V.M.

PATEL COLLEGE OF MANAGEMENT STUDIES

The B.B.A programme is one type of graduate degree course. This is providing us professional management which is universally applicable. It can be applied in business and non-business activities. For preparing the project report, I have visited the Dudhsagar Dairy, Mehsana, during the suggested duration 27-10-2008 to 16-11-2008 to avail the necessary information. The blend of learning and knowledge acquired during my practical studies at the Dudhsagar Dairy, Mehsana, are presented in this project report. The rationale behind visiting the company and preparing project report is to study the ERP System with respect to Finance and Accounts in Dudhsagar Dairy, Mehsana. The project report starts with company profile and covers Overview of ERP System, Various modules of ERP System implemented at Dudhsagar Dairy, Various process cycle of ERP system in Dudhsagar Dairy, Evolution of ERP System, Findings Regarding ERP system at Dudhsagar Dairy, Mehsana. The information presented in this Project Report is obtained from various sources like Company Personnel, Company Internal Intra Websites, Other Websites, Company Reports, and other literature.

NAME DIVISION ROLL NO

POOJA K. SONI C 188

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SUCCESS CAN NEVER BE OBTAINED WITHOUT VALUABLE GUIDANCE GURU BINA GYAN KAHA SE PAU
The successful completion of a project requires active participation of many people from the time of inception of an idea to its implementation, many brain works together and that only provides fruitful results. It's a great pleasure and privilege in presenting this Project Report to one and all concerned. My deepest gratuity to DUDHSAGAR DAIRY, MEHSANA to undergo training at one of the most reputed co-operative Organization. First of all, I would like to thank Dr. Krishnaraj M Chudasma, Principal of V.M. Patel Collage of Management Studies who has gave me the opportunity to undertake this type of research work which will prove very important for me in future. I would also like to thank Prof, Haresh Oza for giving me guidance well when required. I am highly indebted to Mr. Jaysukhbhai Solanki, [Executive (Accounts-dudhsagar dairy)] for bestowing me his kind and gracious facilitation during the training period. Without his prudent guidance and encouragement the project would not have been possible. I would also like to express my sincere thanks to other people at Dudhsagar Dairy, Mehsana for their invaluable contribution and guidance in making this Project Report. I also like to thank all those people who have knowingly and unknowingly contributed in one way or other in making this Project a more completely one with their valuable tips and suggestion. I hope that the information incorporated in this project report would be appreciated as I have put in may be efforts in leaving no stone unturned as I consider it to be true, fair and relevant in its content and context to the best of my knowledge and ability.

NAME DIVISION ROLL NO

POOJA K. SONI C 188

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Dudhsagar Dairy is a co-operative dairy. It works under Gujarat Co-operative Milk Marketing Federation. Dudhsagar Dairy takes milk from many villages around Gujarat and pay for their milk. Then Dudh Sagar Dairy processes it & pack in different packaging and after supply. Dudh sagar Dairys plan is biggest in the all our Asia. Dudhsagar dairy which manufactures milk and milk products under the brand name AMUL and SAGAR has become the first dairy co-operative in the country to implemented enterprise resource planning (ERP) solution across its establishment. In this report I have done a research on "ERP SYSTEM WITH RESPECT TO FINANCE & ACCOUNTS IN DUDHSAGAR DAIRY, MEHSANA. For preparing the project report, I have visited the Dudhsagar dairy for 21 days during the suggested duration from 27-10 2008 to 1611-2008, to avail the necessary information. During my overall research work I have done analysis of the ERP SYSTEM implemented at DUDH SAGAR DAIRY,MEHSANA and according to that some points of analysis are as under: At DUDH SAGAR DAIRY with the help of ERP SYSTEM it is easier and faster to get financial data from various departments, the preparation of valuable financial reports accurately, requirement of HUMAN RESOURCE is reducing, increase in co-ordination among employees in finance & accounts department, it is become very easier to checkout the past accounts and their impact on present accounts, The chances of mistakes while preparing valuable financial reports can be reduced, useful for saving time, eliminates the paper work Planning and allocation of financial resources become efficient & accurate Apart from such advantages there are certain limitations of ERP SYSTEM at DUDH SAGAR DAIRY like The blurring of company boundaries can cause problems in accountability, lines of responsibility, and employee morale, In FINANCE & ACCOUNTS DEPARTMENT ERP system may be too complex measured against the actual needs of the DAIRY, ERP SYSTEM at DUDH SAGAR DAIRY is not useful to record the collection of milk from various co-operative societies and the payment to cooperative, A small mistake while recording the transaction will affect all other accounts badly which may result in a very big mistake.

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Sr.no.
1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

Particulars
Preface Acknowledgement Executive summary What is ERP? Overview of ERP SYSTEM Development of an ERP system Suppliers of ERP software Selection of ERP ERP life cycle

Page no.
2 3 4 7 10 11 14 17 18 21

Functional modules of ERP software 11. Various ERP Process Cycle 12. Technical specification for implementation of ERP system Findings Conclusion Bibliography 39 25

13. 14. 15.

