Erp Sap

Enterprise resource planning (ERP) is emerging as the next frontier to integrate finance and distribution processes across the extended enterprise designed specifically for the assembly of products and the processing of raw materials in the manufacturing industry.

ERP applications automate parts, purchasing, accounting, messaging, and invoicing processes for manufacturers' multiple sites. It evolved from the manufacturing resources planning (MRP) platform, which didn't track financial, sales and distribution orientation in an enterprise-wide environment or support newer technologies and open-systems.

Even earlier versions of ERP applications, manufacturing execution system (MES) concept, evolved into MRP, but also didn't incorporate the financial and administrative hub of the manufacturing enterprise.

Until recently, software had been an obstacle to progress in manufacturing. A 2004 Harvard Business School study found that the higher the level of computerization, the less flexible plants are when challenged with making a large range of products or changing swiftly among products.

Everyone in manufacturing has a need for ERP applications. It is designed to touch all parts of an organization.

The lead players in ERP software are Baan USA Inc., of Reston, Va., Oracle Systems Corp. (ORCL) , of Redwood City, Calif., PeopleSoft Inc. of Walnut Creek, Calif., and SAP America Inc., of Philadelphia, Pa. The latter's parent company, SAP AG , based in Walldorf, Germany, is a traditional mainframe software vendor that is transforming its business with enterprise level application software.

Part of SAP's business strategy is its large consultancy practice along with its enterprise applications. SAP has been working with Microsoft Corp. to develop Internet applications for use with ERP applications.

ERP software vendors, like SAP, have been aggressive in leveraging its expertise to target elements of the World Wide Web.

The Baan Company is redesigning its business application software, Baan IV, for ERP use. The company's product had been used within the supply chain alongside an electronic data interchange (EDI) application. Its new design can be used on the Internet and company Intranet.

Baan VI includes new sales order functionality that provides EDI through the Internet, as well as links to Internet content providers and connectivity to other computer environments. The company also is partnering on ERP applications with Aspect Development Inc., of Mountain View, Calif., for vendor and volume capabilities; i2 Technologies Inc., of Dallas, for semiconductor planning development engine; KPMG Peat Marwick LLP, of Baltimore, Md., a multisite modeling tool for manufacturers; and Premenos Corp., of Concord, Calif., which added the ability to conduct EDI over the Internet.

Oracle has several ERP products on the market under the Oracle Applications label that include 30 different models for manufacturing, distribution and finance tasks over the Internet and company Intranets. The company also is partnering with Southfield, Mich.-based Radley Corp. on an EDI component, to penetrate the automotive markets' supply chain -- a quickly expanding market for ERP. As part of the agreement, Oracle purchased a minority interest in Radley.

As vendors clamor for lucrative projects, some are finding creating a new identity a good way to position themselves in the industry.