dates back to before the 1960s. In those years, classical, manual stocking based on the traditional inventory approach was used. In subsequent years, since manufacturers had switched to mass production, procuring enough raw materials to achieve production quantities became difficult. To overcome this, business managers started entering routing information, product trees, and sales forecasts into computers, both determining the amount of raw materials and looking at existing stocks and placed orders to determine the correct quantities to be procured.
This method, known as Materials Requirements Planning, is a system that breaks down finished products in the master production schedule into parts along with detailed component requirements. MRP performs production control by constantly monitoring purchasing operations or production operations. In the following years, with the understanding that the market is determined by the customer, there was a transition from production where MRP was the solution to order-based production. The inadequacy of MRP for production management gave rise to the need for Manufacturing Resource Planning, a method of effectively planning a company's resources. MRP II software started being implemented with the addition of functions such as sales planning, capacity management, and scheduling to MRP systems. MRP II synchronized purchasing, manufacturing, finance and engineering work, human resources, and sales by applying a single database to plan and update all activities in the business. In the 1990s, businesses, especially multinational companies rapidly spreading in parallel with globalization, were experiencing integration difficulties. Integration would only be possible by integrating information supporting activities. This means a higher level of information integration beyond MRP II, which could only be achieved with the Enterprise Resource Planning concept. Enterprise Resource Planning (ERP) is a comprehensive software system that achieves global information integration.
ERP advantages stand out with the features it possesses. Some companies have stated that after starting to use this software system, product delivery rate has increased to 99%, better information management has been achieved, and customers are more satisfied and happy. Companies using ERP software have also been able to make production based on actual customer orders instead of order forecasts. When these analyses are reflected in rates, delivery speed increased from 60% to over 95%, and procurement time for customers decreased from 6 weeks to 2 weeks. Other advantages that ERP provides to integrated businesses are as follows:
Faster reaction to competitive pressures and market opportunities
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