40 44 46

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INTRODUCTION
 ERP SYSTEM AT DUDHSAGAR DAIRY
 Dudhsagar dairy which manufactures milk and milk products under the brand name AMUL and SAGAR has become the first dairy co-operative in the country to implemented enterprise resource planning (ERP) solution across its establishment.  Dudhsagar dairy has implemented ORACLE E-BUSINESS SUIT (version-11.5.9) as ERP software.  The main server is implemented at Mehsana head office and it is connected with different locations i.e. chilling centers Vihar, Kheralu, Harij, Kadi & Hansapur and cattle feed factory Boriavi & Ubkhal. These all centers are connected through BSNL telephone leas lines.  The Dudhsagar dairy has completed 47 years of his success and it is in the northern part of Gujarat. The dairy has completed task of creating a common integrated management system under project SAMANWAY to create and derive the benefit of modern technology to make the dairy operation more efficient, thus contributing in improving the lives of hundreds and thousands of milk producers in the region.  The ERP - SAMANVAY project has covered the implementation of Oracle Financials, Oracle Purchasing, Oracle Process Manufacturing, Oracle Asset Management, Oracle Inventory Management and Oracle Order Management modules Of Oracle-E-Business Suits.  There are numerous software programs that are being used at different locations gathering information would often take days. With a uniform ERP solution across all establishment and place, as expect a huge improvement in account statement by the year-end as per management.

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 This ERP solution package was implemented in 11 month from 4 August 2003 to 2-July, 2004.  The set up of ERP system is done by TCS TATA CONSULTANCY SERVICES, but it took be few month for the employers to get accustomed to the new system and to streamline all procedures.  For each ERP users they have separate login knowing there confidential password for ERP suits and also separate assessment for higher authorities. In each department one ERP core team members has support to his staff members for day-to-day transactions.  Now Dudhsagar Dairy, maintain two ERP instance (1) Production Instance (SAGAR-8000) for live data (2) Test Instance (TClone-8025) for old data and testing and training purpose

Following other software programs are using by Dudhsagar Dairy. MCBS Milk Collection and Billing Systems FoxPro Transport Payment and accounting program Tally 9 etc.

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 WHAT IS ERP?
ERP (Enterprise Resource planning) covers the technique and concepts employed for the integrated management of business as a whole, from the viewpoint of the effectiveness use of management resources, to improve the efficiency of an enterprise. ERP packages are integrated software packages that support the ERP concepts. An Enterprise Resource Planning (ERP) system is a software infrastructure embedded with "best practices", thus providing the best ways to do business based on common business practices or academic theory. The aim of an ERP is to improve the co-operation and interaction between all departments in organizations (such as product planning, manufacturing, purchasing, marketing and customer service department). ERP is a fine expression of the inseparability of IT and business. As an enabling key technology, as well as being an effective managerial tool, ERP systems allow companies to integrate at all levels and to utilize important ERP applications such as supply-chain management, financial and accounting applications, human resource management and customer relationship management. They represent large, complex, computerized and integrated systems which can strongly influence long-term business success. Enterprise Resource Planning is the latest high end solution, information technology has lent to business application. The ERP solutions seek to streamline and integrate operation processes and information flows in the company to synergies the resources of an organization namely men, material, money and machine through information. Initially implementation of an ERP package was possible only for very large Multi National Companies and Infrastructure Companies due to high cost involved. Today many companies in India have gone in for implementation of ERP and it is expected in the near future that 60% of the companies will be implementing one or the other ERP packages since this will become a must for gaining competitive advantage.

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Integration is Key to ERP Integration is an extremely important part to ERP's. ERP's main goal is to integrate data and processes from all areas of an organization and unify it for easy access and work flow. ERP's usually accomplish integration by creating one single database that employs multiple software modules providing different areas of an organization with various business functions. Although the ideal configuration would be one ERP system for an entire organization, many larger organizations usually create and ERP system and then build upon the system and external interface for other stand alone systems which might be more powerful and perform better in fulfilling an organizations needs. Usually this type of configuration can be time consuming and does require lots of labor hours.

 ORIGIN OF THE TERM

The initials ERP originated as an extension of MRP (material requirements planning then manufacturing resource planning). ERP systems now attempt to cover all basic functions of an enterprise, regardless of the organizations business or charter. Non-manufacturing businesses, non-profit organizations and governments now all utilize ERP systems. To be considered an ERP system, a software package must provide the function of at least two systems. For example, a software package that provides both payroll and accounting functions could technically be considered an ERP software package. However, the term is typically reserved for larger, more broadly based applications. The introduction of an ERP system to replace two or more independent applications eliminates the need for external interfaces previously required between systems, and provides additional benefits that range from standardization and lower maintenance (one system instead of two or more) to easier and/or greater reporting capabilities (as all data is typically kept in one database). Examples of modules in an ERP which formerly would have been stand-alone applications include: Manufacturing, Supply Chain, Financials, Customer Relationship Management (CRM), Human Resources, Warehouse Management and Decision Support System.

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 EVOLUTION OF ENTERPRISE RESOURCE PLANNING

In the ever growing business environment the following demands are placed on the industry:      Aggressive Cost control initiatives Need to analyze costs / revenues on a product or customer basis Flexibility to respond to changing business requirements More informed management decision making Changes in ways of doing business

Difficulty in getting accurate data, timely information and improper interface of the complex natured business functions have been identified as the hurdles in the growth of any business. Time and again depending upon the velocity of the growing business needs, one or the other applications and planning systems have been introduced into the business world for crossing these hurdles and for achieving the required growth. They are:         Management Information Systems (MIS) Integrated Information Systems (IIS) Executive Information Systems (EIS) Corporate Information Systems (CIS) Enterprise Wide Systems (EWS) Material Resource Planning (MRP) Manufacturing Resource Planning (MRP II) Money Resource Planning (MRP III)

The latest planning tool added to the above list is Enterprise Resource Planning.

