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In the absence of an ERP system, a manufacturer in need of what it has to offer, may find itself with many software applications that do not talk to each other, do not effectively interface: design engineering how best to make the product; keeping track of the status of customer orders from acceptance thru fulfillment; managing interdependencies of complex Product Tree Management product structures in the real world of evolving Engineering and Revision changes and improvements, and the need to make material substitutions, during temporary inventory shortages; 3-way match between Purchase orders (what was ordered), Inventory receipts (what arrived), and Costing (what the vendor invoiced); Accounting for all of this, including tracking Costs and Profits on a granular level. But the advantage of having an ERP is that all this, and more, is integrated.

Change how a product is made, in the engineering details, and that is how it will now be made. Effectively dates can be used to control when the switch over will occur from an old version to the next one, both the date that some ingredients go into effect, and date that some are discontinued. Part of the change can include labeling to identify version #s.

Computer security is included within an ERP, to protect against both outsider crime, such as industrial espionage and insider crime, such as embezzlement. Can some terrorist mess with the Product Tree Management so as to put poison in food products, or other sabotage? Preventing abuse is part of what ERP security takes care of.

There are concepts of Front office (how the company interacts with customers}, which includes CRM or Customer relationship management, Back end (internal workings of the company to fulfill customer needs), which includes quality control, to make sure there are no problems not fixed, in the end products], Supply chain (interacting with suppliers and transportation infrastructure), all of which can be integrated through an ERP, although some ERP have some gaps in what is supported, or works effectively. Without an ERP that integrates this stuff, it can be a nightmare for a manufacturer to manage.

Source: http://en.wikipedia.org/wiki/Enterprise_resource_planning

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