Glossary

With a plethora of terminology, and sometimes several meanings for same terminology, the world of Supply Chain can get very confusing. In this section, we define basic supply chain terms and their most accepted meanings. This section is always in improvement. You are welcome to send in your comments and contributions

ERP Definition Framework

  • It all started with Materials Requirements Planning (MRP) when companies starting managing their inventories by anticipating usage and planning orders accordingly to keep the stocks at a desired (low) levels. The key inputs for these plans are Master Production Schedule (MPS), Bills of Materials (BoMs), Inventory Status, Lead times, Standard times (and schedules), Routing of parts and Standard Costing
  • Manufacturing Resource Planning (MRP II) goes one step further and assigns standard costs to parts and products in order to create a closed loop system that can generate financial figures on production and inventories that management can live with
  • Enterprise Resource Planning (ERP) went a step further to record and report every transaction of the enterprise. In order to facilitate planning under this paradigm all transactions are standardised. The processes are mostly coded for best practice applications, and hence create an impetus for process improvement. However, these systems tend to be one size fit all approach, and are difficult and costly to modify, if they do not fit a particular industry/organisation
  • ERP II is emerging as a solution to the problems with ERP; they combine the breadth of ERP with the depth of applications designed for particular industry

Supply Chain Management Systems