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 OVERVIEW OF AN ERP SYSTEM

Some organizations typically those with sufficient in-house IT skills to integrate multiple software products choose to implement only portions of an ERP system and develop an external interface to other ERP or stand-alone systems for their other application needs. For example, one may choose to use human resource management system from one vendor, and the financial systems from another, and perform the integration between the systems themselves. This is very common in the retail sector[citation needed], where even a mid-sized retailer will have a discrete Point-of-Sale (POS) product and financials application, then a series of specialized applications to handle business requirements such as warehouse management, staff roistering, merchandising and logistics. Enterprise resource planning (ERP) systems attempt to integrate several data sources and processes of an organization into a unified system. A typical ERP system will use multiple components of computer software and hardware to achieve the integration. A key ingredient of most ERP systems is the use of a unified database to store data for the various system modules. The two key components of an ERP system are a common database and a modular software design. A common database is the system that allows every department of a company to store and retrieve information in real-time. Using a common database allows information to be more reliable, accessible, and easily shared. Furthermore, a modular software design is a variety of programs that can be added on an individual basis to improve the efficiency of the business. This improves the business by adding functionality, mixing and matching programs from different vendors, and allowing the company to choose which modules to implement. These modular software designs link into the common database, so that all of the information between the departments is accessible and real-time.

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 DEVELOPMENT OF AN ERP SYSTEM

Enterprise Resource Planning is a term originally derived from manufacturing resource planning (MRP II) that followed material requirements planning (MRP). MRP evolved into ERP when routings became a major part of the software architecture and a companys capacity planning activity also became a part of the standard software activity.[citation needed] ERP systems typically handle the manufacturing, logistics, distribution, inventory, shipping, invoicing, and accounting for a company. Enterprise Resource Planning or ERP software can aid in the control of many business activities, like sales, marketing, delivery, billing, production, inventory management, quality management, and human resource management. ERP systems saw a large boost in sales in the 1990s as companies faced the Y2K problem in their legacy systems. Many companies took this opportunity to replace their legacy information systems with ERP systems. This rapid growth in sales was followed by a slump in 1999, at which time most companies had already implemented their Y2K solution. ERPs are often incorrectly called back office systems indicating that customers and the general public are not directly involved. This is contrasted with front office systems like customer relationship management (CRM) systems that deal directly with the customers, or the e-Business systems such as e-Commerce, e-Government, e-Telecom, and e-Finance, or supplier relationship management (SRM) systems. ERPs are cross-functional and enterprise wide. All functional departments that are involved in operations or production are integrated in one system. In addition to manufacturing, warehousing, logistics, and information technology, this would include accounting, human resources, marketing, and strategic management. ERP II means open ERP architecture of components. The older, monolithic ERP systems became component oriented.[citation needed] EAS Enterprise Application Suite is a new name for formerly developed ERP systems which include (almost) all segments of business, using ordinary Internet browsers as thin clients.

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ERP - Integrated Data/Processes

Purchasing E-Commerce Inventory Management General Ledger

Accounts Receivable

ERP System

Job Costing

Accounts Payable Single Database Common processes Cross function support

Fixed Assets

Payroll Manufacturing

Customer Relationship Sales Order Management Processing Foreign Trade

Distribution Planning

Data Flow
13

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 AIM OF ERP
The aim of ERP is to improve the co-operation and interaction between all departments in organization (such as product planning, manufacturing, purchasing, marketing & customer service department)

 NEED FOR ERP

Most organizations across the world have realized that in a rapidly changing environment, it is impossible to create and maintain a custom designed software package which will cater to all their requirements and also be completely up-to-date. Realizing the requirement of user organizations some of the leading software companies have designed Enterprise Resource Planning software which will offer an integrated software solution to all the functions of an organization.

 FEATURES OF ERP
 ERP facilitates company-wide Integrated Information System covering all functional areas like Manufacturing, Selling and distribution, Payables, Receivables, Inventory, Accounts, Human resources, Purchases etc.,      ERP performs core corporate activities and increases customer service and thereby augmenting the Corporate Image. ERP bridges the information gap across the organization. ERP provides for complete integration of Systems not only across the departments in a company but also across the companies under the same management. ERP is the only solution for better Project Management. ERP allows automatic introduction of latest technologies like Electronic Fund Transfer (EFT), Electronic Data Interchange (EDI), Internet, Intranet, Video conferencing, ECommerce etc.  ERP eliminates the most of the business problems like Material shortages, Productivity enhancements, Customer service, Cash Management, Inventory problems, Quality problems, Prompt delivery etc.,  ERP provides business intelligence tools like Decision Support Systems (DSS), Executive Information System (EIS), Reporting, Data Mining and Early Warning Systems (Robots) for enabling people to make better decisions and thus improve their business processes

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 SUPPLIERS OF ERP SOFTWARE

There are many numbers of ERP suppliers who are very active in the market. Some of the companies offering renowned international ERP products include:               SAP Baan Microsoft-Dynamic, Navision CODA D&B IBM JD Edwards Marcarn Oracle Peoplesoft Platinum Ramco SMI Software 2000

 THERE ARE TWO MAIN STUDY IN ERP SYSTEM

As-is study Prior to the concept of ERP systems, it was not unusual for each department within an organization to have its own customized computer system. For example, the human resources (HR) department, the payroll department, and the financial department might all have their own computer systems. Typical difficulties involved integration of data from potentially different computer manufacturers and systems. For example, the HR computer system (often called HRMS or HRIS) would typically manage employee information while the payroll department would typically calculate and store paycheck information for each employee, and the financial department would typically store financial transactions for the organization. Each system would have to integrate using a predefined set of common data which would be transferred between each computer system. Any deviation from the data format or the integration schedule often resulted in problems.

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To-be study ERP software, among other things, combined the data of formerly separate applications. This simplified keeping data in synchronization across the enterprise, it simplified the computer infrastructure within a large organization, and it standardized and reduced the number of software specialties required within larger organizations.

 COMPONENTS OF ERP
To enable the easy handling of the system the ERP has been divided into the following Core subsystems:            Sales and Marketing Master Scheduling Material Requirement Planning Capacity Requirement Planning Bill of Materials Purchasing Shop floor control Accounts Payable/Receivable Logistics Asset Management Financial Accounting

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 VARIOUS FUNCTIONS OF DIFFERENT SUBSYSTEM

 Sales  SFA(Sales Force Automation)      Enquiry/Quotations Sales order management Billing Stock transfer Exports

 Procurement     Product/Services management Sub-contracting management Supplier management

Materials     

Inventory Inventory control Warehousing Dispatch Stock reconciliation

 Financials       GL(General Ledger) AP/AR(Accounts Payable and Receivables) Budgeting Vouchers and Day Books Trial Balance, Balance Sheet and other Financial reports

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 Manufacturing  Bill of material  Machine allocation  MRP  Shop floor management  Production Capacity planning  Monthly Production schedules  Fixed Assets and Costing  Processing  Asset Depreciation and Transactions  Expenses allocation  Budget/Forecast Analysis  Multiple cost centres  Product/Project costing  Equipment Maintenance  Maintenance Requisitions  Service Order management  Preventive and Breakdown Maintenance

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 GENERALLY IN ERP CONSULTING THERE WILL BE 2 DIFFERENT ARES :

1. Technical 2. Functional

1. Technical consultants will take care about the Hardware, Hardware performance, Hardware tuning, System administration, Data base, Administration and Development 2. Functional Consultants will involve the Business Process customization into ERP application components. Here the consultants need the respective business process like Finance, Controlling, Sales and Distribution, Materials Management, Production Planning, etc. As per your profile you covered all the areas but, you should concentrate one end to end business process of a department, or you can go for a position Manager ERP where ERP implemented. You should update all ERP modules overview.

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 SELECTION OF ERP SYSTEM

Once the BPR is completed the next task is to evaluate and select a suitable package for implementation. Evaluation of the right ERP package is considered as more crucial step. Evaluation and selection involves:       checking whether all functional aspects of the Business are duly covered checking whether all the business functions and processes are fully integrated checking whether all the latest IT trends are covered checking whether the vendor has customizing and implementing capabilities checking whether the business can absorb the cost checking whether the ROI is optimum

 IMPLEMENTATION OF ERP SYSTEM

Implementing an ERP package has to be done on a phased manner. Step by step method of implementing will yield a better result than big-bang introduction. The total time required for successfully implementing an ERP package will be anything between 18 and 24 months Because of their wide scope of application within a business, ERP software systems are typically complex and usually impose significant changes on staff work practices. Implementing ERP software is typically not an in-house skill, so even smaller projects are more cost effective if specialist ERP implementation consultants are employed. The length of time to implement an ERP system depends on the size of the business, the scope of the change and willingness of the customer to take ownership for the project. A small project (e.g., a company of less than 100 staff) may be planned and delivered within 3-9 months; however, a large, multi-site or multicountry implementation may take years. To implement ERP systems, companies often seek the help of an ERP vendor or of third-party consulting companies. These firms typically provide three areas of professional services: consulting, customization and support, data migration is one of the most important activities in determining the success of an ERP implementation. Since many decisions must be made before migration, a significant amount of planning must occur. Unfortunately, data migration is the last activity before the production phase of an ERP implementation, and therefore receives minimal attention due to time constraints.

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 ERP LIFE CYCLE

ERP lifecycle is in which highlights the different stages in implementation of An ERP. There are different stages of the ERP implementation that are as give below:

Pre evaluation Screening

Evaluation Package

Project Planning

Gap Analysis

Re engineering

Team training

Testing

Post implementation

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1. Pre evaluation Screening Once the company has decided to go for the ERP system, the search for the package must start as there are hundreds of packages it is always better to do a through and detailed evaluation of a small number of packages, than doing analysis of dozens of packages. This stage will be useful in eliminating those packages that are not suitable for the business process. 2. Evaluation Package This stage is considered an important phases of the ERP implementation, as the package that one selects will decide the success or failure of the project. Implementation of an ERP involves huge investments and it is not easy to switch between different packages, so the right thing is do it right the first time. Once the packages to be evaluated are identified, the company needs to develop selection criteria that permit the evaluation of all the available packages on the same scale. 3. Project Planning This is the phase that designs the implementation process. It is in this phase that the details of how to go about the implementation are decided. Time schedules deadlines, etc for the project are arrived at. The plan is developed, roles are identified and responsibilities are assigned. It will also decide when to begin the project, how to do it and it completion. A committee by the team leaders of each implementation group usually does such a planning. 4. GAP analysis This is considered the most crucial phase for the success of ERP implementation. This is the process through which the companies create a complete model of where they are now, and in which direction will they opt in the future. It has been estimated that even the best packages will only meet 80% of the companys requirements. The remaining 20% presents problematic issues for the companys reengineering.

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5. Reengineering It is in this phase that human factors are taken into consideration. While every implementation is going to involve a significant change in number of employees and their job responsibilities, as the process becomes more automated and efficient, it is best to treat ERP as an investment as well as cost cutting measure. 6. Team training Training is also an important phase in the implementation, which takes place along with the process of implementation. This is the phase where the company trains its employees to implement and later, run the system. Thus, it is vital for the company to choose the right employee who has the right attitude- people who are willing to change, learn new things and are not afraid of technology and a good functional knowledge. 7. Testing This is the phase where one tries to break the system. One has reached a point where the company is testing the real case scenarios. The system is configured and now you must come up with extreme cases like system overloads, multiple users logging on at the same time, users entering invalid data, hackers trying to access restricted areas and so on. This phase is performed to find the weak link so that it can be rectified before its implementation. 8. Post implementation One the implementation is over, the vendor and the hired consultants will go. To reap the fruit of the implementation it is very important that the system has wide acceptance. There should be enough employees who are trained to handle problems those crops up time to time. The system must be updated with the change in technology. The post implementation will need a different set of roles and skills than those with less integrated kind of systems. However, an organization can get the maximum value of these inputs if it successfully adopts and effectively uses the system.

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DUDH SAGAR DAIRY HAS IMPLEMENTED FOLLOWING MODULES OF ORACLE E-BUSINESS SUIT VERSION 11.5.9

FUNCTIONAL MODULES OF ERP SOFTWARE

ERP software is made up of many software modules. Each ERP software module mimics a major functional area of an organization. Common ERP modules include modules for product planning, parts and material purchasing, inventory control, product distribution, order tracking, finance, accounting, marketing, and HR. Organizations often selectively implement the ERP modules that are both economically and technically feasible.

(1) (2) (3) (4) (5) (6)

Oracle Purchasing Oracle Inventory (Stock) Oracle Process Manufacturing (Production) Oracle Enterprise Asset Management (EAM) (for asset maintenance) Oracle Order Management (sales) Oracle Financial for Finance & Accounts (a) (b) (c) (d) (e) General Ledger Account Payable (Creditors) Account Receivables (Debtors) Cash Management Fixed Assets

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(1) Oracle Purchasing

Oracle Purchase module streamlines procurement of required raw materials. It automates the processes of identifying potential suppliers, negotiating price, awarding purchase order to the supplier, and billing processes. Purchase module is tightly integrated with the inventory control and production planning modules. Purchasing module is often integrated with supply chain management software. Oracle Purchase aims at making available the required materials of the right quality, in the right quantity, at the right time and at the right price, for the smooth functioning of the organization. All purchasing and subcontracting activities such as inviting quotations, supplier evaluation, placing purchase order, order scheduling and billing are covered in this module. Order tracking is made easy for the purchase department by the various reports and MIS that are available in Purchase module. Import of goods is also handled by the system. Oracle Purchase is integrated with Inventory, Finance & Production Planning. (2) Oracle Inventory (Stock)

Oracle Inventory module facilitates processes of maintaining the appropriate level of stock in a warehouse. The activities of inventory control involves in identifying inventory requirements, setting targets, providing replenishment techniques and options, monitoring item usages, reconciling the inventory balances, and reporting inventory status. Integration of inventory control module with sales, purchase, finance modules allows ERP systems to generate vigilant executive level reports. Oracle inventory covers all stock related functions of an organization. Stock management and valuation activities, which form the backbone of any organization generally, take a lot of time and resources. Inventory handles all the store activities of issues, dispatches, receipts and quality control. The lot wise stock of each item is maintained and various MIS are provided for tracking stock movement. Inventory is integrated with Sales, Purchase, Finance, Customer Care, Equipment Maintenance, Production Planning and Production.

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(3) Oracle Process Manufacturing (Production) In the process of evolution of manufacturing requirements planning (MRP-II) into ERP, while vendors have developed more robust software for production planning, consulting firms have accumulated vast knowledge of implementing production planning module. Production planning optimizes the utilization of manufacturing capacity, parts, components and material resources using historical production data and sales forecasting. Oracle Production Planning helps an organization plan production with the optimum utilization of all available resources. Material Requirement Planning is done based on the production advice generated by the sales department. Feasibility of production is evaluated using details like raw material availability and procurement time, machine availability and capacity. A production schedule is generated for all machines where the scheduling is done in an optimized fashion based on the priorities of production. Production Planning is integrated with Sales, Inventory, and Purchase & Production.

(4) Oracle Enterprise Asset Management (EAM)(Engineering)

Oracle Enterprise asset management helps in maintaining the fixed assets of an organization. Contracts with service providers can be made after which service requisitions and job orders are issued. The periodic as well as unscheduled maintenance details of machinery can be recorded. Maintenance bills can also be generated. Equipment Maintenance provides reports, which help in analyzing the data pertaining to maintenance activities of the machinery. Oracle Equipment Maintenance is integrated with Assets, Inventory and Finance.

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(5) Oracle Order Management (Sales) Revenues from sales are live blood for commercial organizations. Oracle Sales module implements functions of order placement, order scheduling, shipping and invoicing. Sales module is closely integrated with organizations' ecommerce websites. Many ERP vendors offer online storefront as part of the sales module. Sales is the most important and essential function for the existence of an organization. Oracle Sales handle all the activities for domestic and export sales of an organization. The customer and product database is maintained. Sales Force Automation is an important feature of Oracle Sales. Capturing enquiries, order placement, order scheduling and then dispatching and invoicing form the broad steps of the sales cycle. Stock transfer between warehouses is also covered. Besides all this, important analysis reports are provided to guide decision making and strategy planning. Export documents are also generated. Oracle Sales is integrated with Inventory, Production Planning and Finance. (6) Oracle Financial for Finance & Accounts

a) b) c) d) e)

General ledger Account payable(creditors) Account receivables(debtors) Cash management Fixed assets

Both for-profit organizations and non-profit organizations benefit from the implementation of ERP financial module. The financial module is the core of many ERP software systems. It can gather financial data from various functional departments, and generates valuable financial reports such balance sheet, general ledger, trail balance, and quarterly financial statements. Oracle Finance streamlines the financial operations of a company. Chart of groups and chart of accounts are defined here. All vouchers related to journal entries, sales, purchase, receipt and payment are recorded. Using Oracle Finance a company can generate balance sheet, general ledger, trial balance, profit & loss statement and and Equipment Maintenance. daybooks besides many other transactional reports. Oracle Finance is integrated with Sales, Purchase, Inventory, Costing, Customer Care

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VARIOUS ERP PROCESS CYCLE (1) Procure to pay (2) Quote to cash (3) Storage to distribution (4) Plan to produce (5) Works to pay (6) Accounting to profit

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(1) Procure to pay

Creation of PO

PO Approval as per authority

Printing of PO

Receipts entry

Inspection Entry

Acceptance / Rejection

Entry of supplier invoice

Match Invoice with receipt / PO

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Approval of payments

Payment - Cheque printing

Variance booking

STD cost updating

Closing of PO

FEATURES & HIGHLIGHTS:  Highly parameterized to reduce data entry  Streamlines purchase and process cycles  Detailed Supplier/Subcontractor/Service Provider database  Capturing materials requirement  Automatic firing of purchase requisitions based on MRS  Quotations from various suppliers  Quotation validity  MIS for vendor evaluation based on quality, price & delivery time  Subcontracting generation of process orders  Multiple indents for multiple items in a single PO  Purchase order processing for Raw Materials Sub-contracted items Bought out items Non-inventory items Fixed Assets

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 Purchase order entry with item details and other details like taxes, discounts, extra Charges like freight, P&F, octroi etc.  Flexibility to generate Purchase Order in domestic and foreign currency  Recording Payment terms in PO  Excise consideration in Purchase and Process Orders  PO authorization  PO amendments with complete amendment history  Order cancellation and order closing  Multiple delivery schedules  Quality inspection of goods  Advance adjustments  Purchase bill with updation of GL and purchase book  Service contracts, Service Bills, Service indents and PO  Value based approval of indents  Bill of Entry  Complete import functionality with handling of custom details - Purchase Bill for import, Excise consideration in imports  Reports for Order tracking for complete control on the procurement cycle  SCM integration through Internet posting quotation on web by suppliers.  Importing quotations into ERP after validations

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(2) Quote to cash

Sales Quotations

Approval of quotations

Creation of Sales Order

Confirmation of Order

Printing of Order

Allocations as per the Stock

Picking list generation

Picking list printing

Stock delegations

Lot confirmations

Delivery

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Shipment advice

Invoice generations

Invoice printing

AR booking

Cheque entry

Sales booking

Revenue updations

Sales commission/bonus updations

Sales closing

Revenue updations

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FEATURES & HIGHLIGHTS:  Handles pre-sales and sales activities of the organization  Complete stock-to-dock tracking of sales order processing cycle  Sales Force Automation Prospect tracking through various stages, detailed Competitor products information location-wise, scheduling marketing executives Visits, tracking expenses  Marketing surveys for estimating demand for various products to prepare an Effective marketing strategy  Detailed Customers/ Business Partners/ Dealers database including bank details, TDS details, contact details and credit limit  Target setting for executives  Association of customers to Marketing Executives and Business Partners for Tracking  Flexibility to define customer-specific prices for products and reference to customer Part no.  Multiple dispatch location for customers/dealers  Product Definition - up to 30 character user-defined product code, Product Category, group and subgroup for classification of products  Complete export documentation for export oriented companies  Excise details (chapter no. associated with excisable products)  Enquiries from potential and existing customers  Quotations and amendments to quotations with complete history  Analyzing lost jobs  Different types of orders can be generated to suit varied needs of customers  Order entry for direct/scheduled/open/D3/sample orders with details for Dealers, Incentive % and competition  Order calculation based on price offered, discounts (line and total), excise, taxes, Freight etc.  Letter of credit details for association with sales orders  Order amendment history  Authorization of orders and invoices  Order scheduling over a period of time and tracking delivery schedule  Order tracking through status and transaction reports

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 Order closing/cancellation  Generation of production advice to plan for production based on sales orders  Order processing based on MRP  Preparation of dispatch advice  Multiple dispatches against single Sales Order  Invoice generation with advance adjustments sales voucher automatically Generated in Finance  Tracking sales returns  Rejection invoice for rejections made against purchases with excise consideration  MIS for analyzing sales trends to project and forecast sales  Stock Transfer between warehouses for multi-locational companies  Service invoice for services given to customers  Variance reports  Enables top view - consolidation of sales data for all child companies

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(3)Storage to distribution

New receipt

Matching with purchase order

Receipt of inventory

Inspection

Accept/reject

Deliver (if rejected return to vendor)

OPM inventory

OPM inventory control

Transact process purchase order

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Manual lot allocate

Transact

Closing of storage to distribution

FEATURES & HIGHLIGHTS:  Online status of item quantity in terms of on-hand, on-hand, available, reserved, ordered, to order, rejected, defective and rework able quantities.  Complete excise functionality and generation of excise registers  Up to 30 Character alphanumeric stock code  Multiple levels of classification of items  Excisable items Definition and Chapter allocation  Multiple units of measurement  Alternate items for Production Planning  Handling of non-stock low value items like stationery  Lot wise tracking of inventory at shop floor and main stores  Stock Valuation LIFO/FIFO/weighted average  Material Requisition from different requirement areas  Purchasing and subcontracting  Receiving material against sales order processing, material requirement, Subcontracting, gate pass and production requisition  Landed Rate of Items  Quality Control based on QC parameters  Handling Material Rejections  Rejected Material dispatch to subcontractors  Linking of GRN to PO and Invoice  Gate pass returnable/non returnable

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 Cenvat claim for capital goods  Analysis which help in maintaining optimum stock levels  Physical verification of stock  Reallocation of rework able stock  Multiple warehouses/branches/regional offices  Stock transfer receipts from other warehouse  Consolidation of all warehouses  Consolidation at any level of company hierarchy

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(4)Plan to produce

Creation of the Production Order

Approval of the production order

Release of the production order

Issue of the Raw materials

Receipt the Finished Goods

Complete the Production order

FEATURES & HIGHLIGHTS:  Process definition with inputs, outputs, by-products and overheads  Definition of Bill of Material for all products up to any number of levels  Planning based on customer wise production advice and sales forecast  Material requirement planning: MRP based on machine capacity and availability, machine efficiency, raw material availability, lead time - giving feasible quantity for production  Production plan for machines with optimum utilization of all available resources like raw materials and machines  Option to revoke production plan to change input parameters/ production priority/ quantity using fresh production advice  Generation of production schedule for machines detailing inputs and outputs

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 Analysis of machine efficiency and utilization  Automatic generation of MRS and purchase requisitions on finalization of plan  Generation of process requisition for processes that have to be subcontracted  Reserving quantity for production  Automatic generation of job orders for production  Option to make daily plans for production

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(5)Work to pay

Log In Engineering

EAM > Work Order

Release Work Order

Work order transaction>material transaction

Resource Transaction

Work order completion

Close work order

Make the invoice

Make the payment

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FEATURES & HIGHLIGHTS:  Database of service providers and contracts with them  Recording of Maintenance requisitions  Generation of job orders based on quotations sent by service providers  Maintenance schedule for monthly and annual maintenance  Generation of maintenance bill with updation in Finance  Tracking of warranty activities, claims, equipment utilization and breakdown maintenance  Categorization of maintenance activities and assigning priority  Unplanned maintenance work and besides schedule maintenance

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(6)Accounting to profit

Define Accounting Policy

Define Chart of Accounts

Define fiscal calendar and currency

Define Process wise document sequence

Define Process wise accounts

mapping (Default accounts)

Define Inventory Organizations and Inventory Locations

Monthly close sub-module

Import data in general ledger for the month, post the data and generate trial balance

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FEATURES & HIGHLIGHTS:  Caters to both national and international markets: user-defined formats for number, currency and date  Consolidated reports for any level of the company hierarchy  Drill down reports to reach up to the voucher level  Up to 7 levels of groups with up to 999 groups at each level  28 system defined groups  Entering pending voucher details at the time of accounts creation  Definition of subsidiary ledgers  User definable precision for amounts (no. of digits after decimal)  Flexibility of Indian/American number system  Printing of amount in words in any language  Multi-branch accounting  Allocation of income and expenses to cost centers  Department wise budget allocation for all accounts  Online and batch posting of vouchers by authorized users  Defining narration for vouchers for ease of data entry  Flexible voucher numbering daily, weekly, monthly, yearly and carry forward  Transaction limit for vouchers  Up to 999 entries per voucher  Transactions in multiple currencies  Conversion rates on selling/buying price  Adjustments of exchange fluctuations  Fiscal year definition  Enterable sales/purchase voucher till sales/purchase modules are live  Receipt/Payment voucher - Against invoice/bill - On account - New reference against orders - advance adjustments  Complete TDS functionality  TDS monitoring through integrated inputs from purchase and payments  Debit notes/credit notes

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- On account - New reference against order - Against invoices/bills  Book closing  Period closing  Financial year closing - All accounts closing - Bank and cash closing - Transfer without closing ability to work in 2 financial years Simultaneously

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 TECHNICAL SPECIFICATION FOR IMPLEMENTATION OF ERP SYSTEM AT DUDHSAGAR DAIRY,MEHSANA

 Dudhsagar dairy has implemented ORACLE-E-BUSINESS SUIT(VERSION11.5.9) as ERP SOFTWARE.   Dudhsagar dairy uses Linux operating system for ERP SOFTWARE. Dudhsagar dairy uses following hardware for ERP SOFTWARE. IBM X445/X235

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 ADVANTAGES OF ERP SYSTEM IN FINANCE & ACCOUNTS DEPARTMENT OF DUDHSAGAR DAIRY..  At DUDH SAGAR DAIRY with the help of ERP SYSTEM it is easier and faster to get financial data from various departments like purchase department, sales department, store department, production department and it generates valuable financial reports such balance sheet, general ledger, trail balance, and quarterly financial statements.  With the help of ERP SYSTEM at DUDH SAGAR DAIRY, all vouchers related to journal entries, sales, purchase, receipt and payment are recorded at finance & accounts department.  By using ERP SYSTEM at DUDH SAGAR DAIRY, the preparation of valuable financial reports such balance sheet, general ledger, trail balance, and quarterly financial statements become accurate.  After implementation of ERP SYSTEM at DUDH SAGAR DAIRY, the requirement of HUMAN RESOURCE is reducing. Ex. Before implementation of ERP SYSTEM at DUDH SAGAR DAIRY there are 21 employees in internal audit department but after implementation of ERP SYSTEM at DUDH SAGAR DAIRY, there are only 4 employees in internal audit department.  With the help of ERP SYSTEM at DUDH SAGAR DAIRY, there is co-ordination among employees in finance & accounts department.  After implementation of ERP SYSTEM at DUDH SAGAR DAIRY, it is become very easier to checkout the past accounts and their impact on present accounts. increase in

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 The chances of mistakes while preparing valuable financial reports such balance sheet, general ledger, trail balance, and quarterly financial statements can be reduced with the help of ERP SYSTEM at DUDH SAGAR DAIRY  ERP SYSTEM at DUDH SAGAR DAIRY is very useful for saving time.  The use of ERP SYSTEM at DUDH SAGAR DAIRY eliminates the paper work.  Other departments of DUDH SAGAR DAIRY can share all information regarding receipt & payment through the ERP SYSTEM.  Planning and allocation of financial resources become efficient & accurate with the help of ERP SYSTEM at DUDH SAGAR DAIRY  With the help of ERP SYSTEM at DUDH SAGAR DAIRY TDS monitoring through integrated inputs from purchase and payments become easier.  ERP SYSTEM performs Other function involves taxation .i.e. income tax payment, TDS, sales tax & other taxes. It also takes care of benefit schemes for employees like PF, Gratuity and Insurance etc.  Department wise budget allocation for all accounts efficiently by using ERP SYSTEM at DUDH SAGAR DAIRY  Profitable Allocation of income and expenses to cost centers after

implementation of ERP SYSTEM at DUDH SAGAR DAIRY

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 LIMITATIONS OF ERP SYSTEM IN FINANCE & ACCOUNTS DEPARTMENT OF DUDHSAGAR DAIRY..  As Once a ERP SYSTEM is established At DUDH SAGAR DAIRY, switching costs are very high.(reducing flexibility and strategic control at the corporate level).  The blurring of company boundaries can cause problems in accountability, lines of responsibility, and employee morale.  At DUDH SAGAR DAIRY resistance in sharing sensitive internal information between departments can reduce the effectiveness of the software.  In FINANCE & ACCOUNTS DEPARTMENT ERP system may be too complex measured against the actual needs of the DAIRY.  ERP SYSTEM at DUDH SAGAR DAIRY is not useful to record the collection of milk from various co-operative societies and the payment to co-operative societies so DUDH SAGAR DAIRY has to use MCBS Software(Milk Collection & billing system)  ERP SYSTEM at DUDH SAGAR is not useful to maintain the accounts of farmers of various co-operative societies, and DUDH SAGAR DAIRY has to use TALLY Software.  Though the employees from TCS provide training to employees of DUDH SAGAR DAIRY regarding ERP SYSTEM for one year but still the employees are not well aware about the uses of ERP SYSTEM and they are often take help of their colleagues and take advice from their senior employees which creates disturbance while recording various important transactions.  A small mistake while recording the transaction will affect all other accounts badly which may result in a very big mistake.

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DUDH SAGAR DAIRY spend about Rs. 4 crore for implementation of ERP SYSTEM but it is not proved more beneficial for DUDH SAGAR DAIRY as compare to cost.

 CERTAIN LIMITATIONS WHICH I HAVE TO FACE WHILE PREPARING THE PROJECT REPORT  The limiting factor of my research was the duration of the time; I could not get over all information regarding the ERP SYSTEM implemented at dudhsagar dairy within 21 days.  Sometimes the employees are busy with their own work so they try to avoid explaining the system and due to that I have to wait for longer time.

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IMPLEMENTATION OF ERP SYSTEM AT DUDH SAGAR DAIRY INTEGRATION OF PROCUREMENT, MANUFACTURING (DAIRY PLANT) AND ORDER MANAGEMENT TO SIGNIFICANTLY REDUCE TIME TO MARKET AND PRODUCTION CYCLE TIME TO MEET INCREASED DEMANDS.

BUSINESS DRIVERS
 Optimize Returns to stakeholders-farmer families  To be aligned with the industry best practices  Easy availability of info across the organization

BEST PRACTICES
 Big bang approach  Proven implementation methodology  Enabling change management across the various layers in the organization  Obtaining high level of commitment from project sponsor

MAJOR ACCOMPLISHMENTS
 First of its kind of implementation in an cooperative based dairy industry  Successful integration with business critical legacy applications for milk procurement and society transactions  Integration with customer application for order management  Implementation of oracle apps at main dairy plant, 5 remotely located chilling centers and 2 cattle feed plants  Transformation of organization from low computer literacy to use of state-of the art technology V.M.PATEL COLLEGE OF MANAGEMENT STUDIES
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RESULTS
 Successful implementation of oracle applications 11.5.9 covering oracle financials, order management, purchasing, OPM and EAM with online interfaces to business critical custom applications

The limiting factor of my visit was the duration of the time; I could not get over all information regarding the firm. But anyhow I have prepared the report on whatever the information I got. It is a good experience to conduct such project and it will prove beneficial for me in my future career and again I would like to thank all the people who knowingly or unknowingly help me for complete the research work regarding the study of ERP SYSTEM at DUDH SAGAR DAIRY.

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WEBSITES
www.intrasagar.com www.tcs.com www.erpwire.com
www.management-hub.com

www.ebizframe.com  MAGAZINE Business Today

BOOK Getting more out of ERP

(By David Hendrickson)

MATERIAL provided by DUDH SAGAR DAIRY

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